REGIONS FINANCIAL CORP, S-4, 1998-11-18

REGIONS FINANCIAL CORP
S-4, 1998-11-18
NATIONAL COMMERCIAL BANKS

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<PAGE> 1

As filed with the Securities and Exchange Commission on November 18, 1998
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 ANTHONY J. CORRERO, III
LANGE, SIMPSON, ROBINSON & ALSTON & BIRD LLP CORRERO FISHMAN HAYGOOD PHELPS
SOMERVILLE LLP 601 PENNSYLVANIA AVENUE, N.W. WEISS WALMSLEY & CASTEIX, LLP
417 NORTH 20TH STREET, SUITE 1700 NORTH BUILDING, SUITE 250 201 ST. CHARLES AVENUE
BIRMINGHAM, AL 35203 WASHINGTON, D.C. 20004 FORTY-SIXTH FLOOR
(205) 250-5000 (202) 508-3303 NEW ORLEANS, LA 70170
(504) 586-5252
</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 1,433,180 $11.45564409 $16,418,000 $4,564.20
=========================================================================================================================
</TABLE>

*Calculated in accordance with Rule 457(f), based on the total stockholders'
equity of the company being acquired. The number of shares being registered is
based on an exchange ratio calculated based on an assumed price of the
Registrant's common stock of $30.00 per share.

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

<TABLE>
<S> <C>
PROXY STATEMENT PROSPECTUS
ST. JAMES BANCORPORATION, INC. REGIONS FINANCIAL CORPORATION
COMMON STOCK
UP TO 1,433,180 SHARES
</TABLE>

-------------------------

MERGER PROPOSED -- YOUR VOTE IS VERY IMPORTANT
-------------------------

The Boards of Directors of St. James Bancorporation, Inc. and Regions Financial
Corporation have agreed on a merger of St. James and Regions. Regions will be
the surviving corporation in the merger. Regions is a regional bank holding
company headquartered in Birmingham, Alabama. with banking operations in
Alabama, Arkansas, Florida, Georgia, Louisiana, South Carolina, Tennessee, and
Texas. Regions has assets of about $35.1 billion, deposits of about $27.2
billion, and stockholders' equity of about $3.0 billion.

If the merger is completed, St. James stockholders will receive, for each share
of St. James common stock they own, that number of shares of Regions common
stock computed to have a value of $175.00. The computation is based on the
average of the last sales prices of Regions common stock on the Nasdaq National
Market over the last 20 trading days immediately before the date of the special
meeting of St. James stockholders. Regions stockholders will continue to own
their existing shares of Regions common stock after the merger.

We can't complete the merger unless the stockholders of St. James approve it.
St. James has scheduled a special meeting for its stockholders to vote on the
merger.

YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the stockholder
meeting, please take the time to vote by completing and mailing the enclosed
proxy card. If you sign, date and mail your proxy card without indicating how
you want to vote, your proxy will be counted as a vote in favor of the merger.
If you return your proxy card marked to abstain, the effect will be a vote
against the merger.

The date, time, and place of the special meeting of stockholders is as follows:

, 1998 p.m.
Main Office, St. James Bancorporation, Inc.
1980 West Main Street
Lutcher, Louisiana 70071

This Proxy Statement-Prospectus gives you detailed information about the
proposed merger. You can also get information about Regions from documents filed
with the Securities and Exchange Commission. We encourage you to read this
entire document carefully. Your Board of Directors strongly supports the merger
and recommends that you vote in favor of it.

SHARES OF REGIONS COMMON STOCK 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.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATORS HAVE APPROVED THE REGIONS COMMON STOCK TO BE ISSUED UPON COMPLETION
OF THE MERGER OR DETERMINED IF THIS PROXY STATEMENT-PROSPECTUS IS ACCURATE OR
ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Proxy Statement-Prospectus dated , 1998, and first mailed to
stockholders on , 1998.
<PAGE> 3

We have not authorized anyone to give any information or make any representation
about the merger or our companies that differs from, or adds to, the information
in this Proxy Statement-Prospectus or in Regions' documents that are publicly
filed with the Securities and Exchange Commission. Therefore, if anyone does
give you different or additional information, you should not rely on it.

If you are in a jurisdiction where it is unlawful to offer to exchange or sell,
or to ask for offers to exchange or buy, the securities offered by this Proxy
Statement-Prospectus or to ask for proxies, or if you are a person to whom it is
unlawful to direct such activities, then the offer presented by this Proxy
Statement-Prospectus does not extend to you.

The information contained in this Proxy Statement-Prospectus speaks only as of
its date unless the information specifically indicates that another date
applies.

Information in this Proxy Statement-Prospectus about Regions Financial
Corporation has been supplied by Regions, and information about St. James
Bancorporation, Inc. has been supplied by St. James.

CAUTION ABOUT FORWARD-LOOKING STATEMENTS

Each company makes forward-looking statements in this Proxy
Statement-Prospectus, and in Regions' public documents to which we refer, that
are subject to risks and uncertainties. These forward-looking statements include
information about possible or assumed future results of our operations or the
performance of the combined company after the merger. Also, when we use any of
the words "believes," "expects," "anticipates" or similar expressions, we are
making forward-looking statements. Many possible events or factors could affect
the future financial results and performance of each of our companies and the
combined company after the merger. This could cause results or performance to
differ materially from those expressed in our forward-looking statements. You
should consider these risks when you vote on the merger. These possible events
or factors include the following:

1. Regions' revenues after the merger and other recent acquisitions may be
lower than expected, Regions' restructuring charges in recent acquisitions
may be higher than expected, or Regions' operating costs after the merger
and other recent acquisitions may be greater than expected;

2. Competition among depository and other financial institutions may
increase significantly;

3. We may have more trouble obtaining regulatory approvals for the merger
than expected;

4. Regions may have more trouble integrating acquired businesses or
retaining key personnel than expected;

5. Regions' costs savings from the merger and other recent acquisitions may
be less than expected, or Regions may be unable to obtain those cost
savings as soon as expected;

6. Changes in the interest rate environment may reduce operating margins;

7. General economic or business conditions may be worse than we expect;
<PAGE> 4

8. Legislative or regulatory changes may adversely affect our businesses;

9. Technological changes and systems integration may be harder to make or
more expensive than expected; and

10. Adverse changes may occur in the securities markets.
<PAGE> 5

ST. JAMES BANCORPORATION, INC.
1980 WEST MAIN STREET, LUTCHER, LOUISIANA, 70071
------------------------

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD , 1998
------------------------

Notice is hereby given that a Special Meeting of Stockholders (the "Special
Meeting") of St. James Bancorporation, Inc. ("St. James"), will be held at St.
James' main office, located at 1980 West Main Street, Lutcher, Louisiana, 70071
on , 1998, at :00 p.m., local time, for the following
purposes:

1. Merger. To consider and vote on the Agreement and Plan of Merger, dated as
of July 17, 1998 (the "Agreement"), between St. James and Regions Financial
Corporation ("Regions") pursuant to which (i) St. James will merge into Regions
with Regions as the surviving corporation (the "Merger") and (ii) each share of
St. James common stock (excluding certain shares held by St. James, Regions, or
their respective subsidiaries and excluding all shares held by stockholders who
perfect their dissenters' rights) will be converted into that number of shares
of Regions common stock computed to have a value of $175.00 (based on the
average of the last sales prices of Regions common stock on the Nasdaq National
Market over the last 20 trading days before the date of the Meeting), with cash
to be paid in lieu of any remaining fractional share interest, all as described
more fully in the accompanying Proxy Statement-Prospectus; and

2. Other Business. To transact such other business as may properly 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 , 1998, are
entitled to receive notice of and to vote at the Special Meeting or any
adjournment or postponement thereof. Approval of the Agreement and the Merger
will require the affirmative vote of at least two-thirds of the shares of St.
James common stock represented in person or by proxy at the Special Meeting.

Stockholders of St. James have a right to dissent from the Merger and obtain
payment of the fair value of their shares in cash by complying with the
applicable provisions of applicable law. DISSENTING STOCKHOLDERS WHO COMPLY WITH
THE PROCEDURAL REQUIREMENTS OF THE BUSINESS CORPORATION LAW OF LOUISIANA WILL BE
ENTITLED TO RECEIVE PAYMENT OF THE FAIR CASH VALUE OF THEIR SHARES IF THE MERGER
IS EFFECTED UPON APPROVAL BY LESS THAN 80% OF THE CORPORATION'S TOTAL VOTING
POWER.

The Board of Directors of St. James unanimously recommends that holders of St.
James common stock vote FOR the proposals listed above.

We urge you to sign and return the enclosed proxy 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 by filing with the Secretary of St.
James an instrument of revocation or a duly executed proxy bearing a later date
or by electing to vote in person at the Special Meeting.

