REGIONS FINANCIAL CORP, S-4, 1995-01-19

REGIONS FINANCIAL CORP
S-4, 1995-01-19
NATIONAL COMMERCIAL BANKS

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<PAGE> 1

As filed with the Securities and Exchange Commission on January 19, 1995
Registration No.
--------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
--------------------
Regions Financial Corporation
(Exact Name of Registrant as Specified in its Charter)
--------------------
<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)
--------------------
Samuel E. Upchurch, Jr.
General Counsel and Corporate Secretary
417 North 20th Street
Birmingham, AL 35203
(205) 326-7860
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
--------------------
Copies to:

<TABLE>
<S> <C> <C>
CHARLES C. PINCKNEY FRANK M. CONNER III F. SHEFFIELD HALE
LANGE, SIMPSON, ROBINSON & ALSTON & BIRD KILPATRICK & CODY
SOMERVILLE SUITE 350 SUITE 2800
417 NORTH 20TH STREET, SUITE 1700 700 THIRTEENTH STREET, NW 1100 PEACHTREE STREET
BIRMINGHAM, AL 35203 WASHINGTON, D.C. 20005 ATLANTA, GEORGIA 30309
(205) 250-5000 (202) 508-3303 (404) 815-6500
</TABLE>

--------------------
Approximate date of commencement of proposed sale of securities to the
public: As soon as practicable after this Registration Statement becomes
effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. / /

--------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of each Proposed maximum Proposed maximum
class of securities Amount to be offering price aggregate Amount of
to be registered registered per unit* offering price* registration fee
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 1,074,747 $17.540872 $18,852,000 $6,500.69
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Calculated in accordance with Rule 457(f).

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.
- --------------------------------------------------------------------------------
<PAGE> 2

REGIONS FINANCIAL CORPORATION

CROSS-REFERENCE SHEET

<TABLE>
<CAPTION>
CAPTION OR LOCATION IN
FORM S-4 ITEM PROXY STATEMENT/PROSPECTUS
- ---------------------------------------------------------- ------------------------------------------
<S> <C>
1. Forepart of registration statement and outside front
cover page of prospectus.............................. Outside Front Cover of Proxy
Statement/Prospectus; Facing Page of
Registration Statement; Cross-Reference Sheet.
2. Inside front and outside back cover of prospectus..... Available Information; Documents
Incorporated by Reference; Table of
Contents.
3. Risk factors, ratio of earnings to fixed charges and
other information..................................... Summary; Comparative Market Prices and Dividends.
4. Terms of the transaction.............................. Summary; Description of the Transaction;
Effect of the Merger on Rights of
Stockholders; Description of Regions
Common Stock.
5. Pro forma financial information....................... Summary.
6. Material contacts with the company being acquired..... Summary; Description of the Transaction.
7. Additional information required for re-offering by
persons and parties deemed to be underwriters......... Not applicable.
8. Interest of named experts and counsel................. Opinions.
9. Disclosure of Commission position on indemnification
for Securities Act liabilities........................ Not Applicable (See Part II, Item 20).
10. Information with respect to S-3 registrants........... Documents Incorporated by Reference;
Summary; Business of Regions.
11. Incorporation of certain information by reference..... Documents Incorporated by Reference.
12. Information with respect to S-2 or S-3 registrants.... Not Applicable.
13. Incorporation of certain information by reference..... Not Applicable.
14. Information with respect to registrants other than S-2
or S-3 registrants.................................... Not Applicable.
15. Information with respect to S-3 companies............. Not Applicable.
16. Information with respect to S-2 or S-3 companies...... Not Applicable.
17. Information with respect to companies other than S-2
or S-3 companies...................................... Fidelity Management's Discussion and Analysis of
Financial Condition and Results of Operations;
Business of Fidelity; Voting Securities and Principal
Stockholders of Fidelity; Index to Fidelity Financial
Statements.
18. Information if proxies, consents, or authorizations
are to be solicited................................... Documents Incorporated by Reference; Summary;
The Special Meeting; Description of the Transaction;
Description of Regions Common Stock.
19. Information if proxies, consents, or authorizations
are not to be solicited or in an exchange offer....... Not Applicable.

</TABLE>
<PAGE> 3

Dear Fidelity Stockholder:

You are cordially invited to attend the special meeting of stockholders
(the "Special Meeting") of Fidelity Federal Savings Bank ("Fidelity") to be
held at Fidelity's main office, 500 E. Walnut Avenue, Dalton, Georgia 30720 on
, 1995, at .m., local time. At the Special Meeting, you will be
asked to consider and vote on the Agreement and Plan of Reorganization (the
"Agreement") entered into with Regions Financial Corporation ("Regions") and
the related Plan of Merger and Combination (the "Plan of Merger"), pursuant to
which a newly formed, interim federal savings bank subsidiary of Regions will
merge (the "Merger") with and into Fidelity.

At the effective time of the Merger, each share of Fidelity common stock
then issued and outstanding, with certain exceptions, will be converted into
of a share of Regions common stock, and each share of Fidelity preferred
stock, with certain exceptions, then issued and outstanding will be converted
into of a share of Regions common stock, subject to adjustment in the
event of any change in the conversion ratio of Fidelity preferred stock into
Fidelity common stock.

The Merger has been approved unanimously by your Board of Directors and is
recommended by the Board to you for approval. Consummation of the Merger is
subject to certain conditions, including approval of the Agreement and the Plan
of Merger by Fidelity's stockholders and approval of the Merger by various
regulatory agencies. The enclosed Notice of Special Meeting and Proxy
Statement/Prospectus describe the Merger and provide specific information
regarding the transaction and the Special Meeting. Please read these materials
carefully and consider thoughtfully the information set forth in them.

Stockholders of Fidelity who perfect their dissenters' rights of appraisal
prior to the proposed Merger and comply with applicable law will be entitled to
receive the fair value of their shares of Fidelity capital stock in cash, as
provided by applicable law.

Approval of the Agreement and the Plan of Merger requires the affirmative
vote of at least two-thirds of the outstanding shares of Fidelity common stock
and Fidelity preferred stock entitled to be voted at the Special Meeting,
voting separately as classes. A failure to vote will have the same effect as a
vote against the Merger.

Whether or not you plan to attend the Special Meeting, you are urged to
complete, sign, and return promptly the enclosed proxy card. If you attend the
Special Meeting, you may vote in person if you wish, even if you previously
have returned your proxy card. The combination with Regions is a significant
step for Fidelity and your vote on this matter is of great importance. On
behalf of the Board of Directors, I urge you to vote for approval of the
transaction by marking the enclosed proxy card "FOR" Item One.

Sincerely

Richard G. Rhodes, Sr.
President and Chief Executive Officer
<PAGE> 4

FIDELITY FEDERAL SAVINGS BANK
500 E. WALNUT AVENUE, DALTON, GEORGIA 30720
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD , 1995

Notice is hereby given that a Special Meeting of Stockholders (the "Special
Meeting") of Fidelity Federal Savings Bank ("Fidelity") will be held at
Fidelity's main office, 500 E. Walnut Avenue, Dalton, Georgia 30720 on ,
1995, at .m., local time, for the following purposes:

1. Merger. To consider and vote upon a proposal to approve the
Agreement and Plan of Reorganization, dated as of October 17, 1994 (the
"Agreement"), by and between Fidelity and Regions Financial Corporation
("Regions"), and the related Plan of Merger and Combination (the "Plan of
Merger"), pursuant to which: (i) a newly formed, interim federal savings bank
subsidiary of Regions will merge (the "Merger") with and into Fidelity; (ii)
Regions will acquire all of the outstanding capital stock of Fidelity; (iii)
each share of Fidelity common stock issued and outstanding on the effective
date of the Merger (the "Effective Date") (excluding any shares held by
Fidelity, Regions, or their respective subsidiaries, in each case other than
shares held in a fiduciary capacity or in satisfaction of debts previously
contracted, and excluding shares held by stockholders who perfect their
dissenters' rights of appraisal) will be converted into of a share of Regions
common stock; (iv) each share of Fidelity preferred stock (excluding any shares
held by Fidelity, Regions, or their respective subsidiaries, in each case other
than shares held in a fiduciary capacity or in satisfaction of debts previously
contracted, and excluding shares held by stockholders who perfect their
dissenters' rights of appraisal) issued and outstanding on the Effective Date
will be converted into of a share of Regions common stock, subject to
adjustment in the event of any change of the conversion ratio of Fidelity
preferred stock into Fidelity common stock; and (v) each Fidelity stockholder
will receive cash in lieu of any remaining fractional share interest, all as
described more fully in the accompanying Proxy Statement/Prospectus.

2. Other Business. To transact such other business as properly may come
before the Special Meeting, including adjourning the Special Meeting to permit,
if necessary, further solicitation of proxies.

Only stockholders of record at the close of business on , 1995, are
entitled to receive notice of and vote at the Special Meeting or any
adjournment or postponement thereof.

The Board of Directors of Fidelity unanimously recommends that the holders
of Fidelity capital stock vote to approve the above proposals.

Stockholders of Fidelity have a right to dissent from the Merger and obtain
payment in cash of the fair value of their shares of Fidelity capital stock if
the Merger is consummated. The right of any stockholder to receive such payment
is conditioned on strict compliance with the applicable provisions of the
regulations promulgated by the Office of Thrift Supervision, which are attached
to the accompanying Proxy Statement/Prospectus as Appendix D.

Approval of the Merger will require the affirmative vote of at least
two-thirds of the outstanding shares of Fidelity common stock and Fidelity
preferred stock entitled to be voted at the Special Meeting, voting separately
as classes. We therefore urge you to sign and return the enclosed proxy card as
promptly as possible, whether or not you plan to attend the Special Meeting in
person. The proxy may be revoked by the person executing the proxy card by
filing an instrument of revocation or a duly executed proxy card bearing a
later date with the Secretary of Fidelity, or by electing to vote in person at
the Special Meeting.

By Order of the Board of Directors

William J. Chappell
Secretary
Dalton, Georgia
, 1995
<PAGE> 5

FIDELITY FEDERAL SAVINGS BANK REGIONS FINANCIAL CORPORATION
PROXY STATEMENT PROSPECTUS
FOR SPECIAL MEETING OF STOCKHOLDERS COMMON STOCK
TO BE HELD , 1995 (PAR VALUE $.625)

This Prospectus of Regions Financial Corporation, a regional bank
holding company organized under the laws of the of the state of Delaware
("Regions"), relates to the shares of its common stock, par value $.625 per
share ("Regions Common Stock"), which are issuable to the stockholders of
Fidelity Federal Savings Bank ("Fidelity") upon consummation of the proposed
merger (the "Merger") and related transactions described herein, by which a
newly formed, interim federal savings bank subsidiary of Regions ("Fidelity
Interim") will merge with and into Fidelity, and Fidelity will become a wholly
owned subsidiary of Regions, all pursuant to the terms of the Agreement and Plan
of Reorganization, dated as of October 17, 1994, by and between Regions and
Fidelity (the "Agreement"), and the related Plan of Merger and Combination (the
"Plan of Merger"), to be entered into by Fidelity and Fidelity Interim. The
Agreement and the Plan of Merger are referred to herein, together, as the
"Agreements."

On the date (the "Effective Date") that the Merger becomes effective:
(i) Fidelity Interim will merge with and into Fidelity; (ii) Regions will
acquire all of the outstanding capital stock of Fidelity; (iii) each share of
the $1.00 par value common stock of Fidelity ("Fidelity Common Stock") issued
and outstanding on the Effective Date (excluding any shares held by Fidelity,
Regions, or their respective subsidiaries, in each case other than shares held
in a fiduciary capacity or in satisfaction of debts previously contracted, and
excluding shares held by stockholders who perfect their dissenters' rights of
appraisal) will be converted into of a share of Regions Common Stock (the
"Common Stock Exchange Ratio"); (iv) each share of the Class A 6.0%
noncumulative, nonvoting restricted, convertible, noncallable preferred stock of
Fidelity ("Fidelity Preferred Stock" and, together with Fidelity Common Stock,
"Fidelity Capital Stock") (excluding any shares held by Fidelity, Regions, or
their respective subsidiaries, in each case other than shares held in a
fiduciary capacity or in satisfaction of debts previously contracted, and
excluding shares held by stockholders who perfect their dissenters' rights of
appraisal) issued and outstanding on the Effective Date will be converted into
of a share of Regions Common Stock, subject to adjustment in the event of any
change in the conversion ratio of Fidelity Preferred Stock into Fidelity Common
Stock; and (v) each Fidelity stockholder will receive cash in lieu of any
remaining fractional share interest. Copies of the Agreement and the Plan of
Merger are attached to this Proxy Statement/Prospectus as Appendices A and B,
respectively. For a further description of the terms of the Merger and the
related matters, see "Description of the Transaction."

This Prospectus also constitutes a Proxy Statement of Fidelity and is being
furnished to the stockholders of Fidelity in connection with the solicitation
of proxies by the Board of Directors of Fidelity for use at its special meeting
of stockholders (including any adjournment or postponement thereof, the
"Special Meeting"), to be held on , 1995, to consider and vote on the
Agreements and related matters. This Proxy Statement/Prospectus and the
accompanying proxy card are first being mailed to stockholders of Fidelity on
or about , 1995.

THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS, SAVINGS ACCOUNTS, OR OTHER
OBLIGATIONS OF A DEPOSITORY INSTITUTION AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this Proxy Statement/Prospectus is , 1995.
<PAGE> 6

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 Proxy Statement/Prospectus constitutes part of the Registration
Statement on Form S-4 of Regions (including any exhibits and amendments
thereto, the "Registration Statement") filed with the SEC under the Securities
Act of 1933, as amended (the "Securities Act"), relating to the securities
offered hereby. This Proxy Statement/Prospectus does not include all of the
information set forth in the Registration Statement, certain portions of which
have been omitted pursuant to the rules and regulations of the SEC. For further
information about Regions and the securities offered hereby, reference is made
to the Registration Statement. The Registration Statement may be inspected and
copied, at prescribed rates, at the SEC's public reference facilities at the
addresses set forth above. Regions Common Stock is traded in the Nasdaq
National Market. Reports, proxy statements, and other information concerning
Regions may be inspected at the offices of the National Association of
Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.

No person is authorized to give any information or to make any
representation other than those included in this Proxy Statement/Prospectus,
and, if given or made, such information or representation must not be relied
upon as having been authorized by Regions or Fidelity. This Proxy
Statement/Prospectus does not constitute an offer to sell, or a solicitation of
an offer to buy, the securities offered hereby in any jurisdiction to or from
any person to or from whom it is unlawful to make such an offer or
solicitation. Neither the delivery of this Proxy Statement/Prospectus nor any
distribution of securities made hereunder shall under any circumstances create
an implication that there has been no change in the affairs of Regions or
Fidelity since the date hereof or that the information herein is correct as of
any time subsequent to the date hereof.

All information included or incorporated by reference in this Proxy
Statement/Prospectus with respect to Regions was supplied by Regions, and all
information included or incorporated by reference herein with respect to
Fidelity was supplied by Fidelity.

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, June 30, and September 30, 1994;

3. Regions' Current Reports on Form 8-K, dated as of December 31,
1993, and July 8, July 18, September 6, September 8, and November 23, 1994;

4. The description of Regions Common Stock under the heading "Item 1.
Capital Stock to be Registered" in the Registration Statement on Form 8-A
of Regions relating to Regions Common Stock and in any amendment or report
filed for the purpose of updating such description; and

5. Regions' Reports on Form 10-C, dated as of December 31, 1993, and
May 2, 1994.

2
<PAGE> 7

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 Proxy Statement/Prospectus and
prior to the date of the Special Meeting shall be deemed to be incorporated by
reference in this Proxy Statement/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.

This Proxy Statement/Prospectus incorporates documents by reference which
are not presented herein or delivered herewith. those documents are available
upon request, without charge (except for the exhibits thereto), from Ronald C.
Jackson, Stockholder Assistance, Regions Financial Corporation, P.O. Box 1448,
Montgomery, Alabama 36102 (telephone (334) 832-8450). In order to ensure timely
delivery of the documents, any request should be made by , 1995.

3
<PAGE> 8

TABLE OF CONTENTS

AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DOCUMENTS INCORPORATED BY REFERENCE . . . . . . . . . . . . . . . . . . . . .
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special Meeting of Fidelity Stockholders . . . . . . . . . . . . . . . .
Fidelity Stockholders. . . . . . . . . . . . . . . . . . . . . . . . . .
Record Date; Vote Required . . . . . . . . . . . . . . . . . . . . . . .
The Merger; Exchange Ratio . . . . . . . . . . . . . . . . . . . . . . .
Reasons for the Merger; Recommendation of Fidelity's Board
of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Opinion of Fidelity's Financial Advisor . . . . . . . . . . . . . . . .
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exchange of Stock Certificates . . . . . . . . . . . . . . . . . . . . .
Regulatory Approvals and Other Conditions . . . . . . . . . . . . . . .
Waiver, Amendment, and Termination of the Agreement . . . . . . . . . .
Interests of Certain Persons in the Merger . . . . . . . . . . . . . . .
Certain Federal Income Tax Consequences of the Merger. . . . . . . . . .
Certain Differences in Stockholders' Rights . . . . . . . . . . . . . .
Comparative Market Prices of Common Stock . . . . . . . . . . . . . . .
Comparative Per Share Data . . . . . . . . . . . . . . . . . . . . . .
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . .
THE SPECIAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Record Date; Vote Required . . . . . . . . . . . . . . . . . . . . . .
DESCRIPTION OF THE TRANSACTION . . . . . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Background of and Reasons for the Merger. . . . . . . . . . . . . . . .
Opinion of Fidelity's Financial Advisor . . . . . . . . . . . . . . . .
Effective Date of the Merger. . . . . . . . . . . . . . . . . . . . . .
Distribution of Regions Stock Certificates and
Payment for Fractional Shares. . . . . . . . . . . . . . . . . . . . .
Conditions to Consummation of the Merger. . . . . . . . . . . . . . . .
Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . .
Waiver, Amendment, and Termination of the Agreement . . . . . . . . . .
Conduct of Business Pending the Merger. . . . . . . . . . . . . . . . .
Management Following the Merger . . . . . . . . . . . . . . . . . . . .
Interests of Certain Persons in the Merger. . . . . . . . . . . . . . .
Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain Federal Income Tax Consequences of the Merger . . . . . . . . .
Accounting Treatment. . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . .
Resales of Regions Common Stock . . . . . . . . . . . . . . . . . . . .
Option to Purchase Fidelity Preferred Stock . . . . . . . . . . . . . .
EFFECT OF THE MERGER ON RIGHTS OF STOCKHOLDERS . . . . . . . . . . . . . . .
Antitakeover Provisions Generally . . . . . . . . . . . . . . . . . . .
Authorized Capital Stock. . . . . . . . . . . . . . . . . . . . . . . .
Amendment of Certificate of Incorporation and Bylaws. . . . . . . . . .
Classified Board of Directors and Absence of Cumulative Voting. . . . .

4
<PAGE> 9

Removal of Directors . . . . . . . . . . . . . . . . . . . . . . . . .
Limitations on Director Liability . . . . . . . . . . . . . . . . . . .
Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special Meetings of Stockholders . . . . . . . . . . . . . . . . . . .
Actions by Stockholders Without a Meeting . . . . . . . . . . . . . . .
Stockholder Nominations and Proposals . . . . . . . . . . . . . . . . .
Business Combinations With Certain Persons. . . . . . . . . . . . . . .
Mergers, Consolidations, and Sales of Assets Generally. . . . . . . . .
Dissenters' Rights. . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockholders' Rights to Examine Books and Records . . . . . . . . . . .
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
COMPARATIVE MARKET PRICES AND DIVIDENDS. . . . . . . . . . . . . . . . . . .
FIDELITY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . .
BUSINESS OF FIDELITY . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General Business and Properties . . . . . . . . . . . . . . . . . . . .
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS OF FIDELITY . . . . . . . . . .
BUSINESS OF REGIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . .
SUMMARY PRO FORMA FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . .
Selected Pro Forma Combined Data for Regions and Fidelity . . . . . . .
Selected Pro Forma Combined Data for Regions, Fidelity, and
Other Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . .
SUPERVISION AND REGULATION . . . . . . . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of Dividend . . . . . . . . . . . . . . . . . . . . . . . . . .
Transactions With Affiliates. . . . . . . . . . . . . . . . . . . . . .
Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . .
Support of Subsidiary Banks . . . . . . . . . . . . . . . . . . . . . .
Prompt Corrective Action. . . . . . . . . . . . . . . . . . . . . . . .
Brokered Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . .
FDIC Insurance Assessments. . . . . . . . . . . . . . . . . . . . . . .
Safety and Soundness Standards. . . . . . . . . . . . . . . . . . . . .
Depositor Preference. . . . . . . . . . . . . . . . . . . . . . . . . .
DESCRIPTION OF REGIONS COMMON STOCK. . . . . . . . . . . . . . . . . . . . .
STOCKHOLDER PROPOSALS. . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OPINIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
INDEX TO FIDELITY FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . .F-1
APPENDIX A--Agreement and Plan of Reorganization . . . . . . . . . . . . .A-1
APPENDIX B--Plan of Merger and Combination. . . . . . . . . . . . . . . . .B-1
APPENDIX C--Opinion of Sterne, Agee & Leach, Inc. . . . . . . . . . . . . .C-1
APPENDIX D--Copy of Section 552.14, Title 12, Code of Federal Regulations .D-1

5
<PAGE> 10

SUMMARY

The following is a summary of certain information relating to the Special
Meeting, the Merger, and the offering of shares of Regions Common Stock to be
issued upon consummation thereof. This summary does not purport to be complete
and is qualified in its entirety by the more detailed information appearing
elsewhere or incorporated by reference in this Proxy Statement/Prospectus.
Stockholders are urged to read carefully the entire Proxy Statement/Prospectus,
including the Appendices. As used in this Proxy Statement/Prospectus, the terms
"Regions" and "Fidelity" refer to those entities, respectively, and, where the
context requires, to those entities and their respective subsidiaries.

THE PARTIES

Fidelity. Fidelity is a federal stock savings bank organized under the laws
of the United States. Fidelity provides a range of retail banking services
through four offices in Dalton and Chatsworth, Georgia and a mortgage and
construction loan office in Chattanooga, Tennessee. At September 30, 1994,
Fidelity had total consolidated assets of approximately $287 million, total
consolidated deposits of approximately $255 million, and total consolidated
stockholders' equity of approximately $19 million. Fidelity's principal
executive office is located at 500 E. Walnut Avenue, Dalton, Georgia 30720, and
its telephone number at such address is (706) 226-2600.

Regions. Regions is a regional bank holding company headquartered in
Birmingham, Alabama, which operated 256 banking offices located in Alabama,
Florida, Georgia, Louisiana, and Tennessee as of September 30, 1994. At that
date, Regions had total consolidated assets of approximately $ 11.7 billion,
total consolidated deposits of approximately $9.3 billion, and total
consolidated stockholders' equity of approximately $ 902 million. Regions is
the third largest bank holding company headquartered in Alabama in terms of
assets, based on September 30, 1994 information. Regions operates seven
state-chartered commercial bank subsidiaries in Alabama, Florida, Georgia,
Louisiana, and Tennessee 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.

During the 1994 fiscal year, Regions has completed the acquisitions of six
financial institutions in Alabama, Georgia, and Louisiana (the "Recently
Completed Acquisitions") and has entered into a definitive agreement to acquire
one additional financial institution, in addition to Fidelity. Information with
respect to the Recently Completed Acquisitions and the other pending
acquisition is included under "Business of Regions--Recent Developments" and
"Summary Pro Forma Financial Data" and in certain of the documents incorporated
by reference in this Proxy Statement/Prospectus. See "Documents Incorporated by
Reference."

Regions was organized under the laws of the state of Delaware and commenced
operations in 1971 as a registered bank holding company under the Bank Holding
Company Act of 1956, as amended (the "BHC Act"). Regions' principal executive
office is located at 417 North 20th Street, Birmingham, Alabama 35203, and its
telephone number at such address is (205) 326-7100.

Additional information with respect to Regions and its subsidiaries is
included in documents incorporated by reference in this Proxy
Statement/Prospectus. See "Available Information," "Documents Incorporated by
Reference," and "Business of Regions."

SPECIAL MEETING OF FIDELITY STOCKHOLDERS

The Special Meeting will be held at :00 .m., local time, on ,
1995, at Fidelity's main office, 500 E. Walnut Avenue, Dalton, Georgia 30720,
for the purpose of considering and voting on approval of the Agreements. See
"The Special Meeting."

6
<PAGE> 11

RECORD DATE; VOTE REQUIRED

Only holders of record of Fidelity Capital Stock at the close of business
on , 1995 (the "Record Date"), will be entitled to vote at the Special
Meeting. Approval of the Agreements requires the affirmative vote of at least
two-thirds of the outstanding shares of Fidelity Common Stock and Fidelity
Preferred Stock entitled to be voted at the Special Meeting, voting separately
as classes. As of the Record Date, there were 1,774,800 shares of Fidelity
Common Stock outstanding and entitled to be voted, and 300,000 shares of
Fidelity Preferred Stock outstanding and entitled to be voted.

The directors and executive officers of Fidelity and their affiliates
beneficially owned, as of the Record Date, 492,144 shares (or approximately
27.73% of the outstanding shares) of Fidelity Common Stock, and 37,250 shares
(or approximately 12.42% of the outstanding shares) of Fidelity Preferred
Stock. Each member of the Board of Directors of Fidelity has agreed to vote
those shares of Fidelity Capital Stock over which such member has voting
authority (other than in a fiduciary capacity) in favor of the Merger. In
addition, certain additional holders of 9,000 shares of Fidelity Preferred
Stock, representing in aggregate 3% of the outstanding shares of Fidelity
Preferred Stock, have entered into agreements to vote their shares of Fidelity
Preferred Stock in favor of the Merger. The directors and executive officers of
Regions and their affiliates beneficially owned, as of the Record Date, no
shares of Fidelity Capital Stock. As of that date, neither Fidelity nor Regions
held any shares of Fidelity Capital Stock in a fiduciary capacity for others.
See "The Special Meeting--Record Date; Vote Required."

THE MERGER; EXCHANGE RATIO

The Agreement provides for the acquisition of Fidelity by Regions pursuant
to the Merger of Fidelity Interim with and into Fidelity. On the Effective
Date, each share of Fidelity Common Stock and each share of Fidelity Preferred
Stock then issued and outstanding (excluding any shares held by stockholders
who perfect their dissenters' rights of appraisal and shares held by Fidelity,
Regions, or their respective subsidiaries, other than shares held in a
fiduciary capacity or in satisfaction of debts previously contracted) will be
converted into of a share of Regions Common Stock, subject in the case of
Fidelity Preferred Stock to adjustment in the event of any change of the
conversion ratio of Fidelity Preferred Stock into Fidelity Common Stock.

No fractional shares of Regions Common Stock will be issued in connection
with the Merger. In lieu of issuing fractional shares, Regions will make a cash
payment (without interest) in an amount equal to the fractional interest which
a Fidelity stockholder otherwise would receive multiplied by the closing price
of Regions Common Stock on the Nasdaq National Market (as reported by The Wall
Street Journal or, if not reported thereby, another authoritative source chosen
by Regions) on the last trading day preceding the time the Merger becomes (the
"Closing Price"). No such holder will be entitled to dividends, voting rights,
or any other rights as a stockholder in respect of any fractional shares. See
"Description of the Transaction--General."

Under the terms of the Agreement, the fraction of a share of Regions Common
Stock into which each share of Fidelity Common Stock is to be converted at the
Effective Date was originally established at 0.449 of a share of Regions Common
Stock but was subject to possible adjustment in the event (i) the average
trading price of Regions Common Stock during a specified period immediatley
prior to the effectiveness of this Registration Statement was less than $32.32
and (ii) the decline in the average trading price of Regions Common Stock from
a date immediately preceding execution of the Agreement to a specified period
immediately prior to effectiveness of this Registration Statement was greater
than the decline in the trading price of the common stock of a comparable
group of publicly traded bank holding companies during the same period. On the
basis of the provisions of the Agreement, the original common stock exchange
ratio was [not] adjusted to arrive at the Common Stock Exchange Ratio of _____
of a share of Regions Common Stock for each share of Fidelity Common Stock.
See "Description of the Transaction--General."

DISSENTERS' RIGHTS

Holders of Fidelity Capital Stock entitled to vote on approval of the
Agreements have the right to dissent from the Merger and, upon consummation of
the Merger and the satisfaction of certain specified procedures and conditions,
to receive the fair value of such holders' shares of Fidelity Capital Stock in
cash in accordance with the applicable provisions of Section 552.14 of Title 12
of the Code of Federal Regulations ("12 C.F.R.

7
<PAGE> 12

Section 552.14"). The procedures to be followed by dissenting stockholders are
summarized under "Description of the Transaction--Dissenters' Rights," and 12
C.F.R. Section 552.14 is reproduced as Appendix D to this Proxy
Statement/Prospectus.

REASONS FOR THE MERGER; RECOMMENDATION OF FIDELITY'S BOARD OF DIRECTORS

Fidelity's Board of Directors has unanimously approved the Merger and the
Agreements and has determined that the Merger is fair to, and in the best
interests of, Fidelity and its stockholders. Accordingly, Fidelity's Board
unanimously recommends that Fidelity's stockholders vote FOR approval of the
Agreements. In approving the Merger, Fidelity's directors considered, among
other things, Fidelity's financial condition, the financial terms and the
income tax consequences of the Merger, the likelihood of the Merger being
approved by regulatory authorities without undue conditions or delay, legal
advice concerning the proposed Merger, and the opinion of Sterne, Agee & Leach,
Inc. ("Sterne, Agee") that, as of the date of its opinion, the consideration to
be received in the Merger was fair, from a financial point of view, to the
stockholders of Fidelity. See "Description of the Transaction--Background of
and Reasons for the Merger."

Each member of the Board of Directors of Fidelity has agreed to vote those
shares of Fidelity Capital Stock over which such member has voting authority
(other than in a fiduciary capacity) in favor of the Merger.

OPINION OF FIDELITY'S FINANCIAL ADVISOR

Sterne, Agee has rendered an opinion to Fidelity that, based on and subject
to the procedures, matters, and limitations described in its opinion and such
other matters as it considered relevant, as of the date of its opinion, the
consideration to be received in the Merger was fair, from a financial point of
view, to the stockholders of Fidelity. The opinion of Sterne, Agee is attached
as Appendix C to this Proxy Statement/Prospectus. Fidelity stockholders are
urged to read the opinion in its entirety for a description of the procedures
followed, matters considered, and limitations on the reviews undertaken in
connection therewith. See "Description of the Transaction--Opinion of
Fidelity's Financial Advisor."

EFFECTIVE DATE

Subject to the conditions to the obligations of the parties to effect the
Merger, the Effective Date will occur on the date and at the time that the
Articles of Combination relating to the Merger are filed and declared effective
with the OTS. Unless otherwise agreed upon by Regions and Fidelity, and subject
to the conditions to the obligations of the parties to effect the Merger, the
parties will use their reasonable efforts to cause the Effective Date to occur
on the first business day in which the later of the following events occurs:
(i) the effective date (including the expiration of any applicable waiting
period) of the last federal or state regulatory approval required for the
Merger and (ii) the date on which the Agreements are approved by the requisite
vote of the Fidelity stockholders; or such later date within 30 days thereof as
specified by Regions.

No assurance can be provided that the necessary stockholder and regulatory
approvals can be obtained or that other conditions precedent to the Merger can
or will be satisfied. Regions and Fidelity anticipate that all conditions to
consummation of the Merger will be satisfied so that the Merger can be
consummated during the first quarter of 1995. However, delays in the
consummation of the Merger could occur.

EXCHANGE OF STOCK CERTIFICATES

Promptly after the Effective Date, Regions will cause First Alabama Bank,
acting in its capacity as exchange agent for Regions (the "Exchange Agent"), to
mail a letter of transmittal, together with instructions for the exchange of
such stockholders' certificates representing shares of Fidelity Capital Stock
for certificates representing shares of Regions Common Stock, to the former
stockholders of Fidelity. Fidelity stockholders

8
<PAGE> 13

should not send in their stock certificates until they receive the form letter
of transmittal and instructions. See "Description of the
Transaction--Distribution of Regions Stock Certificates and Payment for
Fractional Shares."

REGULATORY APPROVALS AND OTHER CONDITIONS

The Merger is subject to approval by the Board of Governors of the Federal
Reserve System (the "Federal Reserve"), the Office of Thrift Supervision (the
"OTS"), and the Georgia Department of Banking and Finance (the "Georgia
Department"). An application has been filed with each of these agencies for the
requisite approvals. There can be no assurance that the requisite approvals
will be given, nor can there be any assurance as to the timing or conditions of
such approvals.

Consummation of the Merger is subject to various other conditions,
including receipt of the required approval of Fidelity stockholders, receipt of
an opinion of counsel as to the tax-free nature of certain aspects of the
Merger, and certain other customary conditions. See "Description of the
Transaction--Conditions to Consummation of the Merger."

WAIVER, AMENDMENT, AND TERMINATION OF THE AGREEMENT

The Agreement may be terminated, and the Merger abandoned, at any time
prior to the Effective Date by mutual action of the Boards of Directors of both
Fidelity and Regions, or by action of the Board of Directors of either company
under certain circumstances, including if the Merger is not consummated by June
30, 1995, unless the failure to consummate by such time is due to a breach of
the Agreement by the party seeking to terminate. If for any reason the Merger
is not consummated, Fidelity will continue to operate as a federal stock
savings bank under its present management. See "Description of the
Transaction--Waiver, Amendment, and Termination of the Agreement."

INTERESTS OF CERTAIN PERSONS IN THE MERGER

Certain members of Fidelity's management and Board of Directors have
interests in the Merger in addition to their interests as stockholders of
Fidelity generally. Those interests relate to, among other things, provisions
in the Agreement regarding indemnification, termination of the employment
agreement of Richard G. Rhodes, and eligibility for certain Regions employee
benefits. See "Description of the Transaction--Interests of Certain Persons in
the Merger."

CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

Consummation of the Merger is conditioned upon the receipt of an opinion of
counsel to the effect that, among other things, the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and the exchange in the Merger of
Fidelity Capital Stock for Regions Common Stock will not give rise to
recognition of gain or loss for federal income tax purposes to Fidelity
stockholders, except to the extent of any cash received in lieu of fractional
share interests or as a result of a stockholder's perfecting such holder's
dissenters' rights of appraisal. See "Description of the Transaction--Certain
Federal Income Tax Consequences of the Merger."

DUE TO THE INDIVIDUAL NATURE OF THE TAX CONSEQUENCES OF THE MERGER,
FIDELITY STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE
THE SPECIFIC EFFECT OF THE MERGER ON THEM UNDER FEDERAL, STATE, LOCAL, AND
FOREIGN TAX LAWS.

CERTAIN DIFFERENCES IN STOCKHOLDERS' RIGHTS

On the Effective Date, Fidelity stockholders, whose rights are governed by
Fidelity's Charter and Bylaws and by federal law, will automatically become
Regions stockholders, and their rights as Regions stockholders

9
<PAGE> 14

will be determined by Regions' Certificate of Incorporation and Bylaws and by
the Delaware General Corporation Law (the "Delaware GCL").

The rights of Regions stockholders differ from the rights of Fidelity
stockholders in certain important respects, some of which constitute additional
antitakeover provisions provided for in Regions' governing documents. See
"Effect of the Merger on Rights of Stockholders."

COMPARATIVE MARKET PRICES OF COMMON STOCK

Regions Common Stock is traded in the over-the-counter market and quoted on
the Nasdaq National Market. Fidelity Common Stock is not traded in any
established market.

The following table sets forth as of the indicated dates (i) the last sale
price of Regions Common Stock, (ii) the price of Fidelity Common Stock in the
last known purchase and sale transaction, and (iii) the equivalent per share
price (as explained below) of Fidelity Common Stock. The indicated dates
represent, respectively, the last trading day immediately preceding public
announcement of the proposed Merger and , 1995, the latest practicable
date prior to the mailing of this Proxy Statement/Prospectus.

<TABLE>
<CAPTION>
EQUIVALENT
PER
SHARE PRICE
REGIONS FIDELITY OF FIDELITY
MARKET PRICE PER SHARE AT: COMMON STOCK COMMON STOCK COMMON STOCK
- -------------------------- ------------ ------------ ------------
<S> <C> <C> <C>

October 17, 1994 $34.25 $ . $ .
, 1995 . . .
</TABLE>

The equivalent per share price of Fidelity Common Stock at each specified
date represents the last sale price of a share of Regions Common Stock on such
date multiplied by the Common Stock Exchange Ratio. Stockholders are advised to
obtain current market quotations for Regions Common Stock and Fidelity Common
Stock. No assurance can be given as to the market price of Regions Common Stock
at or after the Effective Date.

COMPARATIVE PER SHARE DATA

The following table sets forth certain comparative per share data relating
to net income, cash dividends, and book value on (i) an historical basis for
Regions and Fidelity; (ii) a pro forma combined basis per share of Regions
Common Stock, giving effect to the Merger; (iii) an equivalent pro forma basis
per share of Fidelity Common Stock, giving effect to the Merger; (iv) a pro
forma combined basis per share of Regions Common Stock, giving effect to the
Merger and the Other Acquisitions, and (v) an equivalent pro forma basis per
share of Fidelity Common Stock, giving effect to the Merger and the Other
Acquisitions. The Regions and Fidelity pro forma combined information and the
Fidelity pro forma Merger equivalent information give effect to the Merger on a
pooling-of-interests accounting basis and reflect an assumed common stock
exchange ratio of (based on the closing sale price of Regions Common
Stock as reported by the Nasdaq National Market on , 1994). See
"Description of the Transaction--Accounting Treatment." The Regions, Fidelity,
and Other Acquisitions pro forma combined information and the Fidelity pro
forma Merger and Other Acquisitions equivalent information give effect to (i)
the Merger as described in the preceding sentence and (ii) the Other
Acquisitions as described under "Summary Pro Forma Financial Data--Selected Pro
Forma Combined Data for Regions, Fidelity, and Other Acquisitions." The pro
forma data are presented for information purposes only and are not necessarily
indicative of the results of operations or combined financial position that
would have resulted had the Merger or the Other Acquisitions been consummated
at the dates or during the periods indicated, nor are they necessarily
indicative of future results of operations or combined financial position.

The information shown below should be read in conjunction with, and is
qualified in its entirety by, the

10
<PAGE> 15

historical financial statements of Regions and Fidelity, including the
respective notes thereto, and the pro forma financial information included or
incorporated by reference herein. See "Documents Incorporated by Reference,"
"--Selected Financial Data," "Business of Regions--Recent Developments,"
"Summary Pro Forma Financial Data," and "Index to Fidelity Financial
Statements."

NINE MONTHS
ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------- --------------------------
1994 1993 1993 1992 1991
---- ---- ---- ---- ----
(Unaudited) (Unaudited except Regions
and Fidelity historical)

<S> <C> <C> <C> <C> <C>
NET INCOME PER COMMON EQUIVALENT SHARE
Regions historical . . . . . . . . . . . . . . $ 2.52 $ 2.26 $ 3.01 $ 2.60 $ 2.16
Fidelity historical . . . . . . . . . . . . . 1.33 1.06 1.31 0.15 1.39
Regions and Fidelity pro forma combined(1) . . 2.53 2.26 3.00 2.54 2.18
Fidelity pro forma Merger equivalent(2) . . . . 1.14 1.02 1.35 1.14 0.98
Regions, Fidelity, and Other Acquisitions
pro forma combined(3) . . . . . . . . . . . 2.54 3.03
Fidelity pro forma Merger and Other Acquisitions
equivalent(2) . . . . . . . . . . . . . . . 1.14 1.36
DIVIDENDS DECLARED PER COMMON SHARE
Regions historical . . . . . . . . . . . . . . $ 0.90 $ 0.78 $ 1.04 $ 0.91 $ 0.87
Fidelity common stock historical . . . . . . . . 0.25 0.06 0.12 0.04 0.17
Fidelity preferred stock historical . . . . . . 0.30 0.10 0.20 0.10 0.40
Fidelity pro forma Merger equivalent(4) . . . . 0.41 0.35 0.47 0.41 0.39
BOOK VALUE PER COMMON EQUIVALENT SHARE (PERIOD END)
Regions historical . . . . . . . . . . . . . . $ 21.46 $ 19.00 $ 20.73 $ 17.62 $ 15.76
Fidelity historical. . . . . . . . . . . . . . 9.09 7.83 8.02 6.84 6.74
Regions and Fidelity pro forma combined(1) . . 21.39 18.92 20.63 17.53 15.71
Fidelity pro forma Merger equivalent(2) . . . . 9.63 8.51 9.28 7.89 7.07
Regions, Fidelity, and Other Acquisitions
pro forma combined(3) . . . . . . . . . . . 21.76
Fidelity pro forma Merger and Other Acquisitions
equivalent(2) . . . . . . . . . . . . . . . 9.79
</TABLE>

_____________________

(1) Represents the pro forma combined information of Regions and Fidelity as if
the Merger were consummated on January 1, 1991, and were accounted for as a
pooling of interests.
(2) Represents pro forma combined information multiplied by an assumed
exchange ratio of 0.450 of a share of Regions Common Stock for each share
of Fidelity Capital Stock.
(3) Represents the pro forma combined information of Regions, Fidelity, and the
Other Acquisitions as if the Merger were consummated at the time and
pursuant to the accounting basis described in note (1) and the Other
Acquisitions were consummated at the time and pursuant to the accounting
bases described under "Summary Pro Forma Financial Data--Selected Pro Forma
Combined Data for Regions, Fidelity, and Other Acquisitions."
(4) Represents historical dividends declared per share by Regions multiplied by
an assumed exchange ratio of 0.450 of a share of Regions Common Stock
for each share of Fidelity Capital Stock.

SELECTED FINANCIAL DATA

The following tables present certain selected historical financial
information for Regions and Fidelity. The data should be read in conjunction
with the historical financial statements, related notes, and other financial
information concerning Regions and Fidelity incorporated by reference or
included herein. See "Documents Incorporated by Reference," "Pro Forma
Financial Data," and "Index to Fidelity Financial Statements."

11
<PAGE> 16

Selected Historical Financial Data of Regions
<TABLE>
<CAPTION>
NINE MONTHS YEAR ENDED
ENDED SEPTEMBER 30, DECEMBER 31,
--------------------- -------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
(Unaudited)
(In thousands except per share data and ratios)

<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total interest income . . . . . . $ 568,358 $ 413,443 $ 555,667 $ 536,747 $ 556,821 $ 519,753 $ 496,392
Total interest expense . . . . . 246,294 158,519 213,614 224,068 292,017 297,613 292,687
Net interest income . . . . . . . 322,064 254,924 342,053 312,679 264,804 222,140 203,705
Provision for loan losses . . . . 13,804 17,401 21,533 27,072 24,005 24,208 15,800
Net interest income after
loan loss provision . . . . 308,260 237,523 320,520 285,607 240,799 197,932 187,905
Total noninterest income
excluding security
gains (losses) . . . . . . . 108,552 96,965 131,949 119,130 101,964 94,730 71,976
Security gains (losses) . . . . . 444 76 78 (53) (507) (982) 506
Total noninterest expense . . . . 254,376 209,632 287,026 264,659 230,340 195,611 176,707
Income tax expense . . . . . . . 54,243 40,946 53,476 44,977 33,660 27,175 21,046
Net income . . . . . . . . . . . $108,637 $ 83,986 $ 112,045 $ 95,048 $ 78,256 $ 68,894 $ 62,634

PER SHARE DATA:
Net income . . . . . . . . . . . $ 2.52 $ 2.26 $ 3.01 $ 2.60 $ 2.16 $ 1.91 $ 1.72
Cash dividends . . . . . . . . . 0.90 0.78 1.04 0.91 0.87 0.84 0.76
Book value . . . . . . . . . . . 21.46 19.00 20.73 17.62 15.76 14.54 13.48

OTHER INFORMATION:
Average number of shares
outstanding . . . . . . . . 43,029 37,167 37,205 36,532 36,191 36,097 36,331

BALANCE SHEET DATA (PERIOD END):
Total assets . . . . . . . . . . $11,469,957 $8,145,838 $10,476,348 $7,881,026 $6,745,053 $6,344,406 $5,549,612
Securities . . . . . . . . . . . 2,484,835 1,646,778 2,368,445 1,670,170 1,575,725 1,489,200 1,133,087
Loans, net of unearned income . . 8,037,888 5,585,955 6,833,246 5,142,531 4,274,958 4,092,262 3,552,082
Total deposits . . . . . . . . . 9,269,856 7,043,046 8,770,694 6,701,142 5,917,028 5,353,211 4,744,364
Long-term debt . . . . . . . . . 612,198 141,842 462,862 136,990 18,782 19,707 45,343
Stockholders' equity . . . . . . 901,533 706,016 850,965 656,655 572,971 524,132 489,441

PERFORMANCE RATIOS:
Return on average assets (1) . . 1.31% 1.43% 1.40% 1.34% 1.23% 1.23% 1.20%
Return on average stockholders'
equity (1) . . . . . . . . . 15.99 16.49 16.14 15.64 14.27 13.64 13.25
Net interest margin (1) . . . . . 4.30 4.87 4.82 4.98 4.78 4.67 4.65
Efficiency (2) . . . . . . . . . 57.99 58.28 59.24 59.87 60.77 59.22 60.68
Dividend payout . . . . . . . . . 35.71 34.51 34.55 35.00 40.28 43.98 44.19

ASSET QUALITY RATIOS:
Net charge-offs to average loans,
net of unearned income (1) . 0.11% 0.11% 0.19% 0.28% 0.35% 0.44% 0.42%
Problem assets to net loans and
other real estate (3) . . . 0.60 0.54 0.84 0.70 0.89 0.98 0.72
Nonperforming assets to net loans
and other real estate (4) . 0.67 0.65 1.03 0.81 1.01 1.12 0.94
Allowance for loan losses to loans,
net of unearned income . . . 1.40 1.56 1.47 1.43 1.28 1.10 1.05
Allowance for loan losses to
nonperforming assets (4) . . 209.25 238.92 143.05 175.92 126.32 98.18 110.71

LIQUIDITY AND CAPITAL RATIOS:
Average stockholders' equity to
average assets . . . . . . . 8.21% 8.67% 8.70% 8.59% 8.63% 9.03% 9.06%
Average loans to average
deposits . . . . . . . . . . 80.17 78.06 78.14 72.46 73.40 76.67 75.23
Tier 1 risk-based capital (5) . . 10.93 11.70 11.13 11.68 11.85 11.31 n/a
Total risk-based capital (5) . . 14.79 14.36 13.48 14.44 13.19 12.51 n/a
Tier 1 leverage (5) . . . . . . . 7.71 8.44 10.11 8.44 8.40 7.65 8.36
</TABLE>
__________________________
(1) Interim period ratios are annualized.
(2) Noninterest expense divided by the sum of net interest income
(taxable-equivalent basis) and noninterest income net of gains
(losses) from security transactions.
(3) Problem assets include loans on a nonaccrual basis, restructured
loans, and foreclosed properties.
(4) Nonperforming assets include loans on a nonaccrual basis,
restructured loans, loans 90 days or more past due, and foreclosed
properties.
(5) The required minimum Tier 1 and total risk-based capital ratios are
4.0% and 8.0%, respectively. The minimum leverage ratio of Tier 1
capital to total adjusted assets is 3.0% to 5.0%, depending on the
risk profile of the institution and other factors.

12
<PAGE> 17

Selected Historical Financial Data of Fidelity

<TABLE>
<CAPTION>
NINE MONTHS YEAR ENDED
ENDED SEPTEMBER 30, DECEMBER 31,
------------------------ ------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
(Unaudited) (In thousands except per share data and ratios)

<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:(1)
Total interest income . . . . $ 13,955 $ 12,346 $ 16,444 $ 17,373 $ 20,918 $ 20,384 $ 17,040
Total interest expense . . . 7,170 6,237 8,367 10,092 13,727 14,003 11,566
Net interest income . . . . . 6,785 6,109 8,077 7,281 7,191 6,381 5,474
Provision for loan losses . . 0 127 127 2,737 465 2,608 364
Net interest income after
loan loss provision . . 6,785 5,982 7,950 4,544 6,726 3,773 5,110
Other income . . . . . . . . 4,795 4,268 5,751 4,064 4,449 3,505 1,891
Other expense . . . . . . . . 7,207 6,656 9,434 8,286 6,578 5,490 3,796
Income before income tax . . 4,373 3,594 4,267 322 4,597 1,788 3,205
Income tax . . . . . . . . . 1,623 1,390 1,544 14 1,714 718 1,056
Net income . . . . . . . . . $ 2,750 $ 2,204 $ 2,723 $ 308 $ 2,883 $ 1,070 $ 2,149

PER SHARE DATA:(2)
Net income . . . . . . . . . $ 1.33 $ 1.06 $ 1.31 $ 0.15 $ 1.39 $ 0.52 $ 1.04
Cash dividends-preferred . . 0.30 0.10 0.20 0.10 0.40 0.40 0.40
Cash dividends-common . . . . 0.25 0.06 0.12 0.04 0.17 0.17 0.12
Book value . . . . . . . . . 9.09 7.83 8.02 6.84 6.74 5.55 5.20

OTHER INFORMATION:
Average number of shares
outstanding . . . . . . 2,075 2,075 2,075 2,075 2,075 2,075 2,075

BALANCE SHEET DATA (PERIOD END):
Total assets . . . . . . . . $287,254 $235,695 $255,118 $218,068 $223,708 $223,937 $179,618
Mortgage backed securities . 0 0 0 6,544 8,434 9,560 10,363
Investment securities . . . . 8,311 8,062 7,040 10,694 2,064 4,048 1,870
Other real estate owned . . . 61 1,627 480 1,467 1,999 2,633 1,160
Total loans . . . . . . . . . 249,061 201,036 213,098 156,844 173,658 155,782 131,767
Total deposits . . . . . . . 254,662 210,377 226,782 198,265 203,329 206,925 163,025
Other borrowed money(3) . . . 4,700 2,900 5,400 500 600 700 800
Stockholders' equity . . . . 18,852 16,253 16,636 14,186 13,982 11,521 10,786

PERFORMANCE RATIOS:
Return on average assets (4) 1.37% 1.27% 1.16% 0.14% 1.30% 0.52% 1.30%
Return on average stockholders'
equity (4) . . . . . . . 21.31 18.22 17.67 2.28 22.25 9.72 23.59
Net interest margin (4) . . . 3.64 3.84 3.72 3.66 3.48 3.32 3.52
Efficiency (5) . . . . . . . 62.24 66.75 70.28 73.04 56.51 55.53 51.54
Dividend payout (6) . . . . . 41.35 15.09 24.48 93.33 41.01 109.62 50.00

ASSET QUALITY RATIOS:
Net charge-offs to average
loans, net of unearned
income (4) . . . . . . . 0.08% 0.20% 0.39% 0.81% 0.49% 0.16% 0.04%
Nonperforming assets to net
loans and other real
estate (7) . . . . . . . 0.76 1.91 1.45 3.90 2.88 1.97 1.44
Nonperforming assets to total
loans(7) . . . . . . . . 0.75 1.89 1.45 3.94 2.86 2.00 1.47
Allowance for loan losses to
total loans . . . . . . 1.56 2.13 1.80 2.77 1.63 2.05 0.62
Allowance for loan losses to
nonperforming assets (7) 204.92 112.52 126.59 72.27 43.54 104.62 42.78

LIQUIDITY AND CAPITAL RATIOS:
Average stockholders' equity
to average assets . . . . 6.44% 6.95% 6.57% 6.13% 5.14% 5.40% 5.51%
Average loans to average
deposits . . . . . . . . 96.72 87.54 89.92 80.89 82.76 81.03 84.85
Leverage (core) capital (8) . 6.56 6.89 6.52 6.49 5.80 3.80 5.03
Risk-based capital (8) . . . 11.73 11.81 11.36 11.20 10.20 9.40 N/A
Tangible capital (8) . . . . 6.56 6.89 6.52 6.49 5.80 3.80 5.03
</TABLE>
________________________
(1) Net income and retained earnings for 1991, 1990 and 1989 were restated
as of December 31, 1992 due to the implementation of SFAS 109 (see
note 13 in the notes to consolidated financial statements).
(2) Per share data for all periods has been restated for a two for one
stock split that took place in July, 1994. Preferred shares are
considered common stock equivalents for per share data.
(3) Other borrowed money consists of FHLB advances and Bonds Payable.
(4) Interim period ratios are annualized.
(5) Noninterest expense divided by the sum of net interest income and
noninterest income net of gains (losses) from security transactions.
(6) Dividend payout ratio is computed based on dividends declared rather
than dividends paid and includes both common and preferred shares.
(7) Nonperforming assets consist of nonperforming loans, troubled debt
restructurings and REO, but does not include loans available for
sale. Nonperforming loans consist of nonaccrual loans (and accruing
loans 90 days or more overdue), while REO consists of real estate
acquired through foreclosure, deed-in-lieu of foreclosure and
in-substance foreclosure.
(8) The OTS regulatory capital regulations promulgated under the
Financial Institutions Reform, Recovery, and Enforcement Act of 1991,
provide that the applicable leverage, risk-based, and tangible
capital ratios for Fidelity as of September 30, 1994, were 3.0%
to 5.0%, 8.0% and 1.5%, respectively.

Regions Fourth Quarter 1994 Operating Results

Regions' fourth quarter net income of $37.3 million ($0.88 per share)
increased 33% over the fourth quarter of 1993 of $28.1 million ($0.75 per
share). Total assets at December 31, 1994, were $12.8 billion, an increase of
23% since December 31, 1993.

<PAGE> 18

THE SPECIAL MEETING

GENERAL

This Proxy Statement/Prospectus is being furnished to the holders of
Fidelity Capital Stock in connection with the solicitation by the Fidelity
Board of Directors of proxies for use at the Special Meeting, at which Fidelity
stockholders will be asked to vote upon a proposal to approve the Agreements.
The Special Meeting will be held at :00 .m., local time, on , 1995, at
the main offices of Fidelity, located at 500 E. Walnut Avenue, Dalton, Georgia
30720.

Fidelity stockholders are urged to sign, date, and return promptly the
accompanying proxy card to Fidelity in the enclosed postage-paid, addressed
envelope. A stockholder's failure to return a properly executed proxy card or
to vote at the Special Meeting will have the same effect as a vote against the
Agreements.

Any Fidelity stockholder who has delivered a proxy may revoke it at any
time before it is voted by giving notice of revocation in writing or submitting
to Fidelity a signed proxy card bearing a later date, provided that such notice
or proxy card is actually received by Fidelity before the vote of stockholders
or in open meeting prior to the taking of the stockholder vote at the Special
Meeting. Any notice of revocation should be sent to Fidelity Federal Savings
Bank, 500 E. Walnut Avenue, Dalton, Georgia 30720, Attention: William J.
Chappell, Secretary. A proxy will not be revoked by death or supervening
incapacity of the stockholder executing the proxy unless, before the vote,
notice of such death or incapacity is filed with the Secretary. The shares of
Fidelity Capital Stock represented by properly executed proxies received at or
prior to the Special Meeting and not subsequently revoked will be voted as
directed in such proxies. IF INSTRUCTIONS ARE NOT GIVEN, SHARES REPRESENTED BY
PROXIES RECEIVED WILL BE VOTED FOR APPROVAL OF THE AGREEMENTS AND IN THE
DISCRETION OF THE PROXY HOLDER AS TO ANY OTHER MATTERS THAT PROPERLY MAY COME
BEFORE THE SPECIAL MEETING. IF NECESSARY, AND UNLESS CONTRARY INSTRUCTIONS ARE
GIVEN, THE PROXY HOLDER ALSO MAY VOTE IN FAVOR OF A PROPOSAL TO ADJOURN THE
SPECIAL MEETING TO PERMIT FURTHER SOLICITATION OF PROXIES IN ORDER TO OBTAIN
SUFFICIENT VOTES TO APPROVE THE AGREEMENTS. As of the date of this Proxy
Statement/Prospectus, Fidelity is unaware of any other matter to be presented
at the Special Meeting.