By Order of the Board of Directors

Cindy D. Martin
Corporate Secretary

, 1998
<PAGE> 6

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SUMMARY..................................................... 1
The Companies.......................................... 1
The Merger............................................. 1
Comparative Per Share Market Price Information......... 2
Reasons for the Merger................................. 2
Opinion of Financial Advisor........................... 2
The Special Meeting.................................... 2
Recommendations to Stockholders........................ 3
Record Date; Voting Power.............................. 3
Vote Required.......................................... 3
Conditions to Completion of the Merger................. 3
Termination of the Merger Agreement.................... 4
Federal Income Tax Consequences........................ 4
Accounting Treatment................................... 4
Interests of Persons in the Merger That Are Different
from Yours............................................ 4
Dissenters' Appraisal Rights........................... 5
Regulatory Approvals................................... 5
Comparative Per Share Data............................. 5
Selected Financial Data................................ 7
THE SPECIAL MEETING......................................... 12
General................................................ 12
Record Date; Vote Required............................. 12
THE MERGER.................................................. 14
General................................................ 14
Background of the Merger............................... 15
St. James' Reasons for the Merger...................... 15
Regions' Reasons for the Merger........................ 16
Opinion of St. James' Financial Advisor................ 16
Effective Time of the Merger........................... 21
Distribution of Regions Stock Certificates and Payment
for Fractional Shares................................. 21
Conditions to Consummation of the Merger............... 22
Regulatory Approvals................................... 23
Waiver, Amendment, and Termination of the Agreement.... 23
Conduct of Business Pending the Merger................. 24
Management Following the Merger........................ 25
Interests of Certain Persons in the Merger............. 26
Dissenting Stockholders................................ 26
Federal Income Tax Consequences of the Merger.......... 28
Accounting Treatment................................... 29
Expenses and Fees...................................... 30
Resales of Regions Common Stock........................ 30
EFFECT OF THE MERGER ON RIGHTS OF STOCKHOLDERS.............. 31
Antitakeover Provisions Generally...................... 31
Authorized Capital Stock............................... 32
Amendment of Certificate or Articles of Incorporation
and Bylaws............................................ 32
Classified Board of Directors and Absence of Cumulative
Voting................................................ 33
Removal of Directors................................... 34
</TABLE>
<PAGE> 7

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Limitations on Director Liability...................... 34
Indemnification........................................ 34
Special Meetings of Stockholders....................... 35
Actions by Stockholders Without a Meeting.............. 35
Stockholder Nominations................................ 35
Mergers, Consolidations, and Sales of Assets
Generally............................................. 36
Business Combinations with Certain Persons............. 37
Dissenters' Rights..................................... 38
Stockholders' Rights to Examine Books and Records...... 38
Dividends.............................................. 39
COMPARATIVE MARKET PRICES AND DIVIDENDS..................... 40
ST. JAMES BANCORPORATION MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS................................................ 42
Overview............................................... 42
Result of Operations................................... 43
INFORMATION ABOUT ST. JAMES................................. 57
Properties............................................. 57
Competition............................................ 57
Legal Proceedings...................................... 57
Management............................................. 57
Transactions with Management........................... 58
Voting Securities and Principal Stockholders of St.
James................................................. 59
INFORMATION ABOUT REGIONS................................... 60
General................................................ 60
Recent Developments.................................... 61
SUPERVISION AND REGULATION.................................. 64
General................................................ 64
Payment of Dividends................................... 65
Capital Adequacy....................................... 66
Prompt Corrective Action............................... 67
FDIC Insurance Assessments............................. 68
DESCRIPTION OF REGIONS COMMON STOCK......................... 68
STOCKHOLDER PROPOSALS....................................... 69
EXPERTS..................................................... 69
OPINIONS.................................................... 69
WHERE YOU CAN FIND MORE INFORMATION......................... 69
INDEX TO ST. JAMES FINANCIAL STATEMENTS..................... F-1
APPENDIX A -- Agreement and Plan of Merger.................. A-1
APPENDIX B -- Opinion of Chaffe & Associates................ B-1
</TABLE>
<PAGE> 8

SUMMARY

This summary highlights selected information from this Proxy
Statement-Prospectus. It does not contain all of the information that is
important to you. You should carefully read this entire document and the
documents to which we have referred. These will give you a more complete
description of the proposed merger and its terms. See "Where You Can Find More
Information" (page ). Each item in this summary includes a page reference that
directs you to a more complete description in this document of the topic
discussed.

THE COMPANIES (PAGES AND )

REGIONS FINANCIAL CORPORATION
417 North 20th Street
Birmingham, Alabama 35203
(205) 326-7100

Regions is incorporated in Delaware and is a regional bank holding company.
Regions provides banking and other financial services through banking operations
in Alabama, Arkansas, Florida, Georgia, Louisiana, South Carolina, Tennessee,
and Texas. As of September 30, 1998, Regions' total assets were about $35.1
billion, deposits were about $27.2 billion and stockholders' equity was about
$3.0 billion.

The section of this Proxy Statement-Prospectus under the caption "Where You Find
More Information" refers you to places where you can find more information about
Regions.

ST. JAMES BANCORPORATION, INC.
1980 West Main Street
Lutcher, Louisiana, 70071
(225) 869-9711

St. James Bancorporation is incorporated in Louisiana and is a bank holding
company that owns St. James Bank and Trust Company, a commercial bank, which
serves customers primarily in St. James and Ascension Parishes , Louisiana. As
of September 30, 1998, St. James' total assets were about $150.3 million,
deposits were about $131.1 million, and stockholders' equity was about $16.4
million.

THE MERGER (PAGE )

St. James proposes to merge into Regions with Regions as the surviving
corporation in the merger. When the merger is completed, you will receive, for
each share of St. James Common Stock that you own, that number of shares of
Regions stock computed to have a value of $175.00. The computation is based on
the average of the last sales prices of Regions common stock on the Nasdaq
National Market over the last 20 trading days immediately before the date of the
special meeting of St. James stockholders. However, you will not receive a
fraction of a share. Instead, you will receive a cash payment for any fraction
of a share to which you may become entitled.

If the merger is approved by less than 80% of the voting power of St. James and
if you elect to dissent from the merger under Louisiana law and follow the
required procedures, you will receive a cash payment for your shares of St.
James common stock instead of receiving Regions common stock.
1
<PAGE> 9

More information about your rights to dissent from the merger, and the
procedures you must follow should you choose to do so, is included under the
heading "The Merger -- Dissenting Stockholders" at page .

We have attached the merger agreement to this Proxy Statement-Prospectus as
Appendix A. We encourage you to read the merger agreement. It is the legal
document that establishes the terms and conditions of the Merger.

COMPARATIVE PER SHARE MARKET PRICE INFORMATION (PAGE )

Shares of Regions are quoted on the Nasdaq National Market. Shares of St. James
are not quoted on any established market. On July 21, 1998, the last full
trading day prior to the public announcement of an agreement in principle for
the merger, Regions stock closed at $41.88 per share. As of that date the last
known price of St. James Bancorporation stock was for 2 shares on October 29,
1997 at $61.00 per share. On , 1998, Regions stock closed at
$ per share.

Of course, the market price of Regions common stock will fluctuate after the
exchange ratio is fixed.

REASONS FOR THE MERGER (PAGE )

Before deciding to approve and recommend the merger, your Board of Directors
considered the financial condition and prospects of St. James, information about
Regions, the financial terms of the merger, the likelihood that bank regulators
will approve the merger, the federal income tax consequences of the merger, the
advice of your Board's legal and financial advisors, and other factors. Your
Board of Directors decided the merger is advisable and is in your best interests
as stockholders.

To review the background of and reasons for the merger in greater detail, please
see the discussion under the headings "The Merger -- Background of the Merger"
and "The Merger -- St. James' Reasons for the Merger" at pages and .

OPINION OF FINANCIAL ADVISOR (PAGE )

In deciding to approve the merger, your Board considered the opinion of its
financial advisor, Chaffe & Associates, that as of the date of the opinion, the
consideration you are to receive in the merger was fair from a financial point
of view to you as St. James Bancorporation stockholders. We have attached this
opinion as Appendix B to this Proxy Statement-Prospectus. You should read it
carefully.

THE SPECIAL MEETING (PAGE )

The St. James special meeting will be held at St. James Bancorporation's main
office, 1980 West Main Street, Lutcher, Louisiana, 70071, at p.m.
on , 1998. At the special meeting, St. James stockholders will be
asked to approve the merger agreement.
2
<PAGE> 10

RECOMMENDATIONS TO STOCKHOLDERS (PAGE )

Your Board of Directors believes that the merger is fair to you and in your best
interests. The Board unanimously recommends that you vote "FOR" the proposal to
approve the merger agreement.

RECORD DATE; VOTING POWER (PAGE )

You can vote at the Meeting if you owned St. James Common Stock as of the close
of business on , 1998, the record date. On that date, 245,688 shares
of St. James common stock were outstanding and therefore are allowed to vote at
the meeting. You will be able to cast one vote for each share of St. James
Common Stock you owned on , 1998.

Regions stockholders will not vote on the merger.