Solicitation of proxies will be made by mail, but also may be made by
telephone or telegram or in person by the directors, officers, and employees of
Fidelity, who will receive no additional compensation for such solicitation,
but may be reimbursed for out-of-pocket expenses. Brokerage houses, nominees,
fiduciaries, and other custodians will be requested to forward solicitation
materials to beneficial owners and will be reimbursed for their reasonable
out-of-pocket expenses.

FIDELITY STOCKHOLDERS SHOULD NOT FORWARD ANY STOCK CERTIFICATES WITH THEIR
PROXY CARDS.

RECORD DATE; VOTE REQUIRED

Fidelity's Board of Directors has established the close of business on
, 1995, as the Record Date for determining the Fidelity stockholders
entitled to notice of and to vote at the Special Meeting. Only Fidelity
stockholders of record as of the Record Date will be entitled to vote at the
Special Meeting. Approval of the Agreements will require the affirmative vote
of at least two-thirds of the outstanding shares of Fidelity Common Stock and
Fidelity Preferred Stock entitled to be voted at the Special Meeting, voting
separately as classes. Therefore, an abstention or failure to return a properly
executed proxy card will have the same effect as a vote against the Agreements,
as will a broker's submitting a proxy card without exercising discretionary
voting authority with respect to the Agreements. As of the Record Date, there
were approximately 190 holders of 1,774,800 shares of Fidelity Common Stock
outstanding and entitled to vote at the Special Meeting, with each share
entitled to one vote, and approximately 36 holders of 300,000 shares of
Fidelity Preferred Stock outstanding and entitled to vote at the Special
Meeting, with each share entitled to one vote. For information as to persons
known by Fidelity to beneficially own more than 5.0% of the outstanding shares
of Fidelity Common Stock or Fidelity Preferred Stock as of the Record Date, see
"Voting Securities and Principal

14
<PAGE> 19

Stockholders of Fidelity."

The presence, in person or by proxy, of a majority of the outstanding
shares of each of the Fidelity Common Stock and the Fidelity Preferred Stock is
necessary to constitute a quorum of the stockholders in order to take action at
the Special Meeting. For these purposes, shares of Fidelity Capital Stock that
are present, or represented by proxy, at the Special Meeting will be counted
for quorum purposes regardless of whether the holder of the shares or proxy
fails to vote on the Agreements or whether a broker with discretionary
authority fails to exercise its discretionary voting authority with respect to
the Agreements. Once a quorum is established, approval of the Agreements
requires the affirmative vote of the holders of the requisite number of shares,
as described above.

The directors and executive officers of Fidelity and their affiliates
beneficially owned, as of the Record Date, 492,144 shares (or approximately
27.73% of the outstanding shares) of Fidelity Common Stock, and 37,250 shares
(or approximately 12.42% of the outstanding shares) of Fidelity Preferred
Stock. Each member of the Board of Directors of Fidelity has agreed to vote the
shares of Fidelity Capital Stock over which such director has voting authority
(other than in a fiduciary capacity) in favor of the Merger. In addition,
certain holders of shares of Fidelity Preferred Stock representing in aggregate
3% of the outstanding Fidelity Preferred Stock have entered into agreements to
vote their shares of Fidelity Preferred Stock in favor of the Agreements. The
directors and executive officers of Regions and their affiliates beneficially
owned, as of the Record Date, no shares of Fidelity Common Stock. As of that
date, neither Fidelity nor Regions held any shares of Fidelity Capital Stock in
a fiduciary capacity for others.

DESCRIPTION OF THE TRANSACTION

The following material describes certain aspects of the proposed Merger.
This description does not purport to be complete and is qualified in its
entirety by reference to the Appendices hereto, including the Agreement and the
Plan of Merger, which are attached as Appendices A and B, respectively, to this
Proxy Statement/Prospectus and incorporated herein by reference. All
stockholders are urged to read the Appendices in their entirety.

GENERAL

Upon consummation of the Merger, Regions will acquire Fidelity pursuant to
the Merger of Fidelity Interim with and into Fidelity; the separate existence
of Fidelity Interim will cease; and Fidelity will continue in operation serving
its current markets as a federal stock savings bank subsidiary of Regions.

Each share of Fidelity Common Stock issued and outstanding at the Effective
Date (excluding any shares held by Fidelity, Regions, or their respective
subsidiaries, in each case other than shares held in a fiduciary capacity or in
satisfaction of debts previously contracted, and excluding shares held by
stockholders who perfect their dissenters' rights of appraisal) will be
converted into of a share of Regions Common Stock, and each share of
Fidelity Preferred Stock issued and outstanding on the Effective Date
(excluding any shares held by Fidelity, Regions, or their respective
subsidiaries, in each case other than shares held in a fiduciary capacity or in
satisfaction of debts previously contracted, and excluding shares held by
stockholders who perfect their dissenters' rights of appraisal) will be
converted into of a share of Regions Common Stock, subject to adjustment in
the event of any change of the conversion ratio of Fidelity Preferred Stock
into Fidelity Common Stock. As of the date of this Proxy Statement/Prospectus,
each share of Fidelity Preferred Stock is convertible into one share of
Fidelity Common Stock.

15
<PAGE> 20

this Registration Statement was less than $32.32 and (ii) the decline in the
average trading price of Regions Common Stock from a date immediately preceding
execution of the Agreement to a specified period immediately prior to
effectiveness of this Registration Statement was greater than the decline in
the trading price of the common stocks of a comparable group of publicly traded
bank holding companies during the same period. On the basis of the provisions
of the Agreement, the original common stock exchange ratio was [not] adjusted
to arrive at the Common Stock Exchange Ratio of of a share of Regions
Common Stock for each share of Fidelity Common Stock.

BACKGROUND OF AND REASONS FOR THE MERGER

Background of the Merger. During 1994, the Board and management of Fidelity
concluded that Fidelity would be required to increase its earning assets base
in order to continue to compete successfully as a financial institution and to
remain profitable in the current regulatory and competitive environment.
Through such growth, the Board believed that Fidelity could realize the
benefits of the greater economies of scale which the Board believed would
result from spreading Fidelity's largely fixed regulatory and management costs
over a higher revenue base. In addition to expanding in size, the Board decided
that it would be prudent to expand geographically in order to lessen Fidelity's
reliance on the Dalton-based carpet industry. The other option considered by
the Board was the sale of Fidelity to a larger banking organization.

During the summer of 1994, the Board decided its preference was to expand
the institution and, specifically, to establish a full service branch of
Fidelity in Chattanooga, Tennessee. This expansion would require additional
capital, and the Board determined that, to raise this capital effectively, it
would be necessary to form a holding company for Fidelity. The proposed holding
company formation was submitted to the stockholders of Fidelity for approval
pursuant to a proxy statement dated September 23, 1994, which was mailed to all
the stockholders of Fidelity for a special meeting of the stockholders to be
held on October 14, 1994. At the same time, Fidelity's management engaged
Sterne, Agee to serve as the lead underwriter for a public offering of the
common stock of the holding company in anticipation of stockholder approval.
Prior to the stockholders meeting date, the President of Fidelity and several
Board members met with certain holders of the Fidelity Preferred Stock who
indicated they would oppose the holding company formation. The Board,
concluding that the holding company proposal would likely be defeated, then
decided to postpone the stockholders meeting indefinitely and notified the
stockholders of the postponement on October 6, 1994. Fidelity also suspended
further discussions about pursuing a public offering.

On October 7, 1994, Fidelity's Chief Executive Officer, who had previously
been informally approached by Regions on two separate occasions in the summer
of 1994, commenced negotiations with Regions about a potential acquisition of
Fidelity by Regions. In response, Regions began drafting a reorganization
agreement, and the parties negotiated the terms of the transaction and
performed due diligence reviews over the course of the following week. The
draft reorganization agreement, which provided for a common stock exchange
ratio of 0.433 shares of Regions Common Stock to be exchanged for each
outstanding share of Fidelity Capital Stock, was presented to the Board of
Fidelity on October 14, 1994, at a specially called meeting. At that Board
meeting, legal counsel reviewed with the Board the terms of the proposed
reorganization agreement, and Sterne, Agee, who had been hired as Fidelity's
investment advisors to review the proposed offer, made a presentation as to the
fairness of the offer. The Chief Executive Officer of Regions also made a
presentation to the Board on the historical financial performance of Regions.
The Board adjourned the meeting and negotiations continued with Regions and
certain holders of Fidelity Preferred Stock over the weekend, resulting in an
increase in the common stock exchange ratio to 0.449 shares of Regions Common
Stock for

16
<PAGE> 21

each outstanding share of Fidelity Capital Stock. The Fidelity Board met again
on Monday, October 17, 1994, and after carefully considering business,
financial, and legal factors, including the future prospects of the financial
service industry in general and the thrift industry in particular, approved the
Agreement with the increase in the common stock exchange ratio.

Fidelity's Board considered that the Merger would permit Fidelity's
stockholders to exchange their ownership interests in Fidelity for an equity
interest in Regions, a regional financial institution which has greater
financial resources than Fidelity. Fidelity's Board also considered the terms
of the Merger, including the common stock exchange ratio, which were determined
through arm's-length negotiations between Fidelity and Regions, to be fair and
equitable, taking into account the relative earnings power of Fidelity and
Regions, their historic and anticipated operations, the cost savings to be
achieved through the Merger, the trading prices of the stocks of the respective
companies, and other pertinent factors. In addition, the Board was aware that
the stockholders of Fidelity would be exchanging their shares of Fidelity
Capital Stock, for which there is no established public market, for securities
which are publicly traded on the Nasdaq National Market. The Board of Fidelity
also believed the Merger would provide a satisfactory solution to the deadlock
arising out of the exercise by the holders of Fidelity Preferred Stock of their
right, as contained in Fidelity's Charter, to veto major corporate changes
which affect their rights as holders of Fidelity Preferred Stock.

Fidelity's Reasons for the Merger. In approving the Merger, the directors
of Fidelity considered a number of factors. Without assigning any relative or
specific weights to the factors, the Fidelity Board of Directors considered the
following material factors:

(a) the information presented to the directors by the management of
Fidelity concerning the business, operations, earnings, asset quality, and
financial condition of Fidelity, including compliance with regulatory capital
requirements on an historical and prospective basis;

(b) the financial terms of the Merger, including the relationship of the
value of Regions Common Stock issuable in the Merger to the market value,
tangible book value, and earnings per share of Fidelity Capital Stock;

(c) the nonfinancial terms of the Merger, including the treatment of the
Merger as a tax-free exchange of Fidelity Capital Stock for Regions Common
Stock for federal income tax purposes;

(d) the likelihood of the Merger being approved by applicable regulatory
authorities without undue conditions or delay;

(e) the opinion of Sterne, Agee that, as of the date of its opinion, the
consideration to be received in the Merger was fair, from a financial point of
view, to the stockholders of Fidelity; and

(f) in general, the fairness of the Merger to Fidelity and its
stockholders.

The terms of the Merger were the result of arm's-length negotiations
between representatives of Fidelity and representatives of Regions. Based upon
the consideration of the foregoing factors, the Board of Directors of Fidelity
unanimously approved the Merger as being in the best interests of Fidelity and
its stockholders. Each member of the Board of Directors of Fidelity has agreed
to vote the shares of Fidelity Capital Stock over which such director has
voting authority (other than in a fiduciary capacity) in favor of the Merger.
In addition, certain holders of shares of Fidelity Preferred Stock representing
in aggregate 3% of the outstanding Fidelity Preferred Stock have entered into
agreements to vote their shares of Fidelity Preferred Stock in favor of the
Merger.

FIDELITY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT FIDELITY
STOCKHOLDERS VOTE FOR APPROVAL OF THE AGREEMENT AND THE PLAN OF MERGER.

Regions' Reasons for the Merger. In approving the Merger, the Regions Board
considered a number of factors. Without assigning any relative or specific
weights to the factors, the Regions Board of Directors considered the following
material factors:

17
<PAGE> 22

(a) a review, based in part on a presentation by Regions management, of (i)
the business, operations, earnings, and financial condition, including the
capital levels and asset quality, of Fidelity on an historical, prospective,
and pro forma basis and in comparison to other financial institutions in the
area; (ii) the demographic, economic, and financial characteristics of the
markets in which Fidelity operates, including existing competition, history of
the market areas with respect to financial institutions, and average demand for
credit, on an historical and prospective basis; and (iii) the results of
Regions' due diligence review of Fidelity; and

(b) a variety of factors affecting and relating to the overall strategic
focus of Regions, including Regions' desire to expand into certain markets in
the southeastern United States.

OPINION OF FIDELITY'S FINANCIAL ADVISOR

Fidelity retained Sterne, Agee to act as Fidelity's financial advisor in
connection with the Merger. As part of this engagement, Sterne, Agee agreed to
render to the Fidelity Board an opinion with respect to the fairness to the
stockholders of the consideration to be received in the Merger from a financial
point of view. On October 14, 1994, Sterne, Agee delivered to the Fidelity
Board its oral opinion that, as of such date, the consideration to be received
pursuant to a draft version of the merger agreement was fair to the Fidelity
stockholders from a financial point of view. Sterne, Agee subsequently
confirmed such opinion in writing as of October 25, 1994, based on the final
Agreement, and as of the date of this Proxy Statement/Prospectus. The full text
of Sterne, Agee's final written opinion to the Fidelity Board is included as
Appendix C to this Proxy Statement/Prospectus and should be read carefully and
in its entirety. Sterne, Agee's opinion does not constitute a recommendation to
any stockholder as to how such stockholder should vote at the Special Meeting.
The fairness opinion was based upon information available to Sterne, Agee as of
the date the opinion was rendered.

In rendering its opinion, Sterne, Agee, among other things: (i)
reviewed certain publicly available financial and other data with respect to
Fidelity and Regions, including consolidated financial statements for recent
years and interim periods to date, drafts of the Registration Statement,
certain Regions Current Reports on Form 8-K presenting certain financial
statements on a pro forma basis incorporating the effects of then pending and
expected to be completed acquisitions by Regions, and certain other relevant
financial and operating data relating to Fidelity and Regions made available to
Sterne, Agee from published sources and from the internal records of Fidelity
and Regions; (ii) reviewed the Agreement; (iii) reviewed certain historical
market prices and trading volumes of Regions Common Stock in the
over-the-counter market as reported by the Nasdaq National Market and of
Fidelity based on actual transactions known to and reported by Fidelity's
management; (iv) compared Fidelity and Regions from a financial point of view
with certain other companies in the financial services industry which Sterne,
Agee deemed relevant; (v) considered the financial terms, to the extent
publicly available, of selected recent acquisitions of financial institutions
which Sterne, Agee deemed to be comparable, in whole or in part, to the Merger;
(vi) reviewed and discussed with representatives of the managements of Fidelity
and Regions certain information of a business and financial nature regarding
Fidelity and Regions, respectively, furnished to Sterne, Agee by Fidelity and
Regions, respectively; (vii) made inquiries regarding and discussed the Merger
and the Agreement and other matters related thereto with Fidelity's counsel;
and (viii) performed such other analyses and examinations as Sterne, Agee
deemed appropriate.

In connection with its review, Sterne, Agee did not independently verify
any of the foregoing information and Sterne, Agee relied on such information
and assumed that there has been no material change in Fidelity's or Regions'
assets, financial condition, results of operations, business or prospects since
the date of the last financial statements that were made available to Sterne,
Agee. Sterne, Agee relied on advice of counsel to Fidelity as to all legal
matters with respect to Fidelity, Regions, the Merger and the Agreement.
Sterne, Agee did not examine any of the loan files of Fidelity or Regions or
otherwise evaluate the allowance for loan losses of Fidelity or Regions and did
not make an independent evaluation, appraisal or physical inspection of the

18
<PAGE> 23

assets or individual properties of Fidelity or Regions, nor was it furnished
with any such appraisals. The opinion is based on economic, monetary and market
conditions as of its date.

Sterne, Agee is a regional investment banking firm and, as part of its
investment banking activities, is regularly engaged in the valuation of
businesses and their securities in connection with merger transactions and
other types of acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements
and valuations for corporate and other purposes. Fidelity's Board of Directors
selected such firm to act as its financial advisor in connection with the
Merger on the basis of the firm's expertise and its previous role on various
matters pertaining to a review of Fidelity's strategic alternatives and Sterne,
Agee's involvement in the preliminary stages of a possible public offering of
securities by Fidelity. In the ordinary course of its business, Sterne, Agee
actively trades the equity securities of Regions and, to a very limited extent,
Fidelity for its own accounts and for the accounts of its customers and,
accordingly, may at any time hold a long or short position in such securities.

The summary set forth below reflects the material analyses performed by
Sterne, Agee but does not purport to be a complete description of the analyses
performed by Sterne, Agee. The analyses performed by Sterne, Agee are not
necessarily indicative of the actual values, which may be significantly more or
less favorable than suggested by such analyses. Additionally, analyses relating
to the values of businesses do not purport to be appraisals or to reflect the
prices at which businesses actually may be sold.

In connection with rendering its opinion to the Fidelity Board, Sterne,
Agee performed a variety of financial analyses, which are summarized below.
Sterne, Agee performed substantially similar analyses for its earlier opinions.
The evaluation of the fairness, from a financial point of view, of the
consideration to be received in the Merger was to some extent a subjective one
based on the experience and judgment of Sterne, Agee and not merely the result
of mathematical analysis of financial data. Sterne, Agee considered various
financial valuation methodologies in its determinations. The preparation of a
fairness opinion involves determinations as to the most appropriate factors to
be considered as well as relevant methods of financial analysis and the
application of those factors and methods to the particular circumstances, and,
therefore, such an opinion is not readily susceptible to summary description.
Sterne, Agee believes that its analyses must be considered as a whole and that
selecting portions of such analyses and factors considered by Sterne, Agee
without considering all such analyses and factors could create an incomplete
view of the process underlying Sterne, Agee's opinion. In addition, Sterne,
Agee may have given various analyses more or less weight than other analyses
and may have deemed various assumptions more or less probable than other
assumptions. In its analyses, Sterne, Agee incorporated numerous assumptions
with respect to business, market, monetary and economic conditions, industry
performance and other matters, many of which are beyond Fidelity's and Regions'
control. Any estimates contained in Sterne, Agee's analyses are not necessarily
indicative of future results or values, which may be significantly more or less
favorable than such estimates. Such analyses were prepared solely as part of
Sterne, Agee's analysis of the fairness to the Fidelity stockholders of the
consideration to paid in the Merger.

Analysis of Selected Thrift Merger Transactions. Sterne, Agee compared the
Merger on the basis of multiples of earnings and tangible book value and
premium to core deposits of Fidelity implied by the aggregate consideration to
be paid in the Merger as of the date of its opinion, with the same ratios in
recent acquisitions of thrifts which Sterne, Agee deemed comparable, in whole
or in part, to the Merger. Such comparable acquisitions included actual or
pending transactions of eight thrifts announced during 1992 through August
1994, including Bank South Corporation's acquisition of Gwinnett Bancshares;
AmSouth Bancorporation's acquisition of Community Federal Savings Bank and
First Chattanooga Financial Corporation; Union Planters Corporation's
acquisition of BNF Bancorp and Liberty Bancshares; Colonial BancGroup, Inc.'s
acquisition of First AmFed Corporation; First Tennessee National Corporation's
acquisition of Home Financial Corporation; and SouthTrust Corporation's
acquisition of Carolina Financial Corporation. In addition, 11 other relevant
acquisitions that were announced between 1992 and December 1994 were also
considered. Among the characteristics which such comparable acquisitions have
in common with the Merger

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<PAGE> 24

are a size of $100 million to $1 billion in assets and a market share rank
among the top three independent depository institutions within a local market.
Sterne, Agee's analysis showed that, in the 19 transactions which were
considered, the average price-to-tangible-book-value ratio was 1.48x, the
average price-to-earnings ratio was 14.5x, and the average premium to core
deposits ratio was 6.6%. Sterne, Agee determined the price multiples implied by
the value of the consideration to be received by Fidelity stockholders in the
Merger based on a Regions common stock price of $33 on January 16, 1995: the
price-to-tangible-book-value ratio was 1.66x; the price-to-last-12-months
earnings ratio was 9.4x; the price-to-1994 estimated core earnings was 11.4x;
and the premium to core deposits ratio was 5.8%.

Dilution Analysis. Sterne, Agee compared Fidelity's book value and earnings
per share as of December 31, 1993 and for the nine months ended September 30,
1994, with Regions' pro forma numbers adjusted for the mergers of American
Bancshares, Union Bank & Trust Co., First Commercial Bancshares, and Fidelity,
based on internal reports provided by Regions. Assuming a 0.450 exchange ratio,
Sterne, Agee calculated that there would be a 7.7% increase in equivalent
stated book value per share from $9.09 to $9.79 per share as of September 30,
1994 and a 14.3% decrease in equivalent nine months 1994 earnings per share
from $1.33 to $1.14 per share. Sterne, Agee compared Fidelity's indicated
dividend rate per share as of September 30, 1994 with Regions' numbers and
calculated a 50.0% increase in the equivalent indicated dividend rate per share
from $0.36 to $0.54 per share. Fidelity's convertible preferred stock is
exchangeable on a one-for-one basis into Fidelity's common stock; consequently,
shares of such convertible preferred stock will experience the same dilutive
effects as shares of common stock, except that there will be a 35.0% increase
in the equivalent indicated dividend rate per convertible preferred share from
$0.40 to $0.54 per share.

Present Value Analysis. Sterne, Agee calculated the present value of a
share of Fidelity Common Stock assuming various price-to-earnings multiples
applied to future estimated earnings per share, plus interim dividends
received, discounted at various rates. The analysis incorporated Fidelity's
forecasts for earnings growth during the periods and an assumed dividend payout
of 30%. The range of price-to-earnings multiples considered was 8x to 9x and
the discount rates used were 11% and 15%. On the basis of such varying
assumptions, Sterne, Agee calculated a present value of Fidelity on a
stand-alone basis ranging from $10.24 to $14.96 per share.

Sterne, Agee also calculated the present value under various scenarios of
receiving 0.450 shares of Regions Common Stock per share of Fidelity based on
the future value of Regions Common Stock received. Two sets of assumptions were
used in analyzing the various scenarios. First, Sterne, Agee calculated the
present value of a share of Regions Common Stock assuming various
price-to-earnings multiples applied to future estimated earnings per share,
plus interim dividends received, discounted at various rates. The analysis
incorporated Regions forecasts for earnings growth during the periods and
assumed a dividend payout of 35%. The range of price-to-earnings multiples was
9x to 1Ox and the discount rates used were 11% and 15%. On the basis of such
varying assumptions, Sterne, Agee calculated a present value of Regions on a
stand-alone basis ranging from $30.21 to $43.58 per share. Based on an
Exchange Ratio of 0.450, these values would equate to a range of $13.59 to
$19.61 per Fidelity share. Second, Regions Common Stock was viewed assuming its
acquisition at a later date at multiples of book value ranging from 1.8x to
2.4x. The discount rates used were 11% and 15%. On the basis of such varying
assumptions, Sterne, Agee calculated a present value ranging from $35.70 to
$52.94 per share. Based on an Exchange Ratio of 0.450, these values would
equate to a range of $16.07 to $23.82 per Fidelity share.

These analyses were based, as applicable, upon various earnings forecasts
for Fidelity and Regions and assumed future dividend payout ratios.
Managements' projections are based upon many factors and assumptions, many of
which are beyond the control of Fidelity or Regions.

The foregoing description of Sterne, Agee's opinion is qualified in its
entirety by reference to the full text of such opinion which is attached hereto
as Appendix C.

Compensation to Financial Advisor. In a letter agreement dated October 13,
1994, Fidelity retained Sterne, Agee to act as its financial advisor to render
a fairness opinion to Fidelity in connection with any sale or merger of
Fidelity. Pursuant to the letter agreement, Fidelity agreed to pay Sterne, Agee
a fee of $100,000, $25,000 of the fee as a retainer paid as of the date of the
letter agreement, and $75,000 to be paid at the time of publication of any
proxy statement containing a fairness opinion. In addition, Fidelity agreed to
reimburse

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<PAGE> 25

Sterne, Agee for its reasonable out-of-pocket costs and expenses incurred in
connection with its services rendered to Fidelity pursuant to the letter
agreement and to indemnify Sterne, Agee, its affiliates and their respective
partners, directors, officers, agents, consultants and employees and
controlling persons against certain liabilities, including liabilities under
the federal securities laws.

EFFECTIVE DATE OF THE MERGER

Subject to the conditions to the obligations of the parties to effect the
Merger, the Effective Date will occur on the date and at the time that the
articles of combination relating to the Merger are filed and declared effective
with the OTS. Unless otherwise agreed upon by Regions and Fidelity, and subject
to the conditions to the obligations of the parties to effect the Merger, the
parties will use their reasonable efforts to cause the Effective Date to occur
on the first business day in which the last of the following events occurs:
(i) the effective date (including the expiration of any applicable waiting
period) of the last federal or state regulatory approval required for the
Merger and (ii) the date on which the Agreements are approved by the requisite
vote of all Fidelity stockholders; or such later date within 30 days thereof as
specified by Regions.

The Board of Directors of either Regions or Fidelity generally may
terminate the Agreement if the Merger is not consummated by June 30, 1995,
unless the failure to consummate by that date is the result of a breach of the
Agreement by the party seeking termination. See "--Conditions to Consummation
of the Merger" and "--Waiver, Amendment, and Termination of the Agreement."

DISTRIBUTION OF REGIONS STOCK CERTIFICATES AND PAYMENT FOR FRACTIONAL SHARES

Promptly after the Effective Date, Regions will cause First Alabama Bank,
acting in its capacity as Exchange Agent, to mail a letter of transmittal,
together with instructions for the exchange of such stockholders' certificates
representing shares of Fidelity Capital Stock for certificates representing
shares of Regions Common Stock, to the former stockholders of Fidelity.

FIDELITY STOCKHOLDERS SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL THEY
RECEIVE THE LETTER OF TRANSMITTAL AND INSTRUCTIONS.

Upon surrender to the Exchange Agent of certificates for Fidelity Capital
Stock, together with a properly completed letter of transmittal, there will be
issued and mailed to each holder of Fidelity Capital Stock surrendering such
items a certificate or certificates representing the number of shares of
Regions Common Stock to which such holder is entitled, if any, and a check for
the amount to be paid in lieu of any fractional share (without interest). After
the Effective Date, to the extent permitted by law, Fidelity stockholders of
record as of the Effective Date will be entitled to vote at any meeting of
Regions stockholders the number of whole shares of Regions Common Stock into
which their shares of Fidelity Capital Stock have been converted, regardless of
whether such stockholders have surrendered their Fidelity Capital Stock
certificates. Whenever a dividend or other distribution is declared by Regions
on Regions Common Stock, the record date for which is at or after the Effective
Date, the declaration will include dividends or other distributions on all
shares issuable pursuant to the Agreement, but no dividend or other
distribution payable after the Effective Date with respect to Regions Common
Stock will be paid to the holder of any unsurrendered Fidelity Capital Stock
certificate until the holder duly surrenders such certificate. Upon surrender
of such Fidelity Capital Stock certificate, however, both the Regions Common
Stock certificate, together with all such undelivered dividends or other
distributions (without interest) and any undelivered cash payments to be paid
in lieu of fractional shares (without interest), will be delivered and paid
with respect to each share represented by such certificate.

After the Effective Date, there will be no transfers of shares of Fidelity
Capital Stock on Fidelity's stock

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<PAGE> 26

transfer books. If certificates representing shares of Fidelity Capital Stock
are presented for transfer after the Effective Date, they will be canceled and
exchanged for the shares of Regions Common Stock and a check for the amount due
in lieu of fractional shares, if any, deliverable in respect thereof.

CONDITIONS TO CONSUMMATION OF THE MERGER

Consummation of the Merger is subject to a number of conditions, including,
but not limited to:

(a) the approval of the Federal Reserve, the OTS, and the Georgia
Department, none of which approvals will be conditioned or restricted in a
manner (including requirements relating to the raising of additional capital or
the disposition of any assets, including branch offices or deposit liabilities)
which in the reasonable judgment of the Board of Directors of Regions would so
materially adversely impact the economic or business benefits of the
transactions contemplated by the Agreements so as to render inadvisable the
consummation of the Merger, and expiration of any applicable waiting period;

(b) the approval at the Special Meeting of the Agreements by the required
vote of the holders of Fidelity Capital Stock;

(d) the receipt of a satisfactory opinion of counsel that the Merger will
constitute a reorganization within the meaning of Section 368(a) of the Code,
that the exchange in the Merger of Fidelity Capital Stock for Regions Common
Stock will not give rise to recognition of any gain or loss for federal income
tax purposes to Fidelity stockholders with respect to such exchange (except to
the extent of any cash received), and that each of Fidelity, Regions, and
Fidelity Interim will be a party to that reorganization within the meaning of
Section 368(b) of the Code; and

(e) the approval for listing on the Nasdaq National Market of the shares of
Regions Common Stock to be issued in the Merger.

Consummation of the Merger also is subject to the satisfaction or waiver of
various other conditions specified in the Agreement, including, among others:
(i) the delivery by Regions and Fidelity of opinions of their respective
counsel and certificates executed by their respective chief executive officers
and chief financial officers as to compliance with the Agreement; (ii) receipt
of a letter from Ernst & Young LLP, dated as of the Effective Date, to the
effect that the Merger will qualify for pooling-of-interests accounting
treatment; and (iii) as of the Effective Date, the accuracy of certain
representations and warranties and the compliance in all material respects with
the agreements and covenants of each party.

REGULATORY APPROVALS

The Merger may not proceed unless the requisite regulatory approvals are
obtained. There can be no assurance that such regulatory approvals will be
obtained or as to the timing of such approvals. There also can be no assurance
that such approvals will not be accompanied by a conditional requirement which
causes such approvals to fail to satisfy the conditions set forth in the
Agreement. Applications for the approvals described below have been submitted
to the appropriate regulatory agencies.

Regions and Fidelity are not aware of any material governmental approvals
or actions that are required for consummation of the Merger, except as
described below. Should any other approval or action be required, it presently
is contemplated that such approval or action would be sought.

The Merger will require the prior approvals of: (i) the Federal Reserve,
pursuant to Section 4(c)(8) of the BHC Act; (ii) the OTS, pursuant to Section
10(e) of the Home Owners' Loan Act, as amended (the "HOLA"), and pursuant to
the Bank Merger Act, Section 18(c) of the Federal Deposit Insurance Act, as
amended (the "FDIA"), and the regulations of the OTS codified at 12 C.F.R.
Section 552.13; and (iii) the Georgia Department, pursuant to Sections 7-1-606
and 7-1-621 of the Georgia Code of Banking and Finance (the "Georgia Code").

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<PAGE> 27

Approval of the OTS also is required for the organization of Fidelity Interim.
In granting their approvals under Section 4(c)(8) of the BHC Act and the Bank
Merger Act, the Federal Reserve and the OTS must take into consideration, among
other factors, the financial and managerial resources and future prospects of
the institutions and the convenience and needs of the communities to be served.
The relevant statutes prohibit the Federal Reserve and the OTS from approving
the Merger (a) if it would result in a monopoly or be in furtherance of any
combination or conspiracy to monopolize or to attempt to monopolize the
business of banking in any part of the United States or (b) if its effect in
any section of the country may be substantially to lessen competition or to
tend to create a monopoly, or if it would in any other manner be a restraint of
trade, unless those agencies find that any anticompetitive effects clearly are
outweighed by the public interest and the probable effect of the transaction in
meeting the convenience and needs of the communities to be served. Under the
Bank Merger Act, the Merger may not be consummated until the 15th day following
the date of OTS approval, during which time the United States Department of
Justice may challenge the transaction on antitrust grounds. The commencement of
any antitrust action would stay the effectiveness of the OTS approval, unless a
court specifically orders otherwise. The Georgia Department is required to
consider factors similar to those taken into account by the Federal Reserve and
the OTS in determining whether to approve the Merger.

WAIVER, AMENDMENT, AND TERMINATION OF THE AGREEMENT

Prior to the Effective Date, and to the extent permitted by law, any
provision of the Agreement generally may be (i) waived by the party benefitted
by the provision or (ii) amended by a written agreement between Regions and
Fidelity approved by their respective Boards of Directors; provided, however,
that after approval by the Fidelity stockholders, no amendment that requires
further approval by such stockholders may be made without the further approval
of such stockholders.

The Agreement may be terminated, and the Merger abandoned, at any time
prior to the Effective Date, either before or after approval by Fidelity
stockholders, under certain circumstances, including:

(a) by the Board of Directors of either party upon final, nonappealable
denial of any required regulatory approval, or by the Board of Directors of
Regions if any required regulatory approval is conditioned or restricted in the
manner described above under "--Conditions to Consummation of the Merger";

(b) by the Board of Directors of either party, if the stockholders of
Fidelity fail to vote their approval of the Agreements;

(d) by the Board of Directors of either party, in the event of a breach
of any provision of the Agreement which meets certain materiality standards
specified therein; and

(e) by the Board of Directors of either party if the Merger shall not
have been consummated by June 30, 1995, but only if the failure to consummate
the Merger by such date has not been caused by the terminating party's breach
of the Agreement.

If the Agreement is terminated, the parties will have no further
obligations, except with respect to certain provisions, including those
providing for payment of expenses and restricting disclosure of confidential
information. Further, termination will not relieve the parties from the
consequences of any uncured willful and knowing breach of the Agreement giving
rise to such termination.

CONDUCT OF BUSINESS PENDING THE MERGER

Fidelity generally has agreed, unless the prior consent of Regions is
obtained, and except as otherwise contemplated by the Agreement, to operate its
business only in the ordinary course, preserve intact its business
organizations and assets, and maintain its rights and franchises. Regions has
agreed to continue to conduct its business in a manner designed in its
reasonable judgment to enhance the long-term value of Regions Common

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<PAGE> 28

Stock, to enhance the business prospects of Regions and its subsidiaries, and
to the extent consistent therewith, to preserve intact the core businesses and
goodwill of Regions. Each of Fidelity and Regions has agreed not to take any
action that would affect, adversely and materially, the ability of either party
to perform its covenants and agreements under the Agreement or to obtain any
consent or approval required for the consummation of the transactions
contemplated by the Agreements. In addition, the Agreement contains certain
other restrictions applicable to the conduct of the business of either Fidelity
or Regions prior to consummation of the Merger, as described below.

Fidelity. Fidelity has agreed not to take certain actions relating to the
operation of its business pending consummation of the Merger without the prior
approval of Regions. Those actions generally include, without limitation: (i)
amending its Charter or Bylaws; (ii) incurring, or permitting any of its
subsidiaries to incur, any additional debt or other obligation for borrowed
money in excess of an aggregate of $100,000 for Fidelity and its subsidiaries
on a consolidated basis (except in the ordinary course of business consistent
with past practices), or, except as previously disclosed to Regions, forgive
any such indebtedness of any person to Fidelity or any of its subsidiaries in
excess of an aggregate of $25,000, or impose, or suffer the imposition of, on
any share of stock held by Fidelity or any of its subsidiaries, any lien, or
permit any such lien to exist; (iii) acquiring or exchanging (other than
exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any shares, or any securities convertible into any shares, or
declaring or paying any dividend or making any other distribution in respect of
Fidelity Capital Stock, other than (to the extent permitted by law and by the
OTS) dividends on Fidelity Preferred Stock; provided that Fidelity may (to the
extent legally able to do so), but will not be obligated to, declare and pay
regular quarterly cash dividends on the shares of Fidelity Common Stock at a
rate not in excess of $.09 per share with usual and regular record and payment
dates in accordance with past practice as previously disclosed to Regions; and
provided further that any dividend declared or payable on the shares of
Fidelity Common Stock for the quarter during which the Effective Date occurs,
unless otherwise agreed upon in writing by Regions and Fidelity, will be
declared only if the record date for payment of the quarterly dividend to
holders of Regions Common Stock for the quarter in which the Effective Date
occurs is prior to the Effective Date; (iv) except pursuant to the exercise of
stock options outstanding as of the date of the Agreement and pursuant to the
terms thereof in existence on the date of the Agreement, or pursuant to the
conversion of Fidelity Preferred Stock, issuing, selling, or otherwise
permitting to become outstanding any additional shares of Fidelity Capital
Stock or any other capital stock of Fidelity or any of its subsidiaries, or any
stock appreciation rights, or any option, warrant, conversion, or other right
to acquire any such stock, or any security convertible into any such stock; (v)
adjusting or reclassifying any capital stock of Fidelity or any of its
subsidiaries or issuing or authorizing the issuance of any other securities in
respect of or in substitution for shares of Fidelity Capital Stock or selling
or otherwise disposing of or encumbering any shares of capital stock of
Fidelity or any of its subsidiaries (unless any such shares of stock are sold
or otherwise transferred to Fidelity or any of its subsidiaries) or any assets
having in the aggregate a book value in excess of $100,000 other than in the
ordinary course of business for reasonable and adequate consideration; (vi)
acquiring direct or indirect control over, or investing in equity securities
of, any other entity; (vii) granting any increase in compensation or benefits
to the employees or officers of Fidelity or any of its subsidiaries (except as
previously disclosed to Regions or as required by law), paying any bonus
(except pursuant to the provisions of any applicable program or plan adopted by
its Board of Directors prior to the date of the Agreement and as previously
disclosed to Regions), entering into or amending any severance agreements with
officers of Fidelity or any of its subsidiaries (except as previously disclosed
to Regions), or granting any increase in compensation or other benefits to
directors of Fidelity or any of its subsidiaries; (viii) entering into or
amending any employment contract between Fidelity or any of its subsidiaries
and any person that it does not have the unconditional right to terminate
without liability (except as previously disclosed to Regions and except for any
amendment required by law); (ix) adopting any new employee benefit plan or
program of Fidelity or any of its subsidiaries or materially changing any
existing plan or program of Fidelity or any of its subsidiaries (except as
previously disclosed to Regions and except for any change required by law or
advisable to maintain the tax qualified status of any such plan); (x) making
any significant change in any accounting methods,

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<PAGE> 29

principles, practices, or systems of internal accounting controls (except in
conformity to changes in regulatory accounting requirements or generally
accepted accounting principles ("GAAP")); (xi) commencing any material
litigation (except in accordance with past practices) or settling any
litigation for an amount in excess of $25,000 or in exchange for the imposition
of material restrictions on the operations of Fidelity or any of its
subsidiaries; or (xii) entering into, modifying, or terminating any material
contract.

In addition, Fidelity has agreed not to solicit, directly or indirectly,
any acquisition proposal from any other person or entity. Fidelity also has
agreed not to negotiate with respect to any such proposal, provide nonpublic
information to any party making such a proposal, or enter into any agreement
with respect to any such proposal, except in fulfillment of the fiduciary
obligations of its Board of Directors. In addition, Fidelity has agreed to use
its reasonable efforts to prevent its advisors and other representatives from
engaging in any of the foregoing activities.

Regions. The Agreement prohibits Regions, prior to the earlier of the
Effective Date and the termination of the Agreement, from taking any action
that would materially adversely affect the ability of either party to obtain
the requisite governmental approvals or to perform its covenants and agreements
under the Agreement. Regions has agreed not to amend its Certificate of
Incorporation or Bylaws in any manner which is adverse to and discriminates
against holders of Fidelity Capital Stock.

MANAGEMENT FOLLOWING THE MERGER

Consummation of the Merger will not alter the present officers and
directors of Regions. Information concerning the management of Regions is
included in the documents incorporated herein by reference. See "Documents
Incorporated by Reference."

INTERESTS OF CERTAIN PERSONS IN THE MERGER

Indemnification and Advancement of Expenses. The Agreement provides that
Regions will, and will cause Fidelity (as the surviving association) to,
maintain all rights of indemnification and advancement of expenses incurred in
the defense of any litigation existing in favor of each person entitled to
indemnification from Fidelity or any of its subsidiaries on terms no less
favorable than the rights provided in applicable regulations of the OTS and in
the Charter or Bylaws of Fidelity or any of its subsidiaries, as the case may
be, or the rights otherwise in effect on the date of the Agreement and that
such rights will continue in full force and effect for six years from the
Effective Date with respect to matters occurring at or prior to the Effective
Date.

Employee Benefits. The Agreement also provides that, after the Effective
Date, Regions will provide generally to officers and employees of Fidelity and
any of its subsidiaries who, at or after the Effective Date, become employees
of Regions or any of its subsidiaries, employee benefits under employee
benefit plans (other than stock option or other plans involving the potential
issuance of Regions Common Stock, except as set forth in the Agreement) on
terms and conditions that, when taken as a whole, are substantially similar to
those currently provided by Regions and its subsidiaries to their respective,
similarly situated officers and employees. For purposes of participation and
vesting (but not benefit accrual) under such employee benefit plans, (i)
service under any qualified defined benefit plans of Fidelity should be
treated as service under Regions' qualified defined benefit plans, (ii)
service under any qualified defined contribution plans of Fidelity will be
treated as service under Regions' qualified defined contribution plans, and
(iii) service under any other employee benefit plans of Fidelity will be
treated as service under any similar employee benefit plans maintained by
Regions. The Agreement further provides that Regions will cause Fidelity (as
the surviving association) and its subsidiaries to honor on terms reasonably
agreed upon by the parties all employment, severance, consulting, and other
compensation contracts previously disclosed to Regions between Fidelity or
any of its subsidiaries and any current or former director, officer, or
employee and all provisions for vested benefits or other vested amounts
earned or accrued through the Effective Date under Fidelity's benefit plans.

Fidelity Employment Agreements. Richard G. Rhodes, Sr., President and
Chief Executive Officer of

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<PAGE> 30

Fidelity, has entered into an employment agreement with Fidelity dated March
18, 1993 (the "Employment Agreement"). The Employment Agreement has a rolling
one-year term such that after each day of the term lapses, an additional day is
added to the term. Nonetheless, the Employment Agreement is subject to review
each year by the Board of Directors, but is automatically renewed each year
unless 30 days prior written notice of election not to extend the term is given
by Fidelity or Mr. Rhodes not less than 30 days prior to March 14, the
anniversary date of the Employment Agreement.

Under the terms of the Employment Agreement, Mr. Rhodes is entitled to
receive a base salary of $120,000 per year, which may be increased by the Board
of Directors but may not be decreased without Mr. Rhodes' consent. In addition,
Mr. Rhodes is entitled to receive a bonus if approved by the Board and certain
other customary benefits of employment. The Employment Agreement may be
terminated by Fidelity for Cause (as defined in the Employment Agreement) at
any time and may not be terminated for any other reason upon 30 to 90 days
written notice. If Mr. Rhodes' employment is terminated by Fidelity for any
reason other than Cause, Disability or Retirement (as defined in the Employment
Agreement) or death or if it is terminated by Mr. Rhodes for Good Reason (as
defined in the Employment Agreement, and which term would include a change in
control of Fidelity in conjunction with certain other circumstances or the
failure of a successor to Fidelity to assume the obligations of Fidelity under
the Employment Agreement) or failure of Fidelity to comply with any provision
of the Employment Agreement that is not timely cured, Mr. Rhodes is entitled to
receive severance pay in 12 monthly installments equal to one year's base
salary plus any salary due to him for the remainder of the then-current term.
Mr. Rhodes is also entitled to continue to receive from Fidelity certain
benefits of employment at no expense to him until the earlier of the expiration
of the then current term of the Employment Agreement or until he is employed
full-time elsewhere and receives similar benefits. Mr. Rhodes' severance pay is
subject to reduction under certain circumstances.

It is Regions' policy and practice not to enter into employment agreements
with its officers or other employees. Accordingly, Mr. Rhodes and the Fidelity
Board of Directors have agreed to terminate the Employment Agreement
immediately prior to the Effective Date. Fidelity has agreed to pay Mr. Rhodes
a lump sum payment of $100,000 in consideration for Mr. Rhodes' agreement to
terminate the Employment Agreement prior to the end of its term. It is
anticipated that Fidelity thereafter would continue to employ Mr. Rhodes at a
salary and with benefits comparable to the salary and benefits he currently
receives, except that he would no longer have a severance pay arrangement. If
the Merger is not consummated for any reason, the Employment Agreement will
continue in effect until otherwise terminated according to its terms.

Regions Stock Ownership. As of the Record Date, the directors and
executive officers of Fidelity owned no shares of Regions Common Stock.

DISSENTERS' RIGHTS

If the Merger is consummated, pursuant to regulations of the OTS, any
stockholder of record of Fidelity Capital Stock who (i) objects to the Merger,
(ii) does not vote any of such holder's shares in favor of the Merger, and
(iii) fully complies with all of the provisions of 12 C.F.R. Section 552.14
will be entitled to demand and receive payment in an amount equal to the fair
or appraised value of such holder's shares of Fidelity Capital Stock. For the
purpose of determining the amount to be received in connection with the
exercise of dissenters' rights pursuant to regulations of the OTS, the fair
value of a dissenting stockholder's Fidelity Capital Stock equals the fair
market value of the shares as of the Effective Date, exclusive of any element
of value arising from the accomplishment or expectation of the Merger.

Any Fidelity stockholder desiring to receive payment of the fair value of
such holder's Fidelity Capital Stock in accordance with the requirements of 12
C.F.R. Section 552.14 must (i) deliver to Fidelity, prior to voting on the
Merger, a writing identifying such holder and stating such holder's intention
to demand appraisal of and payment for such holder's shares and (ii) not vote
such holder's shares of Fidelity Capital Stock in favor of the Merger. Any
written notice of intent to demand appraisal of and payment for shares of
Fidelity Capital Stock should be sent to: Richard G. Rhodes, Sr., President,
Fidelity Federal Savings Bank, 500 East Walnut

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Avenue, Dalton, Georgia 30722. A vote against the Merger alone will not satisfy
the requirements for the separate written notice of intent to demand appraisal
of and payment for shares of Fidelity Capital Stock referred to in condition
(i) above. Rather, such demand must be prior and in addition to and separate
from any proxy or vote against the Merger by the dissenting stockholder.

Within ten days of the Effective Date, Fidelity must give written notice of
the Effective Date by mail to any stockholder who complied with the provisions
above and did not vote in favor of the Merger and make a written offer to each
such stockholder to pay for such holder's shares at a price Fidelity estimates
to be the fair value of the shares. Such notice and offer must be accompanied
by Fidelity's balance sheet and statement of income for a fiscal year ending
not more than 16 months before the date of notice and offer, together with the
latest available interim financial statements and a statement of the procedures
that must be followed if the stockholder elects under 12 C.F.R. Section
552.14(c)(5) and (6) to demand appraisal and payment of a different amount than
that offered by Fidelity.

If within 60 days of the Effective Date the stockholder accepts Fidelity's
offer of the fair value for such holder's shares, or the fair value is
otherwise agreed upon between Fidelity and the dissenting stockholder, Fidelity
must make payment for the dissenting stockholder's shares within 90 days of the
Effective Date. At any time within 60 days of the Effective Date, a dissenting
stockholder may withdraw a demand for appraisal and accept the terms of the
Merger, and such shares of Fidelity Capital Stock will become shares of Regions
Common Stock in accordance with the terms of the Agreement.

If the dissenting stockholder and Fidelity do not agree as to the fair
value of the dissenting stockholder's shares within 60 days of the Effective
Date, the dissenting stockholder must file a petition with the OTS, with a copy
by registered or certified mail to Fidelity, demanding a determination of the
fair market value of the shares. Each stockholder demanding appraisal of and
payment for such holder's shares of Fidelity Capital Stock in compliance with
12 C.F.R. Section 552.14 must deliver such holder's shares of Fidelity Capital
Stock to First Alabama Bank, as transfer agent, for notation thereon that an
appraisal proceeding is pending. If a dissenting stockholder fails to file a
petition with the OTS demanding a determination of fair value within 60 days of
the Effective Date or fails to deliver such holder's shares of Fidelity Capital
Stock to the transfer agent, such dissenting stockholder will be deemed to have
accepted the terms of the Merger, and such stockholder's shares of Fidelity
Capital Stock will become shares of Regions Common Stock in accordance with the
terms of the Agreement.

The director of the OTS (the "Director") may appoint either appropriate OTS
staff or one or more independent persons to appraise the shares of a dissenting
stockholder who has complied fully with 12 C.F.R. Section 552.14. Appraisals
prepared by independent persons will be subject to review by OTS staff. If the
Director concurs in the final valuation of the shares, the Director will
instruct Fidelity to pay the appraised fair market value, together with accrued
interest, upon the surrender of the dissenting stockholder's Fidelity Capital
Stock. The Director, at his or her discretion, may apportion or assess the cost
of the appraisal proceeding against some or all of the parties to the
proceeding.

The foregoing does not purport to be a complete statement of the provisions
of the OTS regulations relating to dissenter and appraisal rights and is
qualified in its entirety by reference to the dissenter and appraisal rights
provisions of 12 C.F.R. Section 552.14, which section is reproduced in
Appendix D to this Proxy Statement/Prospectus and which hereby is incorporated
by reference herein.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

The following is a summary of certain anticipated federal income tax
consequences of the Merger. This summary is based on the federal income tax
laws now in effect and as currently interpreted; it does not take into account
possible changes in such laws or interpretations, including amendments to
applicable statutes or regulations or changes in judicial or administrative
rulings, some of which may have retroactive effect. This summary does not
purport to address all aspects of the possible federal income tax consequences
of the Merger

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and is not intended as tax advice to any person. In particular, and without
limiting the foregoing, this summary does not address the federal income tax
consequences of the Merger to Fidelity stockholders in light of their
particular circumstances or status (for example, as foreign persons, tax-exempt
entities, dealers in securities, insurance companies, and corporations, among
others). Nor does this summary address any consequences of the Merger under any
state, local, estate, or foreign tax laws. Fidelity stockholders, therefore,
are urged to consult their own tax advisors as to the specific tax consequences
to them of the Merger, including tax return reporting requirements, the
application and effect of federal, foreign, state, local, and other tax laws,
and the implications of any proposed changes in the tax laws.

A federal income tax ruling with respect to this transaction was not
requested from the Internal Revenue Service. Instead, Alston & Bird, special
counsel to Regions, has rendered an opinion to Regions and Fidelity concerning
certain federal income tax consequences of the Merger under federal income tax
law. It is such firm's opinion that, based upon the assumption that the Merger
is consummated in accordance with federal law and in conformity with the
representations made by management of Regions and Fidelity, the transaction
will constitute a reorganization within the meaning of Section 368 of the Code
and, therefore, will have the following federal income tax consequences to the
Fidelity stockholders:

(a) The acquisition by Regions of all the stock of Fidelity solely in
exchange for shares of Regions Common Stock in the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Code. Each of
Fidelity and Regions will be "a party to the reorganization" within the meaning
of Section 368(b) of the Code.

(b) No gain or loss will be recognized by the Fidelity stockholders upon
the receipt of Regions Common Stock solely in exchange for their shares of
Fidelity Capital Stock.

(c) The basis of Regions Common Stock to be received by Fidelity
stockholders will be the same as the basis of Fidelity Capital Stock
surrendered in exchange therefor.

(d) The holding period of Regions Common Stock to be received by Fidelity
stockholders will include the holding period of Fidelity Capital Stock
surrendered in exchange therefor, provided that the Fidelity Capital Stock was
held as a capital asset on the date of the exchange.

(e) The payment of cash to a Fidelity stockholder in lieu of issuing a
fractional share interest in Regions will be treated for federal income tax
purposes as if the fractional share was distributed as part of the exchange and
then was redeemed by Regions. This cash payment will be treated as having been
received as a distribution in full payment in exchange for the stock redeemed
as provided in Section 302(a) of the Code.

(f) When solely cash is received by a Fidelity stockholder in exchange for
such holder's shares of Fidelity Capital Stock pursuant to the exercise of
dissenters' rights of appraisal, such cash will be treated as having been
received in redemption of such holder's shares of Fidelity Capital Stock,
subject to the provisions and limitations of Section 302 of the Code.

The tax opinion does not address any state, local, or other tax
consequences of the Merger. Fidelity stockholders should consult their own tax
advisors with respect to the tax consequences of the Merger to them
individually, including tax consequences under state or local law.

ACCOUNTING TREATMENT

It is anticipated that the Merger will be accounted for as a pooling of
interests as that term is used pursuant to GAAP, for accounting and financial
reporting purposes. Under the pooling-of-interests method of accounting,
assets, liabilities, and equity of the acquired company are carried forward to
the combined entity at their historical amounts. See "Summary--Comparative Per
Share Data."

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EXPENSES AND FEES

The Agreement provides, in general, that each of the parties will bear and
pay its own expenses in connection with the transactions contemplated by the
Agreement, including fees and expenses of its own financial or other
consultants, investment bankers, accountants, and counsel, except that Regions
will bear and pay the filing fees and printing costs in connection with this
Proxy Statement/Prospectus. Notwithstanding the foregoing, the Agreement
provides that, under certain circumstances involving termination of the
Agreement or failure to consummate the Merger at a time in which it has been
publicly disclosed that a third party has disclosed an intent to acquire
Fidelity, for 12 months following such termination or failure to consummate, it
will be a binding condition to Fidelity's entering into a letter of intent,
agreement in principle, or definitive agreement (whether or not considered
binding, nonbinding, or conditional) with respect to, or recommending
stockholder acceptance of, any business combination with any third party, that
such third party that is a party to the business combination will pay to
Regions, not later than the consummation of the business combination, an amount
in cash equal to $400,000, which sum represents the direct costs and expenses
incurred by Regions in negotiating and carrying out the transactions
contemplated by the Agreement, and the indirect costs and expenses incurred by
Regions in connection with the transactions contemplated by the Agreement,
including Regions management time devoted to negotiation and preparation for
such transaction. In the event such third party refuses to pay such amount, the
amount will be an obligation of Fidelity and will be paid by Fidelity promptly
upon notice to Fidelity by Regions.

RESALES OF REGIONS COMMON STOCK

The Regions Common Stock to be issued to Fidelity stockholders in the
Merger has been registered under the Securities Act, but that registration does
not cover resales of those shares by persons who control, are controlled by, or
are under common control with Fidelity (such persons are referred to
hereinafter as "affiliates" and generally include executive officers,
directors, and 10% stockholders) at the time of the Special Meeting. Affiliates
may not sell shares of Regions Common Stock acquired in connection with the
Merger, except pursuant to an effective registration statement under the
Securities Act or in compliance with SEC Rule 145 or another applicable
exemption from the Securities Act registration requirements.

Prior to the Effective Date each person whom Fidelity reasonably believes
to be an affiliate of Fidelity will deliver to Regions a written agreement
providing that such person generally will not sell, pledge, transfer, or
otherwise dispose of any Regions Common Stock to be received by such person
upon consummation of the Merger, except in compliance with the Securities Act
and the rules and regulations of the SEC promulgated thereunder.

OPTION TO PURCHASE FIDELITY PREFERRED STOCK

Pursuant to the Preferred Stock Option Agreement, dated as of October 17,
1994 (the "Option Agreement"), by and between Fidelity and Regions, Fidelity
granted to Regions an irrevocable option (the "Option") to acquire up to
200,000 shares (as adjusted as set forth in the Option Agreement) of Fidelity
Preferred Stock at a purchase price per share of $6.67. Under the terms of the
Option Agreement, Regions had the right to exercise the Option, in whole or in
part, at any time and from time to time during the ten business day period
preceding the Record Date. As Regions chose not to exercise the Option, the
Option expired in accordance with its terms.

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EFFECT OF THE MERGER ON RIGHTS OF STOCKHOLDERS

As a result of the Merger, holders of Fidelity Capital Stock will be
exchanging their shares of a federally-chartered, stock savings bank governed
by federal law, OTS regulations, and Fidelity's Federal Stock Charter (the
"Charter") and Bylaws, for shares of Regions, a Delaware corporation governed
by the Delaware General Corporation Law, as amended (the "Delaware GCL"), and
Regions' Certificate of Incorporation (the "Certificate") and Bylaws. Certain
significant differences exist between the rights of Fidelity stockholders and
those of Regions stockholders. The differences deemed material by Fidelity and
Regions are summarized below. In particular, Regions' Certificate and Bylaws
contain several provisions that may be deemed to have an antitakeover effect in
that they could impede or prevent an acquisition of Regions unless the
potential acquirer has obtained the approval of Regions' Board of Directors.
The following discussion is necessarily general; it is not intended to be a
complete statement of all differences affecting the rights of stockholders and
their respective entities, and it is qualified in its entirety by reference to
the United States Code, the regulations of the OTS, and the Delaware GCL, as
well as to Regions' Certificate and Bylaws and Fidelity's Charter and Bylaws.

ANTITAKEOVER PROVISIONS GENERALLY

The provisions of Regions' Certificate and Bylaws described below under the
headings, "Authorized Capital Stock," "Amendment of Certificate of
Incorporation and Bylaws," "Classified Board of Directors and Absence of
Cumulative Voting," "Removal of Directors," "Director Exculpation," "Special
Meetings of Stockholders," "Actions by Stockholders Without a Meeting,"
"Stockholder Nominations and Proposals," and "Mergers, Consolidations, and
Sales of Assets Generally," and the provisions of the Delaware GCL described
under the heading "Business Combinations With Certain Persons," are referred to
herein as the "Protective Provisions." In general, one purpose of the
Protective Provisions is to assist Regions' Board of Directors in playing a
role in connection with attempts to acquire control of Regions, so that the
Board can further and protect the interests of Regions and its stockholders as
appropriate under the circumstances, including, if the Board determines that a
sale of control is in their best interests, by enhancing the Board's ability to
maximize the value to be received by the stockholders upon such a sale.

Although Regions' management believes the Protective Provisions are,
therefore, beneficial to Regions' stockholders, the Protective Provisions also
may tend to discourage some takeover bids. As a result, Regions' stockholders
may be deprived of opportunities to sell some or all of their shares at prices
that represent a premium over prevailing market prices. On the other hand,
defeating undesirable acquisition offers can be a very expensive and
time-consuming process. To the extent that the Protective Provisions discourage
undesirable proposals, Regions may be able to avoid those expenditures of time
and money.

The Protective Provisions also may discourage open market purchases by a
potential acquirer. Such purchases may increase the market price of Regions
Common Stock temporarily, enabling stockholders to sell their shares at a price
higher than that which otherwise would prevail. In addition, the Protective
Provisions may decrease the market price of Regions Common Stock by making the
stock less attractive to persons who invest in securities in anticipation of
price increases from potential acquisition attempts. The Protective Provisions
also may make it more difficult and time consuming for a potential acquirer to
obtain control of Regions by replacing the Board of Directors and management.
Furthermore, the Protective Provisions may make it more difficult for Regions'
stockholders to replace the Board of Directors or management, even if a
majority of the stockholders believe such replacement is in the best interests
of Regions. As a result, the Protective Provisions may tend to perpetuate the
incumbent Board of Directors and management.

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AUTHORIZED CAPITAL STOCK

Regions. The Certificate authorizes the issuance of up to 120,000,000
shares of Regions Common Stock, of which 44,934,458 shares were issued,
including 2,919,179 treasury shares at September 30, 1994. Regions' Board of
Directors may cause additional shares of Regions Common Stock to be issued (up
to the amount authorized) without further action by Regions' stockholders,
unless such action is required in a particular case by applicable laws or
regulations or by any stock exchange upon which Regions' capital stock may be
listed.

The authority to issue additional shares of Regions Common Stock provides
Regions with the flexibility necessary to meet its future needs without the
delay resulting from seeking stockholder approval. The authorized but unissued
shares of Regions Common Stock will be issuable from time to time for any
corporate purpose, including, without limitation, stock splits, stock
dividends, employee benefit and compensation plans, acquisitions, and public or
private sales for cash as a means of raising capital. Such shares could be used
to dilute the stock ownership of persons seeking to obtain control of Regions.
In addition, the sale of a substantial number of shares of Regions Common Stock
to persons who have an understanding with Regions concerning the voting of such
shares, or the distribution or declaration of a dividend of shares of Regions
Common Stock (or the right to receive Regions Common Stock) to Regions
stockholders, may have the effect of discouraging or increasing the cost of
unsolicited attempts to acquire control of Regions.

Fidelity. Fidelity's authorized capital stock consists of 10,000,000
shares of Fidelity Common Stock, of which 1,774,800 shares were issued,
as of , 1995, and 500,000 shares of Fidelity Preferred Stock, of which
300,000 shares were issued, as of , 1995.

Pursuant to federal law and Fidelity's Charter, Fidelity's Board of
Directors may authorize the issuance of additional authorized shares of
Fidelity Capital Stock without further action by Fidelity's stockholders.
Fidelity's Charter denies the stockholders of Fidelity preemptive rights to
purchase or subscribe to any unissued authorized shares of Fidelity Capital
Stock or any option or warrant for the purchase thereof.

AMENDMENT OF CERTIFICATE OF INCORPORATION AND BYLAWS

Regions. The Delaware GCL generally provides that the approval of a
corporation's board of directors and the affirmative vote of a majority of (i)
all outstanding shares entitled to vote thereon and (ii) the outstanding shares
of each class of stock entitled to vote thereon as a class, is required to
amend a corporation's certificate of incorporation, unless the certificate
specifies a greater voting requirement. The Certificate states that its
provisions regarding authorized capital stock, election, classification, and
removal of directors, the approval required for certain business combinations,
meetings of stockholders, and amendment of the Certificate and Bylaws may be
amended or repealed only by the affirmative vote of the holders of at least 75%
of the outstanding shares of Regions voting stock, voting together as a single
class.

The Certificate also provides that the Board of Directors has the power to
adopt, amend, or repeal the Bylaws. Any action taken by the stockholders with
respect to adopting, amending, or repealing any Bylaws may be taken only upon
the affirmative vote of the holders of at least 75% of the outstanding shares
of Regions' voting stock.

Fidelity. Under OTS regulations and Fidelity's Charter, subject to certain
exceptions, no amendment or repeal thereof may be made unless first proposed by
the Board of Directors and then preliminarily approved by the OTS, which
preliminary approval may be granted by the OTS pursuant to regulations
specifying pre-approved charter amendments. Under Fidelity's Charter, any
amendment or repeal of the Fidelity Charter must be approved by Fidelity
stockholders by a majority of the total votes eligible to be cast at a legal
meeting. Fidelity's Bylaws provide that they may be amended at any time by a
two-thirds vote of the full Board of Directors or by a majority of the votes
cast by Fidelity stockholders at any legal meeting. Amendments to Fidelity's
Bylaws also must be approved by the OTS.

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CLASSIFIED BOARD OF DIRECTORS AND ABSENCE OF CUMULATIVE VOTING

Regions. The Certificate provides that Regions' Board of Directors is
divided into three classes, with each class to be as nearly equal in number as
possible. The directors in each class serve three-year terms of office.

The effect of Regions' having a classified Board of Directors is that only
approximately one-third of the members of the Board is elected each year, which
effectively requires two annual meetings for Regions' stockholders to change a
majority of the members of the Board.

Pursuant to the Certificate, each stockholder generally is entitled to one
vote for each share of Regions stock held and is not entitled to cumulative
voting rights in the election of directors. With cumulative voting, a
stockholder has the right to cast a number of votes equal to the total number
of such holder's shares multiplied by the number of directors to be elected.
The stockholder has the right to cast all of such holder's votes in favor of
one candidate or to distribute such holder's votes in any manner among any
number of candidates. Directors are elected by a plurality of the total votes
cast by all stockholders. With cumulative voting, it may be possible for
minority stockholders to obtain representation on the Board of Directors.
Without cumulative voting, the holders of more than 50% of the shares of
Regions Common Stock generally have the ability to elect 100% of the directors.
As a result, the holders of the remaining Regions Common Stock effectively may
not be able to elect any person to the Board of Directors. The absence of
cumulative voting thus could make it more difficult for a stockholder who
acquires less than a majority of the shares of Regions Common Stock to obtain
representation on Regions' Board of Directors.

Fidelity. Under Fidelity's Bylaws, Fidelity's Board of Directors is
divided into three classes, with each class as nearly equal in number as
possible. The directors in each class serve a three-year term, and one class is
elected by ballot annually. The effect of the classified Board of Directors is
that only approximately one-third of the members of the Board are elected each
year, which effectively requires two annual meetings for Fidelity charter and
stockholders to change a majority of the members of the Board. Pursuant to
Fidelity's Charter, each holder of Fidelity Common Stock generally is entitled
to one vote for each share of Fidelity Common Stock held. Fidelity's Charter
and Bylaws deny holders of Fidelity Common Stock cumulative voting rights with
respect to the election of directors. Holders of Fidelity Preferred Stock have
no voting rights except and to the extent that action is proposed on behalf of
Fidelity which affects the rights of the holders of Fidelity Preferred Stock,
in which case the holders of Fidelity Preferred Stock may vote as a class to
veto the proposed action.

REMOVAL OF DIRECTORS

Regions. Under the Certificate, any director or the entire Board of
Directors may be removed only for cause and only by the affirmative vote of the
holders of at least 75% of the outstanding shares of Regions' voting stock.

Fidelity. Pursuant to OTS regulations, any director may be removed for
cause by a vote of the holders of the majority of the shares then entitled to
vote in an election of directors at a meeting of stockholders called expressly
for that purpose.

LIMITATIONS ON DIRECTOR LIABILITY

Regions. The Certificate provides that a director of Regions will have no
personal liability to Regions or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability for (i) any breach
of the director's duty of loyalty to the corporation or its stockholders, (ii)
acts or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) the payment of certain unlawful dividends and
the making of certain unlawful stock purchases or redemptions, or (iv) any
transaction from which the director derived an improper personal benefit.

Although this provision does not affect the availability of injunctive or
other equitable relief as a remedy for a breach of duty by a director, it does
limit the remedies available to a stockholder who has a valid claim

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that a director acted in violation of his duties, if the action is among those
as to which liability is limited. This provision may reduce the likelihood of
stockholder derivative litigation against directors and may discourage or deter
stockholders or management from bringing a lawsuit against directors for breach
of their duties, even though such action, if successful, might have benefitted
Regions and its stockholders. The SEC has taken the position that similar
provisions added to other corporations' certificates of incorporation would not
protect those corporations' directors from liability for violations of the
federal securities laws.

Fidelity. OTS regulations and Fidelity's Charter do not provide any
limitations on a director's liability.

INDEMNIFICATION

Regions. The Certificate provides that Regions will indemnify its
officers, directors, employees, and agents to the full extent permitted by the
Delaware GCL. Under Section 145 of the Delaware GCL as currently in effect,
other than in actions brought by or in the right of Regions, such
indemnification would apply if it were determined in the specific case that the
proposed indemnitee acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of Regions and, with
respect to any criminal proceeding, if such person had no reasonable cause to
believe that the conduct was unlawful. In actions brought by or in the right of
Regions, such indemnification probably would be limited to reasonable expenses
(including attorneys' fees) and would apply if it were determined in the
specific case that the proposed indemnitee acted in good faith and in a manner
such person reasonably believed to be in or not opposed to the best interests
of Regions, except that no indemnification may be made with respect to any
matter as to which such person is adjudged liable to Regions, unless, and only
to the extent that, the court determines upon application that, in view of all
the circumstances of the case, the proposed indemnitee is fairly and reasonably
entitled to indemnity for such expenses as the court deems proper. To the
extent that any director, officer, employee, or agent of Regions has been
successful on the merits or otherwise in defense of any action, suit, or
proceeding, whether civil, criminal, administrative, or investigative, such
person must be indemnified against reasonable expenses incurred by him in
connection therewith.

Fidelity. OTS regulations provide that Fidelity will indemnify against
whom an action is brought or threatened because that person is or was a
director, officer, or employee of Fidelity for: (i) any amount for which that
person becomes liable under a judgment in such action and (ii) reasonable costs
and expenses, including reasonable attorneys' fees, actually paid or incurred
by that person in defending or settling such action, or in enforcing such
person's rights if such person attains a favorable judgment in such enforcement
action; provided, however, that any such person will be indemnified only if:
(a) a final judgment on the merits is rendered in such person's favor or (b) in
case of (1) a settlement, (2) a final judgment against such person, or (3) a
final judgment in such person's favor, other than on the merits, if a majority
of the disinterested directors of Fidelity determines that such person was
acting in good faith within the scope of such person's employment or authority
as such person reasonably could have perceived it under the circumstances and
for a purpose which such person reasonably could have believed under the
circumstances was in the best interests of Fidelity or its stockholders; and
provided, further, that no such indemnification will be made by Fidelity unless
Fidelity gives the OTS at least 60 days' prior notice and the OTS does not
object in writing to such indemnification.

In addition, under OTS regulations, if a majority of the directors of
Fidelity concludes that, in connection with any action, any person ultimately
may become entitled to indemnification, the directors may authorize payment of
reasonable costs and expenses, including reasonable attorneys' fees, arising
from the defense or settlement of such action. The directors of Fidelity may
impose such conditions on a payment of expenses as they deem warranted and in
the interests of Fidelity. Before making any advance payment of expenses,
however, Fidelity must obtain an agreement that Fidelity will be repaid if the
person on whose behalf the payment is made is later determined not to be
entitled to such indemnification.

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SPECIAL MEETINGS OF STOCKHOLDERS

Regions. Regions' Certificate and Bylaws provide that special meetings of
stockholders may be called at any time, but only by the Chief Executive
Officer, the Secretary, or the Board of Directors of Regions. Regions
stockholders do not have the right to call a special meeting or to require that
Regions' Board of Directors call such a meeting. This provision, combined with
other provisions of the Certificate and the restriction on the removal of
directors, would prevent a substantial stockholder from compelling stockholder
consideration of any proposal (such as a proposal for a business combination)
over the opposition of Regions' Board of Directors by calling a special meeting
of stockholders at which such stockholder could replace the entire Board with
nominees who were in favor of such proposal.

Fidelity. Under Fidelity's Bylaws, special meetings of the stockholders of
Fidelity may be called at any time by the Chairman of the Board, the President,
or a majority of the Board of Directors and shall be called by the Chairman of
the Board, the President, or the Secretary upon the written request of the
holders of not less than one-tenth of all outstanding shares of capital stock
entitled to vote at the meeting.

ACTIONS BY STOCKHOLDERS WITHOUT A MEETING

Regions. The Certificate provides that any action required or permitted to
be taken by Regions stockholders must be effected at a duly called meeting of
stockholders and may not be effected by any written consent by the
stockholders. These provisions would prevent stockholders from taking action,
including action on a business combination, except at an annual or special
meeting called by the Board of Directors, even if a majority of the
stockholders were in favor of such action.

Fidelity. Fidelity's Bylaws provide that action required or permitted to
be taken at a meeting of stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent thereto in writing.

STOCKHOLDER NOMINATIONS AND PROPOSALS

Regions. Regions' Certificate and Bylaws provide that any nomination by
stockholders of individuals for election to the Board of Directors must be made
by delivering written notice of such nomination (the "Nomination Notice") to
the Secretary of Regions not less than 14 days nor more than 50 days before any
meeting of the stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given to
stockholders, the Nomination Notice must be delivered to the Secretary of
Regions not later than the seventh day following the day on which notice of the
meeting was mailed to stockholders. The Nomination Notice must set forth
certain background information about the persons to be nominated, including
information concerning (i) the name, age, business, and, if known, residential
address of each nominee, (ii) the principal occupation or employment of each
such nominee, and (iii) the number of shares of Regions capital stock
beneficially owned by each such nominee. The Board of Directors is not required
to nominate in the annual proxy statement any person so proposed; however,
compliance with this procedure would permit a stockholder to nominate the
individual at the stockholders' meeting, and any stockholder may vote such
holder's shares in person or by proxy for any individual such holder desires.

Fidelity. Nominations of directors may be made by the Board of Directors
or a designated committee thereof and by any stockholder entitled to vote in an
election of directions if written notice of the stockholder's intent to
nominate the director has been received (i) not later than 20 days prior to the
meeting or (ii) if notice of the meeting has been sent 30 days or more prior to
the meeting, not later than the tenth day following the date that the notice of
the meeting was mailed.

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BUSINESS COMBINATIONS WITH CERTAIN PERSONS

Regions. Section 203 of the Delaware GCL ("Section 203") places certain
restrictions on "business combinations" (as defined in Section 203, generally
including mergers, sales and leases of assets, issuances of securities, and
similar transactions) by Delaware corporations with an "interested stockholder"
(as defined in Section 203, generally the beneficial owner of 15% or more of
the corporation's outstanding voting stock). Section 203 generally applies to
Delaware corporations, such as Regions, that have a class of voting stock
listed on a national securities exchange, authorized for quotation on an
interdealer quotation system of a registered national securities association,
or held of record by more than 2,000 stockholders, unless the corporation
expressly elects in its certificate of incorporation or bylaws not to be
governed by Section 203.

Regions has not specifically elected to avoid the application of Section
203. As a result, Section 203 generally would prohibit a business combination
by Regions or a subsidiary with an interested stockholder within three years
after the person or entity becomes an interested stockholder, unless (i) prior
to the time when the person or entity becomes an interested stockholder,
Regions' Board of Directors approved either the business combination or the
transaction pursuant to which such person or entity became an interested
stockholder, (ii) upon consummation of the transaction in which the person or
entity became an interested stockholder, the interested stockholder held at
least 85% of the outstanding Regions voting stock (excluding shares held by
persons who are both officers and directors and shares held by certain employee
benefit plans), or (iii) once the person or entity becomes an interested
stockholder, the business combination is approved by Regions' Board of
Directors and by the holders of at least two-thirds of the outstanding Regions
voting stock, excluding shares owned by the interested stockholder.

Fidelity. Neither OTS regulations nor Fidelity's Charter place any
restrictions on business combinations with interested stockholders similar to
those imposed by Delaware law.

MERGERS, CONSOLIDATIONS, AND SALES OF ASSETS GENERALLY

Regions. The Certificate generally requires the affirmative vote of the
holders of at least 75% of the outstanding shares of Regions voting stock to
effect (i) any merger or consolidation with or into any other corporation or
(ii) any sale or lease of any substantial part of the assets of Regions to any
party that beneficially owns 5.0% or more of the outstanding shares of Regions
voting stock, unless the transaction was approved by Regions' Board of
Directors before the other party became a 5.0% beneficial owner or is approved
by 75% or more of the full Board after the party becomes such a 5.0% beneficial
owner.

Fidelity. OTS regulations provide that most mergers to which Fidelity is a
party require the approval of the holders of two-thirds of the outstanding
shares of Fidelity, except that the affirmative vote of a majority of Fidelity
stockholders is required to approve a merger with an interim thrift for the
purpose of forming a thrift holding company. If a proposed merger or any other
proposed action affects the rights of the holders of Fidelity Preferred Stock,
they have a right under the Fidelity Charter to veto the proposed action.

DISSENTERS' RIGHTS

Regions. The rights of appraisal of dissenting stockholders of Regions are
governed by the Delaware GCL. Pursuant thereto, except as described below, any
stockholder has the right to dissent from any merger of which Regions could be
a constituent corporation. No appraisal rights are available, however, for (i)
the shares of any class or series of stock that is either listed on a national
securities exchange, quoted on the Nasdaq National Market, or held of record by
more than 2,000 stockholders or (ii) any shares of stock of the constituent
corporation surviving a merger if the merger did not require the approval of
the surviving corporation's stockholders, unless, in either case, the holders
of such stock are required by an agreement of merger or consolidation to accept
for that stock something other than: (a) shares of stock of the corporation
surviving or resulting from the merger or consolidation; (b) shares of stock of
any other corporation that will be listed at the effective date of the merger
on a national securities exchange, quoted on the Nasdaq National

35
<PAGE> 40

Market, or held of record by more than 2,000 stockholders; (c) cash in lieu of
fractional shares of stock described in clause (a) or (b) immediately above; or
(d) any combination of the shares of stock and cash in lieu of fractional
shares described in clauses (a) through (c) immediately above. Because Regions
Common Stock is quoted on the Nasdaq National Market and is held of record by
more than 2,000 stockholders, unless the exception described immediately above
applies, holders of Regions Common Stock do not have dissenters' rights of
appraisal.

Fidelity. The rights of appraisal of dissenting stockholders under OTS
regulations, while generally similar to those afforded under the Delaware GCL,
differ in certain details. For a full description of the rights of dissenting
stockholders under applicable law, see "Description of the
Transaction--Dissenters' Rights." The applicable OTS regulation is reproduced
as Appendix D to this Proxy Statement/Prospectus.

STOCKHOLDERS' RIGHTS TO EXAMINE BOOKS AND RECORDS

Regions. The Delaware GCL provides that a stockholder may inspect books
and records upon written demand under oath stating the purpose of the
inspection, if such purpose is reasonably related to such person's interest as
a stockholder.

Fidelity. OTS regulations applicable to Fidelity provide that any
stockholder or group of stockholders holding of record (i) voting shares having
a cost of at least $100,000 or constituting at least 1.0% of the total
outstanding voting shares, provided, in either case, that such stockholder or
group has held those shares of record for at least six months, or (ii) at least
5.0% of the total outstanding voting shares, has the right to examine, with
certain exceptions, books and records of account, minutes, and records of
stockholders, upon written demand stating a proper purpose. Any Fidelity
stockholder may inspect a list of the stockholders entitled to vote at an
annual or special meeting at any time within the 20 days prior to the
meeting or during the meeting. Pursuant to OTS regulations, Fidelity may
require that the stockholder or stockholders requesting examination furnish
Fidelity or its transfer agent or registrar with an affidavit to the effect
that the examination will not be conducted for any purpose other than the
business of Fidelity and that the stockholder or stockholders have not offered
for sale or helped anyone else sell, and do not intend to sell or help any
other person sell, any list of stockholders of Fidelity or any other
corporation. No stockholder has a right to obtain or review any portion of the
books or records of Fidelity containing information concerning individual
depositors.

DIVIDENDS

Regions. The Delaware GCL provides that, subject to any restrictions in
the corporation's certificate of incorporation, dividends may be declared from
the corporation's surplus, or, if there is no surplus, from its net profits for
the fiscal year in which the dividend is declared and the preceding fiscal
year. Dividends may not be declared, however, if the corporation's capital has
been diminished to an amount less than the aggregate amount of all capital
represented by the issued and outstanding stock of all classes having a
preference upon the distribution of assets. Substantially all of the funds
available for the payment of dividends by Regions are derived from its
subsidiary banks. There are various statutory limitations on the ability of
Regions' subsidiary banks to pay dividends to Regions. See "Supervision and
Regulation--Payment of Dividends."

Fidelity. OTS regulations permit Fidelity to pay dividends on its capital
stock only from net income, earned surplus, or undivided profits and do not
permit Fidelity to pay dividends if its capital would thereby be reduced below
specified levels, including the amount established by Fidelity for a
liquidation account in connection with its conversion from mutual to stock form
and the capital requirements imposed on Fidelity. In addition, the OTS may
prohibit any capital distribution that would otherwise be permitted under the
regulations, if the OTS determines that such a capital distribution would
constitute an unsafe and unsound practice.

Under Fidelity's Charter, no shares of capital stock may be issued to
officers, directors or controlling

36
<PAGE> 41

persons of Fidelity other than as part of a general public offering or as
qualifying shares to a director, unless the issuance or the plan under which
such shares would be issued is approved by a majority of the outstanding shares
of Fidelity.
COMPARATIVE MARKET PRICES AND DIVIDENDS

Regions Common Stock is quoted on the Nasdaq National Market under the
symbol "RGBK." Fidelity Capital Stock is not traded in any established market.
The following table sets forth, for the indicated periods, the high and low
closing sale prices for Regions Common Stock as reported on the Nasdaq National
Market, the high and low prices for Fidelity Common Stock and the cash
dividends declared per share of Regions Common Stock and Fidelity Common Stock
for the indicated periods. The stock prices and historical dividends for
Regions have been adjusted to reflect a 10% stock dividend paid by Regions on
April 1, 1993. The prices indicated for Fidelity are based on actual
transactions in Fidelity Common Stock of which Fidelity management is aware;
however, for the indicated period there has been only a very limited number of
transactions and all such transactions have involved limited numbers of shares
in Fidelity Common Stock in the indicated periods, and no assurance can be
given that the indicated prices represent the actual market value of the
Fidelity Common Stock.

REGIONS COMMON STOCK FIDELITY COMMON STOCK FIDELITY PREFERRED STOCK
-------------------- --------------------- ------------------------
CASH DIVIDENDS CASH DIVIDENDS CASH DIVIDENDS
PRICE RANGE DECLARED PRICE RANGE DECLARED PRICE RANGE DECLARED
------------ ------------ ------------
HIGH LOW PER SHARE HIGH LOW PER SHARE HIGH LOW PER SHARE
---- --- --------- ---- --- --------- ---- --- ---------
<S> <C> <C> <C>
1993
First Quarter . . . . . . . $38.38 $31.25 $.26
Second Quarter . . . . . . 38.25 30.25 .26
Third Quarter . . . . . . . 35.25 31.25 .26
Fourth Quarter . . . . . . 35.00 29.63 .26
1994
First Quarter . . . . . . 33.50 30.13 .30
Second Quarter . . . . . . 36.13 30.50 .30
Third Quarter . . . . . . 36.75 34.63 .30
Fourth Quarter . . . . . . 35.00 29.75 .30
1995
First Quarter
(through
) . . . . .
</TABLE>

On , 1995, the last reported sale price of Regions Common Stock as
reported on the Nasdaq National Market, and the price of Fidelity Common Stock
in the last known transaction, which occurred in ,
were $ and $ , respectively. On October 17, 1994, the last business day
prior to public announcement of the proposed Merger, the last reported sale
price of Regions Common Stock as reported on the Nasdaq National Market, and
the last known price of Fidelity Common Stock, were $34.25 and $ ,
respectively.

The holders of Regions Common Stock are entitled to receive dividends when
and if declared by the Board of Directors out of funds legally available
therefor. Regions has paid regular quarterly cash dividends since 1971.
Although Regions currently intends to continue to pay quarterly cash dividends
on the Regions Common Stock, there can be no assurance that Regions' dividend
policy will remain unchanged after completion of the Merger. The declaration
and payment of dividends thereafter will depend upon business

37
<PAGE> 42

conditions, operating results, capital and reserve requirements, and the Board
of Directors' consideration of other relevant factors.

Regions is a legal entity separate and distinct from its subsidiaries and
its revenues depend in significant part on the payment of dividends from its
subsidiary financial institutions, particularly First Alabama Bank. Regions'
subsidiary depository institutions are subject to certain legal restrictions on
the amount of dividends they are permitted to pay. See "Supervision and
Regulation--Dividends."

Although it has no established policy concerning payment of dividends,
Fidelity has in the past paid cash dividends on outstanding Fidelity Common
Stock and Fidelity Preferred Stock. If the Merger is not consummated, Fidelity
anticipates that it will continue to pay cash dividends, but the declaration
and level of dividends in the future would depend upon Fidelity's financial
performance, capital requirements, and other pertinent factors.

38
<PAGE> 43

FIDELITY MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following narrative and analysis is intended to assist in understanding
Fidelity's results of operations and changes in financial position. This
information should be read in conjunction with the information included under
"Selected Financial Data--Selected Historical Financial Data of Fidelity" and
"Business of Fidelity" and Fidelity's consolidated financial statements and
notes thereto, included elsewhere in this Proxy Statement/Prospectus. This
narrative follows the format of the Consolidated Statement of Earnings and
Statement of Financial Condition for the years ended December 31, 1993 and
1992.

OVERVIEW

Fidelity reported net income of $2,722,942 for the year ended December 31,
1993 which included $405,547 of pretax gain on the sale of investment
securities. This compares to net income of $308,193 for the year ended December
31, 1992. Included in the 1992 net income was $111,718 that related to the
positive benefit of a change in accounting principles with the adoption of
Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes". See note 13 of the notes to consolidated financial statements
and the "Income Tax" section of this narrative for further explanation of the
application of SFAS 109. The primary differences in the net income from 1992 to
1993 related to the decline in the provision for loan losses ($2,736,648 in 1992
compared to $127,422 in 1993) and gain (loss) on the sale of first mortgage
loans and rights to service first mortgage loans (($68,362) in 1992 and
$1,348,225 in 1993). A detailed discussion of these differences is provided in
the "Provision for Loan Losses" and "Other Income" sections of this narrative.
The year ended 1993 marked the first full year of operations under current
management. The major focus of management has been to strengthen controls and
policies and procedures in all operational areas of Fidelity and to identify
and resolve potential losses and improve documentation in the loan portfolio.

Year Ended December 31, 1993, Compared to Year Ended December 31, 1992

RESULTS OF OPERATIONS

Interest Income

Average total loans increased 15.8% from 1992 to 1993. Fidelity's loan
demand continued to be strong throughout 1993 with almost all of the growth in
average loan balances attributable to adjustable rate mortgage loans.
Management entered into a strategy of retaining adjustable rate mortgage loans
to increase Fidelity's percentage of interest sensitive assets and decrease
Fidelity's exposure to interest rate risk. The mortgage refinance market
continued strong throughout 1993 resulting in increased mortgage production.
Most of that production was in fixed rate mortgage product which was sold into
the secondary market. However, Fidelity did experience some success in
attracting one year and three year adjustable rate mortgages. Loan demand for
commercial and consumer loans was sufficient to maintain consistent average
balances from 1992 to 1993.

The average yield on loans and other earning assets continued to decline
throughout 1993. The average yield on earning assets for 1993 was 7.58%
compared to 8.73% for 1992. The decline was attributable to three major
factors: (i) most of the growth in average assets was attributable to
adjustable rate mortgages whose rates are typically lower than prevailing
market fixed rates, (ii) interest rates, in general, continued to decline
throughout 1993, and (iii) management sold most of Fidelity's longer-term
securities portfolio with higher rates and used the proceeds to fund increases
in the loan portfolio.

Interest Expense

Fidelity's average cost of funds declined by 115 basis points from 5.53% in
1992 to 4.38% in 1993. Fidelity was able to decrease its cost of shorter-term
deposits such as NOW, money market and savings accounts by 87 basis points.
Additionally, Fidelity experienced a significant shift of funds from more
costly

39
<PAGE> 44

time deposits to less costly savings deposits. Savings account average balances
increased approximately $9 million during 1993 as certificate of deposit
customers moved their funds into lower yielding but, shorter-term savings
accounts. Customers were unwilling to commit their funds to longer term
deposits during 1993 in anticipation of rising time deposit rates.
Additionally, as time deposits renewed, they renewed at generally lower rates
throughout 1993 resulting in an overall decrease in Fidelity's cost of funds.
In addition to deposit strategies, management took advantage of two sources of
funds available to Fidelity from the Federal Home Loan Bank of Atlanta
("FHLB"). Fidelity periodically drew on an advance line of credit with a
weighted average cost of 3.42% during 1993 that compared to a weighted average
cost of 4.26% during 1992. Fidelity used this line of credit to fund mortgage
loans held for sale and provide for Fidelity's short-term liquidity needs. In
the fourth quarter of 1993 Fidelity took down a five year, $5 million, fixed
rate note payable with the FHLB at a rate of 4.96% (see note 10 in the Notes to
Consolidated Financial Statements). These funds were used to fund adjustable
rate mortgages and other incremental loan growth.

Net Interest Income

Fidelity's net interest income increased 11% from $7.3 million in 1992 to
$8.1 million in 1993. Fidelity's net interest margin also increased from 3.66%
in 1992 to 3.72% in 1993. The net interest spread for the two years was
identical at 3.20%. The increase in interest income and the margin was
attributable primarily to shifts of earning assets from securities and
overnight funds into mortgage and commercial loans. Fidelity's loan to deposit
ratio at December 31, 1993 was 92% compared to 77% at the end of 1992.
Fidelity's ratio of interest-earning assets to interest-bearing liabilities
increased from 109% at December 31, 1992 to approximately 114% at December 31,
1993. Fidelity's liabilities are more interest sensitive than its assets.
Consequently, Fidelity's interest margin responded positively to the downward
rate trend that was prevalent in 1993.

Yield Analysis

The following schedule discloses for the years ended 1993 and 1992 average
balances, interest income and expense and applicable yields.

1993 1992 Change Due To
------------------------- ------------------------- ---------------------
Average Income/ Yield/ Average Income/ Yield/ Rate/
Balance Expense Rate Balance Expense Rate Rate Volume Volume
------- ------- ----- ------- ------- ------ ----- ------- ------
(Dollars in thousands)

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Earning Assets:
Loans Net of Unearned Income(1) $187,688 $15,216 8.11% $162,056 $ 15,840 9.77% ($2,702) $2,505 $(427)
Less Allowance for Loan Losses 4,349 3,926
------- -------
Net Loans 183,339 158,130
Taxable Securities 13,973 759 5.43 16,180 856 5.29 22 (117) (3)
Overnight Funds at FHLB and
Federal Funds Sold 15,358 469 3.06 20,797 677 3.26 (41) (177) 11
------- ------ ------- ------
Total Earning Assets 212,670 16,444 7.58 195,107 17,373 8.73 (2,246) 1,533 (215)
------ ------
Cash and Other Assets 21,862 25,607
------- -------
Average Assets $234,532 $220,714
======= =======
</TABLE>

<PAGE> 45
<TABLE>
<CAPTION>
1993 1992 Change Due To
------------------------ ------------------------ ---------------------
Average Income/ Yield/ Average Income/ Yield/ Rate/
Balance Expense Rate Balance Expense Rate Rate Volume Volume
------- ------- ---- ------- ------- ----- ----- ------- ------
(Dollars in thousands)

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Liabilities and
Stockholders' Equity

Interest-bearing Liabilities:
NOW and Money Market $ 38,955 $1,049 2.69% $ 34,200 $ 1,265 3.70% ($344) $176 ($48)
Savings Deposits 20,798 702 3.37 12,097 497 4.11 (89) 357 (64)
Time Deposits 127,215 6,454 5.07 135,182 8,282 6.13 (1,424) (488) 84
Other Borrowed Funds 3,975 162 4.10 1,020 48 4.70 (6) 139 (18)
------- ----- ------- ------
Total Interest-bearing
Liabilities 190,943 8,367 4.38 182,499 10,092 5.53 (2,094) 467 (97)
----- ------
Net Interest Spread 3.20 3.20
Noninterest-bearing Demand
Accounts 21,750 18,853
Other Liabilities 6,433 5,869
Stockholders' Equity 15,406 13,493
------- -------
Average Liabilities and
Stockholders' Equity $234,532 $220,714
======= =======
Net Interest Income and Margin $8,077 3.72% $ 7,281 3.66%
===== ======

</TABLE>

(1) When computing yields on interest-earning assets, non-accruing loans
are included in average loan balances.

The change in interest income or expense that is due to rate is computed by
multiplying the change in rate between the two years times the previous year's
volume. The change in interest income or expense that is due to volume is
computed by multiplying the change in volume between the two years times the
previous year's interest rate. The change in interest income or expense that is
due to rate/volume is computed by multiplying the change in rate between the
two years times the change in volume between the two years.

The following schedule states earning assets by type for the years ended
December 31, 1989 through 1993. The schedule includes percentage increases and
decreases in balances for 1993 compared to 1992 and 1992 compared to 1991.

Composition of Earning Assets
<TABLE>
<CAPTION>
Percent
Increase (Decrease)
December 31 -------------------
----------------------------------------------- 1993/ 1992/
1993 1992 1991 1990 1989 1992 1991
---- ---- ---- ---- ---- ---- ----
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Loans:
Real Estate Loans $163,564 $111,030 $116,869 $ 94,755 $ 82,755 47.31% (5.00)%
Construction 6,546 2,579 4,572 8,880 6,501 153.86 (43.60)
Consumer 34,709 35,450 43,027 45,095 34,991 (2.09) (17.61)
Commercial 12,223 11,436 16,904 16,597 14,227 6.87 (32.35)
Financing Leases 236 558 572 670 472 (57.65) (2.34)
------- ------- ------- ------- -------
217,278 161,053 181,944 165,997 138,946
Less:
Undisbursed Funds 2,674 1,042 3,797 5,565 4,040 156.48 (72.55)
Unearned Discounts 1,124 3,017 4,343 4,630 3,370 (62.74) (30.55)
Net Deferred Loan Fees 382 150 146 20 (231) 154.06 2.60
------- ------- ------- ------- -------

213,098 156,844 173,658 155,782 131,767

Allowance for Loan Losses 3,841 4,341 2,825 3,191 821 (11.52) 53.68
------- ------- ------- ------- -------
Total Net Loans 209,257 152,503 170,833 152,591 130,946 37.21 (10.73)
======= ======= ======= ======= =======

</TABLE>
41
<PAGE> 46

Percent
Increase (Decrease)
December 31 -------------------
----------------------------------------------- 1993/ 1992/
1993 1992 1991 1990 1989 1992 1991
---- ---- ---- ---- ---- ---- ----
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Investments:
U.S. Treasury Securities 7,006 10,212 1,118 1,245 1,000 (31.39) 813.31
Obligations of Other U.S. Government
Agencies and Corporations -- 6,544 8,434 9,560 10,363 (100.00) (22.41)
Obligations of States and Political
Subdivisions 33 483 946 1,926 172 (93.09) (49.05)
Other Securities 1,068 1,010 945 867 582 5.72 6.85
------- ------- ------- ------- -------
8,107 18,249 11,443 13,598 12,117 (55.57) 59.47
------- ------- ------- ------- -------

Other:
Interest-bearing Deposits in
Financial Institutions 13,103 19,331 17,715 34,295 20,045 (32.22) 9.13
Federal Funds Sold 100 -- 4,000 4,000 -- -- (100.00)
------- ------- ------- ------- -------
13,203 19,331 21,715 38,295 20,045 (31.70) (10.97)
------- ------- ------- ------- -------

Total Earning Assets $230,567 $190,083 $203,991 $204,484 $163,108 21.30% (6.82)%
======= ======= ======= ======= =======

</TABLE>

At December 31, 1993, 1992, 1991, 1990 and 1989, balances include
$9,179,831, $8,918,008, $8,248,640, $870,250 and $1,578,774 of loans classified
as held for sale, respectively.

The following tables provide a comparative breakdown of earning assets'
ability to reprice and market values, where applicable. All amounts represent
period end balances and do not include loans in process, unearned discounts,
allowance for loan losses or deferred fee income.

Loans' Ability to Reprice at December 31, 1993
(Dollars in thousands)

<TABLE>
<CAPTION>
Real Estate Loans
------------------------------------
Land and
Amounts Due in: Residential Commercial Construction Commercial Consumer Total
----------- ---------- ------------ ---------- -------- -----
<S> <C> <C> <C> <C> <C> <C>
One Year or Less $ 27,569 $11,783 $5,136 $ 8,032 $16,185 $ 68,705
After One Year Through Three Years 45,683 13,219 960 2,752 13,378 75,992
After Three Years Through Five Years 20,287 6,660 569 1,063 3,489 32,068
After Five Years Through Ten Years 14,378 210 62 34 1,615 16,299
Greater Than Ten Years 20,619 0 0 2 42 20,663
------- ------ ----- ------ ------ -------
Total $128,536 $31,872 $6,727 $11,883 $34,709 $213,727
======= ====== ===== ====== ====== =======

Interest Rate Terms on Amounts
Fixed 8.26% 8.27% 8.27% 8.06% 9.16% 8.40%
Adjustable 5.52 7.36 7.90 7.42 7.25 5.95

</TABLE>

The above totals do not include unearned discounts or loans in process
accounts.

42
<PAGE> 47

Investment Securities Portfolio
(Dollars in thousands)

<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
Book Market Book Market Book Market
Value Value Value Value Value Value
----- ------ ----- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
U. S. Treasury Securities $7,006 $7,035 $10,212 $10,143 $1,118 $1,117
State, County and Municipals 33 33 482 482 946 952
----- ------ ------ ------ ----- -----
Total $7,039 $7,068 $10,694 $10,625 $2,064 $2,069
====== ====== ======= ======= ====== ======
</TABLE>

Investment Securities' Ability to Reprice at December 31, 1993
(Dollars in thousands)

<TABLE>
<CAPTION>
One Year One to Five to Over Ten
or Less Five Years Ten Years Years Total
------- ---------- --------- ------- -----
<S> <C> <C> <C> <C> <C>
U. S. Treasury Securities . . . . . . $3,006 $4,000 $ -- $ -- $7,006
State, County and Municipals . . . . -- 33 -- -- 33
------ ------ ------- ------ ------
Total . . . . . . . . . . . . . . 3,006 4,033 -- -- $7,039
====== ====== ======= ====== ======
Weighted Average Yield . . . . . . . 4.13% 4.03% --% --% 4.07%
</TABLE>

Mortgage-Backed Securities Portfolio
(Dollars in thousands)
<TABLE>
<CAPTION>
1993 1992 1991
----------------- ----------------- ----------------
Book Market Book Market Book Market
Mortgage-backed Securities Value Value Value Value Value Value
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
FHLMC $ -- $ -- $6,103 $6,312 $7,856 $8,187
GNMA -- -- 441 458 579 599
----- ----- ----- ----- ----- -----
Total Mortgage-backed Securities $ -- $ -- $6,544 $6,770 $8,435 $8,786
====== ===== ===== ===== ===== =====

Mortgage-backed Securities Purchases $ 1,552 $ -- $ --
Mortgage-backed Securities Sold (7,239) -- --
Principal Repayments (857) (1,891) (1,127)
Other, Net -- 1 1
------ ----- -----
Total Additions (Deletions), Net ($6,544) ($1,890) ($1,126)
====== ====== =====
</TABLE>

Provision for Loan Losses

Management continued its efforts to reduce the amount of criticized and
classified assets during 1993. The total amount of criticized and classified
assets was reduced by 32% from $15.2 million or 9.69% of total loans as of
December 31, 1992 to $10.3 million or 4.83% of total loans as of December 31,
1993. Fidelity's loan loss provision for 1993 was $127,000 compared to $2.7
million for 1992. Charge-offs and recoveries were $734,000 and $107,000,
respectively for 1993. This compares to 1992 charge-offs of $1.4 million and
recoveries of $140,000. Fidelity's primary regulator, the OTS, required
Fidelity to maintain reserves (loan loss and real estate owned) of $4.6 million
for the year ended December 31, 1992. The downturn of the national economy and
its impact on Fidelity's market area, particularly real estate, prompted
Fidelity and its regulators to challenge the sufficiency of its allowance for
loan losses approximately midway through 1992. During 1993, management, aided
by an improving economy, continued to convert single-pay notes to more
conventional terms, restructure criticized loans to correct credit weaknesses
and resolve its problem assets in a timely manner. Management was able to
reduce real estate owned by 67% from the year ended 1992 total of $1.5 million
to $480,000 as of December 31, 1993. The result of these efforts was a
drastically reduced

43
<PAGE> 48

need for a loan loss and real estate owned provision in 1993.

Management believes the allowance for loan losses is sufficient to provide
for losses inherent in the portfolio after considering current appraisals,
credit risk, comparable sales values, discounted cash flows and other evidence
of current value. Fidelity's loan portfolio remains dependent, in part, on
real estate collateral values for repayment. Consequently, economic conditions
adverse to real estate values may cause management to reevaluate the allowance
for loan losses.

The following tables set forth the activity in the allowance account,
nonperforming assets and troubled debt restructurings and delinquent loans for
the periods indicated. Comparative ratios are included for analysis purposes.
All amounts, except where indicated are period end balances.

Allowance for Loan Losses and Other Selected Statistics
(Dollars in thousands)

<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Total Average Loans . . . . . . . . . $187,688 $162,056 $172,972 $150,008 $127,198
Total Loans, End of Period . . . . . 213,098 156,844 173,658 155,782 131,767
Allowance for Loan Losses,
Beginning of Year . . . . . . . . 4,341 2,825 3,191 821 491
Charged-off Loans . . . . . . . . (734) (1,360) (861) (248) (51)
Recoveries . . . . . . . . . . . . 107 140 30 9 17
------- ------- ------- ------- -------
Net Loans Charged-off . . . . . . (627) (1,220) (831) (239) (34)
Provision for Loan Losses . . . . 127 2,736 465 2,609 364
------- ------- ------- ------- -------
Allowance for Loan Losses,
End of Year . . . . . . . . . . . $ 3,841 $ 4,341 $ 2,825 $ 3,191 $ 821
======= ======= ======= ======= =======

Net Loans Charged-off to Total
Average Loans . . . . . . . . . . 0.33% 0.75% 0.48% 0.16% 0.03%
Allowance for Loan Losses to
Total Loans . . . . . . . . . . . 1.80 2.77 1.63 2.05 0.62
Allowance for Loan Losses to
Nonperforming Loans . . . . . . . 444.02 436.73 306.04 175.23 111.00
Net Loans Charged-off to Allowance for
Loan Losses . . . . . . . . . . . 16.32 28.11 29.43 7.50 4.17
Recoveries to Charge-offs . . . . . . 14.51 10.31 3.48 3.79 32.72
</TABLE>

44
<PAGE> 49

Nonperforming Assets and Troubled Debt Restructurings
(Dollars in thousands)

<TABLE>
<CAPTION>
Nonaccruing Loans: 1993 1992 1991 1990 1989
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Residential . . . . . . . . . . . $ 166 $ 33 $ 312 $ 726 $ 307
Commercial Real Estate . . . . . . -- -- -- 170 --
Land and Construction . . . . . . 3 5 6 1 --
Consumer . . . . . . . . . . . . . 302 366 216 192 174
Commercial . . . . . . . . . . . . 104 309 6 8 --
----- ----- ----- ----- -----
Total . . . . . . . . . . . . . 575 713 540 1,097 481
----- ----- ----- ----- -----
Accruing Loans More Than 90 Days Delinquent:
Residential . . . . . . . . . . . 282 57 243 666 168
Commercial Real Estate . . . . . . -- -- 53 41 86
Land and Construction . . . . . . -- -- -- -- --
Consumer . . . . . . . . . . . . . 8 118 87 17 5
Commercial . . . . . . . . . . . . 0 105 -- -- --
----- ----- ----- ----- -----
Total . . . . . . . . . . . . . 290 280 383 724 259
----- ----- ----- ----- -----
Total Nonperforming Loans . . . . . . 865 993 923 1,821 740
Other Real Estate Owned Including
Loans to Facilitate the Sale of
Real Estate Owned . . . . . . . . 796 3,090 3,307 1,229 1,180
Troubled Debt Restructurings . . . . 1,373 1,923 2,258 -- --
----- ----- ----- ----- -----
Total Nonperforming Assets . . . $3,034 $6,006 $6,488 $3,050 $1,920
===== ===== ===== ===== =====

</TABLE>

Delinquent Loan Analysis
(Dollars in thousands)
<TABLE>
<CAPTION>

December 31, 1993
-----------------
30-59 Days 60-89 Days 90 or More Days
------------------- ------------------ ------------------
% of Loan % of Loan % of Loan
Amount Category Amount Category Amount Category
------ --------- ------ --------- ------ ---------
<S> <C> <C> <C> <C> <C> <C>
Residential $1,055 0.82% $288 0.22% $282 0.22%
Commercial Real Estate 74 0.23 -- 0.00 -- 0.00
Land and Construction 18 0.27 -- 0.00 -- 0.00
Consumer 247 0.74 66 0.20 8 0.02
Commercial 38 0.32 64 0.54 -- 0.00
----- --- ---
Total $1,432 0.67 $418 0.20 $290 0.14
===== === ===

</TABLE>

December 31, 1992
-----------------
30-59 Days 60-89 Days 90 or More Days
------------------- ------------------ ------------------
% of Loan % of Loan % of Loan
Amount Category Amount Category Amount Category
------ --------- ------ --------- ------ ---------
<S> <C> <C> <C> <C> <C> <C>
Residential $1,281 1.64% $ 481 0.62% $ 57 0.07%
Commercial Real Estate 287 0.94 150 0.49 -- 0.00
Land and Construction 260 5.52 138 2.93 -- 0.00
Consumer 607 1.92 702 2.22 118 0.37
Commercial 104 0.87 20 0.17 105 0.88
----- ----- ---
Total $2,539 1.62 $1,491 0.95 $280 0.18
===== ===== ===

</TABLE>

Other Income

Other income for Fidelity consists of gains or losses on the sale of first
mortgage loans and servicing rights, loan origination and commitment fees, net
loan servicing fees, securities gains, and other income including

45
<PAGE> 50

service charges on deposit accounts. Other income increased $1.7 million or 41%
from $4.1 million in 1992 to $5.8 million for the year ended December 31, 1993.

Fidelity experienced record mortgage production during 1993, closing $233
million in mortgage loans. Net gain on the sale of fixed rate mortgage loans in
the secondary market and gain on the sale of servicing rights of mortgages was
$1.4 million in 1993 compared to a loss of $68,000 in 1992. The refinance
market that was prevalent through-out 1993 was the primary influence on
mortgage loan production. The improved gain on sales of mortgage loans and
servicing rights was attributable to declining interest rates, stronger hedging
policies and a change in strategy of selling servicing rights on mortgage
loans.

While the refinance market of 1993 produced increased gains on mortgage
loan sales, it also contributed to record amortization of both purchased
mortgage servicing rights and excess servicing rights. Amortization of
servicing rights totaled $1.4 million in 1993 compared to $560,000 for 1992.
Mortgage loan servicing fees for the year ended 1993 were $1.4 million compared
to $1.1 million in 1992. The increase in mortgage servicing fees for 1993 was
attributable to a larger servicing portfolio.

The final major difference in other income was attributable to a strategy
whereby all long-term, price-volatile securities were sold in early 1993. This
sale resulted in net pretax gains of $406,000. The proceeds from the sale of
these securities were reinvested in the loan portfolio. Fidelity has maintained
a two year Treasury ladder and has determined that all its securities are held
to maturity.

Other Expense

Other expense for the year ended December 31, 1993 was $9.4 million or
4.02% of average assets. This compared to $8.3 million or 3.77% of average
assets in 1992. The increase in other expense is primarily attributable to
increased salary and benefit costs associated with increased staffing levels
required to strengthen controls and the loan portfolio. Other operating expense
also increased from 1992 to 1993, primarily as the result of increases of
professional and legal fees The increases in other expenses were attributable
to the normal course of business growth, improving and expanding banking
facilities, and deposit insurance premiums.

Income Taxes

Income tax for 1993 was $1.5 million for an effective tax rate on financial
statement pretax earnings of 36.2%. This compared to $14,000 or 4.5% in 1992.
The favorable effective tax rate for 1992 was the result of Fidelity's state
taxable loss.

FINANCIAL CONDITION

Assets

Total assets as of December 31, 1993 were $255 million compared to $218
million as of December 31, 1992. This represents an annual growth rate in total
assets of 17% for 1993. Total average assets for the year ended 1993 amounted
to $235 million, compared to $221 million for 1992, representing an average
asset growth rate of 6%. Investment securities, interest-bearing deposits,
Federal funds sold and mortgage-backed securities constituted 8.4% of total
assets at the end of 1993, compared to 17.2% as of the end of 1992. Average
earning assets totaled $212 million in 1993, compared to $195 million in 1992.
Management invested predominantly in adjustable rate loans through-out 1993.

During 1993, Fidelity's loan portfolio, including loans held for sale, grew
from $157 million as of December 31, 1992 to $213 million as of December 31,
1993, representing a 36% growth rate. Loan balances for 1993 averaged $188
million compared to average loan balances in 1992 of $162 million. The loan
portfolio carried an average yield of 8.11% during 1993 and 9.77% during 1992,
reflecting the effects of a declining interest rate environment and change in
loan mix.

46
<PAGE> 51

Deposits

Total deposits as of December 31, 1993 were $227 million, compared to $198
million as of December 31, 1992, representing a 14% increase from 1992 to 1993.
Average outstanding interest bearing deposits were $187 million for 1993,
compared to $181 million for 1992, an increase of 3%. Average other borrowed
funds were $4.0 million for 1993, relative to average other borrowed funds of
$1 million for 1992. Management placed an increased reliance on borrowings as
interest rates rose in the latter part of 1993, a strategy designed to secure
longer-term funds at a relatively lower cost. Average noninterest-bearing
deposits were $22 million for 1993, compared to $19 million for 1992. Fidelity
continues to have success in attracting noninterest-bearing, NOW, and other
demand deposit products in its market area. Total average time deposits as a
percentage of interest-bearing liabilities declined from 74% in 1992 to 67% in
1993. This is reflective of management's strategy to diversify its funding
sources.

The composition of deposits table represents period end balances and
includes the percentage of total deposits for each deposit type. The deposit
rates tables represents average balances and the applicable average rate paid
on each deposit category.

Composition of Deposits
(Dollars in thousands)

1993 1992 1991
---------------- ---------------- ---------------
Amount % Amount % Amount %
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Transaction and Savings Accounts:
Noninterest-bearing Deposits $ 26,597 11.73% $ 22,534 11.37% $ 20,209 9.94%
NOW Accounts 27,512 12.13 21,325 10.76 12,426 6.11
Money Market Accounts 19,303 8.51 12,953 6.53 17,240 8.48
Savings 20,006 8.82 20,447 10.31 8,549 4.20
------- ------ ------- ------ ------- ------
Total Transaction and
Savings Accounts 93,418 41.19 77,259 38.97 58,424 28.73
------- ------ ------- ------ ------- ------
Certificates of Deposit:
2.50% to 3.99% 23,659 10.43 17,727 8.94 0 0.00
4.00% to 5.99% 81,203 35.81 63,494 32.03 23,847 11.73
6.00% to 7.99% 24,811 10.94 28,549 14.40 106,554 52.41
8.00% to 10.40% 3,691 1.63 11,236 5.67 14,504 7.13
------- ------ ------- ------ ------- ------
Total Certificates of Deposits 133,364 58.81 121,006 61.03 144,905 71.27
------- ------ ------- ------ ------- ------

Total Deposits $226,782 100.00% $198,265 100.00% $203,329 100.00%
======= ====== ======= ====== ======= ======

</TABLE>

Deposit Rates Including Noninterest-bearing Deposits
(Dollars in thousands)

<TABLE>
<CAPTION>
1993 1992 1991
-------------- -------------- --------------
Average Average Average
Average Rate Average Rate Average Rate
Balance Paid Balance Paid Balance Paid
------- ------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Noninterest-bearing Deposits $ 15,148 0.00% $ 17,242 0.00% $ 16,718 0.00%
NOW Accounts 22,763 2.50 17,960 3.10 14,122 5.68
Money Market Accounts 16,191 2.96 16,240 4.36 18,323 6.87
Savings 20,798 3.37 12,097 4.11 6,742 5.33
Certificates of Deposits 127,215 5.07 135,183 6.13 145,544 7.72
------- ------- -------
Total $202,115 4.06% $198,722 5.05% $201,449 6.78%
======= ======= =======

</TABLE>

47
<PAGE> 52

The certificates of deposits of $100,000 or more table represents the
instruments' ability to reprice based on period end balances. The other
borrowed funds table describes certain rates and balances of borrowings for
each applicable period.

Certificates of Deposits' of $100,000 or More Ability to
reprice as of December 31, 1993
(Dollars in thousands)

<TABLE>
<CAPTION>
Amount
------
<S> <C>
Three Months or Less $10,670
Over Three Months through Six Months 3,988
Over Six Months through Twelve Months 5,522
Over Twelve Months 20,200
------
Total $40,380
======
</TABLE>

Other Borrowed Funds
(Dollars in thousands)
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Revenue Bond:
Average Balance Outstanding . . . . . . . . . . $ 467 $ 567 $ 667
Maximum Outstanding at Any Month End . . . . . . 500 600 700
Balance Outstanding at End of Period . . . . . . 400 500 600
Weighted Average Interest Rate During Period . . 6.20% 5.05% 11.43%
Weighted Average Interest Rate at End of Period 5.42% 5.50% 7.79%

Notes Payable - FHLB:
Average Balance Outstanding . . . . . . . . . . $ 841 - -
Maximum Outstanding at Any Month End . . . . . . 5,000 - -
Balance Outstanding at End of Period . . . . . . 5,000 - -
Weighted Average Interest Rate During Period . . 4.96% - -
Weighted Average Interest Rate at End of Period 4.96% - -

FHLB Advances:
Average Balance Outstanding . . . . . . . . . . $2,667 $ 453 -
Maximum Outstanding at Any Month End . . . . . . 9,500 3,000 -
Balance Outstanding at End of Period . . . . . . - - -
Weighted Average Interest Rate During Period . . 3.42% 4.26% -
Weighted Average Interest Rate at End of Period 0.00% 0.00% -
</TABLE>

Liquidity

Liquidity management involves the matching of the cash flow requirements of
customers, who may be either depositors wanting to withdraw funds or borrowers
needing assurance that sufficient funds will be available to meet their credit
needs, and the ability of Fidelity to meet those needs. Management seeks to
meet liquidity requirements primarily through management of short-term,
interest-bearing deposits with financial institutions, overnight investments
and repayment of loans. During 1993, overnight funds at the FHLB and Federal
funds sold averaged $15 million and provided sufficient funds for immediate
needs. However, the peak time of mortgage funding and sales required management
to draw on Fidelity's line of credit from time to time. The proceeds of the
sales of fixed rate mortgage loans were used to repay those borrowings.
Management believes that its funding sources from deposit growth in its market
area and advance lines of credit from the FHLB are adequate for short-term
funding needs. However, management closely monitors and maintains appropriate
levels

48
<PAGE> 53

of available funds so that adequate funds are provided to meet customer
withdrawal and credit needs while maintaining an appropriate net interest
margin.