VOTE REQUIRED (PAGE )

For the special meeting to be held, a quorum must be present. A quorum is
established when a majority of the shares of St. James common stock are
represented at the special meeting either in person or by proxy. To approve the
merger, St. James stockholders who hold at least two-thirds of the outstanding
shares of common stock on the record date that are present or represented by
proxy at the special meeting must vote for the merger. If you do not vote, this
will have the same effect as a vote against the merger.

All together, the directors and officers of St. James can cast about 35.3% of
the votes entitled to be cast at the special meeting. The members of your Board
of Directors have agreed to vote all of their shares in favor of the merger.

CONDITIONS TO COMPLETION OF THE MERGER (PAGE )

The completion of the merger depends on a number of conditions being met,
including the following:

- St. James stockholders approving the merger;

- Receipt of all required regulatory approvals and the expiration of any
regulatory waiting periods;

- The absence of any governmental or court order blocking completion of the
merger, or of any proceedings by a government body trying to block it;

- Receipt of an opinion of counsel that the U.S. federal income tax
treatment to you the stockholders and to St. James in the merger will
generally be tax-free as we've described it to you in this Proxy
Statement-Prospectus;

- Filing with the National Association of Securities Dealers, Inc. of
Regions' notification for listing of additional shares on the Nasdaq
National Market for the shares of Regions common stock to be issued in
the merger.

In cases where the law permits, a party to the merger agreement could elect to
waive a condition that has not been satisfied and complete the merger although
it is entitled not to. We can't be certain whether or when any of the conditions
we've listed will be satisfied (or waived, where permissible), or that the
merger will be completed.
3
<PAGE> 11

TERMINATION OF THE MERGER AGREEMENT (PAGE )

We can agree at any time to terminate the merger agreement without completing
the merger, even if you, the stockholders, have already voted to approve it.
Moreover, either of us can terminate the merger agreement in the following
circumstances:

- After a final decision by a governmental authority to prohibit the
merger, or after the rejection of an application for a governmental
approval required to complete the merger;

- If the merger isn't completed by March 31, 1999;

- If the St. James stockholders don't approve the merger; or

- If the other party violates, in a significant way, any of its
representations, warranties or obligations under the merger agreement and
the party seeking termination isn't in violation of the merger agreement.

FEDERAL INCOME TAX CONSEQUENCES (PAGE )

We have structured the merger with the intent that you won't recognize any gain
or loss for U.S. federal income tax purposes in the merger when you exchange all
of your shares of St. James common stock for shares of Regions common stock in
the merger, except in connection with cash received instead of fractional
shares. We have conditioned the merger on our receipt of a legal opinion that
this will be the case, but the opinion won't bind the Internal Revenue Service,
which could take a different view.

THIS TAX TREATMENT MAY NOT APPLY TO CERTAIN ST. JAMES STOCKHOLDERS, INCLUDING
THE TYPES OF ST. JAMES STOCKHOLDERS DISCUSSED ON PAGE , AND WILL NOT APPLY TO
ANY ST. JAMES STOCKHOLDER WHO DISSENTS FROM THE MERGER UNDER LOUISIANA LAW.
DETERMINING THE ACTUAL TAX CONSEQUENCES OF THE MERGER TO YOU CAN BE COMPLICATED.
THEY WILL DEPEND ON YOUR SPECIFIC SITUATION AND MANY VARIABLES NOT WITHIN OUR
CONTROL. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR FOR A FULL UNDERSTANDING OF THE
MERGER'S TAX CONSEQUENCES.

ACCOUNTING TREATMENT (PAGE )

We expect the merger to qualify for purchase accounting treatment, meaning that
the assets and liabilities of St. James will be recorded at their estimated fair
values and added to those of Regions.

INTERESTS OF PERSONS IN THE MERGER THAT ARE DIFFERENT FROM YOURS (PAGE )

Some of the officers of St. James have benefit and compensation plans that
provide them with interests in the merger that are different from, or in
addition to, their interests as stockholders of St. James Bancorporation. In
addition, members of St. James' Board and its officers are entitled to
indemnification under the merger agreement.

The board of directors of St. James was aware of these interests and considered
them in approving and recommending the merger.
4
<PAGE> 12

DISSENTERS' APPRAISAL RIGHTS (PAGE )

Louisiana law permits you to dissent from the merger and to have the fair value
of your stock paid to you in cash. To do this, you must follow certain
procedures, including the filing of certain notices and must vote your shares
against the merger. If you dissent from the merger, your shares of St. James
common stock will not be exchanged for shares of Regions common stock in the
merger, and your only right will be to receive the value of your shares in cash.

REGULATORY APPROVALS (PAGE )

We can't complete the merger unless we obtain the approval of the Board of
Governors of the Federal Reserve System. The U.S. Department of Justice has
input into the Federal Reserve Board's approval process. Federal law requires us
to wait for up to 30 days before completing the merger after the Federal Reserve
Board has approved it, which the Federal Reserve Board may shorten to 15 days.
The Federal Reserve Board has approved the merger.

In addition, the merger is subject to the approval of or notice to the
Commissioner of Financial Institutions of the State of Louisiana.

We have filed all of the required notices with these regulatory authorities.
While we don't know of any reason why we shouldn't obtain the remaining
regulatory approvals in a timely manner, we can't be certain when we'll obtain
them or that we will obtain them.

COMPARATIVE PER SHARE DATA

The following table shows information about our companies' income per share,
dividends per share and book value per share, and similar information reflecting
the merger of our two companies (which is referred to as "pro forma"
information). In presenting the comparative pro forma information for certain
time periods, we assumed that our companies had been merged throughout those
periods.

In presenting the comparative pro forma information, we also assumed that
Regions will record St. James assets and liabilities at their estimated fair
values and add them to the assets and liabilities of Regions for accounting and
financial reporting purposes (a method which is referred to as the "purchase"
method of accounting).

The information listed as "equivalent pro forma" was obtained by multiplying the
pro forma amounts by an assumed exchange ratio of 4.8276, based on the last
sales price of Regions common stock on the Nasdaq National Market on September
30, 1998. It is intended to reflect the estimate that St. James Bancorporation
stockholders will be receiving 4.8276 shares of Regions common stock for each
share of St. James Bancorporation common stock exchanged in the merger. This may
not be the actual exchange ratio, since the exact ratio won't be determined
until shortly before the merger.

The pro forma information, while helpful in illustrating the financial
attributes of the combined company under one set of assumptions, doesn't attempt
to predict or suggest future results. Also, the information we've set forth for
the nine-month period ended September 30, 1998 doesn't indicate what the results
will be for the full 1998 fiscal year.
5
<PAGE> 13

The information in the following table is based on the historical financial
information of our companies. See "Information About Regions--Recent
Developments," "Where You Can Find More Information" and "Index to St. James
Financial Statements."

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30,
------------- YEAR ENDED
1998 1997 DECEMBER 31, 1997
----- ----- -------------------------
(UNAUDITED) (UNAUDITED EXCEPT REGIONS
AND ST. JAMES HISTORICAL)
<S> <C> <C> <C>
INCOME BEFORE EXTRAORDINARY ITEM PER COMMON
SHARE
Regions historical........................... $1.34 $1.38 $1.82
Regions historical -- diluted................ 1.32 1.36 1.79
St. James historical......................... 5.80 5.24 7.37
St. James historical -- diluted.............. 5.80 5.24 7.37
Regions and St. James pro forma
combined(1)................................ 1.33 1.81
Regions and St. James pro forma combined --
diluted(1)................................. 1.31 1.78
St. James pro forma equivalent(2)............ 6.42 8.74
St. James pro forma
equivalent -- diluted(2)................... 6.32 8.59
DIVIDENDS DECLARED PER COMMON SHARE
Regions historical........................... .69 .60 .80
St. James historical......................... 6.00 3.00 4.50
St. James pro forma equivalent(3)............ 3.33 2.90 3.86
BOOK VALUE PER COMMON SHARE (PERIOD END)
Regions historical........................... 13.38 12.46 12.75
St. James historical......................... 66.82 65.91 66.55
Regions and St. James pro forma
combined(1)................................ 13.38
St. James pro forma equivalent(2)............ 64.59
</TABLE>

- ------------------

(1) Represents the combined results of Regions and St. James as if the Merger
were consummated on January 1, 1997 (or September 30, 1998, in the case of
Book Value Per Share Data), and were accounted for as a purchase.