Interest Rate Sensitivity

The objective of interest rate sensitivity management is to minimize the
effect of interest rate changes on net interest margin while maintaining net
interest income at acceptable levels. The major factors that are used to manage
interest rate risk include the mix of fixed and adjustable interest rates, and
pricing and maturity patterns for asset and liability accounts. The balance
sheet is managed to achieve maximum stockholder returns. However, this is done
within the constraints of maintaining a high level of credit quality,
acceptable interest rate risk, and prudent levels of liquidity. All these
factors must be balanced with competitive market conditions and deposit and
loan demand. Management believes Fidelity's relationship of rate-sensitive
assets to rate-sensitive liabilities is acceptable. However, this balance
remains a concern in future periods and is always a priority for management.

Capital Resources and Dividends

Stockholders' equity and leverage capital (as defined under
"Supervision and Regulation--Capital Adequacy") at December 31, 1993 totaled
$16.6 million or 6.52% of total assets, compared to $14.2 million or 6.49% as
of December 31, 1992. Stockholders' equity and total capital (as defined under
"Supervision and Regulation--Capital Adequacy") as a percentage of
risk-weighted assets as of December 31, 1993 and 1992 was 11.36% and 11.20%,
respectively. The book value of common stock and common stock equivalents
(preferred shares are considered common stock equivalents) at year end 1993 was
$8.02 per share, compared to $6.84 per share for the year ended 1992. All per
share data has been restated for a two for one stock split in July, 1994.

There are two federal measures of capital adequacy for thrifts --
risked-based total and tangible capital guidelines and the leverage capital
guidelines. The risk-based capital guidelines developed by regulatory
authorities assign weighted levels of risk to asset categories to measure
capital adequacy. The ratio of total capital to the sum of the risk-weighted
asset categories must be a minimum of 8%, with at least 4% consisting of
qualifying capital (all of Fidelity's capital is qualifying capital).
Additionally, thrifts must meet leverage ratio minimum requirements. The
leverage ratio is calculated as a percentage of tier 1 capital (total capital
less nonqualifying intangibles) to total qualifying assets. The minimum
leverage ratio is 3% for institutions with the highest supervisory rating from
their regulator. Please see "Supervision and Regulation--Capital Adequacy" for
further detail on capital regulations for thrifts.

Dividends declared and paid in 1993 were $0.20 per share for preferred
stockholders and $0.12 per share for common stockholders. Dividends declared
and paid in 1992 were $0.10 per share for preferred stockholders and $0.04 per
share for common stockholders. Per share dividends for 1993 and 1992 have been
restated for a two for one stock split in July, 1994. Fidelity operated under a
supervisory agreement from August 6, 1991 (and later revised on October 22,
1992) until January 14, 1994 with the OTS. In accordance with the agreement,
Fidelity was ordered to cease and desist from certain practices and implement
certain corrective measures and procedures consistent with safe and sound
banking practices and to refrain from paying dividends. This is explained
further in the Notes to Consolidated Financial Statements under "Supervisory
Agreement". However, quarterly dividends resumed in June, 1993 after regulators
were satisfied that sufficient progress had been made with respect to the
provisions of the supervisory agreement.

Market Price

As of December 31, 1993, there were 185 common and 39 preferred
stockholders of record and 887,400 shares of Fidelity Common Stock and 150,000
shares of Fidelity Preferred Stock were outstanding. On September 30, 1994
there were 189 common and 36 preferred shareholders of record and 1,774,800
shares of common and 300,000 shares of preferred stock were outstanding. In
July, 1994 there was a two for one stock split increasing the number of
outstanding shares of Fidelity Common Stock and Fidelity Preferred Stock to
1,774,800 and 300,000 shares, respectively. Although Fidelity's stock can be
traded privately, there is not

49
<PAGE> 54

sufficient sales data or volume to establish a public trading market price for
the stock.

Third Quarter 1994 Compared to Third Quarter 1993

Net income for the third quarter 1994 was $1.4 million, an increase of
$793,000 when compared to third quarter 1993 earnings of $647,000. Earnings per
share for the third quarter ended September 30, 1994 were $0.69 per share
compared to $0.31 per share for the third quarter ended 1993. The annualized
return on average assets and average equity for the third quarter of 1994 was
2.06% and 32.64%, respectively. This compared favorably to the annualized
return on average assets and average equity for the third quarter of 1993 of
1.11% and 16.19%, respectively. The increase in net income from the third
quarter of 1993 to 1994 is primarily attributable to the sale of Fidelity's
mortgage servicing portfolio in the third quarter of 1994. The net gain before
taxes on the sale of servicing recorded effective September 30, 1994 was
approximately $1.4 million. Additionally, the following variances occurred, (i)
net interest income increased by $154,000, (ii) other noninterest income
(irrespective of the above mentioned gain) decreased by $154,000, (iii) other
noninterest expense increased by $174,000, and (iv) income taxes increased by
$457,000 from the third quarter ended 1993 to third quarter ended 1994.

Third quarter 1994 average earning assets were $261 million, representing a
21% increase when compared to third quarter 1993 average earning assets of $216
million. The yield on earning assets from the third quarter 1994 remained
relatively stable at 7.60% from 7.69% for the third quarter of 1993. Average
interest-bearing liabilities for the third quarter ended 1994 were $234
million with an average cost of 4.47%, compared to $188 million with an average
cost of 4.25% for the third quarter 1993. The net interest margin for the third
quarter of 1994 was 3.60% compared to a net interest margin of 3.98% for the
third quarter of 1993. The increase in net interest income from the third
quarter of 1993 to 1994 is primarily attributable to the increase in volume of
earning assets. The narrowing of the net interest margin is attributable to the
rising rate environment which began during the first quarter of 1994.

The decrease in other noninterest income for the third quarter ended
September 1993 to the third quarter ended 1994 is attributable to decreased
mortgage production and the effect of rising mortgage rates on mortgage loan
sales gains or losses. The increase in other noninterest expense is related to
salaries and employee benefits in conjunction with an incentive bonus accrual
for 1994 and other expenses related to opening a new banking facility and
expanding business opportunities.

Nine Months Ended September 30, 1994, Compared to Nine Months Ended
September 30, 1993

Net income for the nine months ended September 30, 1994 was $2.75 million,
a 25% increase over the net income of $2.2 million for the same period ended
September 30, 1993. The annualized return on average assets and average equity
is 1.37% and 21.31%, respectively, for the nine month period ended 1994,
compared to 1.27% and 18.22%, respectively, for 1993. As discussed above, the
improved earnings from the year to date 1993 to 1994 are attributable primarily
to the gain on sale of Fidelity's mortgage servicing portfolio in the third
quarter of 1994. There are a number of factors, however, that have affected
earnings during 1994 and will continue to have a significant impact on future
earnings.

Fidelity's net interest income increased 11% for the nine month period
ended September 30, 1994, from the nine month period ended September 30, 1993.
The year to date interest income for the nine months ended September 30, 1994,
was $6.79 million, compared to $6.11 million for the nine months ended
September 30, 1993. Fidelity's interest margin has narrowed from 3.84% for 1993
to 3.64% for 1994. The increase in net interest income is due to an increased
volume of earning assets. The nine month average earning assets were $249
million for 1994, compared to $210 million for 1993, an increase of 18.5%.
However, the increase in net interest income has been and will continue to be
hampered by rising interest rates in effect thus far in 1994. As stated
earlier, Fidelity's interest-sensitive liabilities exceed its
interest-sensitive assets, especially in the one year time frame. Consequently,
Fidelity's net interest margin is negatively impacted by rising rates.
Management

<PAGE> 55

has focused on its interest margin by attempting to: (i) originate more
adjustable rate loan products, (ii) manage the pricing of loans and deposits to
ensure proper spreads, and (iii) maintain growth in average loan balances.
Fidelity's interest income can continue to grow but only if loan growth and
demand remains consistent.

Fidelity has not recorded a loan loss provision during 1994. Management
believes the allowance for loan losses remains adequate. The loan loss
provision for the nine months ended September 30, 1993 totaled $127,422. Net
charge-offs for the nine months ended September 30, 1994 were $17,000, compared
to net charge-offs of $275,000 for the same period in 1993. Nonperforming
assets (nonaccrual loans, restructured loans and real estate owned) as of
September 30, 1994 were $1.8 million or .75% of total loans and nonperforming
assets were $3.8 million or 1.9% of loans at September 30, 1993. The allowance
for loan losses as a percent of nonperforming assets for 1994 and 1993 was 205%
and 113%, respectively. Total criticized and classified assets at September 30,
1994 totaled $7.1 million, which represented 38% of tangible capital and 2.8%
of total loans. At September 30, 1993 criticized and classified assets totaled
$12.0 million or 74% of tangible capital and 5.9% of total loans.

Other noninterest income for the nine months ended September 30, 1994 was
$3.36 million, a 9% reduction when compared to the nine months ended September
30, 1993 of $3.71 million. The income Fidelity earned during the nine months
ended September 30, 1994 on mortgage servicing, the sale of servicing rights
and the sale of mortgage loans decreased $252,000 or 18% from that earned
during the nine months ended September 30, 1993 due to the decline in
refinancing activity resulting from increased mortgage rates. As of September
30, 1994, mortgage production for the first nine months decreased 38% from the
first nine months of 1993. Mortgage interest rates continued to rise through
the first nine months of 1994, resulting in the reduction of Fidelity's
mortgage production to more historical levels.

Other noninterest expense for the nine months ended September 30, 1994 was
$7.21 million or 3.60% of average assets, compared to $6.66 million or 3.87% of
average assets for the nine months ended September 30, 1993. Management has
attempted to decrease the percentage of noninterest expense to average assets
and has achieved relative success. The primary expense line item that increased
was salaries and employee benefits which increased $562,000. The reasons for
the increase are as follows: (i) the full year effect of salaries and benefits
for the employees hired mid-way through 1993 has been experienced in 1994, and
(ii) the incentive bonus accrual was fully accrued the first nine months of
1994 whereas there was no bonus accrual through September 30, 1993.
Additionally, there are more participants for a greater time period in the
incentive bonus plan in 1994 than in 1993. Other noninterest expense excluding
salary and benefits for the first nine months of 1994 was approximately equal
to that of the first nine months of 1993. Fidelity has incurred $180,000 less
in professional fees in 1994 than in 1993. However, that has been offset by
increased operating costs related to the continued expansion of banking
services.

Average assets for the nine months ended September 30, 1994 totaled
$267 million, representing a 16% increase from the nine months ended
September 30, 1993 which totaled $231 million. Average loans for 1994 were
$230 million, compared to $176 million for 1993, an increase of 31%. Total
average deposits for the nine months ended September 30, 1994 totaled $237
million, a 15% increase over 1993 of $205 million. Average overnight
investments and investment securities were $11 million and $8 million,
respectively, for 1994. Average overnight investments and investment securities
totaled $18 and $17 million, respectively, for 1993. As stated earlier,
management has attempted to build its loan portfolio with adjustable rate
loans, particularly commercial loans in Fidelity's market area. The average
balance of commercial real estate loans for 1994 was $35 million, representing
an 11% increase from average commercial real estate loans for 1993. The largest
gain in average balances from year to date 1993 to 1994 was in mortgage loans
with nearly all the growth being adjustable rate terms. Weighted average
mortgage loans increased 89% from $53 million for the nine months ended 1993
to $100 million for the nine months ended 1994.

51
<PAGE> 56

Capital Resources and Dividends

Fidelity is characterized as a well capitalized bank under guidelines set
forth by the Federal Deposit Insurance Corporation (the "FDIC") for purposes of
assessing deposit insurance fees. Tangible and total capital amounted to
$18.8 million, resulting in a leverage ratio of 6.56% as of the end of
September, 1994. This compares with tangible and total capital of $16.2 and
a leverage ratio of 6.89% at September 30, 1993. The risk-weighted capital
ratios as of September 30, 1994 and 1993 were 11.73% and 11.81%, respectively.
Capital percentages have remained stable over the periods because retained
earnings were sufficient to support growth in total assets.

Fidelity has declared and paid dividends of $0.30 per share to the
preferred stockholders and $0.25 per share to the common stockholders through
September 30, 1994. Dividends for the nine months ended September 30, 1993
totaled $0.10 per share for preferred stockholders and $0.06 per share for
common stockholders. Fidelity's Board of Directors authorized a two for one
stock split in July, 1994 on the Fidelity Common Stock and Fidelity Preferred
Stock. Consequently, all prior period and current per share data have been
restated for comparison purposes.

Liquidity

Fidelity continues to meet the credit and withdrawal needs of its customers
in the normal course of business. Management has not experienced an inability
to gather deposits. However, rising time deposit rates and growing competition
for funds remain significant issues for Fidelity. The loan to deposit ratio as
of September 30, 1994 was 98%, compared to 96% at September 30, 1993. The
monthly average liquidity under the 5% test as measured by thrift regulations
was 8.4% as of September 30, 1994 and 5.4% as of September 30, 1993. The year
to date average borrowings from the FHLB for the nine months ended September
30, 1994 was $1.6 million with a weighted average cost of 3.62%, compared to
$2.3 million with a weighted average cost of 3.38% for the nine months ended
September 30, 1993. Fidelity has not relied on nondeposit funding in 1994 as
much as it did in 1993, primarily because mortgage needs have not been as much
in 1994.

Interest Rate Sensitivity

The asset/liability committee has continued to manage Fidelity's growth to
minimize the effect of interest rate changes while maintaining a maximized net
interest margin. Fidelity's asset/liability sensitive position has not changed
significantly in the twelve month period from September 30, 1993 to September
30, 1994. Fidelity is still more liability sensitive, consequently, a rising
rate environment is detrimental to Fidelity's interest margin. However,
Fidelity has benefitted in the short-term as a result of recent increases in
the prime rate because deposit market rates have been slower to respond to
prime and discount rate changes. This will change as interest rate increases
filter down to deposit rates. Management will endeavor to mitigate the expected
negative impact on margins caused by increasing interest rates with growth of
average earning asset balances and in interest income.

52
<PAGE> 57

BUSINESS OF FIDELITY

GENERAL

Fidelity is a federal stock savings bank organized under the laws of the
United States, with its principal place of business and executive office
located in Dalton, Georgia. At September 30, 1994, Fidelity had total
consolidated assets of approximately $287 million, total consolidated
deposits of approximately $255 million, and total consolidated stockholders'
equity of approximately $19 million.

BUSINESS AND PROPERTIES

Fidelity was originally chartered as a federal mutual savings and loan
association in 1966. In 1983, Fidelity converted to a federal stock savings
bank charter and adopted its current corporate name. Fidelity is a member of
the Federal Home Loan Bank System and its deposits are federally insured by the
Savings Association Insurance Fund (the "SAIF"). Fidelity conducts its business
through three full service offices located in Dalton, Georgia, one full service
office in Chatsworth, Georgia, and a mortgage and construction loan office
located in Chattanooga, Tennessee. Fidelity is engaged primarily in the
solicitation of deposits from the general public and the origination of
residential real estate loans. In recent years, Fidelity has increased the
amount of consumer loans and commercial real estate loans in its loan
portfolio. As of September 30, 1994, Fidelity had 153 full-time equivalent
employees.

The executive offices, operations, and main office of Fidelity are located
in a 34,900 square foot building located at Fidelity Square, 500 East Walnut
Avenue, Dalton, Georgia. This headquarters building is owned by Fidelity. The
remaining full service locations and buildings in Dalton and Chatsworth are
owned by Fidelity. The office location in Chattanooga is leased. Please refer
to the financial statements included elsewhere in this Proxy
Statement/Prospectus under "Index to Fidelity Financial Statements" for
information on the carrying value of Fidelity's premises, equipment, and
leasehold improvements and other real estate and operating lease commitments.

COMPETITION

Fidelity presently competes with 11 depository institutions in
Whitfield and Murray Counties, Georgia, and numerous financial institutions in
Chattanooga, Tennessee. At September 30, 1994, Fidelity ranked as the largest
of the 11 depository institutions located in Whitfield and Murray Counties
based upon deposits located in these counties.

LEGAL PROCEEDINGS

Fidelity is from time to time a party to certain legal proceedings arising
in the ordinary course of its business; however, Fidelity is not a party to any
litigation which, in the judgment of management, would have a material adverse
effect on its operations or financial condition if adversely determined.

MANAGEMENT

The following tables present information about the directors and the chief
executive officer of Fidelity. Information with respect to beneficial ownership
of stock has been furnished by the respective directors and executive officers.

53
<PAGE> 58

AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
AT DECEMBER 1, 1994

<TABLE>
<CAPTION>
Common Preferred
------------------------------------------ ------------------
Percent of Percent of
Name Age Total Direct Indirect Class Total Class
- ---- --- ----- ------ -------- ---------- ----- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Ernest M. Acree, Jr.
Director 49 56,214 (1) 55,914 300 3.17% 0 *
William J. Chappell
Director 61 5,400 5,400 0 * 0 *
James M. Gowin
Director 63 90,902 (2) 90,902 0 5.12 3,000 1.00%
Jim T. Griffin
Director 44 48,668 (3) 47,068 1,600 2.74 0 *
L. Hugh Kemp
Director 61 2,000 (4) 2,000 0 * 5,000 1.67
Thomas M. Kinnamon
Director 49 38,130 (5) 38,130 0 2.15 6,000 2.00
Arthur B.E. Lauman
Vice Chairman
of the Board 67 144,180 (6) 144,180 0 8.12 11,250 3.75
Leonard T. Lorberbaum
Director 77 66,960 (7) 66,960 0 3.77 12,000 4.00
Richard G. Rhodes, Sr.
President, Chief Executive
Officer and Director 54 13,670 13,670 0 * 0 *
Dr. Donald R. Thomas
Chairman of the Board 61 14,320 14,320 0 * 0 *
Roger Williams
Director 61 11,700 11,700 0 * 0 *
</TABLE>

___________________________
*Does not exceed one percent.

(1) Includes 300 shares owned by Mr. Acree's son, as to which shares Mr. Acree
disclaims beneficial ownership.
(2) Does not include 3,000 shares of Fidelity Preferred Stock.
(3) Includes 1,600 shares owned by the Tunnel Hill First Baptist Church, as to
which shares Mr. Griffin exercises voting control.
(4) Does not include 5,000 shares of Fidelity Preferred Stock.
(5) Does not include 6,000 shares of Fidelity Preferred Stock.
(6) Does not include 11,250 shares of Fidelity Preferred Stock.
(7) Does not include 12,000 shares of Fidelity Preferred Stock.

54
<PAGE> 59

NAME PRINCIPAL OCCUPATION DURING LAST FIVE DIRECTOR
---- YEARS AND OFFICES HELD WITH FIDELITY SINCE
------------------------------------- --------
<S> <C> <C>
Ernest M. Acree, Jr. Certified Public Accountant; Partner in Acree,
Jinright & Co., P.C., Dalton, Georgia. 1993

William J. Chappell Coach and Teacher; Dalton
High School, Dalton, Georgia. 1982

James M. Gowin President, Gonasauca Machinery, Inc.,
Dalton, Georgia, leasing company; prior to
October 1992, President, Gowin Specialties,
Inc., Dalton, Georgia, manufacturer of
carpet machinery; Chairman of the Board of
Directors of Fidelity from April 1983 to
October 1992. 1972

Jim T. Griffin Certified Public Accountant; Associate in
Acree, Jinright & Co., P.C., Dalton,
Georgia; Prior to January 1993, Secretary/
Treasurer, Carpet Wholesale Outlet, Inc.,
Dalton, Georgia, carpet sales. 1982

L. Hugh Kemp Attorney at Law; Partner in Kinney, Kemp,
Pickell, Sponcler & Joiner, Dalton, Georgia. 1982

Thomas M. Kinnamon President, Accent Yarns & Textiles, Inc.,
Dalton, Georgia, textile manufacturer. 1993

Arthur B.E. Lauman Vice Chairman of the Board of Directors of
Fidelity; President, ABEL Industries, Inc.,
Dalton, Georgia, manufacturer; prior to
August 1993, President, Instant Turf Industries,
Inc., Dalton, Georgia, carpet manufacturer. 1992

Leonard T. Lorberbaum Manager, First Development Company of Dalton,
Dalton, Georgia, real estate developer. 1993

Richard G. Rhodes, Sr. President and Chief Executive Officer of Fidelity
and First Fidelity Financial Corporation, a
wholly-owned subsidiary of Fidelity; Prior to
March 1992, Senior Vice President, Bank South,
N.A., Atlanta, Georgia. 1992

Dr. Donald R. Thomas Chairman of the Board of Directors of Fidelity;
Physician, Whitfield Medical Services, Inc.,
Dalton, Georgia. 1966

Roger Williams President, Credit Services, Inc., Dalton,
Georgia, provider of consumer financing. 1982

</TABLE>

55
<PAGE> 60

VOTING SECURITIES AND PRINCIPAL
STOCKHOLDERS OF FIDELITY

The following table sets forth certain information concerning the
beneficial owners of more than 5.0% of Fidelity Capital Stock as of September
30, 1994.

<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class
- -------------- ---------------- -------------------- --------
<S> <C> <C> <C>
Common Stock James M. Gowin
1700 Greeson Road, S.W.
Rocky Face, GA 30740 90,902(1) 5.12%

Common Stock George I. Haigler
P.O. Box 1796
Dalton, GA 30722 144,180(2) 8.12

Common Stock Harvey Howalt, Jr.
1300 Tiarco Drive
Dalton, GA 30722 99,480(3) 5.61

Common Stock Arthur B.E. Lauman
P.O. Box 1974
Dalton, GA 30722 144,180(4) 8.12

Common Stock Frank McDonald
845 Good Hope Rd., N.E.
Dalton, GA 30720 145,904(5) 8.22

Common Stock L. A. Swanson, Jr.
P.O. Box 1248
Dalton, GA 30722 120,984 6.81

Preferred Stock Beaulieu of America
P.O. Box 4539
Dalton, GA 30721 60,000(6) 20.00

Preferred Stock Harvey Howalt, Jr.
1300 Tiarco Drive
Dalton, GA 30722 30,000(7) 10.00

Preferred Stock Tom Peeples
1903 S. Hamilton Street
Dalton, Georgia 30720 15,000(8) 5.00

- ---------------------------
</TABLE>
(1) Does not include 3,000 shares of Fidelity Preferred Stock.
(2) Does not include 12,000 shares of Fidelity Preferred Stock.
(3) Does not include 30,000 shares of Fidelity Preferred Stock.
(4) Does not include 11,250 shares of Fidelity Preferred Stock.
(5) Does not include 9,000 shares of Fidelity Preferred Stock.
(6) Does not include 55,800 shares of Fidelity Common Stock.
(7) Does not include 99,480 shares of Fidelity Common Stock.
(8) Does not include 16,110 shares of Fidelity Common Stock.

56
<PAGE> 61

BUSINESS OF REGIONS

GENERAL

Regions is a regional bank holding company headquartered in Birmingham,
Alabama which operated 256 banking offices in Alabama, Florida, Georgia,
Louisiana, and Tennessee as of September 30, 1994. At that date, Regions had
total consolidated assets of approximately $11.7 billion, total consolidated
deposits of approximately $9.3 billion, and total consolidated stockholders'
equity of approximately $902 million. Regions operates seven state-chartered
commercial bank subsidiaries (collectively, the "Subsidiary Banks") in Alabama,
Florida, Georgia, Louisiana, and Tennessee 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.

In Alabama, Regions operates through First Alabama Bank, which at September
30, 1994, had total consolidated assets of approximately $8.9 billion, total
consolidated deposits of approximately $7.2 billion, and total consolidated
stockholders' equity of approximately $694 million. First Alabama Bank operates
172 banking offices throughout Alabama.

In Florida, Regions operates through Regions Bank of Florida, which at
September 30, 1994, had total consolidated assets of approximately $517
million, total consolidated deposits of approximately $464 million, and total
consolidated stockholders' equity of approximately $51 million. Regions Bank of
Florida operates 27 banking offices in the panhandle region of Florida.

In Georgia, Regions operates through (i) Regions Bank of Georgia and (ii)
First Rome Bank, which at September 30, 1994, had total combined assets of
approximately $233 million, total combined deposits of approximately $212
million, and total combined stockholders' equity of approximately $18 million.
Regions Bank of Georgia operates three banking offices in Columbus, Georgia,
and First Rome Bank operates two banking offices in Rome, Georgia.

In Louisiana, Regions operates through (i) Regions Bank of Louisiana and
(ii) Bank of New Roads. At September 30, 1994, Regions Bank of Louisiana and
Bank of New Roads had total combined assets of approximately $2.1 billion,
total combined deposits of approximately $1.4 billion, and total combined
stockholders' equity of approximately $196 million. Regions Bank of Louisiana
and Bank of New Roads operate 36 banking offices in Louisiana.

In Tennessee, Regions operates through Regions Bank of Tennessee, which at
September 30, 1994, had total consolidated assets of approximately $454
million, total consolidated deposits of approximately $393 million, and total
consolidated stockholders' equity of approximately $39 million. Regions Bank of
Tennessee operates 24 banking offices in middle Tennessee.

Regions was organized under the laws of the state of Delaware and commenced
operations in 1971 under the name First Alabama Bancshares, Inc. On May 2,
1994, the name of First Alabama Bancshares, Inc. was changed to Regions
Financial Corporation.

Regions continually evaluates business combination opportunities and
frequently conducts due diligence activities in connection with possible
business combinations. As a result, business combination discussions and, in
some cases, negotiations frequently take place, and future business
combinations involving cash, debt, or equity securities can be expected. Any
future business combination or series of business combinations that Regions
might undertake may be material, in terms of assets acquired or liabilities
assumed, to Regions' financial condition. Recent business combinations in the
banking industry have typically involved the payment of a premium over book and
market values. This practice could result in dilution of book value and net
income per share for the acquirer.

Additional information about Regions and its subsidiaries is included in
documents incorporated by

57
<PAGE> 62

reference in this Proxy Statement/Prospectus. See "Available Information" and
"Documents Incorporated by Reference."

RECENT DEVELOPMENTS

Recently Completed Acquisitions. During the first nine months of 1994,
Regions acquired (i) Guaranty Bank & Trust Company, located in Baton Rouge,
Louisiana, (ii) First Bank of Fayette, located in Fayette, Alabama, (iii) Bank
of New Roads, located in New Roads, Louisiana, and (iv) First Rome Bank,
located in Rome, Georgia, contributing an aggregate of approximately $527
million in assets, $291 million in loans, and $470 million in deposits to
Regions' consolidated balance sheet. Also during the same period, Regions
acquired four branch offices in Florida, two branch offices in Alabama, and
three branch offices in Louisiana in transactions with the Resolution Trust
Corporation (the "RTC"). For additional information with respect to these
acquisitions and RTC transactions, see Regions' Quarterly Reports on Form 10-Q
for the quarters ended June 30 and September 30, 1994, incorporated herein by
reference.

Since September 30, 1994, Regions has completed the acquisition of the
following institutions (the "Recently Completed Acquisitions"):

<TABLE>
<CAPTION>
Consideration
-------------------------
Approximate
--------------------
Accounting
Institution Asset Size Value Type Treatment
----------- ---------- ----- ---- ---------
(In millions)
<S> <C> <C> <C> <C>
American Bancshares, Inc. ("American") and $307 $55 Regions Purchase
its subsidiary First American Bank and Trust Common
of Louisiana, located in Monroe, Louisiana Stock

Union Bank & Trust Company ("Union"), located 419 66 Regions Purchase
in Montgomery, Alabama Common
Stock
--- ---
Totals $726 $121
=== ===
</TABLE>

Other Pending Acquisition. As of the date of this Proxy
Statement/Prospectus, Regions has pending one acquisition in addition to the
acquisition of Fidelity. Regions has entered into a definitive agreement to
acquire First Commercial Bancshares, Inc. ("First Commercial"), located in
Chalmette, Louisiana. The acquisition of First Commercial (the "First
Commercial Acquisition") would add approximately $114 million in assets to
Regions' consolidated balance sheet, and consideration given by Regions for the
acquisition would consist of a combination of cash and shares of Regions Common
Stock having an combined approximate value of $20 million, computed as of the
date of public announcement of the proposed transaction. Regions anticipates
accounting for the First Commercial Acquisition as a purchase.

Consummation of the First Commercial Acquisition is subject to the approval
of certain regulatory agencies and of the stockholders of First Commercial and
to the effectiveness of a registration statement to be filed with the SEC.
Moreover, the closing of the First Commercial Acquisition is subject to various
contractual conditions precedent. No assurance can be given that the conditions
precedent to consummating the First Commercial Acquisition will be satisfied in
a manner that will result in the consummation of the transaction.

The Recently Completed Acquisitions and the First Commercial Acquisition are
referred to collectively

<PAGE> 63

as the "Other Acquisitions."

If the Other Acquisitions and the Merger had been consummated on September
30, 1994, based on September 30, 1994 pro forma financial information, Regions'
total consolidated assets would have increased by approximately $1.1 billion to
approximately $12.8 billion; its total consolidated deposits would have
increased by approximately $946 million to approximately $10.2 billion; and its
total consolidated stockholders' equity would have increased by approximately
$77 million to approximately $978 million. See "Documents Incorporated by
Reference" and "Summary Pro Forma Financial Data" and the related pro forma
financial information in Regions' Current Report on Form 8-K dated November 23,
1994.

In connection with the acquisitions of American and Union, Regions has
announced that it may purchase, in the open market, an equivalent number of
some or all of the shares of Regions Common Stock to be issued in such
transactions. As a result of the American and Union transactions, Regions
anticipates that it may purchase in the open market as much as approximately
$126 million of Regions Common Stock. The timing and amount of such possible
purchases will be determined based on the Regions Common Stock price, capital
needs, and other factors. As of January 12, 1995, Regions had purchased, in the
open market, approximately $86.3 million of Regions Common Stock pursuant to
this repurchase program. Under rules of the SEC, Regions is not permitted
to purchase shares of Regions Common Stock in the open market during a period
commencing prior to the mailing of this Proxy Statement/Prospectus and ending
immediately following the Special Meeting, during any comparably
corresponding period with respect to the First Commercial Acquisition, and
during the period specified in the Agreement, prior to the mailing of this
Proxy Statement/Prospectus, for determining the average trading price of
Regions Common Stock for the purpose of adjusting or not adjusting the Common
Stock Exchange Ratio. See "Description of the Transaction -- General."

Issuance of Subordinated Notes. On July 21, 1994, Regions issued $25
million of subordinated indebtedness designated 7.65% Subordinated Notes Due
2001 (the "7.65% Notes"), and on September 15, 1994, Regions issued $100
million of subordinated indebtedness designated 7 3/4% Subordinated Notes Due
2024 (the "7 3/4% Notes"). The 7.65% Notes and the 7 3/4% Notes are subordinate
to all senior indebtedness (as defined in the controlling indenture) of
Regions, and payment of the principal of such notes may be accelerated only in
the case of certain events involving bankruptcy, insolvency proceedings, or
reorganization of Regions. The net proceeds from the issuance of the 7.65%
Notes have been used for general corporate purposes, including the repurchase
of an equivalent number of shares of Regions Common Stock in the open market to
be issued in connection with the American Acquisition as described above
under "--Recent Developments--Recently Completed Acquisitions." The net
proceeds from the issuance of the 7 3/4% Notes have been, and will continue to
be, used for general corporate purposes.

59
<PAGE> 64

SUMMARY PRO FORMA FINANCIAL DATA

The following unaudited pro forma financial data give effect, as
appropriate, to the Merger and the Other Acquisitions as of the dates and for
the periods indicated and pursuant to the accounting bases described below. The
unaudited pro forma financial data are presented for informational purposes
only and are not necessarily indicative of the combined financial position or
results of operations which actually would have occurred if the transactions
had been consummated at the date and for the periods indicated or which may be
obtained in the future. The information should be read in conjunction with the
unaudited pro forma financial information included in Regions' Current Report
on Form 8-K dated November 23, 1994. For additional information relating to
specific transactions within the scope of the Other Acquisitions, see "Business
of Regions--Recent Developments."

SELECTED PRO FORMA COMBINED DATA FOR REGIONS AND FIDELITY

The following unaudited pro forma combined data give effect to the
acquisition of Fidelity as of the date or at the beginning of the periods
indicated, assuming such acquisition is treated as a pooling of interests.

<TABLE>
<CAPTION>
AS OF
SEPTEMBER 30,
1994
-------------
(IN THOUSANDS
EXCEPT PER
SHARE DATA)
<S> <C>
BALANCE SHEET DATA:
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,957,186
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,491,837
Loans, net of unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,289,168
Total deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,525,633
Other borrowed money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 650,630
Stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 920,385
Book value per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.39
</TABLE>

60
<PAGE> 65

NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, --------------------------------------
1994 1993 1992 1991
---- ---- ---- ----
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total interest income . . . . . . . . . . $582,278 $572,111 $554,120 $577,739
Total interest expense . . . . . . . . . . 253,464 221,980 234,160 305,744
-------- ------- ------- -------

Net interest income . . . . . . . . . . . 328,814 350,131 319,960 271,995
Provision for loan losses . . . . . . . . 13,804 21,660 29,809 24,470
-------- ------- ------- -------

Net interest income after loan loss
provision . . . . . . . . . . . . . . . . 315,010 328,471 290,151 247,525
Total noninterest income . . . . . . . . . 113,836 137,777 123,142 105,906
Total noninterest expense . . . . . . . . 261,594 296,460 272,946 236,918
Income tax expense . . . . . . . . . . . . 55,865 55,020 44,991 35,374
-------- ------- ------- -------

Net income . . . . . . . . . . . . . . . . $111,387 $114,768 $ 95,356 $ 81,139
======== ======= ======= =======

Net income per share . . . . . . . . . . . $ 2.53 $ 3.00 $ 2.54 $ 2.18

Average common shares outstanding . . . . 44,033 38,209 37,536 37,195
</TABLE>

SELECTED PRO FORMA COMBINED DATA FOR REGIONS, FIDELITY, AND OTHER ACQUISITIONS

The following unaudited pro forma combined data as of September 30,
1994, and for the nine months ended September 30, 1994, and the year ended
December 31, 1993, give effect to (i) the acquisition of Fidelity by Regions,
assuming such acquisition is accounted for as a pooling of interests, and (ii)
the acquisitions of Union, American, and First Commercial by Regions,assuming
such acquisitions are treated as purchases for accounting purposes, as if all
such transactions had been consummated on September 30, 1994, in the case of
the data included under "Balance Sheet Data," and on January 1, 1993, in the
case of the data included under "Income Statement Data."

61
<PAGE> 66

<TABLE>
<CAPTION>
AS OF
SEPTEMBER 30,
1994
-------------
(IN THOUSANDS
EXCEPT PER
SHARE DATA)
<S> <C>
BALANCE SHEET DATA:
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,771,778
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,645,339
Loans, net of unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,756,305
Total deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,216,207
Other borrowed money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 710,380
Stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 978,417
Book value per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.76
</TABLE>

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1994 1993
-------------- --------------
(IN THOUSANDS EXCEPT
PER SHARE DATA)
<S> <C> <C>
INCOME STATEMENT DATA:
Total interest income . . . . . . . . . . . . . . . . . $624,217 $629,573
Total interest expense . . . . . . . . . . . . . . . . . 275,864 253,171
------- -------

Net interest income . . . . . . . . . . . . . . . . . . 348,353 376,402
Provision for loan losses . . . . . . . . . . . . . . . . 12,190 23,421
------- -------

Net interest income after loan loss
provision . . . . . . . . . . . . . . . . . . . . . . 336,163 352,981
Total noninterest income . . . . . . . . . . . . . . . . 121,838 146,926
Total noninterest expense . . . . . . . . . . . . . . . . 286,458 329,117
Income tax expense . . . . . . . . . . . . . . . . . . . 57,678 53,711
------- -------

Income before cumulative effect of
change in accounting principle . . . . . . . . . . . . $113,865 $117,079
======= =======

Income before cumulative effect of
change in accounting principle per
share . . . . . . . . . . . . . . . . . . . . . . . . $ 2.54 $ 3.03
Average common shares outstanding . . . . . . . . . . . 44,857 38,699
</TABLE>

62
<PAGE> 67

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 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.

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 the provisions of the Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994 (the "Interstate Banking Act"), which was
signed into law by President Clinton on September 29, 1994, the existing
restrictions on interstate acquisitions of banks by bank holding companies,
including the regional interstate banking legislation adopted by the state of
Alabama, will be repealed one year following enactment such that Regions and
any other 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 Interstate Banking Act also
generally provides that, after June 1, 1997, national and state-chartered banks
may branch interstate through acquisitions of banks in other states. By
adopting legislation prior to that date, a state has the ability either to "opt
in" and accelerate the date after which interstate branching is permissible or
"opt out" and prohibit interstate branching altogether. Assuming no state
action prior to June 1, 1997, Regions would be able to consolidate all of its
Subsidiary Banks into a single bank with interstate branches following that
date.

The BHC Act generally prohibits Regions from engaging in activities other
than banking or managing or

63
<PAGE> 68

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 nonbanking 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 Banks is a member of 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, 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. The FDIC regularly examines the
operations of the Subsidiary Banks and is given authority to approve or
disapprove mergers, consolidations, the establishment of branches, and similar
corporate actions. The FDIC also has the power to prevent the continuance or
development of unsafe or unsound banking practices or other violations of law.

The Subsidiary Banks 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 subsidiary bank 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 would be assessed and enforced. In response to widespread
criticisms of the December 1993 proposal, the agencies on September 26, 1994,
issued a revised proposal. Under the new proposal, the current process-based
CRA assessment factors would be replaced with a new evaluation system that
would rate institutions based on their actual performance in meeting community
credit needs. The evaluation system used to judge an institution's CRA
performance will consist of three tests: a lending test; an investment test;
and a service test. Each of these tests would be applied by the institution's
federal regulator in an assessment context that would take into account such
factors as: (i) demographic data about the community; (ii) the institution's
capacity and constraints; (iii) the institution's product offerings and
business

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strategy; and (iv) data on the prior performance of the institution and
similarly situated lenders.

The proposed lending test--the most important of the three tests for all
institutions other than wholesale and limited purpose (e.g., credit card)
banks--would evaluate an institution's lending activities as measured by its
home mortgage loans, small business and farm loans, community development
loans, and, at the option of the institution, its consumer loans. The
institution's regulator would weigh each of these lending categories to reflect
their relative importance to the institution's overall business and, in the
case of community development loans, the characteristics and needs of the
institution's service area and the opportunities available for this type of
lending. Assessment criteria for the lending test would include: (i) geographic
distribution of the institution's lending; (ii) distribution of the
institution's home mortgage and consumer loans among different economic
segments of the community; (iii) the number and amount of small business and
small farm loans made by the institution; (iv) the number and amount of
community development loans outstanding; and (v) the institution's use of
innovative or flexible lending practices to meet the needs of low- to
moderate-income individuals and neighborhoods. At the election of an
institution, or if particular circumstances so warrant, the banking agencies
will take into account in making their assessments lending by the institution's
affiliates as well as community development loans made by lending consortia and
other lenders in which the institution has invested. As part of the proposal,
all financial institutions would be required to report data on their small
business and small farm loans as well as their home mortgage loans, which are
currently required to be reported under the Home Mortgage Disclosure Act.

The focus of the investment test would be the degree to which the
institution is helping to meet the needs of its service area through qualified
investments that (i) benefit low- to moderate-income individuals and small
businesses or farms, (ii) address affordable housing needs, or (iii) involve
donations of branch offices to minority or women's depository institutions.
Assessment of an institution's performance under the investment test would be
based upon the dollar amount of the institution's qualified investments, its
use of innovative or complex techniques to support community development
initiatives, and its responsiveness to credit and community development needs.
The service test would evaluate an institution's systems for delivering retail
banking services, taking into account such factors as (i) the geographic
distribution of the institution's branch offices and automated teller machines
("ATMs"), (ii) the institution's record of opening and closing branch offices
and ATMs, and (iii) the availability of alternative product delivery systems
such as home banking and loan production offices in low- to moderate-income
areas. The federal regulators would also consider an institution's community
development services as part of the service test. A separate community
development test would be applied to wholesale or limited purpose financial
institutions.

Smaller institutions (those having total assets of less than $250 million)
would be evaluated under more streamlined criteria. In addition, a financial
institution would have the option of having its CRA performance evaluated based
on a strategic plan of up to five years in length that it had developed in
cooperation with local community groups. In order to be rated under a strategic
plan, the institution would be required to obtain the prior approval of its
federal regulator.

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 noncompliance.
An institution would then receive a certain number of points for its rating on
each test, and the points would be combined to produce an overall composite
rating of either outstanding, satisfactory, needs to improve, or substantial
noncompliance. Under the agencies' proposed rating guidelines, an institution's
rating on the lending test would count for at least 50% of its overall rating,
and no institution can receive an overall rating of "satisfactory" unless it
receives a rating of at least "low satisfactory" on its lending test. The
proposed guidelines also provide that if an institution received no better than
a "needs to improve" rating on its previous two CRA exams, a "needs to improve"
rating on the third exam would be downgraded to "substantial noncompliance." In
any situation, evidence of discriminatory or other illegal credit practices
would adversely effect an institution's overall rating.

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Under the proposal, an institution's CRA rating would continue to be taken
into account by its regulator in considering various types of applications. In
addition, an institution receiving a rating of "substantial noncompliance"
would be subject to civil money penalties or a cease and desist order under
Section 8 of the Federal Deposit Insurance Act (the "FDIA").

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, is dividends from the Subsidiary Banks.
There are statutory and regulatory limitations on the payment of dividends by
the Subsidiary Banks 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 the states of Alabama, Florida, Georgia,
Louisiana, and Tennessee and to the regulations of the FDIC as to the 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 and the FDIC 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 if payment would cause it to become undercapitalized or if it already
is 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 September 30, 1994, under dividend restrictions imposed under federal
and state laws, the Subsidiary Banks, without obtaining governmental approvals,
could declare aggregate dividends to Regions of approximately $262 million.

The payment of dividends by Regions and the Subsidiary Banks may also be
affected or limited by other factors, such as the requirement to maintain
adequate capital above regulatory guidelines.

TRANSACTIONS WITH AFFILIATES

There are various restrictions on the extent to which Regions and its
nonbank subsidiaries can borrow or otherwise obtain credit from the Subsidiary
Banks. Each Subsidiary Bank (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 Bank and its
subsidiaries may not exceed 10% of the capital stock and surplus of such
Subsidiary Bank; and (ii) in the case of all affiliates, the aggregate amount
of covered transactions of the Subsidiary Bank and its subsidiaries may not
exceed 20% of the capital stock and surplus of such Subsidiary Bank. "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
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.

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CAPITAL ADEQUACY

Regions and the Subsidiary Banks are required to comply with the capital
adequacy standards established by the Federal Reserve in the case of Regions
and the FDIC in the case of the Subsidiary Banks. 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 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 September 30, 1994, Regions' consolidated Tier 1 Capital and Total
Capital ratios were 10.93% and 14.79%, 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 September 30, 1994, was 7.71%. 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, which are substantially similar to
those adopted by the Federal Reserve. Each of the Subsidiary Banks was in
compliance with applicable minimum capital requirements as of December 31,
1993. Neither Regions nor any of the Subsidiary Banks 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 and the FDIC 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 BANKS

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 Banks. 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 Banks are
subordinate in right of payment to deposits and to certain other indebtedness
of such Subsidiary Bank. 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 Bank 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 Banks are subject to these
cross-guarantee provisions. As a result, any loss suffered by the FDIC in
respect of any of the Subsidiary Banks would likely result in assertion of the
cross-guarantee provisions, the assessment of such estimated losses against
Regions' other Subsidiary Banks, and a potential loss of Regions' investment in
such other Subsidiary Banks.

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, 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

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to be in a capitalization category that is lower than is indicated by its
actual capital position if it receives an unsatisfactory examination rating.

An institution that is categorized as undercapitalized, significantly
undercapitalized, or critically undercapitalized is required to submit an
acceptable capital restoration plan to its appropriate federal banking agency.
Under FDICIA, a bank holding company must guarantee that a subsidiary
depository institution meet its capital restoration plan, subject to certain
limitations. The obligation of a controlling bank holding company under FDICIA
to fund a capital restoration plan is limited to the lesser of 5.0% of an
undercapitalized subsidiary's assets 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 is given
authority with respect to any undercapitalized depository institution to take
any of the actions it is required to or may take with respect to a
significantly undercapitalized institution as described below if it determines
"that those actions are necessary to carry out the purpose" of FDICIA.

For those institutions that are significantly undercapitalized or
undercapitalized and either fail to submit an acceptable capital restoration
plan or fail to implement an approved capital restoration plan, the appropriate
federal banking agency must require the institution to take one or more of the
following actions: (i) sell enough shares, including voting shares, to become
adequately capitalized; (ii) merge with (or be sold to) another institution (or
holding company), but only if grounds exist for appointing a conservator or
receiver; (iii) restrict certain transactions with banking affiliates as if the
"sister bank" exception to the requirements of Section 23A of the Federal
Reserve Act did not exist; (iv) otherwise restrict transactions with bank or
nonbank affiliates; (v) restrict interest rates that the institution pays on
deposits to "prevailing rates" in the institution's "region"; (vi) restrict
asset growth or reduce total assets; (vii) alter, reduce, or terminate
activities; (viii) hold a new election of directors; (ix) dismiss any director
or senior executive officer who held office for more than 180 days immediately
before the institution became undercapitalized, provided that in requiring
dismissal of a director or senior officer, the agency must comply with certain
procedural requirements, including the opportunity for an appeal in which the
director or officer will have the burden of proving his or her value to the
institution; (x) employ "qualified" senior executive officers; (xi) cease
accepting deposits from correspondent depository institutions; (xii) divest
certain nondepository affiliates which pose a danger to the institution; or
(xiii) be divested by a parent holding company. In addition, without the prior
approval of the appropriate federal banking agency, a significantly
undercapitalized institution may not pay any bonus to any senior executive
officer or increase the rate of compensation for such an officer without
regulatory approval.

At September 30, 1994, all of the Subsidiary Banks 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 Banks had at September 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 Banks.

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FDIC INSURANCE ASSESSMENTS

In July 1993, the FDIC adopted a new risk-based assessment system for
insured depository institutions that takes into account the risks attributable
to different categories and concentrations of assets and liabilities. The new
system, which went into effect on January 1, 1994, and 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 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 and the
Savings Association Insurance Fund are designed to increase the reserve ratios
(i.e., the ratios of reserves to insured deposits) for both funds to a
designated ratio (i.e., 1.25%) within a specified period of time. Once the
designated ratio is reached, the FDIC is to set future assessment rates at such
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 (a) those performing internal
audits be qualified and independent, (b) internal controls and information
systems be tested and reviewed, (c) corrective actions be adequately
documented, and (d) 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

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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 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 in the "liquidation or other
resolution" of such an institution by any receiver.

DESCRIPTION OF REGIONS COMMON STOCK

Regions is authorized to issue 120,000,000 shares of Regions Common Stock,
of which 44,934,458 shares were issued, including 2,919,179 treasury shares, at
September 30, 1994. No other class of stock is authorized.

Holders of Regions Common Stock are entitled to receive such dividends as
may be declared by the Board of Directors out of funds legally available
therefore. Dividend payments are subject to certain limitations imposed in
Regions' debt instruments. Under the most restrictive of such limitations, $724
million was available for payment of dividends as of September 30, 1994.
However, the ability of Regions to pay dividends is further affected by the
ability of its Subsidiary Banks to pay dividends, which is limited by
applicable regulatory requirements and capital guidelines. At September 30,
1994, under such requirements and guidelines, the Subsidiary Banks had $262
million of undivided profits legally available for the payment of dividends.
See "Supervision and Regulation--Dividends."

For a further description of Regions Common Stock, see "Effect of the
Merger on Rights of Stockholders."

STOCKHOLDER PROPOSALS

Regions expects to hold its next annual meeting of stockholders after the
Merger during April 1995. Under SEC rules proposals of Regions stockholders
intended to be presented at that meeting must have been received by Regions at
its principal executive offices no later than November 16, 1994, for
consideration by Regions for possible inclusion in such proxy materials.
Proposals with respect to Regions' 1996 annual meeting of stockholders may be
submitted until the date specified in Regions' 1995 annual meeting proxy
statement.

EXPERTS

The financial statements of Fidelity as of December 31, 1993, and 1992, and
for each of the years in the two-year period ended December 31, 1993, have been
included herein in reliance upon the report of Evans, Porter, Bryan & Co.,
independent auditors, and on the authority of said firm as experts in
accounting and auditing. The financial statements of Fidelity for the year
ended December 31, 1991, have

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been included herein in reliance upon the report of KPMG Peat Marwick,
independent auditors, and on the authority of said firm as experts in
accounting and auditing.

The consolidated financial statements of Regions, incorporated by reference
in this Registration Statement, have been audited by Ernst & Young LLP,
independent auditors, for the periods indicated in their report thereon which
is included in the Annual Report to Stockholders which is incorporated by
reference in its Annual Report on Form 10-K for the year ended December 31,
1993. The financial statements audited by Ernst & Young LLP have been
incorporated herein by reference in reliance on their report given on their
authority as experts in accounting and auditing.

OPINIONS

The legality of the shares of Regions Common Stock to be issued in the
Merger will be passed upon by Lange, Simpson, Robinson & Somerville,
Birmingham, Alabama. Henry E. Simpson, partner in the law firm of Lange,
Simpson, Robinson & Somerville, is a member of the Board of Directors of
Regions. As of January , 1995, attorneys in the law firm of Lange, Simpson,
Robinson & Somerville owned an aggregate of 119,995 shares of Regions Common
Stock.

Certain tax consequences of the transaction have been passed upon by
Alston & Bird, Atlanta, Georgia.

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INDEX TO FIDELITY FINANCIAL STATEMENTS

Page

Fidelity Federal Savings Bank and Subsidiary
Report of Independent Certified Public Accountants . . . . . . . . . . . F-
Fidelity Federal Savings Bank and Subsidiary
Report of Independent Certified Public Accountants . . . . . . . . . . . F-
Consolidated Statements of Financial Condition as of
December 31, 1993 and 1992 . . . . . . . . . . . . . . . . . . . . . . . F-
Consolidated Statements of Earnings for the Years
Ended December 31, 1993, 1992, and 1991 . . . . . . . . . . . . . . . . F-
Consolidated Statements of Changes in Stockholders'
Equity for the Years Ended December 31, 1993, 1992, and 1991 . . . . . . F-
Consolidated Statements of Cash Flows for the Years
Ended December 31, 1993, 1992, and 1991 . . . . . . . . . . . . . . . . F-
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . F-
Condensed Consolidated Statement of Financial Condition
as of September 30, 1994 (Unaudited) . . . . . . . . . . . . . . . . . . F-
Condensed Consolidated Statements of Earnings for the
Nine Months Ended September 30, 1994 and 1993 (Unaudited) . . . . . . . F-
Condensed Consolidated Statement of Changes in Stockholders'
Equity for the Nine Months Ended September 30, 1994 (Unaudited) . . . . F-
Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 1994 and 1993 (Unaudited) . . . . . . . F-
Notes to Unaudited Condensed Consolidated Interim Financial Statements . . F-

F-1
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders
Fidelity Federal Savings Bank
Dalton, Georgia

We have audited the accompanying consolidated statements of financial condition
of Fidelity Federal Savings Bank and subsidiary as of December 31, 1993 and
1992, and the related consolidated statements of earnings, changes in
stockholders' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Bank's management. Our responsibility
is to express an opinion on these financial statements based on our audits. The
financial statements for the year ended December 31, 1991 were audited by other
auditors whose report dated March 6, 1992 expressed an unqualified opinion on
those financial statements.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Fidelity Federal
Savings Bank and subsidiary as of December 31, 1993 and 1992, and the results
of their operations and their cash flows for the years then ended, in
conformity with generally accepted accounting principles.

/s/ Evans, Porter, Bryan & Co.

Atlanta, Georgia
February 25, 1994, except for note 18 as to which the
date is October 17, 1994.

F-2
<PAGE> 79

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Consolidated Statements of Financial Condition

December 31, 1993 and 1992

Assets

<TABLE>
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
Cash and due from banks $ 13,531,414 16,233,708
Interest-bearing deposits in financial institutions (note 2) 13,103,487 19,331,481
Federal funds sold 100,000 -
----------- -----------
Cash and cash equivalents 26,734,901 35,565,189

Investment securities (estimated market value of
$7,068,646 and $10,625,022) (note 2) 7,039,750 10,694,463
Investment required by law, at cost-stock of Federal Home Loan
Bank (note 10) 1,067,600 1,009,800
Mortgage-backed and related securities (estimated market value
of $6,769,654) (note 3) - 6,544,347
Mortgage loans held for sale 9,179,831 8,918,008
Loans, net (notes 4 and 10) 200,077,329 143,585,318
Accrued interest receivable 1,316,182 1,247,964
Real estate owned, net (note 6) 479,769 1,467,126
Premises and equipment, net (notes 7 and 9) 5,590,186 5,530,957
Cost of loan servicing rights acquired (note 5) 1,515,687 1,336,695
Excess servicing fees receivable (note 5) 1,028,632 1,301,638
Other assets 1,088,235 866,206
----------- -----------
$255,118,102 218,067,711
=========== ===========
Liabilities and Stockholders' Equity
Deposits (note 8) $226,781,519 198,264,705
Bonds payable (note 9) 400,000 500,000
Advances from Federal Home Loan Bank (note 10) 5,000,000 -
Advances from borrowers for taxes and insurance 1,818,761 1,369,642
Custodial escrow balances (note 5) 1,737,965 941,159
Accrued interest payable 2,361,101 2,439,111
Accrued expenses and other liabilities 382,966 367,270
----------- -----------
Total liabilities 238,482,312 203,881,887
----------- -----------
Commitments and contingencies (notes 16 and 17)
Stockholders' equity (notes 11, 13 and 14):
Preferred stock, Series A, 6% nonvoting, restricted
convertible, noncallable, $1.00 par value; authorized
500,000 shares; issued and outstanding 300,000 shares 300,000 300,000
Common stock, $1.00 par value, authorized 10,000,000 shares;
issued and outstanding 1,774,800 shares 1,774,800 1,774,800
Additional paid-in capital:
Preferred 1,800,000 1,800,000
Common 166,146 166,146
Retained earnings 12,594,844 10,144,878
----------- -----------
Total stockholders' equity 16,635,790 14,185,824
----------- -----------
$255,118,102 218,067,711
=========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE> 80

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Consolidated Statements of Earnings

For the Years Ended December 31, 1993, 1992 and 1991

<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Interest income:
Loans $ 15,215,965 15,840,213 18,673,200
Mortgage-backed and related securities 238,099 626,068 771,006
Investment securities 520,427 230,280 223,994
Other interest-earning assets 469,484 676,175 1,250,022
----------- ----------- ----------

Total interest income 16,443,975 17,372,736 20,918,222
---------- ---------- ----------

Interest expense:
Deposits (note 8) 8,204,591 10,043,915 13,650,481
Borrowed funds 161,841 47,905 76,200
---------- ----------- -----------

Total interest expense 8,366,432 10,091,820 13,726,681
---------- ----------- -----------

Net interest income 8,077,543 7,280,916 7,191,541

Provision for loan losses (note 4) 127,422 2,736,648 465,000
---------- ---------- ----------

Net interest income after provision for
loan losses 7,950,121 4,544,268 6,726,541
---------- ---------- ----------

Other income:
Gain (loss) on sales of first mortgage loans and
rights to service first mortgage loans 1,348,225 (68,362) 709,771
Loan origination and commitment fees 1,669,880 2,020,077 1,459,940
Loan servicing fees, net (4,008) 546,376 516,165
Securities gains, net 405,547 - -
Miscellaneous (note 15) 2,331,048 1,566,549 1,762,900
---------- ---------- ----------

Total other income 5,750,692 4,064,640 4,448,776
---------- ---------- ----------

Other expense:
Salaries and benefits 5,190,061 4,397,374 3,927,017
Occupancy and equipment 1,200,589 1,018,979 760,254
Deposit insurance premiums 583,876 462,432 466,918
Provision for estimated losses on real estate owned - 481,298 -
Other operating (note 15) 2,459,005 1,926,246 1,424,280
---------- ---------- ----------
Total other expense 9,433,531 8,286,329 6,578,469
---------- ---------- ----------
Earnings before income taxes 4,267,282 322,579 4,596,848

Income tax expense (note 13) 1,544,340 14,386 1,714,309
---------- ---------- ----------
Net earnings $ 2,722,942 308,193 2,882,539
========== ========== ==========
Net earnings per common and common equivalent share
$ 1.31 0.15 1.39
========== ========== ==========
Weighted average common and common equivalent shares 2,074,800 2,074,800 2,074,800
========== ========== ==========

</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE> 81

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Consolidated Statements of Changes in Stockholders' Equity

For the Years Ended December 31, 1993, 1992 and 1991

<TABLE>
<CAPTION>
Additional Paid-in Capital
--------------------------
Series A Series A
Preferred Common Preferred Common Retained
Stock Stock Stock Stock Earnings Total
-------- ---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1990 $ 300,000 1,774,800 1,800,000 166,146 7,479,808 11,520,754

Net earnings - - - - 2,882,539 2,882,539

Cash dividends:
Common stock - - - - (301,713) (301,713)
Preferred stock - - - - (120,000) (120,000)
-------- ---------- ---------- ----------- ---------- ----------

Balance, December 31, 1991 300,000 1,774,800 1,800,000 166,146 9,940,634 13,981,580

Net earnings - - - - 308,193 308,193

Cash dividends:
Common stock - - - - (73,949) (73,949)
Preferred stock - - - - (30,000) (30,000)
-------- ---------- ---------- ----------- ---------- ----------

Balance, December 31, 1992 300,000 1,774,800 1,800,000 166,146 10,144,878 14,185,824

Net earnings - - - - 2,722,942 2,722,942

Cash dividends:
Common stock - - - - (212,976) (212,976)
Preferred stock - - - - (60,000) (60,000)
-------- ---------- ---------- ----------- ---------- ----------

Balance, December 31, 1993 $ 300,000 1,774,800 1,800,000 166,146 12,594,844 16,635,790
======== ========== ========== =========== ========== ==========

</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE> 82

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Consolidated Statements of Cash Flows

For the Years Ended December 31, 1993, 1992 and 1991

<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 2,722,942 308,193 2,882,539
Adjustments to reconcile net earnings to net cash
provided (used) by operating activities:
Depreciation, amortization and accretion 2,146,661 1,001,621 398,433
Provision for loan losses 127,422 2,736,648 465,000
Provision for estimated losses on real estate
owned - 481,298 -
Provision for deferred income taxes (5,419) (647,996) 107,947
Net (gain) loss on sales of:
Investment and mortgage-backed securities (405,547) - -
First mortgage loans and rights to service
first mortgage loans (1,348,225) 68,362 (709,771)
Real estate owned (204,244) (258) (40,270)
Premises and equipment (3,810) 13,183 -
FHLB stock dividend (57,800) (64,700) (68,600)
Change in:
Accrued interest receivable (68,218) 747,866 253,146
Accrued interest payable (78,010) (632,576) (204,737)
Other (678,350) (1,018,193) (661,692)
Net change in mortgage loans held for sale (261,823) (669,368) (7,378,390)
----------- ----------- ----------

Net cash provided (used) by operating
activities 1,885,579 2,324,080 (4,956,395)
----------- ----------- ----------

Cash flows from investing activities:
Net change in loans (56,782,926) 14,243,080 (10,586,412)
Principal repayments on mortgage-backed and
related securities 866,107 1,890,829 1,126,798
Proceeds from sales of investment and
mortgage-backed securities 19,657,094 - -
Proceeds from maturities of investment securities 615,000 3,438,333 3,778,333
Purchases of investment securities (10,539,257) (12,037,267) (2,590,176)
Improvements to real estate owned - (3,085) (24,856)
Proceeds from sales of real estate owned 1,763,933 936,615 322,828
Proceeds from sale of premises and equipment 3,810 5,150 -
Purchases of premises and equipment (689,391) (452,270) (566,520)
----------- ----------- ----------

Net cash provided (used) by investing
activities $(45,105,630) 8,021,385 (8,540,005)
----------- ----------- ----------

</TABLE>

F-7
<PAGE> 83

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Consolidated Statements of Cash Flows, continued

For the Years Ended December 31, 1993, 1992 and 1991

<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Cash flows from financing activities:
Net change in deposits $28,516,814 (5,064,393) (3,596,401)
Principal payments on bonds payable (100,000) (100,000) (100,000)
Proceeds of advances from FHLB 5,000,000 - -
Net increase in advances from borrowers for taxes
and insurance 449,119 415,317 567,701
Net change in custodial escrow accounts 796,806 (268,197) 594,536
Cash dividends paid on preferred and common stock (272,976) (103,949) (421,713)
---------- ---------- -----------

Net cash provided (used) by financing
activities 34,389,763 (5,121,222) (2,955,877)
---------- ---------- -----------

Net increase (decrease) in cash and
cash equivalents (8,830,288) 5,224,243 (16,452,277)

Cash and cash equivalents at beginning of year 35,565,189 30,340,946 46,793,223
---------- ---------- -----------

Cash and cash equivalents at end of year $26,734,901 35,565,189 30,340,946
========== ========== ===========

Supplemental disclosures of cash flow information:
Noncash investing and financing activities:
Transfer from loans to real estate owned $ 667,332 800,752 746,705
Financed sales of real estate owned $ 95,000 89,164 600,569

Cash paid during the year for:
Interest $ 8,444,442 10,724,396 13,931,418
Income taxes $ 1,533,000 894,867 1,484,500

</TABLE>

See accompanying notes to consolidated financial statements.

F-8
<PAGE> 84

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Notes to Consolidated Financial Statements

(1) Summary of Significant Accounting Policies
The accounting and reporting policies of Fidelity Federal Savings Bank
and subsidiary (the Bank) conform to generally accepted accounting
principles and to general practices within the thrift industry. The
following is a description of the more significant of those policies
which the Bank follows in preparing and presenting its consolidated
financial statements.

Principles of Consolidation
The consolidated financial statements include the accounts of Fidelity
Federal Savings Bank and First Fidelity Financial Corporation, its
wholly-owned subsidiary. All significant intercompany balances and
transactions are eliminated in consolidation.

Cash Equivalents
For purposes of the statements of cash flows, the Bank considers cash,
amounts due from banks, interest-bearing deposits in financial
institutions and federal funds sold to be cash equivalents.

Investment Securities
Investment securities are stated at amortized cost, adjusted for
unamortized premiums and unearned discounts. Discounts are accreted
and premiums are amortized into interest income by a method which
approximates the level-yield method over the remaining contractual
terms of the respective securities. Sales of investment securities
may be consummated as a result of changing liquidity needs, capital
standards or level of portfolio risk. Gains and losses from the sale
of securities are determined using the specific identification
method.

Mortgage-Backed Securities
Mortgage-backed securities represent participating interests in pools of
long-term first mortgage loans originated and serviced by the issuers
of the securities. These securities are carried at unpaid principal
balances, adjusted for unamortized premiums and unearned discounts.
Premiums are amortized and discounts are accreted using a method
which approximates the level-yield method over the remaining period
to contractual maturity, adjusted for anticipated prepayments. Sales
of mortgage-backed securities may be consummated as a result of
changing liquidity needs, capital standards or level of portfolio
risk. Gains and losses on the sale of mortgage-backed securities are
determined using the specific identification method.

Mortgage Loans Held for Sale
Mortgage loans originated and intended for sale in the secondary market
are carried at the lower of aggregate cost or market value. The
amount by which cost exceeds market value is accounted for as a
valuation allowance. Changes, if any, in the valuation allowance are
included in the determination of net earnings in the period in which
the change occurs. Gains and losses from the sale of loans are
determined using the specific identification method.

Loans and Allowance for Loan Losses
Loans are stated at unpaid principal balances, net of unearned income
and net deferred loan origination fees or costs. Unearned income on
consumer loans is recognized over the lives of the loans using
methods that approximate the level-yield method.

Accrual of interest is discontinued on a loan when management believes,
after considering economic and business conditions and collection
efforts, that the borrower's financial condition is such that
collection of interest is doubtful.

F-9
<PAGE> 85

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Notes to Consolidated Financial Statements, continued

(1) Summary of Significant Accounting Policies, continued

Loans and Allowance for Loan Losses, continued

The allowance for loan losses is established through a provision for
loan losses charged to expense. Loans are charged against the
allowance for loan losses when management believes that the
collectibility of the principal is unlikely. The allowance represents
an amount which, in management's judgement, will be adequate to
absorb possible losses on existing loans that may become
uncollectible. Management's judgement in determining the adequacy of
the allowance is based on evaluations of the collectibility of loans.
These evaluations take into consideration such factors as changes in
the nature and volume of the loan portfolio, current economic
conditions that may affect the borrower's ability to pay, overall
portfolio quality, and review of specific problem loans.

Management believes that the allowance for loan losses is adequate.
While management uses available information to recognize losses on
loans, future additions to the allowance may be necessary based on
changes in economic conditions. In addition, various regulatory
agencies, as an integral part of their examination process,
periodically review the Bank's allowance for loan losses. Such
agencies may require the Bank to recognize additions to the allowance
based on judgements different than those of management.

Loan Origination and Commitment Fees and Related Costs
Loan fees are accounted for in accordance with Statement of Financial
Accounting Standards No. 91. Loan fees and certain direct loan
origination costs are deferred, and the net fee or cost is recognized
in interest income using the level-yield method over the contractual
life of the loans, adjusted for estimated prepayments based on the
Bank's historical prepayment experience. Commitment fees and costs
relating to commitments whose likelihood of exercise is remote are
recognized over the commitment period on a straight-line basis. If
the commitment is subsequently exercised during the commitment
period, the remaining unamortized commitment fee at the time of
exercise is recognized over the life of the loan as an adjustment of
yield.

Loan Servicing Fees
Fees arising from servicing loans for others are recognized as earned.

Loan Servicing Rights
The cost of loan servicing rights acquired is amortized in proportion
to, and over the period of, estimated net servicing revenues. When
participating interests in loans sold have an average contractual
interest rate, adjusted for normal servicing costs, which differs
from the agreed yield to the purchaser, gains or losses are
recognized equal to the present value of such differential over the
estimated remaining life of such loans. The resulting "excess
servicing fees receivable" is amortized over the same estimated life
using a method approximating the interest method.

The cost of loan servicing rights acquired, the excess servicing fees
receivable, and the amortization thereon is periodically evaluated in
relation to the present value of the estimated future net servicing
revenues. The Bank evaluates the carrying value of the servicing
portfolio by estimating the future net servicing income of the
portfolio based on management's best estimate of remaining loan
lives.

F-10
<PAGE> 86

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Notes to Consolidated Financial Statements, continued

(1) Summary of Significant Accounting Policies, continued

Premises and Equipment
Premises and equipment are stated at cost less accumulated depreciation.
Depreciation is computed primarily by the straight-line method over
the estimated useful lives of the assets. When assets are retired or
otherwise disposed of, the cost and related accumulated depreciation
are removed from the accounts, and any resulting gain or loss is
reflected in income for the period. The cost of maintenance and
repairs is charged to expense as incurred, whereas significant
improvements are capitalized.

Income Taxes
Income taxes are provided for the tax effects of transactions reported
in the financial statements and consist of taxes currently due plus
deferred taxes related primarily to differences between the financial
and tax bases of the allowance for loan losses, deferred
compensation, stock dividends, unearned loan fees and premises and
equipment. The deferred taxes represent the future tax return
consequences of those differences, which will either be taxable or
deductible when the assets and liabilities are recovered or settled.

Disclosures about Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 107, "Disclosures about
Fair Value of Financial Instruments", requires that the Bank disclose
estimated fair values for its financial instruments. Fair value
estimates, methods and assumptions are set forth below and in the
respective section of each note applicable for affected financial
instruments of the Bank.

Cash, Short-term Investments and Federal Home Loan Bank Stock
For cash, due from banks, interest-bearing deposits in financial
institutions, federal funds sold and investments in Federal Home
Loan Bank, the carrying amount is a reasonable estimate of fair
value.

Commitments to Originate First Mortgage Loans
For commitments to originate fixed-rate first mortgage loans,
fair value considers the terms of the agreements, the
creditworthiness of the counterparties and the difference between
current levels of interest rates and the committed rates. As the
Bank's terms are for a short duration, the contract value is a
reasonable estimate of fair value.

Commitments to Extend Credit, Standby Letters of Credit and
Forward Sales Contracts
Because commitments to extend credit, standby letters of credit
and forward sales contracts are made using variable rates, the
contract value is a reasonable estimate of fair value.

Fair value estimates are made at a specific point in time, based on
relevant market information and information about the financial
instrument. These estimates do not reflect any premium or discount
that could result from offering for sale at one time the Bank's
entire holdings of a particular financial instrument. Because no
market exists for a significant portion of the Bank's financial
instruments, fair value estimates are based on many judgements. These
estimates are subjective in nature and involve uncertainties and
matters of significant judgement and therefore cannot be determined
with precision. Changes in assumptions could significantly affect the
estimates.

F-11
<PAGE> 87

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Notes to Consolidated Financial Statements, continued

(1) Summary of Significant Accounting Policies, continued

Disclosures about Fair Value of Financial Instruments, continued

Fair value estimates are based on existing on and off-balance sheet
financial instruments without attempting to estimate the value of
anticipated future business and the value of assets and liabilities
that are not considered financial instruments. Significant assets and
liabilities that are not considered financial instruments include
premises and equipment, real estate owned, deferred income taxes and
intangible assets. In addition, the tax ramifications related to the
unrealized gains and losses can have a significant effect on the fair
value estimates and have not been considered in the estimates.

Earnings Per Share
Preferred shares outstanding are treated as common equivalent shares for
the purpose of computing weighted average common and common
equivalent shares.

Reclassifications
Certain items in the 1992 and 1991 consolidated financial statements
have been reclassified to conform to the current year presentation.

(2) Investment Securities
The carrying value and estimated market value (based on quoted market
prices) of investment securities at December 31, 1993 and 1992 are
summarized as follows:

<TABLE>
<CAPTION>
Gross Gross Estimated
Carrying Unrealized Unrealized Market
1993 Value Gains Losses Value
---- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
U.S. Treasury $ 7,006,417 28,896 - 7,035,313
State, county and municipals 33,333 - - 33,333
---------- ------ --------- ----------

$ 7,039,750 28,896 - 7,068,646
========== ====== ========= ==========

1992
----

U.S. Treasury $10,212,422 9,231 78,498 10,143,155
State, county and municipals 482,041 - 174 481,867
---------- ------ --------- ----------

$10,694,463 9,231 78,672 10,625,022
========== ====== ========= ==========

</TABLE>

The carrying value and estimated market value of investment securities
at December 31, 1993, by contractual maturity, are shown below.
Expected maturities will differ from contractual maturities because
borrowers have the right to call or prepay obligations with or
without call or prepayment penalties.

<TABLE>
<CAPTION>
Estimated
Carrying Market
Value Value
--------- ----------
<S> <C> <C>
Due in one year or less $3,006,760 3,022,500
Due after one year through five years 4,032,990 4,046,146
--------- ---------

$7,039,750 7,068,646
========= =========
</TABLE>

F-12
<PAGE> 88

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Notes to Consolidated Financial Statements, continued

(2) Investment Securities, continued

Proceeds from sales of investment securities during 1993 were
$12,174,375. Gross gains of $179,613 and gross losses of $17,995 were
realized on those sales. There were no sales of investment securities
during 1992 and 1991.

Investment securities carried in the consolidated statements of
financial condition at $6,666,193 and $3,875,000 as of December 31,
1993 and 1992, respectively, were pledged to secure public deposits,
or for other purposes. Such public deposits were further secured by
the pledge of $7,630,000 of deposits held in other financial
institutions as of December 31, 1993.

(3) Mortgage-Backed and Related Securities
The carrying value and estimated market value (based on quoted market
prices) of mortgage-backed and related securities at December 31,
1992 are summarized as follows:

<TABLE>
<CAPTION>
Gross Gross Estimated
Carrying Unrealized Unrealized Market
Value Gains Losses Value
--------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
GNMA Certificates $ 441,303 16,549 - 457,852
FHLMC Certificates 6,103,044 208,758 - 6,311,802
--------- ------- ---------- ----------

$6,544,347 225,307 - 6,769,654
========= ======= ========== ==========

</TABLE>

Proceeds from sales of investments in mortgage-backed and related
securities during 1993 were $7,482,719. Gross gains of $243,929 were
realized on those sales.

As of December 31, 1992, mortgage-backed securities with a carrying
value of approximately $4,625,000, were pledged to secure public
deposits.

(4) Loans and Allowance for Loan Losses
Loans at December 31, 1993 and 1992 are summarized as follows:

<TABLE>
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
Real estate $154,384,011 102,112,408
Construction 6,546,340 2,578,727
Consumer 34,709,172 35,449,586
Commercial 12,222,507 11,436,327
Financing leases 236,469 558,371
----------- -----------

208,098,499 152,135,419
Less:
Undisbursed construction loan proceeds 2,673,772 1,042,485
Unearned discounts 1,123,740 3,016,217
Net deferred loan fees 382,852 150,297
----------- -----------

203,918,135 147,926,420
Allowance for loan losses 3,840,806 4,341,102
----------- -----------

Total net loans $200,077,329 143,585,318
=========== ===========

</TABLE>

F-13
<PAGE> 89

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Notes to Consolidated Financial Statements, continued

(4) Loans and Allowance for Loan Losses, continued

The Bank grants loans and extensions of credit to individuals and a
variety of firms and corporations located primarily in Whitfield
County, Georgia and the surrounding area. Although the Bank has a
diversified loan portfolio, a substantial portion of the loan
portfolio is collateralized by improved and unimproved real estate
and is dependent upon the real estate market.

Activity in the allowance for loan losses is summarized as follows for
the years ended December 31:

<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year $4,341,102 2,824,769 3,191,007
Provisions charged to operations 127,422 2,736,648 465,000
Chargeoffs (734,223) (1,360,545) (861,230)
Recoveries 106,505 140,230 29,992
--------- ---------- ---------

Balance at end of year $3,840,806 4,341,102 2,824,769
========= ========== =========

</TABLE>

Nonaccrual loans totaled $575,263 and $713,359 at December 31, 1993 and
1992, respectively.

Loans to facilitate the sale of real estate owned, recorded as real
estate owned for regulatory reporting purposes, totaled $300,821 and
$1,364,147 at December 31, 1993 and 1992, respectively. These are
loans in which the borrowers did not meet the minimum initial down
payment requirements necessary for sales recognition.

Fair values are estimated for portfolios of loans with similar financial
characteristics. Loans are segregated by type such as installment,
commercial, mortgage and held for sale. Each category includes loans
with both fixed and adjustable rate terms and also includes loans
secured by real estate, loans secured by collateral other than real
estate and unsecured loans. The estimated discount rate used has
considered the components of each of these loan categories.

The fair value of each category of loans is calculated by discounting
scheduled cash flows through the estimated maturity using estimated
market discount rates that reflect the credit and interest rate risk
inherent in the loan. The estimated fair value of net loans and
mortgage loans held for sale at December 31, 1993 and 1992 is
$215,004,000 and $157,737,000, respectively.

In the normal course of business, executive officers and directors of
the Bank, including certain business organizations and individuals
associated with them, maintain a variety of banking relationships
with the Bank. Loans to executive officers and directors are made on
terms comparable to those available to other Bank customers. The
following table summarizes related party loan activity during 1993.

<TABLE>
<S> <C>
Beginning balance $1,632,788
New loans 2,918,337
Repayments (879,280)
Parties no longer related (827,901)
---------

Ending balance $2,843,944
=========

</TABLE>

F-14
<PAGE> 90

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Notes to Consolidated Financial Statements, continued

(5) Loan Servicing
Mortgage loans serviced for others are not included in the accompanying
consolidated balance sheets. The unpaid principal balances of these
loans at December 31 are summarized as follows:

<TABLE>
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
Mortgage loan portfolios serviced for:
FHLMC $ 44,535,105 42,351,971
FNMA 394,686,463 343,261,766
----------- -----------

$439,221,568 385,613,737
=========== ===========
</TABLE>

Custodial escrow balances maintained in connection with the foregoing
loan servicing were $1,737,965 and $941,159 at December 31, 1993 and
1992, respectively.

The following is an analysis of the changes in loan servicing rights
acquired (purchased) and excess servicing fees receivable (retained)
asset balances for 1993 and 1992:

<TABLE>
<CAPTION>
Purchased Retained
--------- --------
<S> <C> <C>
Balance, December 31, 1991 $ 635,548 597,701
Additions 903,736 1,060,907
Amortization (202,589) (356,970)
--------- ---------

Balance, December 31, 1992 1,336,695 1,301,638
Additions 983,371 433,451
Amortization (804,379) (706,457)
--------- ---------

Balance, December 31, 1993 $1,515,687 1,028,632
========= =========

</TABLE>

(6) Real Estate Owned
In accordance with the American Institute of Certified Public
Accountants' Statement of Position 92-3 "Accounting for Foreclosed
Assets", the Bank established a valuation allowance for real estate
owned for the year ended December 31, 1992. The allowance represents
an amount which, in management's judgement, is adequate to absorb
both losses on real estate owned and the estimated cost to dispose of
the properties. The following is a summary of the changes in real
estate owned and the related valuation allowance for losses on real
estate owned for the year ended December 31, 1993.

<TABLE>
<CAPTION>
Real Estate
Owned Allowance Total
----------- --------- ---------
<S> <C> <C> <C>
Balance at beginning of year $ 1,726,024 (258,898) 1,467,126
Additions - foreclosures 691,164 (23,832) 667,332
Deletions - sales (1,922,163) 267,474 (1,654,689)
---------- -------- ----------

Balance at end of year $ 495,025 (15,256) 479,769
========== ======== ==========

</TABLE>

F-15
<PAGE> 91

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Notes to Consolidated Financial Statements, continued

(7) Premises and Equipment
Premises and equipment as of December 31 are summarized as follows:

<TABLE>
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
Land $ 606,197 606,197
Buildings and improvements 3,869,192 3,768,729
Furniture, fixtures, and equipment 3,440,837 2,856,037
Automobiles 50,766 56,421
--------- ---------

7,966,992 7,287,384
Less accumulated depreciation 2,376,806 1,756,427
--------- ---------

$5,590,186 5,530,957
========= =========

</TABLE>

Depreciation expense was $630,162, $474,519 and $360,607 in 1993, 1992
and 1991, respectively.

(8) Deposits
Deposits at December 31 are summarized as follows:

<TABLE>
<CAPTION>
1993 1992
-------------------------------- ----------------------------
Weighted Weighted
Average Rate Amount Average Rate Amount
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Noninterest-bearing deposits - $ 26,596,879 - 22,534,103
NOW and SuperNOW accounts 2.43% 27,512,108 2.80% 21,324,852
Money market accounts 3.14% 19,303,216 3.26% 12,952,966
Savings accounts 3.06% 20,005,514 3.97% 20,446,760
----------- -----------

93,417,717 77,258,681
----------- -----------

Certificates of deposit:
2.65% to 3.99% 23,659,468 17,726,427
4.00% to 5.99% 81,202,742 63,493,944
6.00% to 7.99% 24,810,651 28,549,380
8.00% to 10.40% 3,690,941 11,236,273
----------- -----------

Total certificates of deposit 4.93% 133,363,802 5.44% 121,006,024
---- ----------- ---- -----------

3.73% $226,781,519 4.24% 198,264,705
==== =========== ==== ===========

</TABLE>

At December 31, 1993, contractual maturities of certificates are as
follows:

<TABLE>
<S> <C>
Matured at December 31 $ 77,002
Maturing during the year
ending December 31:
1994 67,762,211
1995 49,574,247
1996 10,573,394
1997 and thereafter 5,376,948
-----------

$133,363,802
===========

</TABLE>

F-16
<PAGE> 92

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Notes to Consolidated Financial Statements, continued

(8) Deposits, continued

Interest expense on deposits, for the years ended December 31, is
summarized as follows:

<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Money market accounts $ 479,254 707,278 1,259,680
NOW and SuperNOW accounts 569,398 557,427 802,279
Savings accounts 701,707 496,984 359,147
Certificates of deposit 6,454,232 8,282,226 11,229,375
--------- ---------- ----------

$8,204,591 10,043,915 13,650,481
========= ========== ==========

</TABLE>

Certificates of deposit with balances of $100,000 or more totaled
$40,380,275 and $38,816,524 at December 31, 1993 and 1992,
respectively.

The fair value of deposits with no stated maturity, such as non-interest
bearing demand deposits, savings, money market and checking accounts,
is equal to the amount payable on demand as of December 31, 1993 and
1992. The fair value of certificates of deposit is based on the
discounted value of contractual cash flows. The discount rate is
estimated using the rates currently offered for deposits of similar
remaining maturities. At December 31, 1993 and 1992, the estimated
fair value of the certificates of deposit is $134,354,000 and
$122,794,000, respectively.

The fair value estimates above do not include the benefit that results
from the low-cost funding provided by the deposit liabilities
compared to the cost of borrowing funds in the market. If that value
were considered at December 31, 1993 and 1992, the fair value of the
Bank's net assets would increase by approximately $798,000 and
$675,000, respectively.

(9) Bonds Payable
Bonds payable in the original amount of $1,200,000 were issued August
14, 1985, to finance the construction of the main office facility.
The bonds were issued by the Development Authority of Whitfield
County, Georgia and assigned to Northwest Georgia Bank as trustee.
The bonds bear interest at seventy-five percent (75%) of the prime
rate of Citibank, N.A., adjusted monthly, plus an interest adjustment
factor of approximately 1.2 percent. The effective interest rate was
approximately 5.5 percent at December 31, 1993. The bonds are secured
by the Bank's real and personal property acquired by the proceeds of
the bond issue, and mature in annual installments of $100,000 due
August 14 in each of the years through 1997.

To determine the estimated $390,000 and $489,000 fair value of the bonds
at December 31, 1993 and 1992, respectively, the Bank used rates
currently available for debt with similar terms and remaining
maturities.

(10) Advances from Federal Home Loan Bank
The Bank has a line of credit agreement available with the Federal Home
Loan Bank of Atlanta (FHLB) in the amount of $13,000,000. At December
31, 1993 and 1992, there were no advances outstanding.

In 1993, the Bank entered into a long-term advance agreement for a note
payable to the Federal Home Loan Bank of Atlanta (FHLB) in the amount
of $5,000,000, which includes interest at a fixed rate of 4.96%,
payable monthly, and requires quarterly principal payments of
$200,000 from February 1994 through February 2000. Advances are
secured by the Bank's stock in the FHLB and a blanket floating lien
against a portfolio of first mortgage loans held by the Bank.

F-17
<PAGE> 93

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Notes to Consolidated Financial Statements, continued

(10) Advances from Federal Home Loan Bank, continued

Maturities of the note payable for future years is as follows:

<TABLE>
<S> <C>
1994 $ 800,000
1995 800,000
1996 800,000
1997 800,000
1998 800,000
Thereafter 1,000,000
---------

$5,000,000
=========

</TABLE>

To determine the estimated $4,712,000 fair value of the advance at
December 31, 1993, the Bank used rates currently available for debt
with similar terms and remaining maturities.

(11) Preferred Stock
During 1988, the Bank issued 300,000 shares of 6% cumulative,
non-voting, restricted convertible, non-callable Class A Preferred
Stock for total proceeds of $2,000,000. In April 1991, the terms of
the Class A Preferred Stock were changed from cumulative to
non-cumulative with respect to dividends, so that the stock would be
an allowable component of regulatory capital. In the event of the
dissolution or liquidation of the Bank, or sale of all its assets,
whether voluntary or involuntary, or in the event of its insolvency
or upon distribution of its assets, the holders of the Class A
Preferred Stock shall participate pro rata with the common
shareholders.

(12) Profit Sharing
The Bank has a contributory profit-sharing plan covering substantially
all employees who have 90 days or more of service. Participating
employees may contribute up to fifteen percent of their salary. Based
on years of service, the Bank makes a matching contribution in the
range of 50 to 100 percent of participant contributions (limited to
six percent of compensation) and may make an additional discretionary
contribution up to the maximum amount deductible by the Bank for
federal income tax purposes. The Bank's contributions were $201,433,
$144,579 and $139,710 in 1993, 1992 and 1991, respectively.

(13) Income Taxes
In February 1992 the Financial Accounting Standards Board issued
Statement 109, "Accounting for Income Taxes". The Bank adopted
Statement of Financial Accounting Standards (SFAS) No. 109 during the
year ending December 31, 1992 and restated the 1991 financial
statements to retroactively reflect the adoption.

SFAS 109 requires the recognition of deferred tax assets and liabilities
for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Additionally, the
accounting standard requires the recognition of future tax benefits,
such as net operating loss carryforwards, to the extent that
realization of such benefits is more likely than not. In the event
the future tax consequences of differences between the financial
reporting bases and the tax bases of the Bank's assets and
liabilities result in deferred tax assets, the standard requires an
evaluation of the probability of being able to realize the future
benefits indicated by such asset. A valuation allowance is provided
for the portion of the deferred tax asset when it is more likely than
not that some portion or all of the deferred tax asset will not be
realized.

F-18
<PAGE> 94

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Notes to Consolidated Financial Statements, continued

(13) Income Taxes, continued

The components of income tax expense for the years ended December 31,
1993, 1992 and 1991 are as follows:

<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Federal:
Current $1,415,069 653,069 1,372,322
Deferred (4,849) (544,878) 96,584
--------- -------- ---------
1,410,220 108,191 1,468,906
--------- -------- ---------
State:
Current 134,690 9,313 234,040
Deferred (570) (103,118) 11,363
--------- -------- ---------
134,120 (93,805) 245,403
--------- -------- ---------

Total income tax expense $1,544,340 14,386 1,714,309
========= ======== =========

</TABLE>

The differences between the provision for income taxes and the amount
computed by applying the statutory federal income tax rate to
earnings before taxes are as follows:

<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Pretax income at statutory rates $1,450,876 109,677 1,562,928
Add (deduct):
Tax-exempt interest income (3,280) (38,907) (53,067)
Non-deductible interest expense 576 4,987 30,718
State taxes, net of federal effect 88,519 (61,911) 161,966
Other 7,649 540 11,764
--------- ------- ---------

$1,544,340 14,386 1,714,309
========= ======= =========

</TABLE>

The following summarizes the source and expected tax consequences of
future taxable deductions (income) which comprise the net deferred
tax asset. The deferred tax asset is included as a component of other
assets at December 31, 1993 and 1992.

<TABLE>
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
Net loan fees deferred for financial reporting purposes $145,484 50,946
FHLB stock dividends not currently recognized for
tax purposes (148,694) (126,730)
Difference between financial statement and tax basis
recognition of excess loan servicing fee income - (39,599)
Difference between financial statement and tax basis
premises and equipment (405,281) (404,052)
Provision for loan losses not currently recognized
for tax purposes 873,115 1,089,978
Nonaccrual loan interest not currently recognized
for financial reporting purposes 29,938 22,693
Lease financing receivables (4,177) (31,569)
Accrued incentive compensation deferred for tax
purposes 75,952 -
Other 749 -
------- ---------

$567,086 561,667
======= =========
</TABLE>

F-19
<PAGE> 95

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Notes to Consolidated Financial Statements, continued

(14) Financial Institutions Reform, Recovery, and Enforcement Act of 1989
(FIRREA)
On August 9, 1989, FIRREA was signed into law. FIRREA imposes more
stringent capital requirements upon savings institutions
(institutions) than those previously in effect. In addition, FIRREA
includes provisions for changes in the federal regulatory structure
for institutions including a new deposit insurance system, increased
deposit insurance premiums and restricted investment activities with
respect to noninvestment grade corporate debt and certain other
investments. FIRREA also increases the required ratio of
housing-related assets in order to qualify as an insured institution.

The legislation contains provisions for capital standards that require
institutions to have a minimum regulatory tangible capital equal to
1.5% of total tangible assets, a minimum 3% leverage capital ratio,
and a risk-based capital ratio of 8% on December 31, 1993. In all
cases, the capital standards are required to be no less stringent
than standards applicable to national banks. Currently, national
banks are required to maintain a primary capital-to-assets ratio of
5.5% and a total capital-to-assets ratio of 6%.

The following reconciliation discloses that the Bank exceeds the current
capital requirements set forth in FIRREA:

<TABLE>
<CAPTION>
Regulatory
-----------------------------------------------
(Unaudited)
Tangible Core Risk-based
1993 Capital Capital Capital
---- ------------ ------------ ------------
<S> <C> <C> <C>
Consolidated stockholders' equity $16,635,790 16,635,790 16,635,790
General valuation allowances-limited to
1.25% of risk-based assets - - 2,055,475
Nonallowable assets:
Investment in subsidiary (5,000) (5,000) (5,000)
---------- ---------- ----------

Regulatory capital-computed 16,630,790 16,630,790 18,686,265
Minimum capital requirement 3,825,000 7,650,000 13,298,000
---------- ---------- ----------

Excess regulatory capital $12,805,790 8,980,790 5,388,265
========== ========== ==========

Regulatory capital as a percentage of
adjusted assets 6.5% 6.5% 11.2%
=== === ====

</TABLE>

(15) Miscellaneous Income and Other Operating Expense
Components of miscellaneous income and other operating expense which are
greater than 1% of interest income and other income are as follows:

<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Miscellaneous income:
Banking service charges and fees $ 1,589,447 1,095,986 1,140,670
Late charges on loans 246,417 266,967 268,473
Credit life insurance underwriting
commissions 234,104 188,681 228,339

Other operating expense:
Professional fees $ 642,089 464,491 241,696
Printing, postage and supplies 234,104 508,950 422,100
Data processing maintenance and supplies 262,236 98,459 93,893

</TABLE>

F-20
<PAGE> 96

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Notes to Consolidated Financial Statements, continued

(16) Commitments and Contingencies
The Bank is a party to financial instruments with off-balance sheet risk
in the normal course of business to meet the financing needs of its
customers and to reduce its own exposure to fluctuations in interest
rates. These financial instruments include commitments to extend
credit, standby letters of credit, and forward sales contracts.
Those instruments involve, to varying degrees, elements of credit and
interest rate risk in excess of the amounts recognized in the balance
sheet. The contract amounts of those instruments reflect the extent
of involvement the Bank has in particular classes of financial
instruments.

The Bank's exposure to credit loss in the event of nonperformance by the
other party to the financial instrument for commitments to extend
credit and standby letters of credit is represented by the
contractual amount of those instruments. The Bank uses the same
credit policies in making commitments and conditional obligations as
it does for on-balance sheet instruments. For forward sales
contracts, the contract amounts do not represent exposure to credit
loss; however, these financial instruments do expose the Bank to
interest rate risk. The Bank controls the interest rate risk of these
transactions through credit approvals, limits, and monitoring
procedures.

<TABLE>
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
Financial instruments whose contract amounts represent
credit risk:
Commitments to originate first mortgage loans $ 11,507,298 10,299,115
Commitments to extend credit $ 12,634,353 5,891,995
Standby letters of credit $ 1,235,382 1,076,036
Financial instruments whose contract amounts expose the
Bank to interest rate risk:
Forward sales contracts $ 8,908,200 4,875,525

</TABLE>

Commitments to originate first mortgage loans and to extend credit are
agreements to lend to a customer as long as there is no violation of
any condition established in the contract. Commitments generally have
fixed expiration dates or other termination clauses and may require
payment of a fee. Since many of the commitments are expected to
expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements. The Bank evaluates
each customer's creditworthiness on a case-by-case basis. The amount
of collateral obtained if deemed necessary by the Bank upon extension
of credit is based on management's credit evaluation of the
counterparty. The Bank's loans are primarily collateralized by
residential and other real properties, automobiles, savings deposits,
accounts receivable, inventory, and equipment located in Whitfield
County, Georgia, and contiguous counties.

Standby letters of credit are written conditional commitments issued by
the Bank to guarantee the performance of a customer to a third party.
Those guarantees are primarily issued to support public and private
borrowing arrangements. Most letters of credit extend for less than
one year. The credit risk involved in issuing letters of credit is
essentially the same as that involved in extending loan facilities to
customers.

F-21
<PAGE> 97

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY

Notes to Consolidated Financial Statements, continued

(16) Commitments and Contingencies, continued

Forward sales contracts are for delayed delivery of first mortgages
and/or mortgage-backed securities in which the Bank agrees to make
delivery at a specified future date of a specified instrument, at a
specified price or yield. Risks arise from the possible inability of
counterparties to meet the terms of their contracts and from
movements in loan and securities values, and interest rates.

In the normal course of business the Bank is a party (both as plaintiff
and defendant) to a number of lawsuits. In the opinion of management
and counsel, none of these cases should have a material adverse
effect on the Bank's financial position.

(17) Supervisory Agreement
The Bank operated under a supervisory agreement with its primary
regulator, the Office of Thrift Supervision (OTS), from August 6,
1991 to January 12, 1994. In accordance with the agreement, the Bank
was ordered to cease and desist from certain practices and to
implement certain corrective measures and procedures consistent with
safe and sound banking practices. Based upon action being taken in
the required areas, and the Bank being in substantial compliance with
the time frames established in the regulatory agreement, the OTS
lifted the supervisory agreement in January 1994.

(18) Subsequent Events
In August 1994, the Bank's board of directors approved a 2-for-1 stock
split for both the common and preferred shares outstanding. All share
and per share data in these consolidated financial statements have
been retroactively restated to reflect this stock split.

On October 17, 1994, the Bank's board of directors approved a merger
agreement whereby the Bank would be merged into and become a
subsidiary of Regions Financial Corporation ("Regions"),
headquartered in Birmingham, Alabama. The merger would be effected
through the exchange of the Bank's common and preferred stocks for
common stock of Regions based upon an exchange ratio to be
established at a later date using a predetermined formula. For the
merger to be effected, the Bank's stockholders and the OTS must
approve the transaction, and Regions must complete a public
registration of its shares to be tendered with the merger. Management
expects the merger to occur during the first quarter of 1995;
however, there is no certainty that the transaction will be
consummated within that time frame or at all.

F-22
<PAGE> 98

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
September 30, 1994
(Unaudited)
(In thousands)
<TABLE>
ASSETS
<S> <C>
Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,828
Interest-bearing deposits in financial institutions . . . . . . . . . . . . . . . . 8,272
Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
-------
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,200
Investment securities held to maturity (estimated market value of $6,970)(Note 2) . 7,027
Investment in Federal Home Loan Bank stock, at cost . . . . . . . . . . . . . . . . 1,284
Mortgage loans held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,155
Loans, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243,082
Accrued interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,807
Real estate owned, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Premises and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,287
Cost of loans servicing rights acquired . . . . . . . . . . . . . . . . . . . . . . 289
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,062
-------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $287,254
=======

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $254,662
Bonds payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300
Advances from Federal Home Loan Bank . . . . . . . . . . . . . . . . . . . . . . . 4,400
Advances from borrowers for taxes and insurance . . . . . . . . . . . . . . . . . . 3,077
Custodial escrow balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,115
Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,080
Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . 1,768
-------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268,402
-------

Stockholders' equity
Preferred stock, Series A, 6% nonvoting, restricted convertible, callable,
$1.00 par value; authorized 500,000 shares; issued and outstanding 300,000
shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300
Common stock, $1.00 par value, authorized 10,000,000 shares; issued and
outstanding 1,774,800 shares . . . . . . . . . . . . . . . . . . . . . . . 1,775
Additional paid-in capital:
Preferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,800
Common . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,811
-------
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . 18,852
-------

Total liabilities and stockholders' equity . . . . . . . . . . . . . . . . $287,254
=======

</TABLE>

See accompanying notes to unaudited condensed consolidated interim financial
statements.

F-23
<PAGE> 99

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In thousands, except per share data)

<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
-------------------- ---------------------
1994 1993 1994 1993
------ ------ ------ ------
<S> <C> <C> <C> <C>
Interest income:
Loans . . . . . . . . . . . . . . . . . . . . . $4,754 4,005 13,368 11,277
Investment securities . . . . . . . . . . . . . 94 96 275 675
Other interest-earning assets . . . . . . . . . 134 110 312 394
----- ----- ------ ------
Total interest income . . . . . . . . . . . 4,982 4,211 13,955 12,346
----- ----- ------ ------
Interest expense:
Deposits . . . . . . . . . . . . . . . . . . . 2,575 1,968 6,940 6,154
Borrowed funds . . . . . . . . . . . . . . . . 58 48 230 83
----- ----- ------ ------
Total interest expense . . . . . . . . . . 2,633 2,016 7,170 6,237
----- ----- ------ ------
Net interest income . . . . . . . . . . 2,349 2,195 6,785 6,109
Provision for loan losses . . . . . . . . . . . . - - - 127
----- ----- ------ ------
Net interest income after provision for
loan losses . . . . . . . . . . . . 2,349 2,195 6,785 5,982
----- ----- ------ ------
Other income:
Gain on sales of first mortgage loans and rights
to service first mortgage loans . . . . . . 1,476 371 1,589 1,052
Loan servicing fees net of purchased servicing and
excess servicing fee amortization . . . . . 295 64 966 331
Securities gains, net . . . . . . . . . . . . . - - - 406
Service charges and deposit fees . . . . . . . . 396 379 1,017 1,043
Miscellaneous . . . . . . . . . . . . . . . . . 361 444 1,223 1,436
----- ----- ------ ------
Total other income . . . . . . . . . . . . . 2,528 1,258 4,795 4,268
----- ----- ------ ------
Other expense:
Salaries and benefits . . . . . . . . . . . . . 1,478 1,385 4,254 3,692
Occupancy and equipment . . . . . . . . . . . . 336 313 960 871
Deposit insurance premiums . . . . . . . . . . 155 141 438 433
Other operating expense . . . . . . . . . . . . 599 554 1,555 1,660
----- ----- ------ ------
Total other expense . . . . . . . . . . . . 2,568 2,393 7,207 6,656
----- ----- ------ ------
Earnings before income taxes . . . . . . . 2,309 1,060 4,373 3,594
Income tax expense . . . . . . . . . . . . . . . . 869 413 1,623 1,390
----- ----- ------ ------
Net earnings . . . . . . . . . . . . . . . $1,440 647 2,750 2,204
===== ===== ====== ======

Net earnings per common and common equivalent share $ 0.69 $ 0.31 $ 1.33 $ 1.06

Weighted average common and common equivalent shares 2,075 2,075 2,075 2,075

</TABLE>

See accompanying notes to unaudited condensed consolidated interim financial
statements.

F-24
<PAGE> 100

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Nine Months Ended September 30, 1994
(Unaudited)
(In thousands)

<TABLE>
<CAPTION>
Additional Paid-in Capital
---------------------------
Series A Series A
Preferred Common Preferred Common Retained
Stock Stock Stock Stock Earnings Total
----- ----- ----- ----- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Balance December 31, 1993 . . . . . . . . . . . $300 1,775 1,800 166 12,595 16,636

Net Earnings . . . . . . . . . . . . . . . . . 2,750 2,750

Cash Dividends
Common stock . . . . . . . . . . . . . . . (444) (444)
Preferred stock . . . . . . . . . . . . . (90) (90)
--- ----- ----- ----- ------- ------

Balance, September 30, 1994 . . . . . . . . . . $300 1,775 1,800 166 14,811 18,852
=== ===== ===== ===== ======= ======

</TABLE>

See accompanying notes to unaudited condensed consolidated interim financial
statements.

F-25
<PAGE> 101

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)

<TABLE>
<CAPTION>
For the Nine Months
Ended September 30, 1994
------------------------------
1994 1993
------ ------
<S> <C> <C>
Cash flows from operating activities:
Net earnings . . . . . . . . . . . . . . . . . . . . . . . $ 2,750 $ 2,204
Adjustments to reconcile net earnings to net cash provided
(used) by operating activities:
Depreciation, amortization and accretion . . . . . 1,030 1,197
Provision for loan losses . . . . . . . . . . . . . - 127
Net (gain) loss on sales of:
Investment and mortgage-backed securities . . . - (406)
First mortgage loans and rights to service
first mortgage loans . . . . . . . . . . . (1,589) (1,052)
Real estate owned . . . . . . . . . . . . . . . - (158)
FHLB stock dividend . . . . . . . . . . . . . . . . - (45)
Change in:
Accrued interest receivable . . . . . . . . . . (490) (165)
Accrued interest payable . . . . . . . . . . . 719 (305)
Other . . . . . . . . . . . . . . . . . . . . . 1,926 (1,790)
Mortgage loans held for sale . . . . . . . . . 7,025 (3,866)
------ -------
Net cash provided (used) by operating activities 11,371 (4,259)
------ -------

Cash flows from investing activities:
Net change in loans . . . . . . . . . . . . . . . . . . (43,004) (39,579)
Principal repayments on mortgage-backed and
investment securities . . . . . . . . . . . . . . . - 858
Proceeds from sales of mortgage-backed and
investment securities . . . . . . . . . . . . . . . - 17,676
Proceeds from maturities of mortgage-backed and
investment securities . . . . . . . . . . . . . . . 1,012 624
Purchases of investment securities . . . . . . . . . . (1,000) (8,559)
Proceeds from the sales of real estate owned . . . . . 137 1,438
Proceeds from the sale of premises and equipment . . . - 4
Purchases of premises and equipment . . . . . . . . . . (1,332) (775)
------ ------
Net cash used by investing activities . . . . . . . ($44,187) (28,313)
------ ------

Cash flows from financing activities:
Net change in deposits . . . . . . . . . . . . . . . . $27,880 9,494
Principal payments on bonds payable . . . . . . . . . . (100) (100)
Principal payments on advances from FHLB . . . . . . . (600) -
Proceeds of advances from FHLB . . . . . . . . . . . . - 2,500
Net increases in advances from borrowers for taxes . . 1,258 1,806
Net change in custodial escrow accounts . . . . . . . . (623) 1,677
Cash dividends paid on preferred and common stock . . . (534) (136)
------ ------
Net cash provided by financing activities . . . . . 27,281 15,241
------ ------

Net decrease in cash and cash equivalents . . . . . . . . . (5,535) (17,331)
Cash and cash equivalents at beginning of year . . . . . . 26,735 35,565
------ ------
Cash and cash equivalents at end of year . . . . . . . . . $21,200 18,234
====== ======

Supplemental disclosures of cash flow information:
Noncash investing and financing activities:
Transfer from loans to real estate owned . . . . . $ 356 $ 147
Financed sales of real estate owned . . . . . . . . - 95
Cash paid during the year for:
Interest . . . . . . . . . . . . . . . . . . . . . 6,451 6,542
Income taxes . . . . . . . . . . . . . . . . . . . 1,036 1,203

</TABLE>

See accompanying notes to unaudited condensed consolidated interim financial
statements

F-26
<PAGE> 102

FIDELITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(1) Basis of Presentation

The accompanying condensed consolidated financial statements include
the accounts of Fidelity Federal Savings Bank (the "Bank") and its wholly owned
subsidiary. All significant intercompany balances and transactions are
eliminated in consolidation.

In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments (consisting only of
normal recurring adjustments) necessary to present fairly the financial
position and results of operations of the Bank for the interim periods
presented. The results for the three and nine month periods are not
necessarily indicative of the results expected at year end.

(2) Investment Securities

Investment securities are stated at amortized cost, adjusted for
unamortized premiums and unearned discounts. Discounts are accreted and
premiums are amortized into interest income by a method which approximates the
level-yield method. Effective January 1, 1994, the Bank adopted Statement of
Financial Accounting Standards ("SFAS") No. 115 "Accounting for Certain
Investments in Debt and Equity Securities." All of the investment securities
have been determined to be held to maturity. Substantially all U.S. Treasury
securities are pledged as collateral to public deposits.

(3) Definitive Agreement with Regions Financial Corporation

The Bank's Board of Directors entered into an agreement and plan of
reorginization on October 17, 1994, that provides for the acquisition of
Fidelity by Regions Financial Corporation pursuant to the merger of Fidelity
Interim, a newly formed interim federal savings bank subsidiary of Regions,
with and into Fidelity. Each share of Fidelity common stock issued and
outstanding as of the effective time will be converted into _____ shares of
Regions common stock. Each share of Fidelity preferred stock will be converted
into a like number of Regions common stock equal to the product of the Common
Stock Exchange ratio and the number of shares of Fidelity Common Stock into
which such share of Fidelity Preferred Stock was convertible immediately prior
to the effective time of the merger. Each Fidelity stockholder will receive
cash in lieu of any fractional share interest. For further description of the
terms of the merger see "the Plan of Merger".

F-27
<PAGE> 103

APPENDIX A

FINAL AGREEMENT

AGREEMENT AND PLAN OF REORGANIZATION

BY AND BETWEEN

FIDELITY FEDERAL SAVINGS BANK

AND

REGIONS FINANCIAL CORPORATION

A-1
<PAGE> 104

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Parties.................................................................................
Preamble................................................................................
ARTICLE ONE -- TRANSACTIONS AND TERMS OF MERGER.........................................
1.1 Merger........................................................................
1.2 Time and Place of Closing.....................................................
1.3 Effective Time................................................................
ARTICLE TWO -- TERMS OF MERGER..........................................................
2.1 Business of Surviving Association.............................................
2.2 Assumption of Rights..........................................................
2.3 Assumption of Liabilities.....................................................
2.4 Charter.......................................................................
2.5 Bylaws........................................................................
2.6 Directors and Officers........................................................
ARTICLE THREE -- MANNER OF CONVERTING SHARES............................................
3.1 Conversion of Shares..........................................................
3.2 Anti-Dilution Provisions......................................................
3.3 Shares Held by Fidelity or Regions............................................
3.4 Dissenting Stockholders.......................................................
3.5 Fractional Shares.............................................................
ARTICLE FOUR -- EXCHANGE OF SHARES......................................................
4.1 Exchange Procedures...........................................................
4.2 Rights of Former Fidelity Stockholders........................................
ARTICLE FIVE -- REPRESENTATIONS AND WARRANTIES OF FIDELITY..............................
5.1 Organization, Standing, and Power.............................................
5.2 Authority; No Breach By Agreement.............................................
5.3 Capital Stock.................................................................
5.4 Fidelity Subsidiaries.........................................................
5.5 Financial Statements..........................................................
5.6 Absence of Undisclosed Liabilities............................................
5.7 Absence of Certain Changes or Events..........................................
5.8 Adequacy of Reserves..........................................................
5.9 Tax Matters...................................................................
5.10 Assets........................................................................
5.11 Environmental Matters.........................................................
5.12 Compliance With Laws..........................................................
5.13 Labor Relations...............................................................
5.14 Employee Benefit Plans........................................................
5.15 Material Contracts............................................................
5.16 Legal Proceedings.............................................................
5.17 Reports.......................................................................
5.18 Statements True and Correct...................................................
5.19 Accounting, Tax, and Regulatory Matters.......................................
5.20 State Takeover Laws...........................................................
5.21 Charter Provisions............................................................
</TABLE>

A-2
<PAGE> 105

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE SIX -- REPRESENTATIONS AND WARRANTIES OF REGIONS................................
6.1 Organization, Standing, and Power.............................................
6.2 Authority; No Breach By Agreement.............................................
6.3 Capital Stock.................................................................
6.4 Financial Statements..........................................................
6.5 Absence of Undisclosed Liabilities............................................
6.6 Absence of Certain Changes or Events..........................................
6.7 Compliance With Laws..........................................................
6.8 Legal Proceedings.............................................................
6.9 Reports.......................................................................
6.10 Statements True and Correct...................................................
6.11 Authority of Fidelity Interim.................................................
6.12 Accounting, Tax, and Regulatory Matters.......................................
ARTICLE SEVEN -- CONDUCT OF BUSINESS PENDING CONSUMMATION...............................
7.1 Covenants of Both Parties.....................................................
7.2 Covenants of Fidelity.........................................................
7.3 Covenants of Regions..........................................................
7.4 Adverse Changes in Condition..................................................
7.5 Reports.......................................................................
ARTICLE EIGHT -- ADDITIONAL AGREEMENTS..................................................
8.1 Registration Statement; Proxy Statement; Shareholder Approval.................
8.2 Nasdaq/NMS Listing............................................................
8.3 Applications..................................................................
8.4 Agreement as to Efforts to Consummate.........................................
8.5 Investigation and Confidentiality.............................................
8.6 Press Releases................................................................
8.7 Certain Actions...............................................................
8.8 Tax Matters...................................................................
8.9 Agreements of Affiliates......................................................
8.10 Employee Benefits and Contracts...............................................
8.11 Indemnification...............................................................
ARTICLE NINE -- CONDITIONS PRECEDENT TO OBLIGATIONS
TO CONSUMMATE.................................................................
9.1 Conditions to Obligations of Each Party.......................................
9.2 Conditions to Obligations of Regions..........................................
9.3 Conditions to Obligations of Fidelity.........................................
ARTICLE TEN -- TERMINATION..............................................................
10.1 Termination...................................................................
10.2 Effect of Termination.........................................................
10.3 Non-Survival of Representations and Covenants.................................
ARTICLE ELEVEN -- MISCELLANEOUS.........................................................
11.1 Definitions...................................................................
11.2 Expenses......................................................................
11.3 Brokers and Finders...........................................................
11.4 Entire Agreement..............................................................
11.5 Amendments....................................................................
11.6 Waivers.......................................................................
11.7 Assignment....................................................................
11.8 Notices.......................................................................
</TABLE>

A-3
<PAGE> 106

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
11.9 Governing Law.................................................................
11.10 Counterparts..................................................................
11.11 Captions......................................................................
11.12 Severability..................................................................
Signatures..............................................................................
</TABLE>

LIST OF EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ------------------------------------------------------------------------------------
<S> <C>
1. Form of Support Agreement. (sec. 11.1).
2. List of signatories to Support Agreements.
3. Form of Preferred Stock Option Agreement. (sec. 11.1).
4. Form of Plan of Merger and Combination between Fidelity and Fidelity Interim.
(sec.sec. 1.1, 11.1).
5. Form of agreement of affiliates of Fidelity. (sec. 8.9).
6. Form of Claims Letter. (sec. 9.2).
</TABLE>

A-4
<PAGE> 107

AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and
entered into as of October 17, 1994, by and between FIDELITY FEDERAL SAVINGS
BANK ("Fidelity"), a federal stock savings bank organized and existing under the
laws of the United States, with its principal office located in Dalton, Georgia;
and REGIONS FINANCIAL CORPORATION ("Regions"), a corporation organized and
existing under the laws of the State of Delaware, with its principal office
located in Birmingham, Alabama.

PREAMBLE

The Boards of Directors of Fidelity and Regions are of the opinion that the
transactions described herein are in the best interests of the parties and their
respective stockholders. This Agreement provides for the acquisition of Fidelity
by Regions pursuant to the merger of a newly formed first tier, interim federal
savings bank subsidiary of Regions ("Fidelity Interim") with and into Fidelity.
At the effective time of such merger, the outstanding shares of the capital
stock of Fidelity shall be converted into the right to receive shares of the
common stock of Regions (except as provided herein). As a result, stockholders
of Fidelity shall become stockholders of Regions, and Fidelity shall continue to
conduct its business and operations as a wholly-owned, first tier subsidiary of
Regions. The transactions described in this Agreement are subject to the
approvals of the stockholders of Fidelity, the Office of Thrift Supervision, the
Board of Governors of the Federal Reserve System, appropriate state regulatory
authorities, and the satisfaction of certain other conditions described in this
Agreement. It is the intention of the parties to this Agreement that the Merger
(i) for federal income tax purposes shall qualify as a "reorganization" within
the meaning of Section 368(a) of the Internal Revenue Code, and that the
exchange of Fidelity capital stock, to the extent exchanged for Regions common
stock, will not give rise to gain or loss to the holders of Fidelity capital
stock with respect to such exchange, and (ii) for accounting purposes shall be
accounted for as a "pooling of interests."