(2) Represents pro forma combined information multiplied by an assumed Exchange
Ratio of 4.8276 shares of Regions Common Stock for each share of St. James
Common Stock.
6
<PAGE> 14

(3) Represents historical dividends declared per share by Regions multiplied by
an assumed Exchange Ratio of 4.8276 shares of Regions Common Stock for each
share of St. James Common Stock.
(4) The combined and equivalent pro forma per share data assuming minimum and
maximum Exchange Ratios of 4.1667 and 5.8333 shares of Regions Common Stock
for each share of St. James Common Stock is as follows:

<TABLE>
<CAPTION>
EXCHANGE RATIO
--------------------------------------
MINIMUM (4.1667) MAXIMUM (5.8333)
-------------------------------------- --------------------------------------
NINE MONTHS YEAR NINE MONTHS YEAR
ENDED ENDED ENDED ENDED
SEPTEMBER 30, 1998 DECEMBER 31, 1997 SEPTEMBER 30, 1998 DECEMBER 31, 1997
------------------ ----------------- ------------------ -----------------
(UNAUDITED)
<S> <C> <C> <C> <C>
INCOME BEFORE EXTRAORDINARY
ITEM PER COMMON SHARE
Regions and St. James pro
forma combined............ $ 1.34 $1.82 $ 1.33 $ 1.81
Regions and St. James pro
forma combined -
diluted................... 1.31 1.78 1.31 1.78
St. James pro forma
equivalent................ 5.58 7.58 7.76 10.56
St. James pro forma
equivalent -- diluted..... 5.46 7.42 7.64 10.38
DIVIDENDS DECLARED PER
COMMON SHARE
St. James pro forma
equivalent................ 2.88 3.33 4.02 4.67
BOOK VALUE PER COMMON SHARE
(PERIOD END)
Regions and St. James pro
forma combined............ 13.38 13.38
St. James pro forma
equivalent................ 55.75 78.05
</TABLE>

SELECTED FINANCIAL DATA

The following tables show summarized historical financial data for each of our
companies.

The information in the following tables is based on the historical financial
information of our companies. All of the summary financial information provided
in the following tables should be read in connection with this historical
financial information and with the more detailed financial information we have
provided in this Proxy Statement-Prospectus, which you can find beginning at
page F-1 and in the documents of Regions incorporated by reference. See
"Information About Regions--Recent Developments" on page and "Where You Can
Find More Information" on page . The financial information as of or for the
interim periods ended September 30, 1998 and 1997 has not been audited and in
the respective opinions of management reflects all adjustments (consisting only
of normal recurring adjustments) necessary to a fair presentation of such data.
7
<PAGE> 15

SELECTED HISTORICAL FINANCIAL DATA OF REGIONS

<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------------- -------------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- ----------- -----------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT
DATA:
Total interest
income............. $ 1,932,506 $ 1,684,430 $ 2,276,584 $ 1,954,283 $ 1,750,427 $ 1,385,512 $ 1,102,493
Total interest
expense............ 948,247 808,368 1,097,376 942,459 861,242 598,160 446,199
Net interest income.. 984,259 876,062 1,179,208 1,011,824 889,185 787,352 656,294
Provision for loan
losses............. 41,482 58,966 89,663 46,026 37,493 22,058 38,017
Net interest income
after loan loss
provision.......... 942,777 817,096 1,089,545 965,798 851,692 765,294 618,277
Total noninterest
income before
security gains
(losses)........... 340,835 283,374 381,400 341,792 280,834 251,837 242,326
Security gains
(losses)........... 3,127 454 498 3,311 (697) 681 3,312
Total noninterest
expense............ 839,939 663,039 901,776 837,034 720,825 653,506 584,044
Income tax expense... 152,095 147,693 187,563 156,008 134,529 115,853 88,225
Income before
extraordinary
item............... 294,705 290,192 382,104 317,859 276,475 248,453 191,646
Extraordinary item... -- 15,425 15,425 -- -- -- --
Net income........... 294,705 305,617 397,529 317,859 276,475 248,453 191,646
PER SHARE DATA:
Income before
extraordinary
item............... $ 1.34 $ 1.38 $ 1.82 $ 1.64 $ 1.45 $ 1.36 $ 1.14
Net income........... 1.34 1.46 1.89 1.64 1.45 1.36 1.14
Income before
extraordinary
item -- diluted.... 1.32 1.36 1.79 1.61 1.43 1.34 1.12
Net income --
diluted............ 1.32 1.43 1.86 1.61 1.43 1.34 1.12
Cash dividends....... .69 .60 .80 .70 .66 .60 .52
Book value........... 13.38 12.46 12.75 11.82 10.74 9.58 8.89
OTHER INFORMATION:
Average number of
shares
outstanding........ 220,220 209,721 209,781 194,241 190,896 182,903 168,758
Average number of
shares
outstanding --
diluted............ 223,935 213,940 213,750 197,751 193,579 185,110 171,363
STATEMENT OF
CONDITION DATA
(PERIOD END):
Total assets......... $35,076,264 $30,451,527 $31,414,058 $26,993,344 $24,419,249 $22,184,508 $19,126,602
Securities........... 7,696,008 6,192,352 6,315,923 5,742,375 5,618,839 5,143,226 4,861,348
Loans, net of
unearned income.... 23,852,206 21,215,476 21,881,123 18,395,552 16,156,132 14,726,649 11,791,556
Total deposits....... 27,184,895 24,699,371 25,011,021 22,019,412 19,982,422 18,048,906 16,242,208
Long-term debt....... 424,176 456,347 445,529 570,545 762,521 766,774 683,171
</TABLE>

8
<PAGE> 16

- -------------------------

(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.
9
<PAGE> 17

(5) The required minimum Tier 1 and total capital ratios are 4% and 8%,
respectively. The minimum leverage ratio of Tier 1 capital to total assets
is 3% to 5%. The ratios for prior periods have not been restated to reflect
the combinations with First National Bancorp and First Commercial
Corporation, accounted for as poolings of interests, or any other
pooling-of-interests transactions.

(a) Ratios for the nine months ended September 30, 1998, excluding $76.5 million
(after tax) for nonrecurring merger and restructuring charges are as
follows: Return on average assets -- 1.48%, Return on average stockholders'
equity -- 17.36%, and Efficiency -- 54.00%.

(b) Ratios for the nine months ended September 30, 1997, excluding $15.4 million
(after tax) for extraordinary gain from divestiture of two banks by a pooled
company are as follows: Return on average assets -- 1.33% and Return on
average stockholders' equity -- 15.21%.

(c) Ratios for 1997 excluding $15.4 million (after tax) for extraordinary gain
from divestiture of two banks by a pooled company are as follows: Return on
average assets -- 1.29% and Return on average stockholders'
equity -- 14.79%.

(d) Ratios for 1996 excluding $19.0 million (after-tax) charge for SAIF
assessment and merger expenses are as follows: Return on average
assets -- 1.40%, Return on average stockholders' equity -- 16.45%, and
Efficiency -- 56.16%.

SELECTED HISTORICAL FINANCIAL DATA OF ST. JAMES

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------- ----------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
-------- -------- -------- -------- -------- -------- --------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total interest income............... $ 8,464 $ 7,556 $ 10,226 $ 9,115 $ 9,297 $ 8,846 $ 9,299
Total interest expense.............. 3,609 3,116 4,224 3,739 3,766 3,151 3,469
Net interest income................. 4,855 4,440 6,002 5,376 5,531 5,695 5,830
Provision for loan losses........... 170 180 250 310 1,260 455 420
Net interest income after loan loss
provision......................... 4,685 4,260 5,752 5,066 4,271 5,240 5,410
Total noninterest income excluding
security gains (losses)........... 900 891 1,228 1,079 1,168 1,003 847
Security gains (losses)............. (2) 1 -- (28) -- (2) 17
Total noninterest expense........... 3,557 3,342 4,493 4,296 5,064 3,955 3,744
Income tax expense.................. 601 522 675 506 32 628 387
Net income.......................... 1,425 1,288 1,812 1,315 343 1,658 2,143
PER SHARE DATA:
Net income.......................... $ 5.80 $ 5.24 $ 7.37 $ 5.35 $ 1.40 $ 6.75 $ 8.72
Net income -- diluted............... 5.80 5.24 7.37 5.35 1.40 6.75 8.72
Cash dividends...................... 6.00 3.00 4.50 2.50 1.20 1.00 1.00
Book value.......................... 66.82 65.91 66.55 63.43 60.50 55.89 54.94
OTHER INFORMATION:
Average number of shares
outstanding....................... 246 246 246 246 246 246 246
Average number of shares
outstanding -- diluted............ 246 246 246 246 246 246 246
STATEMENT OF CONDITION DATA
(PERIOD END):
Total assets........................ $150,331 $139,241 $152,374 $139,555 $142,965 $132,329 $140,142
Securities.......................... 38,994 49,496 54,302 51,188 54,418 57,977 67,475
Loans, net of unearned income....... 95,584 78,834 79,513 65,381 65,938 59,317 48,797
</TABLE>