Simultaneously with the execution and delivery of this Agreement, as a
condition and inducement to Region's willingness to enter into this Agreement,
(i) each of Fidelity's directors named in Exhibit 2 to this Agreement are
executing and delivering to Regions an agreement (each a "Support Agreement"),
in substantially the form of Exhibit 1 to this Agreement and (ii) Fidelity and
Regions are entering into the Preferred Stock Option Agreement (the "Preferred
Stock Option Agreement"), in substantially the form of Exhibit 3 to this
Agreement, pursuant to which Fidelity is granting to Regions an option to
purchase shares of Fidelity preferred stock.

Certain terms used in this Agreement are defined in Section 11.1 of this
Agreement.

NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:

ARTICLE ONE

TRANSACTIONS AND TERMS OF MERGER

1.1 MERGER. Subject to the terms and conditions of this Agreement, at the
Effective Time, Fidelity Interim shall be merged with and into Fidelity in
accordance with and with the effect provided in Title 12, United States Code,
Section 1467a(t) (the "Merger"). Fidelity shall be the Surviving Association
resulting from the Merger and shall be a wholly-owned, first tier Subsidiary of
Regions and shall continue to be governed by the Laws of the United States. The
Merger shall be consummated pursuant to the terms of this Agreement, which has
been approved and adopted by the respective Boards of Directors of Fidelity and
Regions, and the terms of a Plan of Merger to be entered into by Fidelity and
Fidelity Interim.

1.2 TIME AND PLACE OF CLOSING. The Closing will take place at 9:00 A.M. on
the date that the Effective Time occurs (or the immediately preceding day if the
Effective Time is earlier than 9:00 A.M.), or at such other time as the Parties,
acting through their chief executive officers or chief financial officers, may
mutually

A-5
<PAGE> 108

agree. The place of Closing shall be at the offices of Regions, or such other
place as may be mutually agreed upon by the Parties.

1.3 EFFECTIVE TIME. The Merger and other transactions contemplated by this
Agreement shall become effective on the date and at the time of endorsement of
the Articles of Combination filed with the OTS or on such other date and at such
other time as the OTS declares the Merger effective (the "Effective Time").
Subject to the terms and conditions hereof, unless otherwise mutually agreed
upon in writing by the chief executive officers or chief financial officers of
each Party, the Parties shall use their reasonable efforts to cause the
Effective Time to occur on the first business day following the last to occur of
(i) the effective date (including expiration of any applicable waiting period)
of the last required Consent of any Regulatory Authority having authority over
and approving or exempting the Merger, and (ii) the date on which the
stockholders of Fidelity approve this Agreement to the extent such approval is
required by applicable Law; or such later date within thirty (30) days of such
date as may be specified by Regions.

ARTICLE TWO

TERMS OF MERGER

2.1 BUSINESS OF SURVIVING ASSOCIATION. The business of the Surviving
Association from and after the Effective Time shall continue to be that of a
federal stock savings association organized under the laws of the United States.
The business shall be conducted from its main office located in such place as
Regions may determine and at its legally established branches, which shall also
include the main office and all branches, whether in operation or approved but
unopened, at the Effective Time.

2.2 ASSUMPTION OF RIGHTS. At the Effective Time, the separate existence
and corporate organization of Fidelity Interim shall be merged into and
continued in the Surviving Association. All rights, franchises, and interests of
both Fidelity and Fidelity Interim in and to every type of property (real,
personal, and mixed), and all choses in action of both Fidelity and Fidelity
Interim shall be transferred to and vested in the Surviving Association without
any deed or other transfer. The Surviving Association, upon consummation of the
Merger and without any order or other action on the part of any court or
otherwise, shall hold and enjoy all rights of property, franchises, and
interests, including appointments, designations, and nominations, and all other
rights and interests as trustee, executor, administrator, registrar of stocks
and bonds, guardian of estates, assignee, receiver, and committee of estates of
incompetent persons, and in every other fiduciary capacity, in the same manner
and to the same extent as such rights, franchises, and interests were held or
enjoyed by either Fidelity or Fidelity Interim at the Effective Time.

2.3 ASSUMPTION OF LIABILITIES. All liabilities and obligations of both
Fidelity and Fidelity Interim of every kind and description (including without
limitation the liquidation accounts established by Fidelity in connection with
its conversion to the stock form of organization, as in existence at the
Effective Time) shall be assumed by the Surviving Association, and the Surviving
Association shall be bound thereby in the same manner and to the same extent
that Fidelity and Fidelity Interim were so bound at the Effective Time.

2.4 CHARTER. The Charter of Fidelity in effect immediately prior to the
Effective Time shall be the Charter of the Surviving Association until otherwise
amended or repealed.

2.5 BYLAWS. The Bylaws of Fidelity Interim in effect immediately prior to
the Effective Time shall be the Bylaws of the Surviving Association until
otherwise amended or repealed.

2.6 DIRECTORS AND OFFICERS. The directors of Fidelity Interim in office
immediately prior to the Effective Time, together with such additional persons
as may thereafter be elected, shall serve as the directors of the Surviving
Association from and after the Effective Time in accordance with the Bylaws of
the Surviving Association. The officers of Fidelity Interim in office
immediately prior to the Effective Time, together with such additional persons
as may thereafter be elected, shall serve as the officers of the Surviving
Association from and after the Effective Time in accordance with the Bylaws of
the Surviving Association.

A-6
<PAGE> 109

ARTICLE THREE

MANNER OF CONVERTING SHARES

3.1 CONVERSION OF SHARES. Subject to the provisions of this Article Three,
at the Effective Time, by virtue of the Merger and without any action on the
part of the holders thereof, the shares of the constituent corporations shall be
converted as follows:

(a) Each share of Regions Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding
from and after the Effective Time.

(b) Each share of Fidelity Interim Common Stock issued and outstanding
at the Effective Time shall be converted into and exchanged for one share
of Fidelity Common Stock.

(c) Each share of Fidelity Common Stock (excluding shares held by any
Fidelity Company or by any Regions Company, which shares shall be canceled
as provided in Section 3.3 of this Agreement, in each case other than in a
fiduciary capacity or in satisfaction of debts previously contracted)
issued and outstanding at the Effective Time shall cease to be outstanding
and shall be converted into and exchanged for .449 of a share of Regions
Common Stock, subject to possible adjustment as provided in Section 9.3(f)
of this Agreement (the "Common Stock Exchange Ratio"). To the extent that
the Common Stock Exchange Ratio is adjusted pursuant to Section 9.3(f) of
this Agreement, references in this Agreement to the "Common Stock Exchange
Ratio" shall thereafter be deemed to refer to the Common Stock Exchange
Ratio, as adjusted pursuant to Section 9.3(f) of this Agreement.

(d) Each share of Fidelity Preferred Stock (excluding shares held by
any Fidelity Company or by any Regions Company, which shares shall be
canceled as provided in Section 3.3 of this Agreement, in each case other
than in a fiduciary capacity or in satisfaction of debts previously
contracted) issued and outstanding at the Effective Time shall cease to be
outstanding and shall be converted into and exchanged for that number of
shares of Regions Common Stock equal to the product (rounded to the nearest
one-thousandth) of (i) the Common Stock Exchange Ratio and (ii) the number
of shares of Fidelity Common Stock into which such share of Fidelity
Preferred Stock was convertible immediately prior to the Effective Time (it
being agreed by the Parties that, as of the date of this Agreement, each
such share of Fidelity Preferred Stock is convertible into 1.0 share of
Fidelity Common Stock).

3.2 ANTI-DILUTION PROVISIONS. In the event Fidelity or Regions changes the
number of shares of Fidelity Capital Stock or Regions Common Stock,
respectively, issued and outstanding prior to the Effective Time as a result of
a stock split, stock dividend, or similar recapitalization with respect to such
stock and the record date therefor shall be prior to the Effective Time, the
Common Stock Exchange Ratio shall be proportionately adjusted.

3.3 SHARES HELD BY FIDELITY OR REGIONS. Each of the shares of Fidelity
Capital Stock held by any Fidelity Company or by any Regions Company, in each
case other than in a fiduciary capacity or in satisfaction of debts previously
contracted, shall be canceled and retired at the Effective Time, and no
consideration shall be issued in exchange therefor.

3.4 DISSENTING STOCKHOLDERS. Any holder of shares of Fidelity Capital
Stock who perfects such holder's dissenters' rights of appraisal in accordance
with and as contemplated by 12 C.F.R. sec. 552.14 shall be entitled to receive
the value of such shares in cash as determined pursuant to such provision of
Law; provided, however, that no such payment shall be made to any dissenting
stockholder unless and until such dissenting stockholder has complied with the
applicable provisions of 12 C.F.R. sec. 552.14 and surrendered to the Surviving
Association the certificate or certificates representing the shares for which
payment is being made. In the event that after the Effective Time a dissenting
stockholder of Fidelity fails to perfect, or effectively withdraws or loses,
such holder's right to appraisal and of payment for such holder's shares,
Regions shall issue and deliver the consideration to which such holder of shares
of Fidelity Capital Stock is entitled under this Article Three (without
interest) upon surrender by such holder of the certificate or certificates
representing shares of Fidelity Capital Stock held by such holder. Fidelity will
establish an escrow account with an amount sufficient to satisfy the maximum
aggregate payment that may be required to be paid to dissenting

A-7
<PAGE> 110

stockholders. Upon satisfaction of all claims of dissenting stockholders, the
remaining escrowed amount, reduced by payment of the fees and expenses of the
escrow agent, will be returned to Fidelity.

3.5 FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, each holder of shares of Fidelity Capital Stock exchanged pursuant to
the Merger who would otherwise have been entitled to receive a fraction of a
share of Regions Common Stock (after taking into account all certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to such fractional part of a share of Regions
Common Stock multiplied by the market value of one share of Regions Common Stock
at the Effective Time. The market value of one share of Regions Common Stock at
the Effective Time shall be the closing price of such common stock as reported
on the Nasdaq/NMS (as reported by The Wall Street Journal or, if not reported
thereby, any other authoritative source chosen by Regions) on the last trading
day preceding the Effective Time. No such holder will be entitled to dividends,
voting rights, or any other rights as a stockholder in respect of any fractional
shares.

ARTICLE FOUR

EXCHANGE OF SHARES

4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, Regions shall
cause First Alabama Bank acting as the exchange agent (the "Exchange Agent") to
mail to the former stockholders of Fidelity appropriate transmittal materials
(which shall specify that delivery shall be effected, and risk of loss and title
to the certificates theretofore representing shares of Fidelity Capital Stock
shall pass, only upon proper delivery of such certificates to the Exchange
Agent). After the Effective Time, each holder of shares of Fidelity Capital
Stock (other than shares to be canceled pursuant to Section 3.3 of this
Agreement) issued and outstanding at the Effective Time shall surrender the
certificate or certificates representing such shares to the Exchange Agent and
shall promptly upon surrender thereof receive in exchange therefor the
consideration provided in Section 3.1 of this Agreement, together with all
undelivered dividends or distributions in respect of such shares (without
interest thereon) pursuant to Section 4.2 of this Agreement. To the extent
required by Section 3.5 of this Agreement, each holder of shares of Fidelity
Capital Stock issued and outstanding at the Effective Time also shall receive,
upon surrender of the certificate or certificates representing such shares, cash
in lieu of any fractional share of Regions Common Stock to which such holder may
be otherwise entitled (without interest). Regions shall not be obligated to
deliver the consideration to which any former holder of Fidelity Capital Stock
is entitled as a result of the Merger until such holder surrenders such holder's
certificate or certificates representing the shares of Fidelity Capital Stock
for exchange as provided in this Section 4.1. The certificate or certificates of
Fidelity Capital Stock so surrendered shall be duly endorsed as the Exchange
Agent may require. Any other provision of this Agreement notwithstanding,
neither Regions, the Surviving Association, nor the Exchange Agent shall be
liable to a holder of Fidelity Capital Stock for any amounts paid or property
delivered in good faith to a public official pursuant to any applicable
abandoned property Law.

4.2 RIGHTS OF FORMER FIDELITY STOCKHOLDERS. At the Effective Time, the
stock transfer books of Fidelity shall be closed as to holders of Fidelity
Capital Stock immediately prior to the Effective Time, and no transfer of
Fidelity Capital Stock by any such holder shall thereafter be made or
recognized. Until surrendered for exchange in accordance with the provisions of
Section 4.1 of this Agreement, each certificate theretofore representing shares
of Fidelity Capital Stock (other than shares to be canceled pursuant to Section
3.3 of this Agreement or as to which the holder thereof has perfected
dissenters' rights of appraisal as contemplated by Section 3.4 of this
Agreement) shall from and after the Effective Time represent for all purposes
only the right to receive the consideration provided in Sections 3.1 and 3.5 of
this Agreement in exchange therefor. To the extent permitted by Law, former
stockholders of record of Fidelity shall be entitled to vote after the Effective
Time at any meeting of Regions stockholders the number of whole shares of
Regions Common Stock into which their respective shares of Fidelity Capital
Stock are converted, regardless of whether such holders have exchanged their
certificates representing Fidelity Capital Stock for certificates representing
Regions Common Stock in accordance with the provisions of this Agreement.
Whenever a dividend or other distribution is declared by Regions on the Regions
Common Stock, the record date for which is at or after the Effective Time, the
declaration shall include dividends or other distributions on all shares of
Regions Common Stock

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issuable pursuant to this Agreement, but no dividend or other distribution
payable to the holders of record of Regions Common Stock as of any time
subsequent to the Effective Time shall be delivered to the holder of any
certificate representing shares of Fidelity Capital Stock issued and outstanding
at the Effective Time until such holder surrenders such certificate for exchange
as provided in Section 4.1 of this Agreement. However, upon surrender of such
Fidelity Capital Stock certificate, both the Regions Common Stock certificate
(together with all such undelivered dividends or other distributions without
interest) and any undelivered cash payments to be paid for fractional share
interests (without interest) shall be delivered and paid with respect to each
share represented by such certificate.

ARTICLE FIVE

REPRESENTATIONS AND WARRANTIES OF FIDELITY

Fidelity hereby represents and warrants to Regions as follows:

5.1 ORGANIZATION, STANDING, AND POWER. Fidelity is a federal stock savings
bank duly organized, validly existing, and in good standing under the Laws of
the United States, and has the corporate power and authority to carry on its
business as now conducted and to own, lease, and operate its Assets. Fidelity is
duly qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Fidelity.

5.2 AUTHORITY; NO BREACH BY AGREEMENT. (a) Fidelity has the corporate
power and authority necessary to execute, deliver, and perform its obligations
under, this Agreement and the Plan of Merger and to consummate the transactions
contemplated hereby and thereby, subject to the approval of this Agreement by
the holders of two-thirds of the outstanding shares of Fidelity Common Stock and
Fidelity Preferred Stock, voting as separate classes. The execution, delivery,
and performance of this Agreement and the Plan of Merger and the consummation of
the transactions contemplated herein and therein, including the Merger, have
been or will be duly and validly authorized by all necessary corporate action in
respect thereof on the part of Fidelity, subject to the approval of this
Agreement by the holders of two-thirds of the outstanding shares of Fidelity
Common Stock and Fidelity Preferred Stock, voting as separate classes. Subject
to such requisite approval, this Agreement represents, and, when executed and
delivered, the Plan of Merger will represent, a legal, valid, and binding
obligation of Fidelity, enforceable against Fidelity in accordance with its
terms (except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar Laws affecting
the enforcement of creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is subject
to the discretion of the court before which any proceeding may be brought).

(b) Neither the execution and delivery of this Agreement and the Plan of
Merger by Fidelity, nor the consummation by Fidelity of the transactions
contemplated hereby or thereby, nor compliance by Fidelity with any of the
provisions hereof or thereof, will (i) conflict with or result in a breach of
any provision of Fidelity's Charter or Bylaws, or (ii) except as disclosed in
Section 5.2(b) of the Fidelity Disclosure Memorandum, constitute or result in a
Default under, or require any Consent pursuant to, or result in the creation of
any Lien on any Asset of any Fidelity Company under, any Contract or Permit of
any Fidelity Company, or (iii) subject to receipt of the requisite approvals
referred to in Section 9.1(b) of this Agreement, violate any Law or Order
applicable to any Fidelity Company or any of their respective Assets.

(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules of
the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
and other than Consents, filings, or notifications which, if not obtained or
made, are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Fidelity, no notice to, filing with, or Consent of,
any public body or authority is

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necessary for the consummation by Fidelity of the Merger and the other
transactions contemplated in this Agreement.

5.3 CAPITAL STOCK. (a) The authorized capital stock of Fidelity consists
of (i) 10,000,000 shares of Fidelity Common Stock, of which 1,774,800 shares are
issued and outstanding as of the date of this Agreement and not more than
1,774,800 shares will be issued and outstanding at the Effective Time, and (ii)
500,000 shares of Fidelity Preferred Stock, of which not more than 300,000
shares of Fidelity Preferred Stock are issued and outstanding as of the date of
this Agreement and not more than 300,000 shares of Fidelity Preferred Stock will
be issued and outstanding at the Effective Time (assuming no exercise of the
Preferred Stock Option Agreement). All of the issued and outstanding shares of
Fidelity Capital Stock are duly and validly issued and outstanding and are fully
paid and nonassessable. None of the outstanding shares of Fidelity Capital Stock
has been issued in violation of any preemptive rights of the current or past
stockholders of Fidelity. Fidelity has reserved not more than 500,000 shares of
Fidelity Common Stock for issuance upon conversion of the Fidelity Preferred
Stock.

(b) Except as set forth in Section 5.3(a) of this Agreement, or as
disclosed in Section 5.3(b) of the Fidelity Disclosure Memorandum, there are no
shares of capital stock or other equity securities of Fidelity outstanding and
no outstanding options, warrants, scrip, rights to subscribe to, calls, or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of the capital stock of Fidelity or
contracts, commitments, understandings, or arrangements by which Fidelity is or
may be bound to issue additional shares of Fidelity capital stock or options,
warrants, or rights to purchase or acquire any additional shares of its capital
stock.

5.4 FIDELITY SUBSIDIARIES. Fidelity has disclosed in Section 5.4 of the
Fidelity Disclosure Memorandum all of the Fidelity Subsidiaries as of the date
of this Agreement. Except as disclosed, Fidelity or one of its Subsidiaries owns
all of the issued and outstanding shares of capital stock of each Fidelity
Subsidiary. No equity securities of any Fidelity Subsidiary are or may become
required to be issued (other than to a Fidelity Company) by reason of any
options, warrants, scrip, rights to subscribe to, calls, or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of the capital stock of any such Subsidiary, and there
are no Contracts by which any Fidelity Subsidiary is bound to issue (other than
to a Fidelity Company) additional shares of its capital stock or options,
warrants, or rights to purchase or acquire any additional shares of its capital
stock or by which any Fidelity Company is or may be bound to transfer any shares
of the capital stock of any Fidelity Subsidiary (other than to a Fidelity
Company). There are no Contracts relating to the rights of any Fidelity Company
to vote or to dispose of any shares of the capital stock of any Fidelity
Subsidiary. All of the shares of capital stock of each Fidelity Subsidiary held
by a Fidelity Company are duly authorized, validly issued, and fully paid and
nonassessable under the applicable corporation Law of the jurisdiction in which
such Subsidiary is incorporated or organized and are owned by the Fidelity
Company free and clear of any Lien. Each Fidelity Subsidiary is a corporation,
and is duly organized, validly existing, and in good standing under the Laws of
the jurisdiction in which it is incorporated or organized, and has the corporate
power and authority necessary for it to own, lease, and operate its Assets and
to carry on its business as now conducted. Each Fidelity Subsidiary is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Fidelity.

5.5 FINANCIAL STATEMENTS. Fidelity has disclosed in Section 5.5 of the
Fidelity Disclosure Memorandum, and has delivered to Regions copies of, all
Fidelity Financial Statements for periods ended prior to the date hereof and
will deliver to Regions copies of all Fidelity Financial Statements prepared
subsequent to the date hereof. The Fidelity Financial Statements (as of the
dates thereof and for the periods covered thereby) (i) are or, if dated after
the date of this Agreement, will be in accordance with the books and records of
the Fidelity Companies, which are or will be, as the case may be, complete and
correct and which have been or will have been, as the case may be, maintained in
accordance with good business practices, and (ii) present or will present, as
the case may be, fairly the consolidated financial position of the Fidelity
Companies as of the dates indicated and the consolidated results of operations,
changes in stockholders' equity, and cash flows of

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the Fidelity Companies for the periods indicated, in accordance with GAAP
(subject to any exceptions as to consistency specified therein or as may be
indicated in the notes thereto or, in the case of interim financial statements,
to normal recurring year-end adjustments that are not material).

5.6 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in Section 5.6
of the Fidelity Disclosure Memorandum, and to the Knowledge of Fidelity, no
Fidelity Company has any Liabilities that are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Fidelity, except
Liabilities which are accrued or reserved against in the consolidated balance
sheets of Fidelity as of December 31, 1993 included in the Fidelity Financial
Statements or reflected in the notes thereto. Except as disclosed in Section 5.6
of the Fidelity Disclosure Memorandum, no Fidelity Company has incurred or paid
any Liability since December 31, 1993, except for such Liabilities incurred or
paid in the ordinary course of business consistent with past business practice
and which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Fidelity.

5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1993, except
as disclosed in the Fidelity Financial Statements filed with the OTS after such
date and prior to the date of this Agreement, (i) there have been no events,
changes, or occurrences which have had, or are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Fidelity, and
(ii) the Fidelity Companies have not taken any action, or failed to take any
action, prior to the date of this Agreement, which action or failure, if taken
after the date of this Agreement, would represent or result in a material breach
or violation of any of the covenants and agreements of Fidelity provided in
Article Seven of this Agreement.

5.8 ADEQUACY OF RESERVES. (a) The allowance for possible loan or credit
losses (the "Allowance") shown on the consolidated balance sheets of Fidelity
included in the most recent Fidelity Financial Statements dated prior to the
date of this Agreement was, and the Allowance shown on the consolidated balance
sheets of Fidelity included in the Fidelity Financial Statements as of dates
subsequent to the execution of this Agreement will be, as of the dates thereof,
adequate (within the meaning of GAAP and applicable regulatory requirements or
guidelines) to provide for losses relating to or inherent in the loan and lease
portfolios (including accrued interest receivables) of the Fidelity Companies
and other extensions of credit (including letters of credit and commitments to
make loans or extend credit) by the Fidelity Companies as of the dates thereof.

(b) The reserve for losses on real estate owned ("REO Reserve") shown on
the consolidated balance sheets of Fidelity included in the most recent Fidelity
Financial Statements dated prior to the date of this Agreement was, and the REO
Reserve shown on the consolidated balance sheets of Fidelity included in the
Fidelity Financial Statements as of dates subsequent to the execution of this
Agreement will be, as of the dates thereof, adequate (within the meaning of GAAP
and applicable regulatory requirements or guidelines) to provide for losses
relating to or inherent in the other real estate owned portfolios of the
Fidelity Companies as of the dates thereof.

(c) The reserves for losses in respect of Litigation ("Litigation
Reserves") shown on the consolidated balance sheets of Fidelity included in the
most recent Fidelity Financial Statements dated prior to the date of this
Agreement was, and the Litigation Reserves shown on the consolidated balance
sheets of Fidelity included in the Fidelity Financial Statements as of dates
subsequent to the execution of this Agreement will be, as of the dates thereof,
adequate (within the meaning of GAAP and applicable regulatory requirements or
guidelines) to provide for losses relating to or arising out of Litigation of
the Fidelity Companies as of the dates thereof.

5.9 TAX MATTERS. (a) All Tax returns required to be filed by or on behalf
of any of the Fidelity Companies have been timely filed, or requests for
extensions have been timely filed, granted, and have not expired for periods
ended on or before December 31, 1993 and on or before the date of the most
recent fiscal year end immediately preceding the Effective Time, except to the
extent that all such failures to file, taken together, are not reasonably likely
to have a Material Adverse Effect on Fidelity, and all such returns filed are
complete and accurate in all material respects. All Taxes shown on filed returns
have been paid. There is no audit examination, deficiency, or refund Litigation
with respect to any Taxes that is reasonably likely to result in a determination
that would have, individually or in the aggregate, a Material Adverse Effect on
Fidelity,

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except to the extent reserved against in the Fidelity Financial Statements dated
prior to the date of this Agreement. All Taxes and other Liabilities due with
respect to completed and settled examinations or concluded Litigation have been
paid.

(b) Except as disclosed in Section 5.9(b) of the Fidelity Disclosure
Memorandum, none of the Fidelity Companies has executed an extension or waiver
of any statute of limitations on the assessment or collection of any Tax due
(excluding such statutes that relate to years currently under examination by the
Internal Revenue Service or other applicable Taxing authorities) that is
currently in effect.

(c) Adequate provision for any Taxes due or to become due for any of the
Fidelity Companies for the period or periods through and including the date of
the respective Fidelity Financial Statements has been made and is reflected on
such Fidelity Financial Statements.

(d) Effective for the fiscal year ended December 31, 1993, Fidelity adopted
Financial Accounting Standards Board Statement 109, "Accounting for Income
Taxes."

5.10 ASSETS. Except as disclosed or reserved against in the Fidelity
Financial Statements, the Fidelity Companies have good and marketable title,
free and clear of all Liens, to all of their respective Assets that are material
to the business of the Fidelity Companies. All material tangible properties used
in the businesses of the Fidelity Companies are in good condition, reasonable
wear and tear excepted, and are usable in the ordinary course of business
consistent with Fidelity's past practices. All Assets which are material to the
business of the Fidelity Companies, held under leases or subleases by any of the
Fidelity Companies, are held under valid Contracts enforceable in accordance
with their respective terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceedings
may be brought), and each such Contract is in full force and effect.

5.11 ENVIRONMENTAL MATTERS. (a) To the Knowledge of Fidelity, each
Fidelity Company, its Participation Facilities, and its Loan Properties are, and
have been, in compliance with all Environmental Laws, except for violations
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Fidelity.

(b) To the Knowledge of Fidelity, there is no Litigation pending or
threatened before any court, governmental agency, or authority, or other forum
in which any Fidelity Company or any of its Participation Facilities has been
or, with respect to threatened Litigation, may be named as a defendant (i) for
alleged noncompliance (including by any predecessor) with any Environmental Law
or (ii) relating to the release into the environment of any Hazardous Material
(as defined below) or oil, whether or not occurring at, on, under, or involving
a site owned, leased, or operated by any Fidelity Company or any of its
Participation Facilities, except for such Litigation pending or threatened that
is not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Fidelity.

(c) To the Knowledge of Fidelity, there is no Litigation pending or
threatened before any court, governmental agency, or board, or other forum in
which any of its Loan Properties (or Fidelity in respect of such Loan Property)
has been or, with respect to threatened Litigation, may be named as a defendant
or potentially responsible party (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii) relating to the release into the
environment of any Hazardous Material or oil, whether or not occurring at, on,
under, or involving a Loan Property, except for such Litigation pending or
threatened that is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Fidelity.

(d) To the Knowledge of Fidelity, there is no reasonable basis for any
Litigation of a type described in subsections (b) or (c), except such as is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Fidelity.

(e) To the Knowledge of Fidelity, during the period of (i) any Fidelity
Company's ownership or operation of any of their respective current properties,
(ii) any Fidelity Company's participation in the

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management of any Participation Facility, or, (iii) any Fidelity Company's
holding of a security interest in a Loan Property, there have been no releases
of Hazardous Material or oil in, on, under, or affecting such properties, except
such as are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Fidelity. Prior to the period of (i) any Fidelity
Company's ownership or operation of any of their respective current properties,
(ii) any Fidelity Company's participation in the management of any Participation
Facility, or (iii) any Fidelity Company's holding of a security interest in a
Loan Property, to the Knowledge of Fidelity, there were no releases of Hazardous
Material or oil in, on, under, or affecting any such property, Participation
Facility, or Loan Property, except such as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Fidelity.

5.12 COMPLIANCE WITH LAWS. Fidelity is an "insured depository institution"
as defined in the Federal Deposit Insurance Act and applicable regulations
thereunder. Each Fidelity Company has in effect all Permits necessary for it to
own, lease, or operate its Assets and to carry on its business as now conducted,
except for those Permits the absence of which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Fidelity, and
there has occurred no Default under any such Permit, other than Defaults which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Fidelity. Except as disclosed in Section 5.12 of the Fidelity
Disclosure Memorandum, none of the Fidelity Companies:

(a) Is in violation of any Laws, Orders, or Permits applicable to its
business or employees conducting its business, except for violations which
are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Fidelity; and

(b) Has received any notification or communication from any agency or
department of federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that any Fidelity Company is
not in compliance with any of the material Laws or material Orders which
such governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Fidelity, (ii) threatening to
revoke any material Permits the revocation of which is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
Fidelity, or (iii) requiring any Fidelity Company (x) to enter into or
consent to the issuance of a cease and desist order, formal agreement,
directive, commitment, or memorandum of understanding, or (y) to adopt any
Board resolution or similar undertaking which restricts materially the
conduct of its business, or in any manner relates to its capital adequacy,
its management, or the payment of dividends.

5.13 LABOR RELATIONS. No Fidelity Company is the subject of any Litigation
asserting that it or any other Fidelity Company has committed an unfair labor
practice (within the meaning of the National Labor Relations Act or comparable
state law) or seeking to compel it or any other Fidelity Company to bargain with
any labor organization as to wages or conditions of employment, nor is any
Fidelity Company a party to or bound by any collective bargaining agreement,
contract, or other agreement or understanding with a labor union or labor
organization, nor is there any strike or other labor dispute involving any
Fidelity Company, pending or threatened, or to its Knowledge, is there any
activity involving any Fidelity Company's employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.

5.14 EMPLOYEE BENEFIT PLANS. (a) Fidelity has disclosed in Section 5.14 of
the Fidelity Disclosure Memorandum, and has delivered or made available to
Regions prior to the execution of this Agreement correct and complete copies in
each case of, all pension, retirement, profit-sharing, deferred compensation,
stock option, employee stock ownership, severance pay, vacation, bonus, or other
incentive plan, all other written employee programs or agreements, all medical,
vision, dental, or other health plans, all life insurance plans, and all other
employee benefit plans or fringe benefit plans, including, without limitation,
"employee benefit plans" as that term is defined in Section 3(3) of ERISA,
currently or previously adopted, maintained by, sponsored in whole or in part
by, or contributed to by any Fidelity Company for the benefit of employees,
retirees, dependents, spouses, directors, independent contractors, or other
beneficiaries and under which employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries are eligible to
participate (collectively, the "Fidelity Benefit Plans"). Any of the Fidelity
Benefit Plans which is an

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"employee welfare benefit plan," as that term is defined in Section 3(l) of
ERISA, or an "employee pension benefit plan," as that term is defined in Section
3(2) of ERISA, is referred to herein as a "Fidelity ERISA Plan." No Fidelity
ERISA Plan is a "defined benefit plan" (as defined in Section 414(j) of the
Internal Revenue Code or Section 3(35) of ERISA). On or after September 26,
1980, neither Fidelity nor any Fidelity Company has had an "obligation to
contribute" (as defined in ERISA Section 4212) to a "multiemployer plan" (as
defined in ERISA Sections 4001(a)(3) and 3(37)(A)).

(b) Fidelity has delivered or made available to Regions prior to the
execution of this Agreement correct and complete copies of the following
documents: (i) all trust agreements or other funding arrangements for such
Fidelity Benefit Plans (including insurance contracts), and all amendments
thereto, (ii) with respect to any such Fidelity Benefit Plans or amendments, all
determination letters, rulings, opinion letters, information letters, or
advisory opinions issued by the Internal Revenue Service, the United States
Department of Labor, or the Pension Benefit Guaranty Corporation after December
31, 1974, (iii) annual reports or returns, audited or unaudited financial
statements, actuarial valuations and reports, and summary annual reports
prepared for any Fidelity Benefit Plan with respect to the most recent three
plan years, and (iv) the most recent summary plan descriptions and any material
modifications thereto.

(c) Except as disclosed in Section 5.14(c) of the Fidelity Disclosure
Memorandum, all Fidelity Benefit Plans are in compliance with the applicable
terms of ERISA, the Internal Revenue Code, and any other applicable Laws the
breach or violation of which are reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Fidelity. Except as disclosed in
Section 5.14(c) of the Fidelity Disclosure Memorandum, each Fidelity ERISA Plan
which is intended to be qualified under Section 401(a) of the Internal Revenue
Code has received a favorable determination letter from the Internal Revenue
Service, and Fidelity is not aware of any circumstances which will or could
result in revocation of any such favorable determination letter. Except as
disclosed in Section 5.14(c) of the Fidelity Disclosure Memorandum, each trust
created under any Fidelity ERISA Plan has been determined to be exempt from Tax
under Section 501(a) of the Internal Revenue Code and Fidelity is not aware of
any circumstance which will or could result in revocation of such exemption.
With respect to each Fidelity Benefit Plan, except as disclosed in Section
5.14(c) of the Fidelity Disclosure Memorandum, no event has occurred which will
or could give rise to a loss of any intended Tax consequences under the Internal
Revenue Code or to any Tax under Section 511 of the Internal Revenue Code. There
is no material pending or threatened Litigation relating to any Fidelity ERISA
Plan. Except as disclosed in Section 5.14(c) of the Fidelity Disclosure
Memorandum, no Fidelity Company has engaged in a transaction with respect to any
Fidelity Benefit Plan that, assuming the taxable period of such transaction
expired as of the date hereof, would subject any Fidelity Company to a tax or
penalty imposed by either Section 4975 of the Internal Revenue Code or Section
502(i) of ERISA in amounts which are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Fidelity.

(d) No liability under Title IV of ERISA has been or is expected to be
incurred by any Fidelity Company with respect to any defined benefit plan
currently or formerly maintained by any of them or by any entity which is
considered an employer with a Fidelity Company under Section 4001 of ERISA or
Section 414 of the Internal Revenue Code (an "ERISA Affiliate").

(e) No defined benefit plan of an ERISA Affiliate has an "accumulated
funding deficiency" (whether or not waived) within the meaning of Section 412 of
the Internal Revenue Code or Section 302 of ERISA and no ERISA Affiliate has an
outstanding funding waiver. No Fidelity Company has provided, or is required to
provide, security to any single-employer plan of an ERISA Affiliate pursuant to
Section 401(a)(29) of the Internal Revenue Code.

(f) Except as disclosed in Section 5.14(f) of the Fidelity Disclosure
Memorandum, no Fidelity Company has any obligations for retiree health and life
benefits under any of the Fidelity Benefit Plans.

(g) Except as disclosed in Section 5.14(g) of the Fidelity Disclosure
Memorandum, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including, without limitation, severance, unemployment compensation,
golden parachute, or otherwise) becoming due to any director or any employee of
any Fidelity Company from any

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Fidelity Company under any Fidelity Benefit Plan or otherwise, (ii) increase any
benefits otherwise payable under any Fidelity Benefit Plan, or (iii) result in
any acceleration of the time of payment or vesting of any such benefit.

(h) Except as disclosed in Section 5.14(h) of the Fidelity Disclosure
Memorandum, no oral or written representation or communication with respect to
any aspect of the Fidelity Benefit Plans has been made to employees of any of
the Fidelity Companies prior to the date hereof which is not in accordance with
the written or otherwise preexisting terms and provisions of such plans. Except
as disclosed in Section 5.14(h) of the Fidelity Disclosure Memorandum, all
Fidelity Benefit Plan documents and annual reports or returns, audited or
unaudited financial statements, actuarial valuations, summary annual reports,
and summary plan descriptions issued with respect to the Fidelity Benefit Plans
are correct and complete and there have been no changes in the information set
forth therein.

5.15 MATERIAL CONTRACTS. Except as disclosed in Section 5.15 of the
Fidelity Disclosure Memorandum, none of the Fidelity Companies, nor any of their
respective Assets, businesses, or operations, is a party to, or is bound or
affected by, or receives benefits under, (i) any employment, severance,
termination, consulting, or retirement Contract providing for aggregate payments
to any Person in any calendar year in excess of $50,000, (ii) any Contract
relating to the borrowing of money by any Fidelity Company or the guarantee by
any Fidelity Company of any such obligation (other than Contracts evidencing
deposit liabilities, purchases of federal funds, fully-secured repurchase
agreements, and Federal Home Loan Bank advances, trade payables, and Contracts
relating to borrowings or guarantees made in the ordinary course of business),
(iii) any Contracts between or among Fidelity Companies; and (iv) any other
Contract or amendment thereto that would be required to be filed as an exhibit
to a Form 10-K filed by Fidelity with the OTS as of the date of this Agreement
if Fidelity were required to file a Form 10-K with the OTS, (together with all
Contracts referred to in Sections 5.10 and 5.14(a) of this Agreement, the
"Fidelity Contracts"). None of the Fidelity Companies is in Default under any
Fidelity Contract which, individually or in the aggregate, is reasonably likely
to have a Material Adverse Effect on Fidelity.

5.16 LEGAL PROCEEDINGS. Except to the extent specifically reserved against
in the Fidelity Financial Statements dated prior to the date of this Agreement,
there is no Litigation instituted or pending, or, to the Knowledge of Fidelity,
threatened (or unasserted but considered probable of assertion and which if
asserted would have at least a reasonable probability of an unfavorable outcome)
against any Fidelity Company, or against any Asset, interest, or right of any of
them, that is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Fidelity, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
any Fidelity Company, that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Fidelity. Fidelity has disclosed in
Section 5.16 of the Fidelity Disclosure Memorandum all Litigation pending or, to
the Knowledge of Fidelity, threatened as of the date of this Agreement where
there are claims against Fidelity.

5.17 REPORTS. Since January 1, 1990, or the date of organization if later,
each Fidelity Company has timely filed all reports and statements, together with
any amendments required to be made with respect thereto, that it was required to
file with (i) the OTS, including, but not limited to, Forms 10-K, Forms 10-Q,
Forms 8-K, and proxy statements, (ii) other Regulatory Authorities, and (iii)
any applicable state securities or banking authorities (except, in the case of
state securities authorities, failures to file which are not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on
Fidelity). As of their respective dates, each of such reports and documents,
including the financial statements, exhibits, and schedules thereto, complied in
all material respects with all applicable Laws. As of its respective date, each
such report and document did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
were made, not misleading.

5.18 STATEMENTS TRUE AND CORRECT. No statement, certificate, instrument,
or other writing furnished or to be furnished by any Fidelity Company or any
Affiliate thereof to Regions pursuant to this Agreement or any other document,
agreement, or instrument referred to herein contains or will contain any untrue
statement of material fact or will omit to state a material fact necessary to
make the statements therein, in light of the

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circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by any Fidelity Company or any Affiliate
thereof for inclusion in the Registration Statement to be filed by Regions with
the SEC will, when the Registration Statement becomes effective, be false or
misleading with respect to any material fact, or contain any untrue statement of
a material fact, or omit to state any material fact required to be stated
thereunder or necessary to make the statements therein not misleading. None of
the information supplied or to be supplied by any Fidelity Company or any
Affiliate thereof for inclusion in the Proxy Statement to be mailed to
Fidelity's stockholders in connection with the Stockholders' Meeting, and any
other documents to be filed by a Fidelity Company or any Affiliate thereof with
the SEC or any other Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective time such documents are filed, and
with respect to the Proxy Statement, when first mailed to the stockholders of
Fidelity, be false or misleading with respect to any material fact, or contain
any misstatement of material fact, or omit to state any material fact required
to be stated thereunder or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or, in the case of
the Proxy Statement or any amendment thereof or supplement thereto, at the time
of the Stockholders' Meeting, be false or misleading with respect to any
material fact, or omit to state any material fact required to be stated
thereunder or necessary to correct any material statement in any earlier
communication with respect to the solicitation of any proxy for the
Stockholders' Meeting. All documents that any Fidelity Company or any Affiliate
thereof is responsible for filing with any Regulatory Authority in connection
with the transactions contemplated hereby will comply as to form in all material
respects with the provisions of applicable Law.

5.19 ACCOUNTING, TAX, AND REGULATORY MATTERS. No Fidelity Company or any
Affiliate thereof has taken any action, or agreed to take any action, or has any
Knowledge of any fact or circumstance that is reasonably likely to (i) prevent
the transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or treatment as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, or (ii)
materially impede or delay receipt of any Consents of Regulatory Authorities
referred to in Section 9.1(b) of this Agreement. To the Knowledge of Fidelity,
there exists no fact, circumstance, or reason why the requisite Consents
referred to in Section 9.1(b) of this Agreement cannot be received in a timely
manner without imposition of any condition of the type described in the second
sentence of such Section 9.1(b).

5.20 STATE TAKEOVER LAWS. No fair price, control share, business
combination, supermajority voting, or similar Law is applicable to the
transactions contemplated by this Agreement.

5.21 CHARTER PROVISIONS. Each Fidelity Company has taken all action so
that the entering into of this Agreement and the consummation of the Merger and
the other transactions contemplated by this Agreement do not and will not result
in the grant of any rights to any Person (other than a Regions Company) under
the Charter, Bylaws, or other governing instruments of any Fidelity Company or
restrict or impair the ability of Regions to vote, or otherwise to exercise the
rights of a stockholder with respect to, shares of any Fidelity Company that may
be acquired or controlled by it.

ARTICLE SIX

REPRESENTATIONS AND WARRANTIES OF REGIONS

Regions hereby represents and warrants to Fidelity as follows:

6.1 ORGANIZATION, STANDING, AND POWER. Regions is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Delaware, and has the corporate power and authority to carry on its business as
now conducted and to own, lease, and operate its Assets. Regions is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Regions.

6.2 AUTHORITY; NO BREACH BY AGREEMENT. (a) Regions has the corporate power
and authority necessary to execute, deliver, and perform its obligations under,
this Agreement and to consummate the transactions

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contemplated hereby. The execution, delivery, and performance of this Agreement
and the consummation of the transactions contemplated herein, including the
Merger, have been duly and validly authorized by all necessary corporate action
in respect thereof on the part of Regions. This Agreement represents a legal,
valid, and binding obligation of Regions, enforceable against Regions in
accordance with its terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar Laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding may be brought).

(b) Neither the execution and delivery of this Agreement by Regions, nor
the consummation by Regions of the transactions contemplated hereby, nor
compliance by Regions with any of the provisions hereof, will (i) conflict with
or result in a breach of any provision of Region's Certificate of Incorporation
or Bylaws, or (ii) constitute or result in a Default under, or require any
Consent pursuant to, or result in the creation of any Lien on any Asset of any
Regions Company under, any Contract or Permit of any Regions Company, or (iii)
subject to receipt of the requisite approvals referred to in Section 9.1(b) of
this Agreement, violate any Law or Order applicable to any Regions Company or
any of their respective Assets.

(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules of
the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans
and other than Consents, filings, or notifications which, if not obtained or
made, is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions, no notice to, filing with, or Consent of,
any public body or authority is necessary for the consummation by Regions or
Fidelity Interim of the Merger and the other transactions contemplated in this
Agreement.

6.3 CAPITAL STOCK. The authorized capital stock of Regions consists of
120,000,000 shares of Regions Common Stock, of which 43,510,939 shares were
issued and outstanding and 1,590,579 shares were held as treasury shares as of
June 30, 1994. All of the issued and outstanding shares of Regions Common Stock
are, and all of the shares of Regions Common Stock to be issued in exchange for
shares of Fidelity Capital Stock upon consummation of the Merger, when issued
in accordance with the terms of this Agreement, will be, duly and validly
issued and outstanding and fully paid and nonassessable under the Delaware GCL.
None of the outstanding shares of Regions Common Stock has been, and none of
the shares of Regions Common Stock to be issued in exchange for shares of
Fidelity Common Stock upon consummation of the Merger will be, issued in
violation of any preemptive rights of the current or past stockholders of
Regions.

6.4 FINANCIAL STATEMENTS. Regions has disclosed in Section 6.4 of the
Regions Disclosure Memorandum and has delivered to Fidelity copies of all
Regions Financial Statements for periods ended prior to the date hereof and will
deliver to Fidelity copies of all Regions Financial Statements prepared
subsequent to the date hereof. The Regions Financial Statements (as of the dates
thereof and for the periods covered thereby) (i) are or, if dated after the date
of this Agreement, will be in accordance with the books and records of the
Regions Companies, which are or will be, as the case may be, complete and
correct and which have been or will have been, as the case may be, maintained in
accordance with good business practices, and (ii) present or will present, as
the case may be, fairly the consolidated financial position of the Regions
Companies as of the dates indicated and the consolidated results of operations,
changes in stockholders' equity, and cash flows of the Regions Companies for the
periods indicated, in accordance with GAAP (subject to exceptions as to
consistency specified therein or as may be indicated in the notes thereto or, in
the case of interim financial statements, to normal recurring year-end
adjustments that are not material).

6.5 ABSENCE OF UNDISCLOSED LIABILITIES. No Regions Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Regions as of
June 30, 1994 included in the Regions Financial Statements or reflected in the
notes thereto. Except as disclosed in Section 6.5 of the Regions Disclosure
Memorandum, no Regions Company has incurred or paid any Liability since June 30,

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1994, except for such Liabilities incurred or paid in the ordinary course of
business consistent with past business practice and which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Regions.

6.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30, 1994, except as
disclosed in the Regions Financial Statements filed with the SEC after such date
and prior to the date of this Agreement or in Section 6.6 of the Regions
Disclosure Memorandum, there have been no events, changes, or occurrences which
have had, or are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions.

6.7 COMPLIANCE WITH LAWS. Regions is duly registered as a bank holding
company under the BHC Act. Each Regions Company has in effect all Permits
necessary for it to own, lease, or operate its Assets and to carry on its
business as now conducted, except for those Permits the absence of which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Regions, and there has occurred no Default under any such Permit,
other than Defaults which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Regions. None of the Regions
Companies:

(b) Has received any notification or communication from any agency or
department of federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that any Regions Company is
not in compliance with any of the material Laws or material Orders which
such governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions, (ii) threatening to revoke
any Permits, the revocation of which are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Regions, or
(iii) requiring any Regions Company (x) to enter into or consent to the
issuance of a cease and desist order, formal agreement, directive,
commitment, or memorandum of understanding, or (y) to adopt any Board
resolution or similar undertaking which restricts materially the conduct of
its business, or in any manner relates to its capital adequacy, its
management, or the payment of dividends.

6.8 LEGAL PROCEEDINGS. Except to the extent specifically reserved against
in the Regions Financial Statements dated prior to the date of this Agreement,
there is no Litigation instituted or pending, or, to the Knowledge of Regions,
threatened (or unasserted but considered probable of assertion and which if
asserted would have at least a reasonable probability of an unfavorable outcome)
against any Regions Company, or against any Asset, interest, or right of any of
them, that is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
any Regions Company, that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions.

6.9 REPORTS. Since January 1, 1990, or the date of organization if later,
Regions has filed all reports and statements, together with any amendments
required to be made with respect thereto, that it was required to file with (i)
the SEC, including, but not limited to, Forms 10-K, Forms 10-Q, Forms 8-K, and
proxy statements, (ii) other Regulatory Authorities, and (iii) any applicable
state securities or banking authorities (except, in the case of state securities
authorities, failures to file which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Regions). As of
their respective dates, each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in all material
respects with all applicable Laws. As of its respective date, each such report
and document did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.

6.10 STATEMENTS TRUE AND CORRECT. No statement, certificate, instrument,
or other writing furnished or to be furnished by any Regions Company or any
Affiliate thereof to Fidelity pursuant to this Agreement or any

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other document, agreement, or instrument referred to herein contains or will
contain any untrue statement of material fact or will omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. None of the information supplied or
to be supplied by any Regions Company or any Affiliate thereof for inclusion in
the Registration Statement to be filed by Regions with the SEC, will, when the
Registration Statement becomes effective, be false or misleading with respect to
any material fact, or contain any untrue statement of a material fact, or omit
to state any material fact required to be stated thereunder or necessary to make
the statements therein not misleading. None of the information supplied or to be
supplied by any Regions Company or any Affiliate thereof for inclusion in the
Proxy Statement to be mailed to Fidelity's stockholders in connection with the
Stockholders' Meeting, and any other documents to be filed by any Regions
Company or any Affiliate thereof with the SEC or any other Regulatory Authority
in connection with the transactions contemplated hereby, will, at the respective
time such documents are filed, and with respect to the Proxy Statement, when
first mailed to the stockholders of Fidelity, be false or misleading with
respect to any material fact, or contain any misstatement of material fact, or
omit to state any material fact required to be stated thereunder or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or, in the case of the Proxy Statement or any amendment
thereof or supplement thereto, at the time of the Stockholders' Meeting, be
false or misleading with respect to any material fact, or omit to state any
material fact required to be stated thereunder or necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the Stockholders' Meeting. All documents that any Regions Company or
any Affiliate thereof is responsible for filing with any Regulatory Authority in
connection with the transactions contemplated hereby will comply as to form in
all material respects with the provisions of applicable Law.

6.11 AUTHORITY OF FIDELITY INTERIM. Fidelity Interim is, or prior to the
Effective Time will be, a federal stock savings bank duly organized, validly
existing, and in good standing under the Laws of the United States as a wholly
owned, first tier Subsidiary of Regions. Fidelity Interim has, or will have, the
corporate power and authority necessary to execute, deliver, and perform its
obligations under the Plan of Merger and to consummate the transactions
contemplated thereby. The execution, delivery, and performance of the Plan of
Merger and the consummation of the transactions contemplated therein, including
the Merger, will be duly and validly authorized by all necessary corporate
action in respect thereof on the part of Fidelity Interim. When executed and
delivered, the Plan of Merger will represent a legal, valid, and binding
obligation of Fidelity Interim, enforceable against Fidelity Interim in
accordance with its terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar Laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding may be brought).

6.12 ACCOUNTING, TAX, AND REGULATORY MATTERS. No Regions Company or any
Affiliate thereof has taken any action, or agreed to take any action, or has any
Knowledge of any fact or circumstance that is reasonably likely to (i) prevent
the transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or treatment as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, or (ii)
materially impede or delay receipt of any Consents of Regulatory Authorities
referred to in Section 9.1(b) of this Agreement. To the Knowledge of Regions,
there exists no fact, circumstance, or reason why the requisite Consents
referred to in Section 9.1(b) of this Agreement cannot be received in a timely
manner without imposition of any condition of the type described in the second
sentence of such Section 9.1(b).

ARTICLE SEVEN

CONDUCT OF BUSINESS PENDING CONSUMMATION

7.1 COVENANTS OF BOTH PARTIES. Unless the prior written consent of the
other Party shall have been obtained, and except as otherwise expressly
contemplated herein, each Party shall and shall cause each of its Subsidiaries
to (a) operate its business only in the usual, regular, and ordinary course, (b)
preserve intact its

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business organizations and Assets and maintain its rights and franchises, and
(c) take no action which would materially (i) adversely affect the ability of
any Party to obtain any Consents required for the transactions contemplated
hereby, or (ii) adversely affect the ability of any Party to perform its
covenants and agreements under this Agreement in all material respects and to
consummate the Merger; provided, that the foregoing shall not prevent any
Regions Company from discontinuing or disposing of any of its Assets or
business, or from acquiring or agreeing to acquire any other Person or any
Assets thereof, if such action is, in the judgment of Regions, desirable in the
conduct of the business of Regions and its Subsidiaries.

7.2 COVENANTS OF FIDELITY. Except as specifically contemplated or
permitted by this Agreement or the Preferred Stock Option Agreement, from the
date of this Agreement until the earlier of the Effective Time or the
termination of this Agreement, Fidelity covenants and agrees that it will not do
or agree or commit to do, or permit any of its Subsidiaries to do or agree or
commit to do, any of the following without the prior written consent of the
chief executive officer or chief financial officer of Regions:

(a) amend the Charter, Bylaws, or other governing instruments of any
Fidelity Company; or

(b) incur, guarantee, or otherwise become responsible for, any
additional debt obligation or other obligation for borrowed money (other
than indebtedness of a Fidelity Company to another Fidelity Company) in
excess of an aggregate of $100,000 (for the Fidelity Companies on a
consolidated basis) except in the ordinary course of the business of
Fidelity Companies consistent with past practices (which shall include, for
Fidelity, creation of deposit liabilities, purchases of federal funds,
advances from the Federal Home Loan Bank or the Federal Reserve Bank, and
entry into repurchase agreements fully secured by U.S. government or agency
securities), or, except as disclosed in Section 7.2(b) of the Fidelity
Disclosure Memorandum, forgive any such indebtedness of any Person to any
Fidelity Company (in excess of an aggregate of $25,000), or impose, or
suffer the imposition, on any share of stock held by any Fidelity Company
of any Lien or permit any such Lien to exist; or

(c) repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any shares, or any securities convertible into any shares, of
the capital stock of any Fidelity Company, or declare or pay any dividend
or make any other distribution in respect of any Fidelity Capital Stock,
other than (to the extent permitted by Law and by the OTS) dividends on
Fidelity Preferred Stock; provided that Fidelity may (to the extent legally
able to do so), but shall not be obligated to, declare and pay regular
quarterly cash dividends on the shares of Fidelity Common Stock at a rate
not in excess of $.09 per share with usual and regular record and payment
dates in accordance with past practice disclosed in Section 7.2(c) of the
Fidelity Disclosure Memorandum; and provided further, that any dividend
declared or payable on the shares of Fidelity Common Stock for the quarter
during which the Effective Time occurs shall, unless otherwise agreed upon
in writing by Regions and Fidelity, be declared only if the record date for
payment of the quarterly dividend to holders of Regions Common Stock for
the quarter in which the Effective Time occurs is prior to the Effective
Time; or

(d) except pursuant to the exercise of stock options outstanding as of
the date hereof and pursuant to the terms thereof in existence on the date
hereof, or pursuant to the conversion of Fidelity Preferred Stock, issue,
sell, pledge, encumber, authorize the issuance of, enter into any Contract
to issue, sell, pledge, encumber, or authorize the issuance of, or
otherwise permit to become outstanding, any additional shares of Fidelity
Capital Stock or any other capital stock of any Fidelity Company, or any
stock appreciation rights, or any option, warrant, conversion, or other
right to acquire any such stock, or any security convertible into any such
stock; or

(e) adjust, split, combine, or reclassify any capital stock of any
Fidelity Company or issue or authorize the issuance of any other securities
in respect of or in substitution for shares of Fidelity Capital Stock or
sell, lease, mortgage, or otherwise dispose of or otherwise encumber any
shares of capital stock of any Fidelity Subsidiary (unless any such shares
of stock are sold or otherwise transferred to another Fidelity Company) or
any Assets having in the aggregate a book value in excess of $100,000 other
than in the ordinary course of business for reasonable and adequate
consideration; or

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(f) acquire direct or indirect control over, or invest in equity
securities of, any Person, other than in connection with (i) foreclosures
in the ordinary course of business, or (ii) acquisitions of control by
Fidelity in its fiduciary capacity; or

(g) grant any increase in compensation or benefits to the employees or
officers of any Fidelity Company except as disclosed in Section 7.2(g) of
the Fidelity Disclosure Memorandum or as required by Law; pay any bonus
except pursuant to the provisions of any applicable program or plan adopted
by its Board of Directors prior to the date of this Agreement and disclosed
in Section 7.2(g) of the Fidelity Disclosure Memorandum; enter into or
amend any severance agreements with officers of any Fidelity Company except
as disclosed in Section 7.2(g) of the Fidelity Disclosure Memorandum; grant
any increase in fees or other increases in compensation or other benefits
to directors of any Fidelity Company; or

(h) except as disclosed in Section 7.2(h) of the Fidelity Disclosure
Memorandum, enter into or amend any employment Contract between any
Fidelity Company and any Person (unless such amendment is required by Law)
that the Fidelity Company does not have the unconditional right to
terminate without Liability (other than Liability for services already
rendered), at any time on or after the Effective Time; or

(i) except as disclosed in Section 7.2(i) of the Fidelity Disclosure
Memorandum, adopt any new employee benefit plan or program of any Fidelity
Company or make any material change in or to any existing employee benefit
plans or programs of any Fidelity Company other than any such change that
is required by Law or that, in the opinion of counsel, is necessary or
advisable to maintain the tax qualified status of any such plan; or

(j) make any significant change in any accounting methods, principles,
or practices or systems of internal accounting controls, except as may be
necessary to conform to changes in regulatory accounting requirements or
GAAP; or

(k) commence or settle any Litigation other than in accordance with
past practice; provided that, except to the extent specifically reserved
against in the Fidelity Financial Statements dated prior to the date of
this Agreement, no Fidelity Company shall settle any Litigation involving
any Liability of any Fidelity Company for money damages in excess of
$25,000 or restrictions upon the operations of any Fidelity Company; or

(l) except in the ordinary course of business, enter into or terminate
any material Contract or make any change in any material lease or Contract,
other than renewals of leases and Contracts without material adverse
changes of terms or as disclosed pursuant to Sections 7.2(g), (h), or (i)
of the Fidelity Disclosure Memorandum.

7.3 COVENANTS OF REGIONS. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, Regions
covenants and agrees that it will not, without the prior written consent of the
chief executive officer or chief financial officer of Fidelity, which consent
shall not be unreasonably withheld, amend the Certificate of Incorporation or
Bylaws of Regions, in each case, in any manner which is adverse to, and
discriminates against, the holders of Fidelity Capital Stock.

7.4 ADVERSE CHANGES IN CONDITION. Each Party agrees to give written notice
promptly to the other Party upon becoming aware of the occurrence or impending
occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) is reasonably likely to cause
or constitute a material breach of any of its representations, warranties, or
covenants contained herein, and to use its reasonable efforts to prevent or
promptly to remedy the same.

7.5 REPORTS. Each Party and its Subsidiaries shall file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and shall deliver to the other Party copies of
all such reports promptly after the same are filed. If financial statements are
contained in any such reports filed with the SEC, in the case of Regions, or the
OTS, in the case of Fidelity, such financial

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statements will fairly present the consolidated financial position of the entity
filing such statements as of the dates indicated and the consolidated results of
operations, changes in stockholders' equity, and cash flows for the periods then
ended in accordance with GAAP (subject in the case of interim financial
statements to normal recurring year-end adjustments that are not material). As
of their respective dates, such reports filed with the SEC or the OTS, as the
case may be, will comply in all material respects with the Securities Laws and
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Any financial statements contained in any other reports to
another Regulatory Authority shall be prepared in accordance with Laws
applicable to such reports.

ARTICLE EIGHT

ADDITIONAL AGREEMENTS

8.1 REGISTRATION STATEMENT; PROXY STATEMENT; SHAREHOLDER APPROVAL. Regions
shall use its reasonable efforts to file within sixty (60) days after the
execution of this Agreement, the Registration Statement with the SEC, provided
Fidelity has provided, on a reasonably timely basis, all information concerning
Fidelity necessary for inclusion in the Registration Statement, and shall use
its reasonable efforts to cause the Registration Statement to become effective
under the 1933 Act as soon as reasonably practicable after the filing thereof
and take any action required to be taken under the applicable state Blue Sky or
securities Laws in connection with the issuance of the shares of Regions Common
Stock upon consummation of the Merger. Fidelity shall promptly furnish all
information concerning it and the holders of its capital stock as Regions may
reasonably request in connection with such action. Fidelity shall call a
Stockholders' Meeting, to be held within forty-five (45) days after the
Registration Statement is declared effective by the SEC, for the purpose of
voting upon approval of (i) this Agreement and the Plan of Merger, (ii) an
amendment to the Charter of Fidelity clarifying the terms of the Fidelity
Preferred Stock as agreed upon by the Parties (the "Preferred Stock Charter
Amendment"), and (iii) such other related matters as it deems appropriate. In
connection with the Stockholders' Meeting, (i) Fidelity shall, if required, file
the Proxy Statement (which shall be included in the Registration Statement) with
the OTS and mail it to its stockholders, (ii) the Parties shall furnish to each
other all information concerning them that they may reasonably request in
connection with such Proxy Statement, (iii) the Board of Directors of Fidelity
shall recommend (subject to compliance with their fiduciary duties as advised in
writing by counsel to such Board) to its stockholders the approval of this
Agreement, the Plan of Merger, and the Preferred Stock Charter Amendment, and
(iv) the Board of Directors and officers of Fidelity shall use their reasonable
efforts to obtain such stockholders' approval (subject to compliance with their
fiduciary duties as advised in writing by counsel to such Board).

8.2 NASDAQ/NMS LISTING. Regions shall file with the NASD a notification
for the listing on the Nasdaq/NMS relating to the proposed issuance of the
shares of Regions Common Stock to be issued to the holders of Fidelity Capital
Stock pursuant to the Merger.

8.3 APPLICATIONS. As soon as reasonably practicable after execution of
this Agreement, Regions shall prepare and file, and Fidelity shall cooperate in
the preparation and, where appropriate, filing of, applications with all
Regulatory Authorities having jurisdiction over the transactions contemplated by
this Agreement seeking the requisite Consents necessary to consummate the
transactions contemplated by this Agreement. Regions shall use all reasonable
efforts to obtain the requisite Consents of all Regulatory Authorities as soon
as reasonably practicable after the filing of the appropriate applications.

8.4 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
practicable after the date of this Agreement, the transactions contemplated by
this Agreement, including, without limitation, using its reasonable efforts to
lift or rescind any Order adversely affecting its ability to consummate the
transactions contemplated herein and to cause to be satisfied the conditions
applicable to such Party referred to in Article Nine of this Agreement.

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Each Party shall use, and shall cause each of its Subsidiaries to use, its
reasonable efforts to obtain all Consents necessary or desirable for the
consummation of the transactions contemplated by this Agreement.

8.5 INVESTIGATION AND CONFIDENTIALITY. (a) Prior to the Effective Time,
each Party will keep the other Party advised of all material developments
relevant to its business and to consummation of the Merger and shall permit the
other Party to make or cause to be made such investigation of the business and
properties of it and its Subsidiaries and of their respective financial and
legal conditions as the other Party reasonably requests, provided that such
investigation shall be reasonably related to the transactions contemplated
hereby and, after the 30th day after execution of this Agreement, shall not
interfere unreasonably with normal operations. No investigation by a Party shall
affect the representations and warranties of the other Party.

(b) Each Party shall, and shall cause its advisers and agents to, maintain
the confidentiality of all confidential information furnished to it by the other
Party concerning its and its Subsidiaries' businesses, operations, and financial
positions and shall not use such information for any purpose except in
furtherance of the transactions contemplated by this Agreement. If this
Agreement is terminated prior to the Effective Time, each Party shall promptly
return all documents and copies thereof, and all work papers containing
confidential information received from the other Party.

(c) Fidelity shall use its reasonable efforts to exercise its rights under
confidentiality agreements entered into with Persons which were considering an
acquisition transaction with Fidelity to preserve the confidentiality of the
information relating to Fidelity provided to such parties.

8.6 PRESS RELEASES. Prior to the Effective Time, Fidelity and Regions
shall consult with each other as to the form and substance of any press release
or other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, however, that nothing in this Section
8.6 shall be deemed to prohibit any Party from making any disclosure which its
counsel advises as necessary or advisable in order to satisfy such Party's
disclosure obligations imposed by Law.

8.7 CERTAIN ACTIONS. Except with respect to this Agreement and the
transactions contemplated hereby, no Fidelity Company nor any Affiliate thereof
nor any investment banker, attorney, accountant, or other representative
(collectively, "Representatives") retained by any Fidelity Company shall
directly or indirectly solicit any Acquisition Proposal by any Person. Except to
the extent necessary to comply with the fiduciary duties of Fidelity's Board of
Directors as advised in writing by counsel to such Board of Directors, no
Fidelity Company or any Affiliate or Representative thereof shall furnish any
non-public information that it is not legally obligated to furnish, negotiate
with respect to, or enter into any Contract with respect to, any Acquisition
Proposal, and shall direct and use its reasonable efforts to cause all of its
Representatives not to engage in any of the foregoing, but Fidelity may
communicate information about such an Acquisition Proposal to its stockholders
if and to the extent that it is required to do so in order to comply with its
legal obligations. Fidelity shall promptly notify Regions orally and in writing
in the event that it receives any inquiry or proposal relating to any such
transaction. Fidelity shall immediately cease and cause to be terminated as of
the date of this Agreement any existing activities, discussions, or negotiations
with any Persons conducted heretofore with respect to any of the foregoing.

8.8 TAX MATTERS. The Parties agree to use their reasonable efforts to
obtain written opinions of legal counsel reasonably acceptable to the Parties to
the effect that (x) the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, (y) the exchange in the
Merger of Fidelity Capital Stock for Regions Common Stock will not give rise to
gain or loss to the stockholders of Fidelity with respect to such exchange
(except to the extent of any cash received), and (z) each of Fidelity, Regions,
and Fidelity Interim will be a party to that reorganization within the meaning
of Section 368(b) of the Internal Revenue Code ("Tax Opinions"). In rendering
such Tax Opinions, counsel shall be entitled to rely upon representations of
officers of Fidelity and Regions reasonably satisfactory in form and substance
to such counsel. Each of the Parties undertakes and agrees to use its reasonable
efforts to cause the Merger, and to take no action which would cause the Merger
not, to qualify for treatment as a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code for Federal income tax purposes.
Upon their mutual agreement, the Parties shall cooperate in the preparation and
filing of a request for a ruling from the Internal

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Revenue Service as to the matters which are intended to be the subject of the
Tax Opinions, together with such other related matters as Regions shall
reasonably determine ("Tax Ruling").

8.9 AGREEMENTS OF AFFILIATES. Fidelity has disclosed in Section 8.9 of the
Fidelity Disclosure Memorandum all Persons whom it reasonably believes is an
"affiliate" of Fidelity for purposes of Rule 145 under the 1933 Act. Fidelity
shall use its reasonable efforts to cause each such Person to deliver to Regions
not later than thirty (30) days prior to the Effective Time, a written
agreement, substantially in the form of Exhibit 5 to this Agreement, providing
that such Person will not sell, pledge, transfer, or otherwise dispose of the
shares of Fidelity Capital Stock held by such Person except as contemplated by
such agreement or by this Agreement and will not sell, pledge, transfer, or
otherwise dispose of the shares of Regions Common Stock to be received by such
Person upon consummation of the Merger except in compliance with applicable
provisions of the 1933 Act and the rules and regulations thereunder (and Regions
shall be entitled to place restrictive legends upon certificates for shares of
Regions Common Stock issued to affiliates of Fidelity pursuant to this Agreement
to enforce the provisions of this Section 8.9). Regions shall not be required to
maintain the effectiveness of the Registration Statement under the 1933 Act for
the purposes of resale of Regions Common Stock by such affiliates.

8.10 EMPLOYEE BENEFITS AND CONTRACTS. Following the Effective Time,
Regions shall provide generally to officers and employees of the Fidelity
Companies, who at or after the Effective Time become employees of a Regions
Company, employee benefits under employee benefit plans (other than stock option
or other plans involving the potential issuance of Regions Common Stock except
as set forth in this Section 8.10), on terms and conditions which when taken as
a whole are substantially similar to those currently provided by the Regions
Companies to their similarly situated officers and employees. For purposes of
participation and vesting (but not accrual of benefits) under such employee
benefit plans, (i) service under any qualified defined benefit plans of Fidelity
should be treated as service under Regions' qualified defined benefit plans,
(ii) service under any qualified defined contribution plans of Fidelity shall be
treated as service under Regions' qualified defined contribution plans, and
(iii) service under any other employee benefit plans of Fidelity shall be
treated as service under any similar employee benefit plans maintained by
Regions. Regions also shall cause Fidelity and its Subsidiaries to honor on
terms reasonably agreed upon by the Parties all employment, severance,
consulting, and other compensation Contracts disclosed in Section 8.10 of the
Fidelity Disclosure Memorandum to Regions between any Fidelity Company and any
current or former director, officer, or employee thereof, and all provisions for
vested benefits or other vested amounts earned or accrued through the Effective
Time under the Fidelity Benefit Plans.

8.11 INDEMNIFICATION. (a) Subject to the conditions set forth in paragraph
(b) below, for a period of six (6) years after the Effective Time, Regions
shall, and shall cause the Surviving Association to, indemnify, defend, and hold
harmless each person entitled to indemnification from a Fidelity Company (each,
an "Indemnified Party") against all Liabilities arising out of actions or
omissions occurring at or prior to the Effective Time (including, without
limitation, the transactions contemplated by this Agreement) to the same extent
and subject to the conditions set forth in applicable regulations of the OTS
(including all official interpretations thereof) and Fidelity's Charter and
Bylaws, in each case as in effect on the date hereof, including provisions
relating to advances of expenses incurred in the defense of any Litigation.
Without limiting the foregoing, in any case in which approval by the Surviving
Association is required to effectuate any indemnification, Regions shall cause
the Surviving Association to direct, at the election of the Indemnified Party,
that the determination of any such approval shall be made by independent counsel
mutually agreed upon between Regions and the Indemnified Party.

(b) Any Indemnified Party wishing to claim indemnification under paragraph
(a), upon learning of any such Liability or Litigation, shall promptly notify
Regions thereof. In the event of any such Litigation (whether arising before or
after the Effective Time), (i) Regions or the Surviving Association shall have
the right to assume the defense thereof and Regions shall not be liable to such
Indemnified Parties for any legal expenses of other counsel or any other
expenses subsequently incurred by such Indemnified Parties in connection with
the defense thereof, except that if Regions or the Surviving Association elects
not to assume such defense or counsel for the Indemnified Parties advises that
there are substantive issues which raise conflicts of interest between Regions
or the Surviving Association and the Indemnified Parties, the

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Indemnified Parties may retain counsel satisfactory to them, and Regions or the
Surviving Association shall pay all reasonable fees and expenses of such counsel
for the Indemnified Parties promptly as statements therefor are received;
provided, however, that Regions shall be obligated pursuant to this paragraph
(b) to pay for only one firm of counsel for all Indemnified Parties in any
jurisdiction, (ii) the Indemnified Parties will cooperate in the defense of any
such Litigation, and (iii) Regions shall not be liable for any settlement
effected without its prior written consent; and provided further that the
Surviving Association shall not have any obligation hereunder to any Indemnified
Party when and if a court of competent jurisdiction shall determine, and such
determination shall have become final, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by applicable
Law.

ARTICLE NINE

CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE

9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective obligations of
each Party to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by both Parties pursuant to Section 11.6 of
this Agreement:

(A) SHAREHOLDER APPROVAL. The stockholders of Fidelity shall have
approved (i) this Agreement and the Plan of Merger, (ii) the Preferred
Stock Charter Amendment, and (iii) the consummation of the transactions
contemplated hereby, including the Merger, as and to the extent required by
Law or by the provisions of any governing instruments.

(B) REGULATORY APPROVALS. All Consents of, filings and registrations
with, and notifications to, all Regulatory Authorities required for
consummation of the Merger shall have been obtained or made and shall be in
full force and effect and all waiting periods required by Law shall have
expired. No Consent so obtained which is necessary to consummate the
transactions as contemplated hereby shall be conditioned or restricted in a
manner which in the reasonable good faith judgment of the Board of
Directors of Regions would so materially adversely impact the economic
benefits of the transaction as contemplated by this Agreement so as to
render inadvisable the consummation of the Merger.

(C) CONSENTS AND APPROVALS. Each Party shall have obtained any and
all other Consents required for consummation of the Merger (other than
those referred to in Section 9.1(b) of this Agreement) or for the
preventing of any Default under any Contract or Permit of such Party which,
if not obtained or made, is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on such Party.

(D) LEGAL PROCEEDINGS. No court or governmental or regulatory
authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced, or entered any Law or Order (whether temporary,
preliminary, or permanent) or taken any other action which prohibits,
restricts, or makes illegal consummation of the transactions contemplated
by this Agreement.

(E) REGISTRATION STATEMENT. The Registration Statement shall be
effective under the 1933 Act, no stop orders suspending the effectiveness
of the Registration Statement shall have been issued, no action, suit,
proceeding, or investigation by the SEC to suspend the effectiveness
thereof shall have been initiated and be continuing, and all necessary
approvals under state securities Laws or the 1933 Act or 1934 Act relating
to the issuance or trading of the shares of Regions Common Stock issuable
pursuant to the Merger shall have been received.

(F) NASDAQ/NMS LISTING. The shares of Regions Common Stock issuable
pursuant to the Merger shall have been approved for listing on the
Nasdaq/NMS.

(G) TAX MATTERS. Each Party shall have received a copy of the Tax
Opinions referred to in Section 8.8 of this Agreement; provided that if the
Parties have applied for and received a Tax Ruling that is reasonably
acceptable to such Parties, the Parties may agree that the Tax Ruling
satisfies the requirements of this sentence. Each Party shall have
delivered to the other a Certificate, dated as of the

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Effective Time, signed by its chief executive officer and chief financial
officer, to the effect that, to the best knowledge and belief of such
officers, the statement of facts and representations made on behalf of the
management of such Party, presented to the legal counsel delivering the Tax
Opinions (or presented in and in support of the request to the Internal
Revenue Service for the Tax Ruling and presented in and in support of all
supplemental requests, as the case may be) were at the date of such
presentation (or request and any such supplement), true, correct, and
complete, and are on the date of such Certificate, to the extent
contemplated by the presentation (or request and any such supplemental
request), true, correct, and complete, as though such presentation (or
request and any such supplemental request) had been made on the date of
such Certificate.

9.2 CONDITIONS TO OBLIGATIONS OF REGIONS. The obligations of Regions to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by Regions pursuant to Section 11.6(a) of this Agreement:

(A) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Fidelity set forth or referred to in this Agreement shall be
true and correct in all respects as of the date of this Agreement and as of
the Effective Time with the same effect as though all such representations
and warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date), except (i) as expressly contemplated by this
Agreement, or (ii) for inaccuracies in representations and warranties
(other than the representations and warranties set forth in Section 5.3 of
this Agreement, which shall be true in all material respects) that are not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Fidelity.

(B) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
agreements and covenants of Fidelity to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied
with in all material respects.

(C) CERTIFICATES. Fidelity shall have delivered to Regions (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
chief executive officer and its chief financial officer, to the effect that
the conditions of its obligations set forth in Sections 9.2(a) and 9.2(b)
of this Agreement have been satisfied, and (ii) certified copies of
resolutions duly adopted by Fidelity's Board of Directors and stockholders
evidencing the taking of all corporate action necessary to authorize the
execution, delivery, and performance of this Agreement, and the
consummation of the transactions contemplated hereby, all in such
reasonable detail as Regions and its counsel shall request.

(D) CLAIMS LETTERS. Each of the directors and officers of Fidelity
shall have executed and delivered to Regions letters in substantially the
form of Exhibit 6.

(E) POOLING LETTER. Regions shall have received a letter from Ernst &
Young LLP, dated as of the Effective Time, to the effect that the Merger
will qualify for pooling-of-interests accounting treatment under Accounting
Principles Board Opinion No. 16 if closed and consummated in accordance
with this Agreement.

(F) ACCOUNTANT'S LETTERS. Regions shall have received from Evans,
Porter, Bryan & Co., letters dated not more than five (5) days prior to (i)
the date of the Proxy Statement and (ii) the Effective Time, with respect
to certain financial information regarding Fidelity, in form and substance
which is customary in transactions of the nature contemplated by this
Agreement.

(G) LEGAL OPINION. Regions shall have received a written opinion,
dated as of the Effective Time, of counsel to Fidelity, in form reasonably
satisfactory to Regions, which shall cover matters customary in
transactions of this nature.

9.3 CONDITIONS TO OBLIGATIONS OF FIDELITY. The obligations of Fidelity to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by Fidelity pursuant to Section 11.6(b) of this Agreement:

(A) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Regions set forth or referred to in this Agreement shall be
true and correct in all respects as of the date of this Agreement and as of
the Effective Time with the same effect as though all such representations
and warranties had been

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made on and as of the Effective Time (provided that representations and
warranties which are confined to a specified date shall speak only as of
such date), except (i) as expressly contemplated by this Agreement, or (ii)
for inaccuracies in representations and warranties (other than the
representations and warranties set forth in Section 6.3 of this Agreement,
which shall be true in all material respects) that are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
on Regions.

(B) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
agreements and covenants of Regions to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied
with in all material respects.

(C) CERTIFICATES. Regions shall have delivered to Fidelity (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
chief executive officer and its chief financial officer, to the effect that
the conditions of its obligations set forth in Sections 9.3(a) and 9.3(b)
of this Agreement have been satisfied, and (ii) certified copies of
resolutions duly adopted by Region's Board of Directors and Fidelity
Interim's Board of Directors and stockholders evidencing the taking of all
corporate action necessary to authorize the execution, delivery, and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as Fidelity and its
counsel shall request.

(D) FAIRNESS OPINION. Fidelity shall have received a letter from
Sterne Agee & Leach, Inc. or another financial adviser selected by Fidelity
dated not more than ten (10) days subsequent to the date of this Agreement
and to be updated to a date not more than five (5) days prior to the date
of the Proxy Statement, to the effect that in the opinion of such firm, the
consideration to be received in the Merger by the stockholders of Fidelity
is fair to the stockholders of Fidelity from a financial point of view.

(E) LEGAL OPINION. Fidelity shall have received a written opinion,
dated as of the Effective Time, of counsel to Regions, in form reasonably
satisfactory to Fidelity, which shall cover matters customary in
transactions of this nature.

(F) PRICE CONDITION. In addition to the foregoing, Fidelity shall not
be obligated to effect the Merger if both of the following conditions are
satisfied:

(1) the Regions Average Closing Price shall be less than $32.32;
and

(2) the Regions Ratio shall be less than the Index Ratio;

subject, however, to the following three sentences. If Fidelity elects to
exercise its rights pursuant to this Section 9.3(f), it shall give written
notice thereof to Regions within five (5) days after the Determination
Date. During the seven-day period commencing with its receipt of such
notice, Regions shall have the option to elect to increase the Common Stock
Exchange Ratio to equal the lesser of (i) the quotient (rounded to the
nearest one thousandth) obtained by dividing (1) the product of $32.32 and
the Common Stock Exchange Ratio (as then in effect) by (2) the Regions
Average Closing Price and (ii) the quotient (rounded to the nearest one
thousandth) obtained by dividing (1) the product of the Index Ratio and the
Common Stock Exchange Ratio (as then in effect) by (2) the Regions Ratio.
If Regions makes an election contemplated by the preceding sentence, within
such seven-day period, it shall give prompt written notice to Fidelity of
such election and the revised Common Stock Exchange Ratio, whereupon the
Closing condition pursuant to this Section 9.3(f) shall be deemed to be
satisfied, and any references in this Agreement to "Common Stock Exchange
Ratio" shall thereafter be deemed to refer to the Common Stock Exchange
Ratio as adjusted pursuant to this Section 9.3(f).

For purposes of this Section 9.3(f), the following terms shall have
the meanings indicated:

"Determination Date" shall mean the fifth full trading date
immediately preceding the date on which the SEC declares the
Registration Statement effective.

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"Index Group" shall mean the thirteen (13) bank holding companies
listed below, the common stocks of all of which shall be publicly traded
and as to which there shall not have been a publicly announced proposal
since the Starting Date and before the Determination Date for any such
company to be acquired. In the event that the common stock of any such
company ceases to be publicly traded or a proposal to acquire any such
company is announced after the Starting Date and before the
Determination Date, such company will be removed from the Index Group,
and the weights (which have been determined based upon the number of
outstanding shares of common stock) redistributed proportionately for
purposes of determining the Index Price. The thirteen (13) bank holding
companies and the weights attributed to them are as follows:

<TABLE>
<CAPTION>
BANK HOLDING COMPANIES WEIGHTING
--------------------------------------------------------------- ---------
<S> <C>
AmSouth Bancorporation (NYSE).................................. 14.34%
Bank South Corporation (Nasdaq/NMS)............................ 12.96%
Compass Bancshares, Inc. (Nasdaq/NMS).......................... 9.52%
Central Fidelity Banks, Inc. (Nasdaq/NMS)...................... 9.00%
Centura Banks, Inc. (NYSE)..................................... 5.06%
Deposit Guaranty Corporation (Nasdaq/NMS)...................... 4.30%
First American Corporation (Nasdaq/NMS)........................ 6.35%
First Citizens Bancshares, Inc. (Nasdaq/NMS)................... 1.97%
First Commercial Corporation (Nasdaq/NMS)...................... 5.57%
First Tennessee National Corporation (Nasdaq/NMS).............. 7.76%
First Virginia Banks, Inc. (NYSE).............................. 7.85%
Mercantile Bankshares Corp. (Nasdaq/NMS)....................... 11.16%
One Valley Bancorp of West Virginia, Inc. (Nasdaq/NMS)......... 4.16%
---------
100%
---------
</TABLE>

"Index Average Closing Price" shall mean the daily average of the
weighted average (weighted in accordance with the factors listed above)
of the closing prices per common share in the principal markets for such
shares (as reported by The Wall Street Journal or, if not reported
thereby, another authoritative source as chosen by Regions) of the
companies composing the Index Group as of the Determination Date.

"Index Ratio" shall mean the quotient obtained by dividing the
Index Average Closing Price by the Index Starting Price.

"Index Starting Price" shall mean the weighted average (weighted in
accordance with the factors listed above) of the closing prices per
common share in the principal markets for such shares (as reported by
The Wall Street Journal or, if not reported thereby, another
authoritative source as chosen by Regions) of the companies composing
the Index Group as of the Starting Date.

"Regions Average Closing Price" shall mean the average of the daily
closing sales prices of Regions Common Stock as reported on the
Nasdaq/NMS (as reported by The Wall Street Journal or, if not reported
thereby, another authoritative source chosen by Regions) for the ten
(10) consecutive full trading days in which such shares are traded on
the Nasdaq/NMS ending at the close of trading on the Determination Date.

"Regions Ratio" shall mean the quotient obtained by dividing the
Regions Average Closing Price by the Regions Starting Price.

"Regions Starting Price" shall mean $34.625.

"Starting Date" shall mean October 13, 1994.

If Regions or any company belonging to the Index Group declares or
effects a stock dividend, reclassification, recapitalization, split-up,
combination, exchange of shares, or similar transaction between

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the Starting Date and the Determination Date, the prices for the common
stock of Regions and such company shall be appropriately adjusted for the
purposes of applying this Section 9.3(f).

ARTICLE TEN

TERMINATION

10.1 TERMINATION. Notwithstanding any other provision of this Agreement,
and notwithstanding the approval of this Agreement by the stockholders of
Fidelity, this Agreement may be terminated and the Merger abandoned at any time
prior to the Effective Time:

(a) By mutual consent of the Board of Directors of Regions and the
Board of Directors of Fidelity; or

(b) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in this Agreement) in the
event of a breach by the other Party of any representation or warranty
contained in this Agreement which cannot be or has not been cured within
thirty (30) days after the giving of written notice to the breaching Party
of such breach and which breach would provide the non-breaching Party the
ability to refuse to consummate the Merger under the standard set forth in
Section 9.2(a) of this Agreement in the case of Regions and Section 9.3(a)
of this Agreement in the case of Fidelity; or

(c) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in this Agreement) in the
event of a material breach by the other Party of any covenant or agreement
contained in this Agreement which cannot be or has not been cured within
thirty (30) days after the giving of written notice to the breaching Party
of such breach; or

(d) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in this Agreement) in the
event (i) any Consent of any Regulatory Authority required for consummation
of the Merger and the other transactions contemplated hereby shall have
been denied by final nonappealable action of such authority or if any
denial by such authority is not appealed within the time limit for appeal
or, in the case of Regions, if any Consent shall be conditioned in the
manner provided in the last sentence of Section 9.1(b) of this Agreement,
or (ii) the stockholders of Fidelity fail to vote their approval of this
Agreement, the Plan of Merger, the Preferred Stock Charter Amendment, and
the transactions contemplated hereby as required by the HOLA at the
Stockholders' Meeting where the transactions were presented to such
stockholders for approval and voted upon; or

(e) By the Board of Directors of Fidelity or by the Board of Directors
of Regions in the event that the Merger shall not have been consummated by
June 30, 1995, in each case only if the failure to consummate the
transactions contemplated hereby on or before such date is not caused by
any breach of this Agreement by the Party electing to terminate pursuant to
this Section 10.1(e); or

(f) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in this Agreement) in the
event that any of the conditions precedent to the obligations of such Party
to consummate the Merger (other than as provided in the first sentence of
Section 9.1(c) or as contemplated by Section 10.1(d) of this Agreement)
cannot be satisfied or fulfilled by the date specified in Section 10.1(e)
of this Agreement as the date after which such Party may terminate this
Agreement; or

(g) By the Board of Directors of Regions, at any time prior to the
31st day after execution of this Agreement without any Liability in the
event that the review of the Assets, business, financial condition, results
of operations, and prospects of Fidelity undertaken by Regions during such
time period or any of the disclosures contained in the Fidelity Disclosure
Memorandum causes the Board of Directors of Regions to determine, in its
reasonable good faith judgment, that a fact or circumstance exists or is

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reasonably likely to exist or result which materially and adversely impacts
one or more of the economic benefits to Regions of the transactions
contemplated by this Agreement so as to render inadvisable the consummation
of the Merger; or

(h) By the Board of Directors of Regions, at any time prior to the
31st day after execution of this Agreement without any Liability in the
event that Fidelity and Regions have not obtained written agreements or
such other assurance as shall be acceptable to Regions in its sole
discretion from that number of holders of Fidelity Preferred Stock, who
agree to vote their shares of Fidelity Common Stock and Fidelity Preferred
Stock in favor of the Merger, sufficient (as determined by Regions) to
reasonably assure approval of the Merger by the stockholders of Fidelity.

10.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to Section 10.1 of this Agreement, this Agreement shall
become void and have no effect, except that (i) the provisions of this Section
10.2 and Article Eleven and Section 8.5(b) of this Agreement shall survive any
such termination, and (ii) a termination pursuant to Sections 10.1(b), 10.1(c),
or 10.1(f) of this Agreement shall not relieve the breaching Party from
Liability for an uncured willful breach of a representation, warranty, covenant,
or agreement giving rise to such termination. Each of the Support Agreements and
the Preferred Stock Option Agreement shall be governed by its own terms as to
its termination.

10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except this Section 10.3 and
Articles Two, Three, Four, and Eleven and Sections 8.9, 8.10, and 8.11 of this
Agreement.

ARTICLE ELEVEN

MISCELLANEOUS

11.1 DEFINITIONS. Except as otherwise provided herein, the capitalized
terms set forth below (in their singular and plural forms as applicable) shall
have the following meanings:

"ACQUISITION PROPOSAL" with respect to a Party shall mean any tender
offer or exchange offer or any proposal for a merger, acquisition of all of
the stock or assets of, or other business combination involving such Party
or any of its Subsidiaries or the acquisition of a substantial equity
interest in, or a substantial portion of the assets of, such Party or any
of its Subsidiaries.

"AFFILIATE" of a Person shall mean (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by,
or under common control with such Person, (ii) any officer, director,
partner, employer, or direct or indirect beneficial owner of any ten
percent (10%) or greater equity or voting interest of such Person, or (iii)
any other Person for which a Person described in clause (ii) acts in any
such capacity.

"AGREEMENT" shall mean this Agreement and Plan of Reorganization,
including the Plan of Merger and each of the Support Agreements and the
other Exhibits (other than the Preferred Stock Option Agreement) delivered
pursuant hereto and incorporated herein by reference.

"ALLOWANCE" shall have the meaning provided in Section 5.8 of this
Agreement.

"ARTICLES OF COMBINATION" shall mean the Articles of Combination to be
filed with the OTS relating to the Merger as contemplated by Section 1.3 of
this Agreement.

"ASSETS" of a Person shall mean all of the assets, properties,
businesses, and rights of such Person of every kind, nature, character, and
description, whether real, personal, or mixed, tangible or intangible,
accrued or contingent, or otherwise relating to or utilized in such
Person's business, directly or indirectly, in whole or in part, whether or
not carried on the books and records of such Person, and whether or not
owned in the name of such Person or any Affiliate of such Person and
wherever located.

"BHC ACT" shall mean the federal Bank Holding Company Act of 1956, as
amended.

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"BUSINESS COMBINATION" shall mean an acquisition of, merger or
combination with, share exchange involving any class of voting stock of,
sale of more than fifty percent (50%) of the consolidated assets by, or
other business combination involving, or tender offer for or sale or
issuance of any equity securities involving an acquisition by a third-party
of more than fifty percent (50%) of the voting stock of, Fidelity, other
than the formation of a newly organized holding company for Fidelity in
which the shares of Fidelity Capital Stock are exchanged for shares of the
holding company on a basis that does not cause the respective beneficial
interests of each stockholder to change or transactions with a Regions
Company.

"CLOSING" shall mean the closing of the transactions contemplated
hereby, as described in Section 1.2 of this Agreement.

"COMMON STOCK EXCHANGE RATIO" shall have the meaning provided in
Section 3.1(c) of this Agreement.

"CONSENT" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.

"CONTRACT" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding, or undertaking of
any kind or character, or other document to which any Person is a party or
that is binding on any Person or its capital stock, Assets, or business.

"DEFAULT" shall mean (i) any breach or violation of or default under
any Contract, Order, or Permit, (ii) any occurrence of any event that with
the passage of time or the giving of notice or both would constitute a
breach or violation of or default under any Contract, Order, or Permit, or
(iii) any occurrence of any event that with or without the passage of time
or the giving of notice would give rise to a right to terminate or revoke,
change the current terms of, or renegotiate, or to accelerate, increase, or
impose any Liability under, any Contract, Order, or Permit.

"DELAWARE GCL" shall mean the Delaware General Corporation Law.

"EFFECTIVE TIME" shall mean the date and time at which the Merger
becomes effective as defined in Section 1.3 of this Agreement.

"ENVIRONMENTAL LAWS" shall mean all Laws which are administered,
interpreted, or enforced by the United States Environmental Protection
Agency and state and local agencies with jurisdiction over pollution or
protection of the environment.

"ERISA PLAN" shall have the meaning provided in Section 5.13 of this
Agreement.

"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.

"EXCHANGE AGENT" shall have the meaning provided in Section 4.1 of
this Agreement.

"EXHIBITS" 1 through 6, inclusive, shall mean the Exhibits so marked,
copies of which are attached to this Agreement. Such Exhibits are hereby
incorporated by reference herein and made a part hereof, and may be
referred to in this Agreement and any other related instrument or document
without being attached hereto.

"FDIC" shall mean the Federal Deposit Insurance Corporation.

"FIDELITY BENEFIT PLANS" shall have the meaning set forth in Section
5.13 of this Agreement.

"FIDELITY CAPITAL STOCK" shall mean, collectively, the Fidelity Common
Stock, the Fidelity Preferred Stock, and any other class or series of
capital stock of Fidelity.

"FIDELITY COMMON STOCK" shall mean the $1.00 par value common stock of
Fidelity.

"FIDELITY COMPANIES" shall mean, collectively, Fidelity and all
Fidelity Subsidiaries.

"FIDELITY DISCLOSURE MEMORANDUM" shall mean the written information
entitled "Fidelity Federal Savings Bank Disclosure Memorandum" delivered
within seven (7) days after the date of this

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Agreement to Regions describing in reasonable detail the matters contained
therein and, with respect to each disclosure made therein, specifically
referencing each Section of this Agreement under which such disclosure is
being made. Information disclosed with respect to one Section shall not be
deemed to be disclosed for purposes of any other Section not specifically
referenced with respect thereto.

"FIDELITY FINANCIAL STATEMENTS" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of Fidelity
as of June 30, 1994, and as of December 31, 1993 and 1992, and the related
statements of income, changes in stockholders' equity, and cash flows
(including related notes and schedules, if any) for the six months ended
June 30, 1994, and for each of the three fiscal years ended December 31,
1993, 1992, and 1991, as disclosed by Fidelity in the Fidelity Disclosure
Memorandum, and (ii) the consolidated balance sheets of Fidelity (including
related notes and schedules, if any) and related statements of income,
changes in stockholders' equity, and cash flows (including related notes
and schedules, if any) with respect to periods ended subsequent to June 30,
1994.

"FIDELITY INTERIM COMMON STOCK" shall mean the $1.00 par value common
stock of Fidelity Interim.

"FIDELITY PREFERRED STOCK" shall mean the Class A preferred stock, par
value $1.00 per share, of Fidelity.

"FIDELITY SUBSIDIARIES" shall mean the Subsidiaries of Fidelity, which
shall include the Fidelity Subsidiaries described in Section 5.4 of this
Agreement and any corporation, bank, savings association, or other
organization acquired as a Subsidiary of Fidelity in the future and owned
by Fidelity at the Effective Time.

"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.

"HAZARDOUS MATERIAL" shall mean any pollutant, contaminant, or
hazardous substance within the meaning of the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. sec. 9601 et seq., or
any similar federal, state, or local Law.

"HOLA" shall mean the Home Owners' Loan Act of 1933, as amended.

"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.

"KNOWLEDGE" as used with respect to a Person shall mean the knowledge
after due inquiry of the chairman, president, chief financial officer,
chief accounting officer, chief credit officer, general counsel, any
assistant or deputy general counsel, or any senior or executive vice
president of such Person.

"LAW" shall mean any code, law, ordinance, regulation, reporting, or
licensing requirement, rule, or statute applicable to a Person or its
Assets, Liabilities, or business, including, without limitation, those
promulgated, interpreted, or enforced by any of the Regulatory Authorities.

"LIABILITY" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost, or expense (including,
without limitation, costs of investigation, collection, and defense),
claim, deficiency, guaranty, or endorsement of or by any Person (other than
endorsements of notes, bills, checks, and drafts presented for collection
or deposit in the ordinary course of business) of any type, whether
accrued, absolute, or contingent, liquidated or unliquidated, matured or
unmatured, or otherwise.

"LIEN" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title
retention, or other security arrangement, or any adverse right or interest,
charge, or claim of any nature whatsoever of, on, or with respect to any
property or property interest, other than (i) Liens for current property
Taxes not yet due and payable, (ii) for depository institutions, pledges to
secure deposits and other Liens incurred in the ordinary course of the
banking business, and (iii) Liens which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on a Party.

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"LITIGATION" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, demand letter, governmental or
other examination or investigation, hearing, inquiry, administrative or
other proceeding, or notice (written or oral) by any Person alleging
potential Liability, but shall not include regular, periodic examinations
of depository institutions and their Affiliates by Regulatory Authorities.

"LOAN PROPERTY" shall mean any property owned by the Party in question
or by any of its Subsidiaries or in which such Party or Subsidiary holds a
security interest, and, where required by the context, includes the owner
or operator of such property, but only with respect to such property.

"MATERIAL ADVERSE EFFECT" on a Party shall mean an event, change, or
occurrence which, together with any other event, change, or occurrence, has
a material adverse impact on (i) the financial position, business, or
results of operations of such Party and its Subsidiaries, taken as a whole,
or (ii) the ability of such Party to perform its obligations under this
Agreement or to consummate the Merger or the other transactions
contemplated by this Agreement, provided that "material adverse impact"
shall not be deemed to include the impact of (x) changes in banking and
similar Laws of general applicability or interpretations thereof by courts
or governmental authorities, or (y) changes in GAAP or regulatory
accounting principles generally applicable to banks and savings
associations and their holding companies.

"MATERIAL" for purposes of this Agreement shall be determined in light
of the facts and circumstances of the matter in question; provided that any
specific monetary amount stated in this Agreement shall determine
materiality in that instance.

"MERGER" shall mean the merger of Fidelity Interim with and into
Fidelity referred to in Section 1.1 of this Agreement.

"NASD" shall mean the National Association of Securities Dealers, Inc.

"NASDAQ/NMS" shall mean the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotations System.

"1933 ACT" shall mean the Securities Act of 1933, as amended.

"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended.

"ORDER" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or
writ of any federal, state, local, or foreign or other court, arbitrator,
mediator, tribunal, administrative agency, or Regulatory Authority.

"OTS" shall mean the Office of Thrift Supervision (including its
predecessor, the Federal Home Loan Bank Board).

"PARTICIPATION FACILITY" shall mean any facility in which the Party in
question or any of its Subsidiaries participates in the management and,
where required by the context, includes the owner or operator or such
property, but only with respect to such property.

"PARTY" shall mean either Fidelity or Regions and "PARTIES" shall mean
both Fidelity and Regions.

"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a party
or that is or may be binding upon or inure to the benefit of any Person or
its securities, Assets, or business.

"PERSON" shall mean a natural person or any legal, commercial, or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting
in a representative capacity.

"PLAN OF MERGER" shall mean the Plan of Merger and Combination, in
substantially the form of Exhibit 4 to this Agreement, to be entered into
by Fidelity and, upon its organization, Fidelity Interim setting forth the
terms of the Merger.

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"PREFERRED STOCK OPTION AGREEMENT" shall mean the Preferred Stock
Option Agreement of even date herewith issued to Regions by Fidelity,
substantially in the form of Exhibit 3 to this Agreement.

"PROXY STATEMENT" shall mean the proxy statement used by Fidelity to
solicit the approval of its stockholders of the transactions contemplated
by this Agreement, Plan of Merger, and the Preferred Stock Charter
Amendment and shall include the prospectus of Regions relating to the
shares of Regions Common Stock to be issued to the stockholders of
Fidelity.

"REGIONS COMMON STOCK" shall mean the $.625 par value common stock of
Regions.

"REGIONS COMPANIES" shall mean, collectively, Regions and all Regions
Subsidiaries.

"REGIONS DISCLOSURE MEMORANDUM" shall mean the written information
entitled "Regions Financial Corporation Disclosure Memorandum" delivered
prior to the date of this Agreement to Fidelity describing in reasonable
detail the matters contained therein and, with respect to each disclosure
made therein, specifically referencing each Section of this Agreement under
which such disclosure is being made. Information disclosed with respect to
one Section shall not be deemed to be disclosed for purposes of any other
Section not specifically referenced with respect thereto.

"REGIONS FINANCIAL STATEMENTS" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any) of
Regions as of June 30, 1994, and as of December 31, 1993 and 1992, and the
related statements of income, changes in stockholders' equity, and cash
flows (including related notes and schedules, if any) for the six months
ended June 30, 1994, and each of the three years ended December 31, 1993,
1992, and 1991, as filed by Regions in SEC Documents and (ii) the
consolidated statements of condition of Regions (including related notes
and schedules, if any) and related statements of income, changes in
stockholders' equity, and cash flows (including related notes and
schedules, if any) included in SEC Documents filed with respect to periods
ended subsequent to June 30, 1994.

"REGIONS SUBSIDIARIES" shall mean the Subsidiaries of Regions.

"REGISTRATION STATEMENT" shall mean the Registration Statement on Form
S-4, or other appropriate form, filed with the SEC by Regions under the
1933 Act in connection with the transactions contemplated by this
Agreement.

"REGULATORY AUTHORITIES" shall mean, collectively, the Federal Trade
Commission, the United States Department of Justice, the Board of the
Governors of the Federal Reserve System, the OTS, the Office of the
Comptroller of the Currency, the FDIC, all state regulatory agencies having
jurisdiction over the Parties and their respective Subsidiaries, the NASD,
and the SEC.

"SEC DOCUMENTS" shall mean all reports and registration statements
filed, or required to be filed, by a Party or any of its Subsidiaries with
any Regulatory Authority pursuant to the Securities Laws.

"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of
1940, as amended, the Trust Indenture Act of 1939, as amended, and the
rules and regulations of any Regulatory Authority promulgated thereunder
including the regulations of the OTS included in 12 C.F.R. Part 563g.

"STOCKHOLDERS' MEETING" shall mean the meeting of the stockholders of
Fidelity to be held pursuant to Section 8.1 of this Agreement, including
any adjournment or adjournments thereof.

"SUBSIDIARY" OR COLLECTIVELY "SUBSIDIARIES" shall mean all those
corporations, banks, associations, or other entities of which the entity in
question owns or controls fifty percent (50%) or more of the outstanding
equity securities either directly or through an unbroken chain of entities
as to each of which fifty percent (50%) or more of the outstanding equity
securities is owned directly or indirectly by its Regions; provided,
however, there shall not be included any such entity acquired through
foreclosure or any such entity the equity securities of which are owned or
controlled in a fiduciary capacity.

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"SUPPORT AGREEMENTS" shall mean the various Support Agreements, each
in substantially the form of Exhibit 1 to this Agreement, dated of even
date herewith and issued to Regions by the persons named in Exhibit 2 to
this Agreement.

"SURVIVING ASSOCIATION" shall mean Fidelity, as the surviving savings
association resulting from the Merger.

"TAX" OR "TAXES" shall mean any federal, state, county, local or
foreign income, profits, franchise, gross receipts, payroll, sales,
employment, use, property, withholding, excise, occupancy, and other taxes,
assessments, charges, fares, or impositions, of any nature whatsoever,
including interest, penalties, and additions imposed thereon or with
respect thereto.

11.2 EXPENSES. (a) Except as otherwise provided in this Section 11.2, each
of the Parties shall bear and pay all direct costs and expenses incurred by it
or on its behalf in connection with the transactions contemplated hereunder,
including filing, registration and application fees, printing fees, and fees and
expenses of its own financial or other consultants, investment bankers,
accountants, and counsel, except that Regions shall bear and pay the filing fees
payable in connection with the Registration Statement and the Proxy Statement
and printing costs incurred in connection with the printing of the Registration
Statement and the Proxy Statement.

(b) Notwithstanding the foregoing, if, after the date of this Agreement and
within twelve (12) months following:

(1) any termination of this Agreement

(i) by Regions pursuant to Sections 10.1(b) (but only in the case
of a willful breach by Fidelity of a representation or warranty),
10.1(c) (but only in the case of a willful breach by Fidelity of a
covenant or agreement), or 10.1(f) (but only on the basis of the failure
to satisfy any of the conditions enumerated in Sections 9.1(a) (but only
in the event the Stockholders' Meeting shall have been cancelled prior
to the termination of this Agreement or Fidelity's Board of Directors
shall have withdrawn or modified in a manner adverse to Regions the
recommendation of Fidelity's Board of Directors with respect to the
Merger or this Agreement, in each case after it shall have been publicly
disclosed that any Person made, or disclosed an intention to make, an
Acquisition Proposal) and (d) or 9.2(a) (but only in the case of a
willful breach by Fidelity of a representation or warranty), (b) (but
only in the case of a willful breach by Fidelity of a covenant or
agreement), or (c) of this Agreement) of this Agreement, or

(ii) by Fidelity pursuant to Section 10.1(f) (but only on the basis
of the failure to satisfy any of the conditions enumerated in Section
9.1(a) (but only in the event the Stockholders' Meeting shall have been
cancelled prior to the termination of this Agreement or Fidelity's Board
of Directors shall have withdrawn or modified in a manner adverse to
Regions the recommendation of Fidelity's Board of Directors with respect
to the Merger or this Agreement, in each case after it shall have been
publicly disclosed that any Person made, or disclosed an intention to
make, an Acquisition Proposal) or (d) or 9.3(d)) of this Agreement, or

(iii) by either Party pursuant to Section 10.1(d)(ii) (but only in
the event the Stockholders' Meeting shall have been cancelled prior to
the termination of this Agreement or Fidelity's Board of Directors shall
have withdrawn or modified in a manner adverse to Regions the
recommendation of Fidelity's Board of Directors with respect to the
Merger or this Agreement, in each case after it shall have been publicly
disclosed that any Person made, or disclosed an intention to make, an
Acquisition Proposal) of this Agreement, or

(2) failure to consummate the Merger by reason of any failure to
satisfy the conditions enumerated in Sections 9.1(a) (but only in the event
the Stockholders' Meeting shall have been cancelled prior to the
termination of this Agreement or Fidelity's Board of Directors shall have
withdrawn or modified in a manner adverse to Regions the recommendation of
Fidelity's Board of Directors with respect to the Merger or this Agreement,
in each case after it shall have been publicly disclosed that any Person
made,

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or disclosed an intention to make, an Acquisition Proposal) or (d), 9.2(a)
(but only in the case of a willful breach by Fidelity of a representation
or warranty), (b) (but only in the case of a willful breach by Fidelity of
a covenant or agreement), or (c) or 9.3(d) of this Agreement,

Fidelity covenants, acknowledges, and agrees that it shall be a specific,
absolute, and unconditional binding condition to Fidelity's entering into a
letter of intent, agreement in principle, or definitive agreement (whether or
not considered binding, non-binding, or conditional) with respect to, or
recommending stockholder acceptance of, any Business Combination with any
third-party, that such third-party that is a party to the Business Combination
shall pay to Regions, not later than the consummation of the Business
Combination an amount in cash equal to $400,000, which sum represents the direct
costs and expenses (including, without limitation, fees and expenses of Region's
financial or other consultants, printing costs, investment bankers, accountants,
and counsel) incurred by Regions in negotiating and carrying out the
transactions contemplated by this Agreement, and the indirect costs and expenses
incurred by Regions in connection with the transactions contemplated by this
Agreement including Region's management time devoted to negotiation and
preparation for such transaction. In the event such third-party shall refuse to
pay such amounts, the amounts shall be an obligation of Fidelity and shall be
paid by Fidelity promptly upon notice to Fidelity by Regions.

(c) Nothing contained in this Section 11.2 shall constitute or shall be
deemed to constitute liquidated damages for the willful breach by a Party of the
terms of this Agreement or otherwise limit the rights of the nonbreaching Party.

11.3 BROKERS AND FINDERS. Except for Sterne, Agee & Leach, Inc. as to
Fidelity, each of the Parties represents and warrants that neither it nor any of
its officers, directors, employees, or Affiliates has employed any broker or
finder or incurred any Liability for any financial advisory fees, investment
bankers' fees, brokerage fees, commissions, or finders' fees in connection with
this Agreement or the transactions contemplated hereby. In the event of a claim
by any broker or finder based upon his or its representing or being retained by
or allegedly representing or being retained by Fidelity or Regions, each of
Fidelity and Regions, as the case may be, agrees to indemnify and hold the other
Party harmless of and from any Liability in respect of any such claim.

11.4 ENTIRE AGREEMENT. Except as otherwise expressly provided herein, this
Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. Nothing in this Agreement,
expressed or implied, is intended to, or shall, confer upon any Person, other
than the Parties or their respective successors, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, other than as
provided in Section 8.11 of this Agreement.

11.5 AMENDMENTS. To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the approval
of the Boards of Directors of each of the Parties; provided, however, that after
any such approval by the holders of Fidelity Capital Stock, there shall be made
no amendment decreasing the consideration to be received by Fidelity
stockholders without the further approval of such stockholders.

11.6 WAIVERS. (a) Prior to or at the Effective Time, Regions, acting
through its Board of Directors, chief executive officer, vice chairman, or other
authorized officer, shall have the right to waive on behalf of it and Fidelity
Interim any Default in the performance of any term of this Agreement by
Fidelity, to waive or extend the time for the compliance or fulfillment by
Fidelity of any and all of its obligations under this Agreement, and to waive
any or all of the conditions precedent to the obligations of Regions under this
Agreement, except any condition which, if not satisfied, would result in the
violation of any Law. No such waiver shall be effective unless in writing signed
by a duly authorized officer of Regions.

(b) Prior to or at the Effective Time, Fidelity, acting through its Board
of Directors, chief executive officer, or other authorized officer, shall have
the right to waive any Default in the performance of any term of this Agreement
by Regions, to waive or extend the time for the compliance or fulfillment by
Regions or Fidelity Interim of any and all of their obligations under this
Agreement, and to waive any or all of the conditions precedent to the
obligations of Fidelity under this Agreement, except any condition which, if not

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satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of Fidelity.

11.7 ASSIGNMENT. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests, or obligations hereunder shall be
assigned by any Party hereto (whether by operation of Law or otherwise) without
the prior written consent of the other Party. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by, the Parties and their respective successors and assigns.

11.8 NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage pre-paid, or by
courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so received:

<TABLE>
<S> <C>
Fidelity: Fidelity Federal Savings Bank
500 E. Walnut Avenue
Dalton, Georgia 30720
Telecopy Number: (706) 275-6832
Attention: Richard G. Rhodes, Sr.
President and Chief Executive Officer
Copy to Counsel: Kilpatrick & Cody
1100 Peachtree Street
Atlanta, Georgia 30309-4530
Telecopy Number: (404) 815-6555
Attention: Hilary P. Jordan
Regions: Regions Financial Corporation
417 North 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7571
Attention: Richard D. Horsley
Vice Chairman and Executive Financial
Officer
Copy to Counsel: Regions Financial Corporation
417 North 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7099
Attention: Samuel E. Upchurch, Jr.
General Counsel and Corporate Secretary
</TABLE>

11.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the Laws of the State of Delaware, without regard to any
applicable conflicts of Laws, except to the extent that the federal laws of the
United States may apply to the Merger.

11.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

11.11 CAPTIONS. The captions contained in this Agreement are for reference
purposes only and are not part of this Agreement.

11.12 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.

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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.

<TABLE>
<S> <C>
ATTEST: FIDELITY FEDERAL SAVINGS BANK

By: /s/ WILLIAM J. CHAPPELL By: /s/ RICHARD G. RHODES, SR.
----------------------------------------- -----------------------------------------
William J. Chappell Richard G. Rhodes, Sr.
Secretary President and Chief Executive Officer

[CORPORATE SEAL]

ATTEST: REGION FINANCIAL CORPORATION

By: /s/ SAMUEL E. UPCHURCH, JR. By: /s/ RICHARD D. HORSLEY
----------------------------------------- -----------------------------------------
Samuel E. Upchurch, Jr. Richard D. Horsley
Corporate Secretary Vice Chairman and Executive Financial
Officer

[CORPORATE SEAL]
</TABLE>

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APPENDIX B

PLAN OF MERGER AND COMBINATION

THIS PLAN OF MERGER AND COMBINATION (this "Plan of Merger") is made and
entered into as of the day of , 1994, by and between FIDELITY
FEDERAL SAVINGS BANK ("Fidelity"), a federal stock savings bank organized and
existing under the laws of the United States, with its principal office located
in Dalton, Georgia, and FIDELITY INTERIM FEDERAL SAVINGS BANK ("Fidelity
Interim"), an interim federal stock savings bank organized and existing under
the laws of the United States, with its principal office located in Dalton,
Georgia.

PREAMBLE

Each of the Boards of Directors of Fidelity and Fidelity Interim deems it
advisable and in the best interests of their respective institutions and the
stockholders thereof for Fidelity Interim to be merged into Fidelity (the
"Merger") on the terms and conditions provided in this Plan of Merger. This Plan
of Merger is made and entered into pursuant to an Agreement and Plan of
Reorganization, dated as of October 17, 1994, by and between Fidelity and
Regions Financial Corporation ("Regions"). At the Effective Time of the Merger,
the outstanding shares of the capital stock of Fidelity shall be converted into
the right to receive shares of the common stock of Regions (subject to certain
exceptions as set forth in the Agreement). As a result, stockholders of Fidelity
shall become stockholders of Regions and Fidelity shall continue to conduct its
business and operations as a wholly-owned first tier subsidiary of Regions. It
is intended that the Merger (i) for federal income tax purposes shall qualify as
a "reorganization" within the meaning of Section 368(a) of the Code, and that
the exchange of Fidelity Capital Stock (as defined herein), to the extent
exchanged for Regions Common Stock (as defined herein), will not give rise to
gain or loss to the holders of Fidelity Capital Stock with respect to such
exchange, and (ii) for accounting purposes shall be accounted for as a "pooling
of interests."

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Fidelity and Fidelity Interim
hereby make, adopt, and approve this Plan of Merger in order to set forth the
terms and conditions of the merger of Fidelity Interim into Fidelity.

ARTICLE ONE

DEFINITIONS

Except as otherwise provided herein, the capitalized terms set forth below
(in their singular and plural forms, as applicable) shall have the following
meanings:

"Agreement" shall mean the Agreement and Plan of Reorganization, dated
as of October 17, 1994, by and between Fidelity and Regions, including each
of the supporting agreements and the other exhibits delivered pursuant
thereto and incorporated therein by reference.