10
<PAGE> 18

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------- ----------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
-------- -------- -------- -------- -------- -------- --------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
Total deposits...................... 131,109 122,008 133,068 122,957 126,434 118,030 125,948
Long-term debt...................... 963 -- 2,000 -- -- 90 175
Stockholders' equity................ 16,418 16,194 16,351 15,584 14,865 13,731 13,498
PERFORMANCE RATIOS:
Return on average assets(1)......... 1.24% 1.25% 1.30% 1.02% .77% 1.25% 1.55%
Return on average stockholders'
equity(1)......................... 11.65 10.78 11.36 8.65 6.86 11.95 16.88
Net interest margin(1).............. 4.58 4.40 4.59 4.43 4.64 4.69 4.70
Efficiency(2)....................... 61.81 62.69 62.14 66.55 75.59 59.05 56.07
Dividend payout..................... 103.45 57.25 61.06 46.73 85.71 14.81 11.47
ASSET QUALITY RATIOS:
Net charge-offs to average loans,
net of unearned income(1)......... .05% .42% .48% .98% .94% 1.22% .67%
Problem assets to net loans and
other real estate(3).............. 1.06 1.33 1.28 2.15 3.23 .92 1.55
Nonperforming assets to net loans
and other real estate(4).......... 1.22 1.52 1.41 2.36 3.83 1.82 3.28
Allowance for loan losses to loans,
net of unearned income............ 1.24 1.30 1.33 1.77 2.27 1.43 2.14
Allowance for loan losses to
nonperforming assets(4)........... 103.31 85.24 94.21 74.69 58.63 78.22 64.67
LIQUIDITY AND CAPITAL RATIOS:
Average stockholders' equity to
average assets.................... 10.65% 11.63% 11.47% 11.81% 11.12% 11.67% 10.13%
Average loans to average deposits... 72.90 64.59 58.89 52.10 50.67 49.42 37.88
Tier 1 risk-based capital(5)........ 18.33 21.26 20.81 21.16 21.68 24.56 26.49
Total risk-based capital(5)......... 19.58 22.51 22.06 22.41 22.93 25.81 27.74
Tier 1 leverage(5).................. 10.53 11.73 11.18 12.09 10.55 11.22 9.72
</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 capital ratios are 4% and 8%,
respectively. The minimum leverage ratio of Tier 1 capital to total assets
is 3% to 5%.
11
<PAGE> 19

THE SPECIAL MEETING

GENERAL

This Proxy Statement-Prospectus is being furnished to the stockholders of St.
James Bancorporation, Inc. in connection with the solicitation on behalf of the
St. James Board of Directors of proxies for use at a special meeting of
stockholders, at which St. James stockholders will be asked to vote upon a
proposal to approve the Agreement and Plan of Merger, dated as of July 17, 1998,
by and between St. James and Regions Financial Corporation.

The Special Meeting will be held at :00 p.m., local time, on , 1998,
at the main offices of St. James, at 1980 West Main Street, Lutcher, Louisiana,
70071.

St. James stockholders are requested promptly to sign, date, and return the
accompanying proxy card to St. James in the enclosed postage-paid, addressed
envelope.

Any St. James 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
St. James a signed proxy card bearing a later date, provided that such notice or
proxy card is actually received by St. James before the taking of the
stockholder vote at the Special Meeting. Any notice of revocation should be sent
to St. James Bancorporation, Inc., 1980 West Main Street, Lutcher, Louisiana,
70071, Attention: Cindy D. Martin, Corporate Secretary. A proxy will not be
revoked by death or 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 St. James Common Stock represented by properly executed proxies
received at or before the vote is taken at 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 AGREEMENT 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 AGREEMENT. As of the
date of this Proxy Statement-Prospectus, St. James 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,
telegram, e-mail or in person by the directors, officers, and employees of St.
James, 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.

St. James stockholders should not forward any stock certificates with their
proxy cards.

RECORD DATE; VOTE REQUIRED

St. James' Board has established the close of business on , 1998, as
the record date for determining the St. James stockholders entitled to notice of
and to vote at the Special Meeting. Only St. James stockholders of record as of
the record date will be entitled to vote at the Special Meeting. As of the
record date, there were approximately holders of 245,688 shares
of common stock of St. James outstanding and

12
<PAGE> 20

entitled to vote at the Special Meeting, with each share entitled to one vote.
For information as to persons known by St. James to beneficially own more than
5.0% of outstanding shares of St. James Common Stock as of the record date, see
"Information About St. James -- Voting Securities and Principal Stockholders of
St. James."

The presence, in person or by proxy, of a majority of the outstanding shares of
St. James Common Stock is necessary to constitute a quorum of the stockholders.
A quorum must be present before a vote on the Merger Agreement can be taken at
the Special Meeting. For these purposes, shares of St. James Common 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 Agreement for any reason, including broker nonvotes. Generally, a
broker who holds shares of St. James Common Stock in "street" name on behalf of
a beneficial owner lacks authority to vote such shares in the absence of
specific voting instructions from the beneficial owner.

Once a quorum is established, approval of the Agreement requires the affirmative
vote of the holders of at least two-thirds of the outstanding shares of St.
James Common Stock present or represented by proxy at the Special Meeting.
Therefore, an abstention by a stockholder present in person or represented by
proxy at the Special Meeting will have the same effect as a vote against the
Agreement.

The directors and executive officers of St. James and their affiliates
beneficially owned, as of the record date, 86,788 shares (or approximately 35.3%
of the outstanding shares) of St. James Common Stock. The directors and
executive officers of Regions and their affiliates beneficially owned, as of the
record date, no shares of St. James Common Stock. As of that date, no subsidiary
of either St. James or Regions held any shares of St. James Common Stock in a
fiduciary capacity for others.

13
<PAGE> 21

THE MERGER

The following material describes certain aspects of the merger of St. James into
Regions. This description does not purport to be complete and is qualified in
its entirety by reference to the Appendices hereto, including the Agreement,
which is attached as Appendix A to this Proxy Statement-Prospectus and
incorporated herein by reference. All stockholders are urged to read the
Appendices in their entirety.

GENERAL

The Agreement provides generally for the acquisition of St. James by Regions
pursuant to the Merger of St. James into Regions. Regions will be the surviving
corporation resulting from the Merger.

On the date and at the time that the Merger becomes effective, each share of St.
James Common Stock (excluding shares held by St. James, Regions, or their
respective subsidiaries, in each case other than shares held in a fiduciary
capacity or as a result of debts previously contracted, and excluding all shares
held by stockholders who perfect their dissenters' rights) issued and
outstanding at the effective time of the Merger will be converted into shares of
common stock of Regions at a ratio (the "Exchange Ratio") specified in the
Agreement. The Agreement establishes the Exchange Ratio as that multiple of a
share of Regions common stock equal to the quotient obtained by dividing (i)
$175.00 by (ii) the average of the last sales prices of Regions common stock on
the Nasdaq National Market over the 20 consecutive trading days ending on the
trading day before the date of the Special Meeting (the "Average Closing
Price").

The formulation of the Exchange Ratio in the Agreement reflects the parties'
agreement that St. James Common Stock will be converted in the Merger into
Regions Common Stock having a value of approximately $175.00 per St. James share
as of the date of the Special Meeting, regardless of any fluctuations in the
market price of Regions Common Stock before or after that date. Accordingly, the
holders of St. James Common Stock do not bear the risk of any decrease in the
trading price of Regions Common Stock prior to the specified valuation period,
but would not benefit from any increase in such trading price before the
valuation period. Conversely, the holders of St. James Common Stock will bear
the risk of a decrease in the trading price of Regions Common Stock after the
specified valuation period, but would also benefit from any increase in such
trading price after the valuation period. Moreover, because the Exchange Ratio
is based on an average of quoted last sale prices of Regions Common Stock over a
20-business-day period, and because the valuation period will occur before the
effective time of the Merger, the equivalent per share value of the Regions
Common Stock issued in the Merger (that is, the Exchange Ratio multiplied by the
quoted per share price of Regions Common Stock on the Nasdaq National Market as
of any given date) may be more or less than $175.00 per share of St. James
Common Stock as of the effective time of the Merger.

Each share of Regions Common Stock outstanding immediately prior to the
effective time of the Merger will remain outstanding and unchanged as a result
of the Merger.

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 equal to the fractional part of a share which a St. James stockholder
would otherwise 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, by another authoritative

14
<PAGE> 22

source selected by Regions), on the last trading day prior to the effective time
of the Merger.

BACKGROUND OF THE MERGER

During the last several years, there have been significant developments in the
banking and financial services industry. These developments have included the
increased emphasis and dependence on automation, specialization of products and
services, increased competition from other financial institutions, and a trend
toward consolidation and geographic expansion, coupled with a relaxation of
regulatory restrictions on interstate conduct of business of financial
institutions.

St. James and its Board of Directors concluded that it could best serve its
stockholders, employees, customers and community by combining with a regional
banking organization, provided that St. James could obtain a fair price for its
stockholders. Accordingly, St. James and Regions entered into negotiations which
culminated in the Agreement.

ST. JAMES' REASONS FOR THE MERGER

In approving the Merger, the directors of St. James considered a number of
factors. Without assigning any relative or specific weights to the factors, the
St. James Board of Directors considered the following material factors:

- the financial terms of the Merger, including the relationship of the
merger price to the book value and earnings per share of St. James Common
Stock and the partial protection against a decline in the market value of
Regions Common Stock;

- the nonfinancial terms of the Merger, including the treatment of the
Merger as a tax-free exchange of St. James Common Stock for Regions
Common Stock for federal and state income tax purposes;

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

- the opinion rendered by St. James' financial advisor to the effect that,
from a financial point of view, the exchange of St. James Common Stock
for Regions Common Stock on the terms and conditions set forth in the
Agreement is fair to the holders of St. James Common Stock;

- stockholders of St. James will receive shares of Regions Common Stock,
which is publicly traded on NASDAQ; there is no current public market for
St. James Common Stock;

- affiliation with a larger holding company would provide the opportunity
to realize economies of scale and increase efficiencies of operations to
the benefit of stockholders and customers. Affiliation with Regions will
also enhance the development of new products and services, the
development and provision of which are becoming increasingly difficult to
address by smaller banks; and

- potential benefits and opportunities for employees of St. James, as a
result of both employment in a larger enterprise and Regions' benefit
plans and policies.