"Articles of Combination" shall mean the Articles of Combination to be
executed by Fidelity and Fidelity Interim and filed with the OTS in
accordance with Section 5.2 of this Plan of Merger.

"Closing" shall mean the closing of the transactions contemplated
hereunder, as described in Section 5.1 of this Plan of Merger.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

"Common Stock Exchange Ratio" shall have the meaning specified in
Section 3.1(c) of this Plan of Merger.

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"Effective Time" shall mean the date and time on which the Merger
contemplated by this Plan of Merger becomes effective pursuant to the laws
of the United States, as defined in Section 5.2 of this Plan of Merger.

"Exchange Agent" shall have the meaning specified in Section 4.1 of
this Plan of Merger.

"Fidelity Capital Stock" shall mean, collectively, the Fidelity Common
Stock, the Fidelity Preferred Stock, and any other class or series of
capital stock of Fidelity.

"Fidelity Common Stock" shall mean the $1.00 par value common stock of
Fidelity.

"Fidelity Companies" shall mean, collectively, Fidelity and all
Fidelity subsidiaries.

"Fidelity Interim Common Stock" shall mean the $1.00 par value common
stock of Fidelity Interim.

"Fidelity Preferred Stock" shall mean the Class A preferred stock, par
value $1.00 per share, of Fidelity.

"Merger" shall mean the merger of Fidelity Interim with and into
Fidelity, as provided in Article Two of this Plan of Merger.

"Nasdaq/NMS" shall mean the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotations System.

"OTS" shall mean the Office of Thrift Supervision (including its
predecessor, the Federal Home Loan Bank Board).

"Regions Common Stock" shall mean the $.625 par value common stock of
Regions.

"Regions Companies" shall mean, collectively, Regions and all Regions
subsidiaries.

"Surviving Association" shall mean Fidelity, as the surviving savings
association resulting from the Merger.

ARTICLE TWO

TERMS OF MERGER

2.1 MERGER. Subject to the terms of this Plan of Merger and the Agreement,
at the Effective Time, Fidelity Interim shall be merged with and into Fidelity
in accordance with and with the effect provided in Title 12, United States Code,
Section 1467a(t). Fidelity shall be the Surviving Association resulting from the
Merger and shall be a wholly-owned, first-tier subsidiary of Regions and shall
continue to be governed by the laws of the United States as a federal stock
savings bank operating under the name of "Fidelity Federal Savings Bank." The
Merger shall be consummated pursuant to the terms of this Plan.

2.2 SURVIVING ASSOCIATION. The business of the Surviving Association from
and after the Effective Time shall continue to be that of a federal stock
savings association organized under the laws of the United States. The business
shall be conducted from its main office located in Dalton, Georgia and its
legally established branches, which shall also include the main office and all
branches, whether in operation or approved but unopened, at the Effective Time.

2.3 ASSUMPTION OF RIGHTS. At the Effective Time, the separate existence
and corporate organization of Fidelity Interim shall be merged into and
continued in the Surviving Association. All rights, franchises, and interests of
both Fidelity and Fidelity Interim in and to every type of property (real,
personal, and mixed), and all choses in action of both Fidelity and Fidelity
Interim shall be transferred to and vested in the Surviving Association without
any deed or other transfer. The Surviving Association, upon consummation of the
Merger and without any order or other action on the part of any court or
otherwise, shall hold and enjoy all rights of property, franchises, and
interests, including appointments, designations, and nominations, and all other
rights and interests as trustee, executor, administrator, registrar of stocks
and bonds, guardian of estates, assignee,

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receiver, and committee of estates of incompetent persons, and in every other
fiduciary capacity, in the same manner and to the same extent as such rights,
franchises, and interests were held or enjoyed by either Fidelity or Fidelity
Interim at the Effective Time.

2.4 ASSUMPTION OF LIABILITIES. All liabilities and obligations of both
Fidelity and Fidelity Interim of every kind and description (including without
limitation the liquidation account established by Fidelity in connection with
its conversion to the stock form of organization, as in existence at the
Effective Time) shall be assumed by the Surviving Association, and the Surviving
Association shall be bound thereby in the same manner and to the same extent
that Fidelity and Fidelity Interim were so bound at the Effective Time.

2.5 SAVINGS ACCOUNTS AND DEPOSITS. All savings accounts and deposits of
Fidelity and Fidelity Interim shall be and continue to be savings accounts and
deposits of the Surviving Association, without change in their respective terms,
maturity, minimum required balances or withdrawal value. As of the Effective
Time, each savings account or deposit of Fidelity or Fidelity Interim shall be
considered for dividend or interest purposes as a savings account or deposit of
the Surviving Association from the time said savings account or deposit was
opened in Fidelity and Fidelity Interim and at all times thereafter until such
account or deposit ceases to be a savings account or deposit of the Surviving
Association.

2.6 CHARTER. The Charter of Fidelity in effect immediately prior to the
Effective Time shall be the Charter of the Surviving Association until otherwise
amended or repealed.

2.7 BYLAWS. The Bylaws of Fidelity Interim in effect immediately prior to
the Effective Time shall be the Bylaws of the Surviving Association until
otherwise amended or repealed.

2.8 BOARD OF DIRECTORS. Upon the Effective Time, the Board of Directors of
the Surviving Association shall consist initially of the following eleven (11)
individuals, who shall include the directors of Fidelity in office immediately
prior to the Effective Time and shall serve for one-year terms:

<TABLE>
<CAPTION>
NAME RESIDENCE ADDRESS
- ------------------------ ------------------------
<S> <C> <C>
Ernest M. Acree, Jr......................................... 606 Wilkins Street
Dalton, GA 30720
William J. Chappell......................................... 603 Wilkins Street
Dalton, GA 30720
James M. Gowin.............................................. 1700 Greesan Road
Rocky Face, GA 30740
Jim T. Griffin.............................................. 526 Varnell Road
Tunnell Hill, GA 30755
L. Hugh Kemp................................................ 508 Loveman Lane
Dalton, GA 30720
Thomas M. Kinnamon.......................................... 100 Kyle Lane
Dalton, GA 30720
Arthur B. E. Lauman......................................... 449 Foster Road
Dalton, GA 30720
Leonard Lorberbaum.......................................... 1026 E. Lakeshore Drive
Dalton, GA 30720
Richard G. Rhodes, Sr....................................... 111 Broadview Terrace
Dalton, GA 30720
Donald R. Thomas, M.D....................................... 184 Haig Mill Road
Dalton, GA 30721
Roger Williams.............................................. 132 Huntington Road
Dalton, GA 30720
</TABLE>

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2.9 OFFICES. The main office of the Surviving Association after the
Effective Time will be located at the main office of the Surviving Association
in Georgia. The Surviving Association's offices will after the Effective Time be
located at the locations set forth in Exhibit A to this Plan of Merger.

ARTICLE THREE

MANNER OF CONVERTING SHARES

(a) Each share of Regions Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding
from and after the Effective Time.

(b) Each share of Fidelity Interim Common Stock issued and outstanding
at the Effective Time shall be converted into and exchanged for one share
of Fidelity Common Stock.

(c) Each share of Fidelity Common Stock (excluding shares held by any
Fidelity Company or by any Regions Company, which shares shall be cancelled
pursuant to Section 3.3 of this Plan of Merger, in each case other than in
a fiduciary capacity or in satisfaction of debts previously contracted)
issued and outstanding at the Effective Time shall cease to be outstanding
and shall be converted into and exchanged for .449 of a share of Regions
Common Stock, subject to possible adjustment as provided in Section 9.3(f)
of the Agreement (the "Common Stock Exchange Ratio"). To the extent that
the Common Stock Exchange Ratio is adjusted pursuant to Section 9.3(f) of
the Agreement, references in this Plan of Merger to the "Common Stock
Exchange Ratio" shall thereafter be deemed to refer to the Common Stock
Exchange Ratio, as adjusted pursuant to Section 9.3(f) of the Agreement.

(d) Each share of Fidelity Preferred Stock (excluding shares held by
any Fidelity Company or by any Regions Company, which shares shall be
cancelled pursuant to Section 3.3 of this Plan of Merger, in each case
other than in a fiduciary capacity or in satisfaction of debts previously
contracted) issued and outstanding at the Effective Time shall cease to be
outstanding and shall be converted into and exchanged for that number of
shares of Regions Common Stock equal to the product (rounded to the nearest
one-thousandth) of (i) the Common Stock Exchange Ratio and (ii) the number
of shares of Fidelity Common Stock into which such share of Fidelity
Preferred Stock was convertible immediately prior to the Effective Time (it
being agreed to by the Parties that, as of the date of the Agreement, each
share of Fidelity Preferred Stock is convertible into 1.0 share of Fidelity
Common Stock).

3.3 SHARES HELD BY FIDELITY OR REGIONS. Each of the shares of Fidelity
Capital Stock held by any Fidelity Company or by any Regions Company, in each
case other than in a fiduciary capacity or in satisfaction of debts previously
contracted, shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.

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deliver the consideration to which such holder of shares of Fidelity Capital
Stock is entitled under this Article Three (without interest) upon surrender by
such holder of the certificate or certificates representing shares of Fidelity
Capital Stock held by such holder. Fidelity will establish an escrow account
with an amount sufficient to satisfy the maximum aggregate payment that may be
required to be paid to dissenting stockholders. Upon satisfaction of all claims
of dissenting stockholders, the remaining escrowed amount, reduced by payment of
the fees and expenses of the escrow agent, will be returned to Fidelity.

3.5 FRACTIONAL SHARES. Notwithstanding any other provision of this Plan of
Merger, each holder of shares of Fidelity Capital Stock exchanged pursuant to
the Merger who would otherwise have been entitled to receive a fraction of a
share of Regions Common Stock (after taking into account all certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to such fractional part of a share of Regions
Common Stock multiplied by the market value of one share of Regions Common Stock
at the Effective Time. The market value of one share of Regions Common Stock at
the Effective Time shall be the closing price of such common stock as reported
on the Nasdaq/NMS (as reported by The Wall Street Journal or, if not reported
thereby, any other authoritative source chosen by Regions) on the last trading
day preceding the Effective Time. No such holder will be entitled to dividends,
voting rights, or any other rights as a stockholder in respect of any fractional
shares.

ARTICLE FOUR

EXCHANGE OF SHARES

4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, Regions shall
cause First Alabama Bank as the exchange agent (the "Exchange Agent") to mail to
the former stockholders of Fidelity appropriate transmittal materials (which
shall specify that delivery shall be effected, and risk of loss and title to the
certificates theretofore representing shares of Fidelity Capital Stock shall
pass, only upon proper delivery of such certificates to the Exchange Agent).
After the Effective Time, each holder of shares of Fidelity Capital Stock (other
than shares to be canceled pursuant to Section 3.3 of this Plan of Merger)
issued and outstanding at the Effective Time shall surrender the certificate or
certificates or warrant representing such shares, to the Exchange Agent and
shall promptly upon surrender thereof receive in exchange therefor the
consideration provided in Section 3.1 of this Plan of Merger, together with all
undelivered dividends or distributions in respect of such shares (without
interest thereon) pursuant to Section 4.2 of this Plan of Merger. To the extent
required by Section 3.5 of this Plan of Merger, each holder of shares of
Fidelity Capital Stock issued and outstanding at the Effective Time also shall
receive, upon surrender of the certificate or certificates representing such
shares, cash in lieu of any fractional share of Regions Common Stock to which
such holder may be otherwise entitled (without interest). Regions shall not be
obligated to deliver the consideration to which any former holder of Fidelity
Capital Stock is entitled as a result of the Merger until such holder surrenders
his certificates of Fidelity Capital Stock for exchange as provided in this
Section 4.1. The certificate of Fidelity Capital Stock so surrendered shall be
duly endorsed as the Exchange Agent may require. Any other provision of this
Plan of Merger notwithstanding, neither Regions, the Surviving Association, nor
the Exchange Agent shall be liable to a holder of Fidelity Capital Stock for any
amounts paid or property delivered in good faith to a public official pursuant
to any applicable abandoned property law.

4.2 RIGHTS OF FORMER FIDELITY STOCKHOLDERS. At the Effective Time, the
stock transfer books of Fidelity shall be closed as to holders of Fidelity
Capital Stock immediately prior to the Effective Time, and no transfer of
Fidelity Capital Stock by any such holder shall thereafter be made or
recognized. Until surrendered for exchange in accordance with the provisions of
Section 4.1 of this Plan of Merger, each certificate theretofore representing
shares of Fidelity Capital Stock (other than shares to be canceled pursuant to
Section 3.3 of this Plan of Merger or as to which the holder thereof has
perfected dissenters' rights of appraisal as contemplated by Section 3.4 of this
Plan of Merger) shall from and after the Effective Time represent for all
purposes only the right to receive the consideration provided in Sections 3.1
and 3.5 of this Plan of Merger in exchange therefor. To the extent permitted by
law, former stockholders of record of Fidelity shall be entitled to vote after
the Effective Time at any meeting of Regions stockholders the number of whole
shares of Regions Common Stock into which their respective shares of Fidelity
Capital Stock are converted, regardless of

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whether such holders have exchanged their certificates representing Fidelity
Capital Stock for certificates representing Regions Common Stock in accordance
with the provisions of this Plan of Merger. Whenever a dividend or other
distribution is declared by Regions on the Regions Common Stock, the record date
for which is at or after the Effective Time, the declaration shall include
dividends or other distributions on all shares of Regions Common Stock issuable
pursuant to this Plan of Merger, but no dividend or other distribution payable
to the holders of record of Regions Common Stock as of any time subsequent to
the Effective Time shall be delivered to the holder of any certificate
representing shares of Fidelity Capital Stock issued and outstanding at the
Effective Time until such holder surrenders such certificate for exchange as
provided in Section 4.1 of this Plan of Merger. However, upon surrender of such
Fidelity Capital Stock certificate, both the Regions Common Stock certificate
(together with all such undelivered dividends or other distributions without
interest) and any undelivered cash payments to be paid for fractional share
interests (without interest) shall be delivered and paid with respect to each
share represented by such certificate.

ARTICLE FIVE

CLOSING AND EFFECTIVE DATE

5.1 TIME AND PLACE OF CLOSING. The Closing will take place at 9:00 A.M. on
the date that the Effective Time occurs (or the immediately preceding day if the
Effective Time is earlier than 9:00 A.M.), or at such other time as the Parties,
acting through their chief executive officers or chief financial officers, may
mutually agree. The place of Closing shall be at the offices of Regions, or such
other place as may be mutually agreed upon by the Parties.

5.2 EFFECTIVE TIME. The Merger and other transactions contemplated by this
Plan of Merger shall become effective on the date and at the time of endorsement
of the Articles of Combination filed with the OTS or on such other date and at
such other time as the OTS declares the Merger effective (the "Effective Time").
Subject to the terms and conditions hereof, unless otherwise mutually agreed
upon in writing by the chief executive officers or chief financial officers of
each party, the parties shall use their reasonable efforts to cause the
Effective Time to occur on the first business day following the last to occur of
(i) the effective date (including expiration of any applicable waiting period)
of the last required consent of any regulatory authority having authority over
and approving or exempting the Merger, and (ii) the date on which the
stockholders of Fidelity approve this Plan of Merger to the extent such approval
is required by applicable law; or such later date within thirty (30) days of
such date as may be specified by Regions.

ARTICLE SIX

EFFECTIVENESS

6.1 CONDITIONS PRECEDENT. Consummation of the Merger is conditioned upon
the approval of the Merger by the stockholders of Fidelity and the sole
stockholder of Fidelity Interim, as and to the extent required by law, and the
receipt of the requisite regulatory approvals as set forth in the Agreement. The
Merger shall not be consummated unless and until approved by the OTS.
Additionally, consummation of the Merger is conditioned upon the fulfillment of
the conditions precedent set forth in Article Nine of the Agreement or the
waiver of such conditions as provided in Section 11.6 of the Agreement.

6.2 TERMINATION. This Plan of Merger may be terminated at any time prior
to the Effective Time by the parties hereto at any time after termination of the
Agreement as provided in Article Ten of the Agreement.

6.3 AMENDMENTS. To the extent permitted by law, this Plan of Merger may be
amended by a subsequent writing signed by each of the Parties upon the approval
of the Boards of Directors of each of the Parties; provided, however, that after
any such approval by the holders of Fidelity Capital Stock, there shall be made
no amendment decreasing the consideration to be received by Fidelity
stockholders without the further approval of such stockholders.

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ARTICLE SEVEN

MISCELLANEOUS

7.1 NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage pre-paid, or by
courier or overnight carrier, to the persons at the addresses set forth in
Section 11.8 of the Agreement (or at such other address as may be provided
hereunder), and shall be deemed to have been delivered as of the date so
personally delivered or mailed; provided, however, that notice of termination of
this Plan of Merger shall be effective only upon actual delivery of such notice
to the party entitled to the same.

7.2 GOVERNING LAW. This Plan of Merger shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to any
applicable conflicts of law, except to the extent that the federal laws of the
United States may apply to the Merger.

7.3 COUNTERPARTS. This Plan of Merger may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

7.4 INCONSISTENT PROVISIONS. The parties agree that, to the extent any of
the provisions of this Plan of Merger shall conflict or be inconsistent with any
provision of the Agreement, the provisions of the Agreement shall control and
prevail and the parties hereto agree to execute such amendments to this Plan of
Merger to conform the provisions hereof to the provisions of the Agreement.

IN WITNESS WHEREOF, each of the parties has caused this Plan of Merger to
be executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto duly authorized all as of the day and year first
above written.

<TABLE>
<S> <C>
FIDELITY FEDERAL SAVINGS BANK

[SAVINGS BANK SEAL] By:
----------------------------------------------
Richard G. Rhodes, Sr.
President and Chief Executive Officer

ATTEST:
------------------------------------
William J. Chappell
Secretary

FIDELITY INTERIM FEDERAL SAVINGS BANK

[SAVINGS BANK SEAL] By:
----------------------------------------------
President

ATTEST:
------------------------------------
Secretary
</TABLE>

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APPENDIX C

, 1995

Members of the Board of Directors
Fidelity Federal Savings Bank
500 East Walnut Avenue
Dalton, Georgia 30722-1504

Sirs:

We understand that Fidelity Federal Savings Bank, a federally-chartered
thrift institution (the "Company"), and Regions Financial Corporation, a
Delaware corporation ("Regions"), have entered into an Agreement and Plan of
Reorganization, dated as of October 17, 1994 (the "Agreement"), pursuant to
which a wholly-owned subsidiary of Regions will be merged with the Company and
each outstanding share of the Company's common and preferred stock (excluding
treasury shares and shares held by stockholders who perfect their dissenters'
rights) will cease to be outstanding and will be converted into and exchanged
for the right to receive 0.449 shares of Regions common stock (the
"Consideration"), subject to possible adjustment as described in the Agreement.

You have asked for our opinion whether the Consideration to be received by
the stockholders of the Company's common and preferred stock pursuant to the
Merger is fair to the stockholders of the Company (other than Regions or any of
its subsidiaries) from a financial point of view, as the date hereof.

In rendering its opinion, Sterne, Agee, among other things: (i) reviewed
certain publicly available financial and other data with respect to the Company
and Regions, including consolidated financial statements for recent years and
interim periods to date; certain Regions Current Reports on Form 8-K presenting
certain financial statements on a pro forma basis incorporating the effects of
then pending and expected to be completed acquisitions by Regions; drafts of the
Registration Statement; and certain other relevant financial and operating data
relating to the Company and Regions made available to Sterne, Agee from
published sources and from the internal records of the Company and Regions; (ii)
reviewed the Agreement; (iii) reviewed certain historical market prices and
trading volumes of Regions Common Stock in the over-the-counter market as
reported by the Nasdaq National Market and of the Company based on actual
transactions known to and reported by the Company's management; (iv) compared
the Company and Regions from a financial point of view with certain other
companies in the financial services industry which Sterne, Agee deemed relevant;
(v) considered the financial terms, to the extent publicly available, of
selected recent acquisitions of financial institutions which Sterne, Agee deemed
to be comparable, in whole or in part, to the Merger; (vi) reviewed and
discussed with representatives of the managements of the Company and Regions
certain information of a business and financial nature regarding the Company and
Regions, respectively, furnished to Sterne, Agee by the Company or Regions,
respectively; (vii) made inquiries regarding and discussed the Merger and the
Agreement and other matters related thereto with the Company's counsel; and
(viii) performed such other analyses and examinations as Sterne, Agee deemed
appropriate.

In connection with our review, we have not independently verified any of
the foregoing information with respect to the Company or Regions, have relied on
all such information, and have assumed that all such information is complete and
accurate in all material respects. With respect to the financial forecasts for
the Company and Regions provided to us by their representative managements, we
have assumed for purposes of our opinion that they have been reasonably prepared
on bases reflecting the best available estimates and judgments of their
respective managements at the time of preparation as to the future financial
performance of the Company and Regions and that they provide a reasonable basis
upon which we can form our opinion. We have also assumed that there have been no
material changes in the Company's or Regions' assets, financial condition,
results of operations, business or prospects since the respective dates of their
last financial statements made available to us. We have relied on advice of
counsel to the Company as to all legal matters with respect to the Company,
Regions, the Merger, and the Agreement. In addition, we have not examined any of
the loan files of the Company or Regions or otherwise evaluated the allowance
for loan losses of the Company or Regions and have not made an independent
evaluation, appraisal or physical inspection of the assets or individual
properties of the Company or Regions, nor have we been furnished with any such
appraisals. Further, our opinion is based on economic, monetary and market
conditions existing as of the date hereof.

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In the ordinary course of our business, we actively trade the equity
securities of Regions and, to a very limited extent, the Company, for our own
account and for the accounts of our customers and, accordingly, may at any time
hold a long or short position in such securities. Prior to its engagement to
render a fairness opinion, Sterne, Agee advised the company during its recent
review of strategic alternatives and was involved in the preliminary stages of a
possible public offering of securities by Fidelity.

Based upon the foregoing, and in reliance thereon, it is our opinion that,
as of the date hereof, the Consideration to be received by the stockholders of
the Company's common and preferred stock pursuant to the Merger is fair to the
stockholders of the Company (other than Regions or any of its subsidiaries) from
a financial point of view.

This opinion is furnished pursuant to our engagement letter, dated October
13, 1994, and is solely for the benefit of the Board of Directors of the
Company.

Very truly yours,

STERNE, AGEE & LEACH, INC.

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<PAGE> 150

APPENDIX D

DISSENTER AND APPRAISAL RIGHTS

Dissenter and appraisal rights for holders of stock in a federal stock
savings bank are governed by Section 552.14 of Title 12 of the Code of Federal
Regulations, the text of which is reproduced below.

SEC. 552.14 DISSENTER AND APPRAISAL RIGHTS.

(a) Right to demand payment of fair or appraised value. Except as provided
in paragraph (b) of this section, any stockholder of a Federal stock association
combining in accordance with sec. 552.13 of this part shall have the right to
demand payment of the fair or appraised value of his stock: Provided, That such
stockholder has not voted in favor of the combination and complies with the
provisions of paragraph (c) of this section.

(b) Exceptions. No stockholder required to accept only qualified
consideration for his or her stock shall have the right under this section to
demand payment of the stock's fair or appraised value, if such stock was listed
on a national securities exchange or quoted on the National Association of
Securities Dealers' Automated Quotation System ("NASDAQ") on the date of the
meeting at which the combination was acted upon or stockholder action is not
required for a combination made pursuant to # 552.13(h)(2) of this part.
"Qualified consideration" means cash, shares of stock of any association or
corporation which at the effective date of the combination will be listed on a
national securities exchange or quoted on NASDAQ or any combination of such
shares of stock and cash.

(1) NOTICE. Each constituent Federal stock association shall notify
all stockholders entitled to rights under this section, not less that
twenty days prior to the meeting at which the combination agreement is to
be submitted for stockholder approval, of the right to demand payment of
appraised value of shares, and shall include in such notice a copy of this
section. Such written notice shall be mailed to stockholders of record and
may be part of the management's proxy solicitation for such meeting.

(2) DEMAND FOR APPRAISAL AND PAYMENT. Each stockholder electing to
make a demand under this section shall deliver to the Federal stock
association, before voting on the combination, a writing identifying
himself or herself and stating his or her intention thereby to demand
appraisal of and payment for his or her shares. Such demand must be in
addition to and separate from any proxy or vote against the combination by
the stockholder.

(3) NOTIFICATION OF EFFECTIVE DATE AND WRITTEN OFFER. Within ten days
after the effective date of the combination, the resulting association
shall;

(i) Give written notice by mail to stockholders of constituent
Federal stock associations who have complied with the provisions of
paragraph (c)(2) of this section and have not voted in favor of the
combination, of the effective date of the combination;

(ii) Make a written offer to each stockholder to pay for dissenting
shares at a specified price deemed by the resulting association to be
the fair value thereof; and

(iii) Inform them that, within sixty days of such date, the
respective requirements of paragraphs (c)(5) and (6) of this section
(set out in the notice) must be satisfied.

The notice and offer shall be accompanied by a balance sheet and statement
of income of the association the shares of which the dissenting stockholder
holds, for a fiscal year ending not more than sixteen months before the
date of notice and offer, together with the latest available interim
financial statements.

(4) ACCEPTANCE OF OFFER. If within sixty days of the effective date
of the combination the fair value is agreed upon between the resulting
association and any stockholder who has complied with the provisions of
paragraph (c)(2) of this section, payment therefor shall be made within
ninety days of the effective date of the combination.

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(5) PETITION TO BE FILED IF OFFER NOT ACCEPTED. If within sixty days
of the effective, date of the combination the resulting association and any
stockholder who has complied with the provisions of paragraph (c)(2) of
this section do not agree as to the fair value, then any such stockholder
may file a petition with the Office, with a copy by registered or certified
mail to the resulting association, demanding a determination of the fair
market value of the stock of all such stockholders. A stockholder entitled
to file a petition under this section who fails to file such petition
within sixty days of the effective date of the combination shall be deemed
to have accepted the terms offered under the combination.

(6) STOCK CERTIFICATES TO BE NOTED. Within sixty days of the
effective date of the combination, each stockholder demanding appraisal and
payment under this section shall submit to the transfer agent his
certificates of stock for notation thereon that an appraisal and payment
have been demanded with respect to such stock and that appraisal
proceedings are pending. Any stockholder who fails to submit his stock
certificates for such notation shall no longer be entitled to appraisal
rights under this section and shall be deemed to have accepted the terms
offered under the combination.

(7) WITHDRAWAL OF DEMAND. Notwithstanding the foregoing, at any time
within sixty days after the effective date of the combination, any
stockholder shall have the right to withdraw his or her demand for
appraisal and to accept the terms offered upon the combination.

(8) VALUATION AND PAYMENT. The Director shall, as he or she may
elect, either appoint one or more independent persons or direct appropriate
staff of the Office to appraise the shares to determine their fair market
value, as of the effective date of the combination, exclusive of any
element of value arising from the accomplishment or expectation of the
combination. Appropriate staff of the Office shall review and provide an
opinion on appraisals prepared by independent persons as to the suitability
of the appraisal methodology and the adequacy of the analysis and
supportive data. The Director after consideration of the appraisal report
and the advice of the appropriate staff shall, if he or she concurs in the
valuation of the shares, direct payment by the resulting association of the
appraised fair market value of the shares, upon surrender of the
certificates representing such stock. Payment shall be made, together with
interest from the effective date of the combination, at a rate deemed
equitable by the Director.

(9) COSTS AND EXPENSES. The costs and expenses of any proceeding
under this section maybe apportioned and assessed by the Director as he or
she may deem equitable against all or some of the parties. In making this
determination the Director shall consider whether any party has acted
arbitrarily,. vexatiously, or not in good faith in respect to the rights
provided by this section.

(10) VOTING AND DISTRIBUTION. Any stockholder who has demanded
appraisal rights as provided in paragraph (c)(2) of this section shall
thereafter neither be entitled to vote such stock for any purpose nor be
entitled to the payment of dividends or other distributions on the stock
(except dividends or other distributions payable to, or a vote to be taken
by stockholders of record at a date which is on or prior to, the effective
date of the combination: Provided, That if any stockholder becomes
unentitled to appraisal and payment of appraised value with respect to such
stock and accepts or is deemed to have accepted the terms offered upon the
combination, such stockholder shall thereupon be entitled to vote and
receive the distributions described above.

(11) STATUS. Shares of the resulting association into which shares of
the stockholders demanding appraisal rights would have been converted or
exchanged had they assented to the combination, shall have the status of
authorized and unissued shares of the resulting association.

D-2
<PAGE> 152

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. 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 empowers the
Company 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 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.

II-1
<PAGE> 153

"(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 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.

II-2
<PAGE> 154

"(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of
expenses or indemnification brought under this section or under any
bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise. The Court of Chancery may summarily determine a
corporation's obligation to advance expenses (including attorneys'
fees)."

The Company 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.

ITEM 21. EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
2.1 -- Agreement and Plan of Reorganization, as of October 17, 1994 by and between Fidelity Federal Savings Bank and
Regions Financial Corporation -- included as Appendix A to the Proxy Statement/Prospectus.
2.2 -- Form of Plan of of Merger and Combination, to be entered into between Fidelity and an interim federal savings bank
to be formed as a subsidiary of Regions Financial Corporation -- included as Appendix B to the Proxy
Statement/Prospectus.
4.1 -- Certificate of Incorporation of Regions Financial Corporation -- incorporated by reference from S-4 Registration
Statement of Regions Financial Corporation, file no. 33-54231.
4.2 -- By-laws of Regions Financial Corporation -- incorporated by reference from S-4 Registration Statement of Regions
Financial Corporation, file no. 33-54231.
5. -- Form of Opinion re: legality.
8. -- Form of Opinion re: tax matters.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Evans, Porter, Bryan & Co.
23.3 -- Consent of KPMG Peat Marwick -- to be added by amendment.
23.4 -- Consent of Lange, Simpson, Robinson & Somerville -- to be included in Exhibit 5.
23.5 -- Consent of Alston & Bird -- to be included in Exhibit 8.
23.6 -- Consent of Sterne, Agee & Leach, Inc.
24. -- Power of Attorney -- the manually signed power of attorney is set forth in the signature page of the registration
statement.
</TABLE>

ITEM 22. UNDERTAKINGS.

A. 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, (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to 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.

B. 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

II-3
<PAGE> 155

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.

C.(1) The undersigned Registrant hereby undertakes as follows: that prior
to any public reoffering of the securities registered hereunder through use of
a prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.

(2) The Registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes 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.

D. The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.

E. The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

II-4
<PAGE> 156

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this 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 18th day of January, 1995.

REGISTRANT:

REGIONS FINANCIAL CORPORATION

/s/ Richard D. Horsley
BY: --------------------------------
Richard D. Horsley
Vice Chairman of the Board and
Executive Financial Officer

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard D. Horsley and Samuel E. Upchurch, Jr.
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments to this
registration statement, and to file the same with all exhibits thereto, and all
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agents, or their substitutes, may lawfully do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -------------------------- ------------------------------ ------------------
<S> <C> <C>
/s/ J. Stanley Mackin
- -------------------------- Chairman of the Board and January 18, 1995
J. Stanley Mackin Chief Executive Officer and
Director
/s/ Richard D. Horsley
- -------------------------- Vice Chairman of the Board and January 18, 1995
Richard D. Horsley Executive Financial Officer
and Director
/s/ Robert P. Houston
- -------------------------- Executive Vice President and January 18, 1995
Robert P. Houston Comptroller

- -------------------------- Director
Sheila S. Blair

/s/ James B. Boone, Jr.
- -------------------------- Director January 18, 1995
James B. Boone, Jr.

/s/ Albert P. Brewer
- -------------------------- Director January 18, 1995
Albert P. Brewer

/s/ James S.M. French
- -------------------------- Director January 18, 1995
James S.M. French
</TABLE>

II-5
<PAGE> 157

<TABLE>
<S> <C> <C>
/s/ Catesby ap C. Jones
- -------------------------- Director January 18, 1995
Catesby ap C. Jones

/s/ Olin B. King
- -------------------------- Director January 18, 1995
Olin B. King

/s/ H. Manning McPhillips, Jr.
- ------------------------------- Director January 18, 1995
H. Manning McPhillips, Jr.

/s/ Henry E. Simpson
- -------------------------- Director January 18, 1995
Henry E. Simpson

/s/ Robert E. Steiner, III
- -------------------------- Director January 18, 1995
Robert E. Steiner, III

/s/ Lee J. Styslinger, Jr.
- -------------------------- Director January 18, 1995
Lee J. Styslinger, Jr.
</TABLE>

II-6
<PAGE> 158

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ------------------------------------------------------------------------------------------------ ------------
<S> <C> <C> <C>
2.1 -- Agreement and Plan of Reorganization, dated as October 17, 1994 by and between Fidelity Federal
Savings Bank and Regions Financial Corporation -- included as Appendix A to the Proxy
Statement/Prospectus.
2.2 -- Form of Plan of of Merger and Combination, to be entered into between Fidelity and an interim
federal savings bank to be formed as a subsidiary of Regions Financial Corporation -- included as
Appendix B to the Proxy Statement/Prospectus.
4.1 -- Certificate of Incorporation of Regions Financial Corporation -- incorporated by reference from S-
4 Registration Statement of Regions Financial Corporation, file no. 33-54231.
4.2 -- By-laws of Regions Financial Corporation -- incorporated by reference from S-4 Registration
Statement of Regions Financial Corporation, file no. 33-54231.
5. -- Form of Opinion re: legality.
8. -- Form of Opinion re: tax matters.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Evans, Porter, Bryan & Co.
23.3 -- Consent of KPMG Peat Marwick -- to be added by amendment.
23.4 -- Consent of Lange, Simpson, Robinson & Somerville -- to be included in Exhibit 5.
23.5 -- Consent of Alston & Bird -- to be included in Exhibit 8.
23.6 -- Consent of Sterne, Agee & Leach, Inc.
24. -- Power of Attorney -- the manually signed power of attorney is set forth in the signature page of
the registration statement.
</TABLE>

II-7

<PAGE> 1

EXHIBIT 5

[Lange, Simpson, Robinson & Somerville letterhead]

February , 1995

Regions Financial Corporation
417 North 20th Street
Birmingham, Alabama 35203

Re: Regions Financial Corporation--S4 Registration Statement, No.

Ladies and Gentlemen:

We have acted as counsel for Regions Financial Corporation, a Delaware
corporation ("Regions") in connection with the merger between Fidelity Federal
Savings Bank ("Fidelity") and an interim federal bank subsidiary of Regions
(the "Merger") and in connection with the registration of shares of common
stock of Regions, par value $.625 per share ("Regions Common Stock"), on Form
S-4 under the Securities Act of 1933. The Merger provides for issuance of
shares of Regions Common Stock to the stockholders of Fidelity upon
consummation of the Merger. The number of shares of Regions Common Stock to be
issued in the Merger depends on the average of the closing prices of Regions
Common Stock over a specified period.

We have examined and are familiar with the registration statement on Form
S-4 (33- ) filed with the Securities and Exchange Commission, as such
registration statement has been amended to date. We have examined and are
familiar with the records relating to the organization of Regions and the
documents and records as we have deemed relevant for purposes of rendering this
opinion.
<PAGE> 2

Regions Financial Corporation
February __, 1995
Page 2

Based on the foregoing it is our opinion that upon satisfaction of the
conditions precedent to consummation of the Merger, or waiver of such
conditions capable of being waived, and upon consummation of the Merger, the
shares of Regions Common Stock issued pursuant to the Merger will be duly
authorized, validly issued and outstanding, fully paid and non-assessable, with
no personal liability attaching to the ownership thereof.

We hereby consent to the filing of this opinion as an exhibit to the
registration statement and to the reference to Lange, Simpson, Robinson &
Somerville under the caption "Opinions" in the proxy statement/prospectus
forming a part of the registration statement.

Very truly yours,

<PAGE> 1
EXHIBIT 8

Alston&Bird

One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424

404-881-7000
Fax: 404-881-7777 Telex: 54-2996

Philip C. Cook (404) 881-7491

__________ __, 1995

Regions Financial Corporation
417 N. 20th Street
Birmingham, Alabama 35203

Fidelity Federal Savings Bank
500 East Walnut Avenue
Dalton, Georgia 30720

Re: Proposed Plan of Merger Involving Regions Financial
Corporation and Fidelity Federal Savings Bank

Ladies and Gentlemen:

We have acted as counsel to Regions Financial Corporation ("Regions"),
a corporation organized and existing under the laws of the State of Delaware,
in connection with the proposed merger of Fidelity Interim, a wholly-owned
subsidiary of Regions ("Fidelity Interim"), with and into Fidelity Federal
Savings Bank ("Fidelity"), a federal stock savings bank organized and existing
under the laws of the United States, with Fidelity as the surviving entity (the
"Merger"). The Merger will be effected pursuant to the Agreement and Plan of
Reorganization by and between Fidelity and Regions made and entered into as of
October 17, 1994 (the "Reorganization Agreement"). In our capacity as counsel
to Regions, our opinion has been requested with respect to certain of the
federal income tax consequences of the proposed Merger.

In rendering this opinion, we have examined (i) the Internal Revenue
Code of 1986, as amended (the "Code") and Treasury regulations, (ii) the
legislative history of applicable sections of the Code, and (iii) appropriate
Internal Revenue Service and court decisional authority. In addition, we have
relied upon certain information made known to us as more fully described below.
All capitalized terms used herein without definition shall
<PAGE> 2

have the respective meanings specified in the Reorganization Agreement, and
unless otherwise specified, all section references herein are to the Code.

INFORMATION RELIED UPON

In rendering the opinions expressed herein, we have examined such
documents as we have deemed appropriate, including:

(1) the Reorganization Agreement;

(2) the Registration Statement that has been filed with
the Securities and Exchange Commission regarding the
Merger ("Registration Statement"), which includes the
preliminary Proxy Statement/Prospectus; and

(3) such additional documents as we have considered
relevant.

In our examination of such documents, we have assumed, with your
consent, that all documents submitted to us as photocopies faithfully reproduce
the originals thereof, that such originals are authentic, that all such
documents have been or will be duly executed to the extent required, and that
all statements set forth in such documents are accurate. We have also obtained
such additional information and representations as we have deemed relevant and
necessary through consultation with various officers and representatives of
Regions and Fidelity.

With your consent, we have assumed that the shareholders of Fidelity
holding at least eighty percent (80%) of the total value of the Fidelity stock
outstanding immediately prior to the Merger will receive Regions Common Stock
in exchange for their Fidelity stock. No opinion is expressed as to the tax
consequences of the Merger if this assumption is inaccurate.

You have advised us that the proposed transaction will enable the
combined organization to realize certain economies of scale, yield a wider
array of banking and banking-related services to consumers and businesses, and
provide for a stronger market position and for greater financial resources to
meet competitive challenges within the Dalton, Georgia market area. To achieve
these goals, the following will occur pursuant to the Reorganization Agreement:

(1) Regions will form Fidelity Interim by transferring
property to Fidelity Interim solely in exchange for all the outstanding shares
of Fidelity Interim common stock ("Fidelity Interim Common Stock").

(2) Fidelity Interim will merge with and into Fidelity in
accordance with and with the effect provided in Title 12, United States Code,
Section 1467a(t). Fidelity

- 2 -

<PAGE> 3

will be the surviving entity and as a result will become a wholly owned
subsidiary of Regions and will continue to be governed by the laws of the
United States.

(3) At the Effective Time, by virtue of the Merger, and
without any action on the part of the holders thereof, the shares of the
constituent corporations shall be converted as follows:

(a) Each share of Regions Common Stock issued and
outstanding immediately prior to the Effective Time shall remain issued
and outstanding from and after the Effective Time.

(b) Each share of Fidelity Interim Common Stock issued
and outstanding at the Effective Time shall be converted into and
exchanged for one share of Fidelity Common Stock.

(c) Each share of Fidelity Common Stock (excluding shares
held by any Fidelity Company or by any Regions Company, which shares
shall be canceled as provided in the Reorganization Agreement, in each
case other than in a fiduciary capacity or in satisfaction of debts
previously contracted) issued and outstanding at the Effective Time
shall cease to be outstanding and shall be converted into and exchanged
for .449 of a share of Regions Common Stock, subject to possible
adjustment as provided in Section 9.3 of the Reorganization Agreement
(the "Common Stock Exchange Ratio"). To the extent that the Common
Stock Exchange Ratio is adjusted pursuant to Section 9.3(f) of the
Reorganization Agreement, references in this opinion, the Certificates
of Representations provided by the management of Regions and of
Fidelity, and the Reorganization Agreement to the "Common Stock Exchange
Ratio" shall thereafter be deemed to refer to the Common Stock Exchange
Ratio, as adjusted pursuant to Section 9.3(f) of the Reorganization
Agreement.

(d) Each share of Fidelity Preferred Stock (excluding
shares held by any Fidelity Company or by any Regions Company, which
shares shall be canceled as provided in the Reorganization Agreement, in
each case other than in a fiduciary capacity or in satisfaction of debts
previously contracted) issued and outstanding at the Effective Time
shall cease to be outstanding and shall be converted into and exchanged
for that number of shares of Regions Common Stock equal to the product
(rounded to the nearest one-thousandth) of (i) the Common Stock Exchange
Ratio and (ii) the number of shares of Fidelity Common Stock into which
such share of Fidelity Preferred Stock was convertible immediately prior
to the Effective Time (it being agreed by Regions and Fidelity that, as
of the date of the Reorganization Agreement, each such share of Fidelity
Preferred Stock was convertible into 1.0 share of Fidelity Common
Stock).

(4) Each holder of shares of Fidelity Capital Stock
(i.e., Fidelity Common Stock, Fidelity Preferred Stock, and any other class or
series of capital stock of

- 3 -
<PAGE> 4

Fidelity) exchanged pursuant to the Merger who would otherwise have been
entitled to receive a fraction of a share of Regions Common Stock (after taking
into account all certificates delivered by such holder) shall receive, in lieu
thereof, cash (without interest) in an amount equal to such fractional part of
a share of Regions Common Stock multiplied by the market value of one share of
Regions Common Stock at the Effective Time. The market value of one share of
Regions Common Stock at the Effective Time shall be the closing price of such
common stock as reported on the NASDAQ/NMS (as reported by The Wall Street
Journal or, if not reported thereby, any other authoritative source chosen by
Regions) on the last trading day preceding the Effective Time. No such holder
will be entitled to dividends, voting rights, or any other rights as a
stockholder in respect of any fractional shares.

(5) Any holder of shares of Fidelity Capital Stock who
perfects such holder's dissenters' rights of appraisal in accordance with and
as contemplated by 12 C.F.R. Section 552.14 shall be entitled to receive the
value of such shares in cash as determined pursuant to such provision of law;
provided, however, that no such payment shall be made to any dissenting
stockholder unless and until such dissenting stockholder has complied with the
applicable provisions of 12 C.F.R. Section 552.14 and surrendered to Fidelity
(as the surviving savings association resulting from the Merger) the
certificate or certificates representing the shares for which payment is being
made. In the event that after the Effective Time a dissenting stockholder of
Fidelity fails to perfect, or effectively withdraws or loses, such holder's
right to appraisal and of payment for such holder's shares, Regions shall issue
and deliver the consideration to which such holder of shares of Fidelity
Capital Stock is entitled under Article Three of the Reorganization Agreement
(without interest) upon surrender by such holder of the certificate or
certificates representing shares of Fidelity Capital Stock held by such holder.
Fidelity will establish an escrow account with an amount sufficient to satisfy
the maximum aggregate payment that may be required to be paid to dissenting
stockholders. Upon satisfaction of all claims of dissenting stockholders, the
remaining escrowed amount, reduced by payment of the fees and expenses of the
escrow agent, will be returned to Fidelity.

(6) In the event Fidelity or Regions changes the number of
shares of Fidelity Capital Stock or Regions Common Stock, respectively, issued
and outstanding prior to the Effective Time as a result of a stock split, stock
dividend, or similar recapitalization with respect to such stock and the record
date therefor shall be prior to the Effective Time, the Common Stock Exchange
Ratio shall be proportionately adjusted.

(7) Each of the shares of Fidelity Capital Stock held by any
Fidelity Company or by any Regions Company, in each case other than in a
fiduciary capacity or in satisfaction of debts previously contracted, shall be
canceled and retired at the Effective Time, and no consideration shall be
issued in exchange therefor.

With your consent, we have also relied on certain factual matters
confirmed to us by you as true both now and as of the Effective Time:

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<PAGE> 5

(a) The exchange ratio used to determine the amount of
Regions Common Stock to be received in the Merger by each shareholder
exchanging Fidelity Capital Stock for Regions Common Stock is the product of
bona fide negotiations between parties bargaining at arm's length.

(b) There is no plan or intention by the officers or
directors of Fidelity who own five percent (5%) or more of the Fidelity stock,
and to the best of the knowledge of the management of Fidelity, there is no
plan or intention on the part of the remaining shareholders of Fidelity to
sell, exchange, or otherwise dispose of a number of shares of Regions stock
received in the Merger that would reduce the Fidelity shareholders' ownership
of Regions stock to a number of shares having a value, as of the date of the
Merger, of less than 50 percent of the value of all of the formerly outstanding
stock of Fidelity as of the same date. For purposes of this assumption, shares
of Fidelity stock exchanged for cash or other property, surrendered by
dissenters, or exchanged for cash in lieu of fractional shares of Regions stock
will be treated as outstanding Fidelity stock on the date of the Merger.
Moreover, shares of Fidelity stock and shares of Regions stock held by Fidelity
shareholders and otherwise sold, redeemed, or disposed of prior or subsequent
to the Merger will be considered in making this representation.

(c) Following the Merger, Fidelity will hold at least 90
percent of the fair market value of its net assets and at least 70 percent of
the fair market value of its gross assets held immediately prior to the Merger
and at least 90 percent of the fair market value of Fidelity Interim's net
assets and at least 70 percent of the fair market value of Fidelity Interim's
gross assets held immediately prior to the Merger. For purposes of this
assumption, amounts paid by Fidelity or Fidelity Interim to dissenters, amounts
paid by Fidelity or Fidelity Interim to shareholders who receive cash or other
property, amounts used by Fidelity or Fidelity Interim to pay reorganization
expenses, and all redemptions and distributions (except for regular, normal
dividends) made by Fidelity will be included as assets of Fidelity or Fidelity
Interim, respectively, immediately prior to the Merger.

(d) Prior to the Merger, Regions will be in control of
Fidelity Interim. For purposes of this assumption and those set forth below
in paragraph (e), (l), and (m), "control" means ownership of 80% of the total
combined voting power of all classes of stock entitled to vote and at least 80%
of the total number of all other classes of stock.

(e) Fidelity has no plan or intention to issue additional
shares of its stock that would result in Regions losing control of Fidelity.

(f) Regions has no plan or intention to reacquire any of
its Common Stock issued in the Merger, except for purchases in the open market
in the normal course of business executed through an independent broker in
which Regions is not aware of the identity of any seller or in private
placement transactions in which the sellers are not former Fidelity
shareholders.

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<PAGE> 6

(g) Regions has no plan or intention to liquidate
Fidelity; to merge Fidelity with or into another corporation; to sell or
otherwise dispose of the stock of Fidelity except for transfers of stock to
corporations controlled by Regions; or to cause Fidelity to sell or otherwise
dispose of any of its assets or of any of the assets acquired from Fidelity
Interim, except for dispositions made in the ordinary course of business or
transfers of assets to a corporation controlled by Fidelity.

(h) The liabilities of Fidelity Interim assumed by
Fidelity (including the liabilities to which the transferred assets of Fidelity
Interim are subject), if any, were incurred by Fidelity Interim in the ordinary
course of its business.

(i) Following the Merger, Fidelity will continue its
historic business or use a significant portion of its historic business assets
in a business.

(j) Regions, Fidelity Interim, Fidelity, and the
shareholders of Fidelity will pay their respective expenses, if any, incurred
in connection with the Merger.

(k) There is no intercorporate indebtedness existing
between Regions and Fidelity or between Fidelity Interim and Fidelity that was
issued, acquired, or will be settled at a discount.

(l) In the Merger, shares of Fidelity Common Stock
representing control of Fidelity will be exchanged solely for voting Common
Stock of Regions. For purposes of this assumption, shares of Fidelity Common
Stock exchanged for cash or other property originating with Regions will be
treated as outstanding Fidelity Common Stock on the date of the Merger.

(m) At the time of the Merger, Fidelity will not have
outstanding any warrants, options, convertible securities, or any other type of
right pursuant to which any person could acquire stock in Fidelity that, if
exercised or converted, would affect Regions' acquisition or retention of
control of Fidelity.

(n) Regions does not own, nor has it owned during the
past five years, any shares of the stock of Fidelity.

(o) No two parties to the Merger are investment
companies. For purposes of the foregoing, an "investment company" is a
corporation that is a regulated investment company, a real estate investment
trust, or a corporation 50 percent or more of the value of whose total assets
are stock and securities and 80 percent or more of the value of whose total
assets are assets held for investment.

(p) On the date of the Merger, the fair market value of
the assets of Fidelity will exceed the sum of its liabilities, plus the amount
of liabilities, if any, to which the assets are subject.

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<PAGE> 7

(q) Fidelity is not under the jurisdiction of a court in
a case under Title 11 of the United States Code or a receivership, foreclosure
or similar proceeding in a federal or state court.

(r) The payment of cash to Fidelity shareholders in lieu
of fractional shares of Regions Common Stock will not be a separately bargained
for consideration, but rather will represent a mere mechanical rounding of the
fractional share interests that may result from the Merger, and will be
undertaken solely for the purpose of avoiding the expense and inconvenience of
issuing and transferring fractional shares. The total cash consideration that
will be paid to Fidelity shareholders in lieu of fractional shares of Regions
Common Stock will represent less than one percent (1%) of the total
consideration issued in the Merger. No shareholder of Fidelity will receive an
amount in cash greater than the value of one full share of Regions Common Stock
in lieu of fractional shares.

(s) None of the compensation received by any
shareholder-employees of Fidelity will be separate consideration for, or
allocable to, any of their shares of Fidelity stock. None of the shares of
Regions Common Stock received by any shareholder-employees will be separate
consideration for, or allocable to, any employment agreement. Any compensation
paid to a Fidelity shareholder-employee who continues as an employee of Regions
subsequent to the Merger will be for services actually rendered and will be
commensurate with amounts paid to third parties bargaining at arm's-length for
similar services.

(t) Regions will pay or assume only those expenses of
Fidelity that are solely and directly related to the Merger in accordance with
the guidelines established in Rev. Rul. 73-54, 1973-1 C.B. 187.

(u) The Reorganization Agreement represents the entire
understanding of Regions, Fidelity, and Fidelity Interim
with respect to the Merger.

(v) At all times during the five-year period ending on
the effective date of the Merger, the fair market value of all of Fidelity's
United States real property interests was and will have been less than 50
percent of the total fair market value of (a) its United States real property
interests, (b) its interests in real property located outside the United
States, and (c) its other assets used or held for use in a trade or business.
For purposes of the preceding sentence, (x) United States real property
interests include all interests (other than an interest solely as a creditor)
in real property and associated personal property (such as movable walls and
furnishings) located in the United States or the Virgin Islands and interests
in any corporation (other than a controlled corporation) owning any United
States real property interest, (y) Fidelity is treated as owning its
proportionate share (based on the relative fair market value of its ownership
interest to all ownership interests) of the assets owned by any controlled
corporation or any partnership, trust, or estate in which Fidelity is a partner
or beneficiary, and (z) any such entity in turn is treated as owning its
proportionate share of the assets owned by any controlled corporation or any

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<PAGE> 8

partnership, trust, or estate in which the entity is a partner or beneficiary.
As used in this paragraph, "controlled corporation" means any corporation at
least 50 percent of the fair market value of the stock of which is owned by
Fidelity, in the case of a first-tier subsidiary of Fidelity or by a controlled
corporation, in the case of a lower-tier subsidiary.

OPINIONS

Based solely on the information submitted and the representations set
forth above, we are of the opinion that:

(1) The acquisition by Regions of all the stock of
Fidelity solely in exchange for shares of Regions Common Stock in the Merger
will constitute a reorganization within the meaning of Section 368(a) of the
Code. Each of Fidelity and Regions will be "a party to a reorganization"
within the meaning of Section 368(b) of the Code.

(2) No gain or loss will be recognized by the Fidelity
stockholders upon the receipt of Regions Common Stock solely in exchange for
their shares of Fidelity Capital Stock.

(3) The basis of Regions Common Stock to be received by
Fidelity stockholders will be the same as the basis of Fidelity Capital Stock
surrendered in exchange therefor.

(4) The holding period of Regions Common Stock to be
received by Fidelity stockholders will include the holding period of Fidelity
Capital Stock surrendered in exchange therefor, provided that the Fidelity
Capital Stock was held as a capital asset on the date of the exchange.

(5) The payment of cash to a Fidelity stockholder in lieu
of issuing a fractional share interest in Regions will be treated for federal
income tax purposes as if the fractional share was distributed as part of the
exchange and then was redeemed by Regions. This cash payment will be treated
as having been received as a distribution in full payment in exchange for the
stock redeemed as provided in section 302(a) of the Code.

(6) Where solely cash is received by a Fidelity
stockholder in exchange for such holder's shares of Fidelity Capital Stock
pursuant to the exercise of dissenters' rights of appraisal, such cash will be
treated as having been received in redemption of such holder's shares of
Fidelity Capital Stock, subject to the provisions and limitations of Section
302 of the Code.

The opinions expressed herein are based upon existing statutory,
regulatory, and judicial authority, any of which may be changed at any time
with retroactive effect. In addition, our opinions are based solely on the
documents that we have examined, the additional information that we have
obtained, and the statements set out herein, which we

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<PAGE> 9

have assumed are true on the date the Merger is consummated. Our opinions
cannot be relied upon if any of the facts contained in such documents or if
such additional information is, or later becomes, inaccurate, or if any of the
statements set out herein is, or later becomes, inaccurate. Finally, our
opinions are limited to the tax matters specifically covered thereby, and we
have not been asked to address, nor have we addressed, any other tax
consequences of the proposed Merger.

This opinion is being provided solely for the use of Regions Financial
Corporation, Fidelity Federal Savings Bank, and the shareholders of Fidelity
Federal Savings Bank and for purposes of Regions Financial Corporation's Form
S-4 Registration Statement under the Securities Act of 1933 filed with the
Securities and Exchange Commission. No other person or party shall be entitled
to rely on this opinion. We hereby consent to the filing of this opinion as an
exhibit to the Form S-4 Registration Statement and consent to any references to
this opinion or our firm in the Proxy Statement/Prospectus.

Very truly yours,

ALSTON & BIRD

By:
------------------------
Philip C. Cook

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<PAGE> 1
EXHIBIT 23.1

CONSENT OF ERNST & YOUNG LLP

We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) and related Prospectus of Regions Financial
Corporation for the registration of up to 1,074,747 shares of its common stock
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
January 18, 1995

<PAGE> 1
EXHIBIT 23.2

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our report, dated February 25, 1994, except for note 18 as to
which the date is October 17, 1994, on the consolidated financial statements of
Fidelity Federal Savings Bank and subsidiary as of and for the years ended
December 31, 1993 and 1992 contained in the Registration Statement on Form S-4
of Regions Financial Corporation and the related Prospectus. We consent to the
use of the aforementioned report in the Registration Statement and Prospectus
and to the use of our name as it appears under the caption "Experts."

EVANS, PORTER, BRYAN & CO.

/S/ EVANS, PORTER, BRYAN & CO.

Atlanta, Georgia
January 19, 1995

<PAGE> 1
CONSENT OF STERNE, AGEE & LEACH, INC.

EXHIBIT 23.6

We hereby consent to the filing of our January 18, 1995 opinion to
Fidelity Federal Savings Bank as an Exhibit to the Registration Statement on
Form S-4 of Regions Financial Corporation and to the references to us and our
opinion in the Proxy Statement/Prospectus that forms a part of the Registration
Statement. In giving this consent we do not concede that we are within the
category of persons whose consent is required in the Registration Statement.

STERNE, AGEE & LEACH, INC.
BY: /S/ Kathryn H. Bissette
Sr. Vice President

January 18, 1995