The terms of the Merger were the result of arms-length negotiations between
representatives of St. James and representatives of Regions. Based upon the
consideration

15
<PAGE> 23

of the foregoing factors, the Board of St. James unanimously approved the Merger
as being in the best interests of St. James and its stockholders. Each member of
the Board of St. James has agreed to vote those shares of St. James Common Stock
over which such member has voting authority (other than in a fiduciary capacity)
in favor of the Merger.

St. James' Board of Directors unanimously recommends that St. James stockholders
vote for approval of the Agreement.

REGIONS' REASONS FOR THE MERGER

In approving the Agreement and the Merger, the Regions Board considered a number
of factors concerning the benefits of the Merger, including the following:

- Information Concerning St. James: The Regions Board considered
information concerning the business, operations, earnings, asset quality,
and financial condition of St. James, and aspects of the St. James
franchise, including the market position of St. James in each of the
markets in which it operates and the compatibility of the community bank
orientation of the operations of St. James to that of Regions. The
Regions Board concluded that St. James is a sound, well managed financial
institution which is well positioned in its market areas and which
presents an attractive opportunity for Regions to add to its franchise in
the Louisiana market.

- Financial Terms of the Merger: The Regions Board considered various
financial aspects of the Merger as reported by Regions' management
including (1) the anticipated effect of the Merger on Regions' per share
earnings (with the Merger anticipated to have no significant effect on
Regions' earnings per share), (2) the anticipated effect of the Merger on
Regions' book value per share (with the Merger anticipated not to dilute
significantly Regions' book value per share), and (3) a comparison of St.
James to selected peer banks and a comparison of pricing aspects of the
Merger to pricing characteristics of other merger transactions involving
financial institutions.

- Nonfinancial Terms of the Merger. The Regions Board considered various
nonfinancial aspects of the Merger, including the treatment of the Merger
as a tax-free exchange of St. James Common Stock for Regions Common Stock
for federal income tax purposes and the likelihood of the Merger being
approved by applicable regulatory authorities without undue conditions or
delay.

The foregoing discussion of the information and factors considered by the
Regions Board is not intended to be exhaustive but includes all material factors
considered by the Regions Board. In reaching its determination to approve the
Merger and the Agreement, the Regions Board did not assign any relative or
specific weights to the foregoing factors, and individual directors may have
given differing weights to different factors. After deliberating with respect to
the Merger and the other transactions contemplated by the Agreement, and
considering, among other things, the matters discussed above, the Regions Board
determined that the Merger is in the best interests of Regions and its
stockholders and unanimously approved the Agreement.

OPINION OF ST. JAMES' FINANCIAL ADVISOR

Chaffe & Associates, Inc. ("Chaffe") has been retained as financial advisor by
St. James Bancorporation on its proposed merger into Regions Financial
Corporation to provide an

16
<PAGE> 24

opinion on the fairness of the transaction (the "Fairness Opinion") to the
stockholders of St. James.

In connection with its opinion, Chaffe reviewed, among other things, (i) the
Merger Agreement; (ii) Audited Financial statements of St. James for the four
years ended December 31, 1997; (iii) unaudited Financial Statements of St. James
for the nine month periods ended September 30, 1998 and 1997; (iv) the draft of
the S-4 Proxy Statement dated September 25, 1998; (v) St. James' Federal Income
Tax Returns for the years ended December 31, 1996 and 1997; (vi) St. James'
Federal Reserve Forms Y-9SP dated December 31, 1996 and 1997 and June 30, 1997
and 1998; (vii) St. James' Articles of Incorporation and Bylaws; (viii) the St.
James Bank & Trust Co.'s (the "Bank") Call Reports for the years ended December
31, 1995 through 1998 and the quarters ended March 31, 1998 through September
30, 1998; (ix) the Bank's Uniform Bank Performance Reports (the "UBPR") for the
quarters ended December 31, 1997 through June 30, 1998; (x) certain
publicly-available industry and company financial information; (xi) certain
internal financial analyses and forecasts for St. James that were prepared by
its management. Chaffe also held discussions with members of the senior
management of St. James and the Bank regarding the strategic rationale for, and
the potential benefits of, the transaction contemplated by the Merger Agreement
and the past and current business operations, financial condition, and future
prospects of St. James. In addition, Chaffe reviewed the reported price and
trading activity for the Regions common stock, compared certain financial and
stock market information for Regions with similar information for certain other
companies, the securities of which are publicly-traded, reviewed the financial
terms of certain recent business combinations in the banking industry, and
performed such other studies and analyses as it considered appropriate. Chaffe
notes that the Bank is wholly-owned by St. James and St. James has only nominal
assets and no operations other than those related to the Bank. Chaffe relied
upon the accuracy and completeness of all of the financial and other information
reviewed by it and Chaffe assumed such accuracy and completeness for purposes of
rendering its opinion. In addition, Chaffe did not make any independent
evaluation or appraisal of the assets and liabilities of St. James and Chaffe
was not furnished with any such evaluation or appraisal. Chaffe's opinion was
provided for the information and assistance of the Board of Directors of St.
James in connection with its consideration of the transaction contemplated by
the Merger Agreement, and such opinion does not constitute a recommendation as
to how any holder of shares of St. James common stock should vote with respect
to such transaction. Further, this opinion should not be interpreted as
projecting the future market value of Regions common stock.

Chaffe reviewed the financial performance of St. James and the Bank and utilized
several valuation models to examine fairness. These valuation models are based
on a large and a small public peer group, the discounted cash flow model (DCF),
a dividend discount model and two merger peer groups with various pricing
multiples. In the process of valuation, Chaffe has given the most weight to the
values derived from the merger peer group models and the dividend discount
model. The circumstances of this valuation are more directly in line with these
specific valuation models than the public peer group models, which indicate
marketable, minority value and must be adjusted for a control value. The
valuation emphasizes earnings, as they are more indicative of value than other
pricing parameters. For the purposes of this analysis, Chaffe uses the Bank's
financial information as of September 30, 1998. The UBPR peer group data is as
of June 30, 1998, the most recent date at which the UBPR is available.

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<PAGE> 25

The following is a summary of certain financial analyses used by Chaffe in
connection with providing its opinion to the St. James Board.

Analysis Of Selected Financial Data. Chaffe compared the performance of the
Bank at September 30, 1998 with that of the June UBPR peer group, which consists
of 900 insured commercial banks with assets between $100 million and $300
million, and with three or more offices located in a metropolitan area. The
Bank's 1997 net income was $1,820,000, compared to $1,359,000 in 1996 and
$1,004,000 in 1995. Net income for the nine months ended September 30, 1998 was
$1,471,000. The Bank's annualized return on average assets ("ROAA") as of
September 30, 1998 was 1.31%, compared to 1.27% for the peer group. The Bank's
figure was also 1.31% at December 31, 1997. The Bank's return on the average
equity ("ROAE") increased from 9.05% in 1996 to 11.42% in 1997, and then up to
11.93% as of September 30, 1998. The Bank's UBPR peer group's ROAE was 12.74% in
1996, 12.91% in 1997, and 13.60% in June 1998.

The Bank's net interest income as of September 30, 1998 was 4.32% of average
assets versus 4.59% for the peer group. The Bank's noninterest income was 0.80%
of average assets compared to 1.14% for the peer group. Also, the Bank's
personnel expenses was 1.63% of average assets compared with 1.84% for its peer
group, and the Bank's average annual personnel expense per employee is $35,401
compared with $38,070 for its peer group.

The Bank's asset quality has been consistent, with a nonperforming-assets
("NPA")-to-asset ratio of 0.64% as of September 30, 1998, compared with 0.60% as
of December 31, 1997. The NPA-to-asset ratio as of December 31, 1996, 1995, and
1994 was 0.96%, 1.64%, and 0.82% respectively. September 1998 nonaccrual loans
to loan loss reserve ratio was 66.84%, which was a decrease from 73.53% at
December 1997, versus the peer group at 43.86% and 47.17% for the same time
periods. Historically, the nonaccrual loans to loan loss reserve ratio was
90.09% and 95.24% as of December 31, 1996 and 1995, respectively. Net loss to
average total loans at September 30, 1998 was 0.06% for the Bank and 0.22% for
its peer group, compared to 0.48% and 0.30% respectively at December 31, 1997.
Historically, net loss to average total loans was 0.98% and 0.94%, respectively,
in 1996 and 1995.

Analysis Of Regions Chaffe reviewed and compared certain financial information
of Regions as of June 30, 1998 to that of a peer group of ten bank holding
companies with operations in the southeast United States (the "Peer Group"),
which consists of Whitney Holding Corp., Hibernia Corp., Union Planters Corp.,
First American Corp., First Tennessee National Corp., AmSouth Bancorporation,
SouthTrust Corp., Hancock Holding Company, Trustmark Corp., and Bank One Corp.
Chaffe reviewed the following: ROAA; ROAE; net interest margin ("NIM");
efficiency ratio; leverage ratio; risk-based capital ratio; nonperforming
assets-to-total assets ("NPA/TA"); nonperforming loans-to-total loans
("NPL/TL"); loan loss reserve-to-total loans ("LLR/TL"), loan loss reserve-to-
nonperforming loans ("LLR/NPL"); and net chargeoffs-to-loan loss reserve
("NCO/LLR").

Chaffe analysis indicated the following median peer group ratios compared to
those of Regions: ROAA of 1.36% compared to 1.40%; ROAE of 15.74% compared to
16.56%; NIM of 4.37% compared to 4.11%; efficiency ratio of 60.55% compared to
55.25%; leverage ratio of 8.58% compared to 7.41%; risk-based capital ratio of
12.99% compared to 12.71%; NPA/TA of 0.46% compared to 0.63%; NPL/TL of 0.65%
compared to 0.83%;

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<PAGE> 26

LLR/TL of 1.61% compared to 1.23%; LLR/NPL of 225.71% compared to 147.26%; and
NCO/LLR of 22.17% compared to 13.72%.

Chaffe reviewed and compared certain stock market pricing multiples and other
market performance indicators of Regions to that of the Peer Group, based on
financial information as of June 30, 1998 and the corresponding stock prices at
October 23, 1998. Chaffe reviewed the following: price-to-trailing twelve months
earnings ("P/E"); price-to-1999 estimated earnings ("P/1999E"); price-to-equity
("P/B"); price-to-assets; price-to-deposits; five-year beta ("Beta"); dividend
yield; and year-to-date price change.

Chaffe analysis indicated the following median Peer Group multiples compared to
those of Regions: P/E of 15.50x compared to 15.82x; P/1999E of 13.28x compared
to 13.88x; P/B of 2.17x compared to 2.48x; price-to-assets of 21.41% compared to
20.56%; price-to-deposits of 30.12% compared to 26.99%; Beta of 0.89 compared to
0.85; dividend yield of 2.6% compared to 2.5%; and year-to-date price change of
(19.72%) compared to (14.54%).

Transaction Value And Exchange Ratio. The stated value of the transaction is
$42,995,000 or $175.00 per share of St. James stock. The exchange ratio is
determined by dividing $175.00 by the average closing price of Regions' common
stock on the twenty trading days immediately preceding the St. James
stockholders meeting (the "Average Market Price"). On October 23, 1998 the
Average Market Price was $34.67 per share, resulting in an exchange ratio of
5.0471 shares of Regions' common stock for each share of St. James common stock.
The closing price of Regions stock on October 23, 1998 was $36.38, and had this
been the date of the stockholders meeting, the transaction value would have been
$45,105,354, or $183.59 per share.

During the period from July 1, 1998 through October 23, 1998 Regions' stock
price ranged from $30.25 to $42.69 per share, and the exchange ratio ranged from
4.22 to 5.09. Given the volatility of the stock market in general, and Regions'
stock in particular, during this period the actual transaction value ranged from
$36,929,500 to $46,054,691, or $150.31 to $187.45 per share. These values were
determined by multiplying Regions' closing stock price on a given day by the
respective Average Market Price.

Although the transaction value is stated as $175.00 per share, Chaffe notes that
the final value to be received by St. James common stockholders will be
dependent upon the stock market value of Regions during the twenty day period
immediately preceding the St. James stockholder meeting.

Stock Price And Dividend Review. Chaffe reviewed certain historical market
information concerning Regions common stock and noted that these shares are
traded on the NASDAQ National Market System under the symbol RGBK. Chaffe noted
that Regions' stock price closed at $36.38 on October 23, 1998, had a high
closing price during 1998 of $45.25, a low closing price during 1998 of $30.25,
and an average daily trading volume during 1998 of 529,600 shares.

Chaffe reviewed the dividend histories and current dividend levels of St. James
and Regions, and noted that their current individual annual dividends per share
were $8.00 and $0.92, respectively, as of June 30, 1998. Based on the terms of
the Merger Agreement, the equivalent cash dividend if the date of the
stockholders meeting had been October 23, 1998, would have been $4.64.

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<PAGE> 27

Control Premium. Valuation methods utilizing a comparison to traded shares,
such as the publicly-traded peer model and the DCF model (when using discount
rates derived from prices of minority shares and a minority level cash flow)
result in a minority value. In order to obtain a value that reflects the value
of the entire company, it may be necessary to add a control premium to the
minority values obtained in these models. The extent or size of a control
premium is based on relationships that exist in the public marketplace, as
evidenced by price movements and price relationships before control bids are
made (or known to be imminent) and the final prices at which control is secured
by subsequent bids or tender offers made to the public stockholders.

Chaffe performed an analysis of publicly-traded banking companies which were
acquired during the third quarter 1998, and determined that the median price
paid for these companies was 132.5% of the market value five days prior to the
announcement of the merger. That is, the premium paid to acquire control of
these companies was 32.5%. Chaffe believes this best reflects the current market
condition and acquisition atmosphere, and therefore has applied a control
premium of 32.5% to the values obtained by the DCF model and the models
utilizing comparisons to publicly-traded companies.

Analysis Of Selected Companies. In order to obtain a valuation range, Chaffe
performed an analysis of the stock market pricing multiples as of October 23,
1998 of a group of large publicly-traded bank holding companies (the "Large
Selected Companies") which includes the Peer Group and Regions. Chaffe analysis
indicated the following median Large Selected Companies multiples: P/E of
15.60x; P/1999E of 13.39x; P/B of 2.18x; price-to-assets of 21.32%; and
price-to-deposits of 29.75%. Chaffe applied these multiples to the corresponding
numbers of the Bank and, after discounting for the size difference of the Bank
compared to the Large Selected Companies and applying a control premium of
32.5%, determined a range of value between $142.63 and $194.75 per share.

Chaffe also performed an analysis of the stock market pricing multiples as of
October 23, 1998 of a group of publicly-traded banking companies which are
comparable to the Bank (the "Comparable Companies"). These companies were chosen
based on the following criteria: assets between $100 million and $200 million;
ROAA between 0.9% and 1.7%; and leverage ratio between 9.5% and 11.5%. Chaffe
analysis indicated the following median Comparable Companies multiples: P/E of
14.52x; P/B of 1.16x; price-to-assets of 15.97%; and price-to-deposits of
21.35%. Chaffe applied these multiples to the corresponding numbers of the Bank
and, after applying a control premium of 32.5%, determined a range of value
between $102.23 and $156.17 per share. Chaffe notes that the transaction value
compares favorably to both ranges of values determined by these comparisons to
comparable companies.

Discounted Cash Flow Analysis. Using the discounted cash flow analysis of the
Bank, Chaffe determined a range of net present values for the Bank's common
stock based on the stream of after-tax cash flows of the bank and certain growth
scenarios after reviewing the Bank's historical growth, its retention of
earnings, and its return on equity. Chaffe noted that the Bank's three-year
annual compound earnings growth from December 1994 through December 1997 was
2.74%, it asset growth for the same period was 4.76%, and its sustainable growth
rate, based on the Bank's rate of retention of earnings and its return on
equity, was 5.43%. Chaffe reviewed these forecasts and assessed the likelihood
of the Bank achieving such forecasts. Chaffe then discounted these cash flow
streams assuming an estimated required rate of return for the Bank of 12.29%,
derived using the capital asset pricing model ("CAPM"), where the risk free rate
is 5.50% (twenty year Treasury Rate quoted in the October 26, 1998 Wall Street
Journal), the market risk premium is 7.8%

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<PAGE> 28

(Ibbotson Associates' Stocks, Bonds, Bills, and Inflation 1998 Yearbook), and
beta is 0.87 (the median of the Large Selected Companies' betas). This analysis
indicated, after applying a control premium of 32.5%, a range of values from
$126.88 to $215.76 per share. Chaffe notes that the stated transaction value of
$175.00 per share is slightly above the midpoint of this range of values.

EFFECTIVE TIME OF THE MERGER

Subject to the satisfaction or waiver of the conditions to the obligations of
the parties to effect the Merger, the effective time of the Merger will occur on
the date and at the time that the Delaware Certificate of Merger and the
Louisiana Certificate of Merger relating to the Merger are filed and declared
effective with, respectively, the Delaware Secretary of State and the Louisiana
Secretary of State. Unless otherwise agreed upon by Regions and St. James, and
subject to the satisfaction or waiver of the conditions to the obligations of
the parties to effect the Merger, the parties will use their reasonable efforts
to cause the effective time of the Merger to occur on the last business day of
the month in which the last of the following 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 Agreement is approved by the requisite vote of St. James stockholders; or
such later date within 30 days thereof as may be 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 St. James anticipate that all conditions to
consummation of the Merger will be satisfied so that the Merger can be
consummated during the fourth quarter of 1998. However, delays in the
consummation of the Merger could occur.

The Board of Directors of either Regions or St. James generally may terminate
the Agreement if the Merger is not consummated by March 31, 1999, 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 time of the Merger, Regions will cause an exchange
agent selected by Regions to mail to the former stockholders of St. James a form
letter of transmittal, together with instructions for the exchange of such
stockholders' certificates representing shares of St. James Common Stock for
certificates representing shares of Regions Common Stock.

ST. JAMES STOCKHOLDERS SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL THEY RECEIVE
THE FORM LETTER OF TRANSMITTAL AND INSTRUCTIONS. Upon surrender to the Exchange
Agent of certificates for St. James Common Stock, together with a properly
completed letter of transmittal, there will be issued and mailed to each holder
of St. James Common Stock surrendering such items a certificate or certificates
representing the number of shares of Regions Common Stock to which such holder
is entitled, if any, and a check for the amount to be paid in lieu of any
fractional share interest, without interest. After the effective time of the
Merger, to the extent permitted by law, St. James stockholders of record as of
the effective time will be entitled to vote at any meeting of holders of Regions
Common Stock the number of whole shares of Regions Common Stock into which their

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<PAGE> 29

St. James Common Stock has been converted, regardless of whether such
stockholders have surrendered their St. James Common Stock certificates. No
dividend or other distribution payable after the effective time with respect to
Regions Common Stock, however, will be paid to the holder of any unsurrendered
St. James certificate until the holder duly surrenders such certificate. Upon
such surrender, all undelivered dividends and other distributions and, if
applicable, a check for the amount to be paid in lieu of any fractional share
interest will be delivered to such stockholder, in each case without interest.

After the effective time of the Merger, a St. James stockholder will be unable
to transfer shares of St. James common stock. If certificates representing
shares of St. James Common Stock are presented for transfer after the effective
time, they will be canceled and exchanged for the shares of Regions Common Stock
and a check for the amount due in lieu of fractional shares, if any, deliverable
in respect thereof.

CONDITIONS TO CONSUMMATION OF THE MERGER

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

- approval from the Board of Governors of the Federal Reserve System (which
has been granted) and notice to the Commissioner of Financial
Institutions of the State of Louisiana and the expiration of all
applicable waiting periods associated with these approvals, without any
conditions or restrictions (excluding requirements relating to the
raising of additional capital or the disposition of assets or deposits)
that would, in the reasonable judgment of Regions' Board of Directors, so
materially adversely impact the economic benefits of the transactions
contemplated by the Agreement as to render inadvisable the consummation
of the Merger;

- the approval by the holders of the requisite number of shares of St.
James Common Stock;

- the absence of any action by any court or governmental authority of
competent jurisdiction restricting, prohibiting, or making illegal the
consummation of the Merger and the other transactions contemplated by the
Agreement;

- the receipt of a satisfactory opinion of counsel that the Merger
qualifies for federal income tax treatment as a reorganization under
Section 368(a) of the Internal Revenue Code, with the effects described
under "-- Federal Income Tax Consequences of the Merger," including,
among others, that the exchange of St. James Common Stock for Regions
Common Stock will not give rise to recognition of gain or loss to St.
James stockholders, except to the extent of any cash received;

- filing with the NASD of notification for listing of additional shares on
the Nasdaq National Market for the shares of Regions Common Stock to be
issued in the Merger; and

- the receipt by St. James of an opinion of St. James' financial advisor
(which has been received and is included as Appendix B) that the
consideration to be received in the Merger by the stockholders of St.
James is fair to such stockholders from a financial point of view.

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<PAGE> 30

Consummation of the Merger also is subject to the satisfaction or waiver of
various other conditions specified in the Agreement which are customary in
transactions of this nature, including, among others: (i) the delivery by
Regions and St. James of opinions of their respective counsel and certificates
executed by their respective duly authorized officers as to the satisfaction of
certain conditions and obligations set forth in the Agreement and (ii) as of the
effective time of the Merger, 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 in the absence of receipt of the requisite regulatory
approvals. There can be no assurance that pending regulatory approvals will be
obtained or as to the timing of such approvals. It is also possible that any
such approval may 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 St. James 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 requires the prior approval of the Federal Reserve Board, pursuant to
Section 3 of the Bank Holding Company Act of 1956. In granting its approval
under Section 3 of the Bank Holding Company Act, the Federal Reserve Board 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 Board from approving the Merger (i) if it would result in a monopoly or
be in furtherance of any combination or conspiracy to monopolize or attempt to
monopolize the business of banking in any part of the United States or (ii) if
its effect in any section of the country may be to substantially lessen
competition or to tend to create a monopoly, or if it would be a restraint of
trade in any other manner, unless the Federal Reserve Board finds that any
anticompetitive effects are outweighed clearly by the public interest and the
probable effect of the transaction in meeting the convenience and needs of the
communities to be served. Under the Bank Holding Company Act, the Merger may not
be consummated until the 30th day following the date of Federal Reserve Board
approval, which may be shortened by the Federal Reserve Board to the 15th day,
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 Federal Reserve Board's approval, unless a court
specifically orders otherwise.

The Federal Reserve Board has approved the Merger. In addition, the Merger is
subject to the approval of the Commissioner of Financial Institution of
Louisiana.

WAIVER, AMENDMENT, AND TERMINATION OF THE AGREEMENT

Prior to the effective time of the Merger, 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 St. James approved by their respective Boards of Directors;
provided, however, that after approval by the St. James

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<PAGE> 31

stockholders, no amendment that pursuant to the Louisiana Business Corporation
Law requires further approval of the St. James stockholders, including
decreasing the consideration to be received by St. James 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 time of the Merger, either before or after approval by St. James
stockholders, under certain circumstances, including:

- by the Board of Directors of either party upon final denial of any
required consent of any regulatory authority, if such denial is
nonappealable or was not appealed within the time limit for appeal;

- by the Board of Directors of either party, if the holders of the
requisite number of shares of St. James Common Stock shall not have
approved the Agreement;

- by mutual consent of the Boards of Directors of Regions and St. James;

- by the Board of Directors of either party (provided the terminating party
is not in material breach of any representation, warranty, covenant, or
agreement included in the Agreement), in the event of any inaccuracy in
any representation or warranty by the other party which meets certain
standards specified in the Agreement and cannot be or has not been cured
within 30 days after the giving of written notice to the breaching party;

- by the Board of Directors of either party (provided the terminating party
is not in material breach of any representation, or warranty included in
the Agreement), in the event of a breach by the other party of any
covenant or agreement included in the Agreement that cannot be cured
within 30 days after giving notice to the breaching party; and

- by the Board of Directors of either party if the Merger shall not have
been consummated by March 31, 1999, 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 generally will not relieve the parties from the consequences of any
uncured willful breach of the Agreement giving rise to such termination.

CONDUCT OF BUSINESS PENDING THE MERGER

Each of St. James and Regions generally has agreed to operate its business only
in the usual, regular, and ordinary course, and to preserve intact its business
organizations and assets and maintain its rights and franchises. Each has also
agreed to take no action which would materially adversely affect the ability of
either party to obtain any consents required for the Merger or to perform its
covenants and agreements under the Agreement and to consummate the Merger. The
foregoing shall not prevent Regions or any subsidiary of Regions from
discontinuing or disposing of any of its assets or business. Nor is Regions
prevented from acquiring or agreeing to acquire any other entity or any assets
thereof, if such action is, in the judgment of Regions, desirable in the conduct
of the business of

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<PAGE> 32

Regions and its subsidiaries. In addition, the Agreement includes certain other
restrictions applicable to the conduct of the business of St. James prior to
consummation of the Merger, as described below.

St. James. St. James has agreed not to take certain actions relating to the
operation of its business pending consummation of the Merger without the prior
written consent of Regions, which Regions has agreed shall not be unreasonably
withheld. The actions St. James has agreed not to take are in the general
categories of:

- amending Articles of Incorporation, Bylaws, or other governing
instruments;

- incurring indebtedness;

- acquiring any of its outstanding shares or making distributions in
respect of its outstanding shares other than dividends of not more than
$2.00 per share per quarter;

- issuing additional securities;

- reclassifying capital stock or selling or encumbering assets;

- acquiring or investing in other entities;

- increasing employees' salaries and benefits or accelerating the vesting
of any stock-based compensation or employee benefits;

- entering into or amending employment contracts;

- adopting employee benefit plans or amending existing plans;

- changing accounting methods or practices;

- commencing or settling litigation; or

- entering into or terminating material contracts.

The specific agreements not to take certain actions of such character, including
the exceptions and contractually permitted actions, are set forth in the
Agreement, which is attached as Appendix A. See Article 7 of the Agreement.

In addition, St. James has agreed not to solicit, directly or indirectly, any
acquisition proposal from any other person or entity. St. James 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 compliance with the fiduciary
obligations of its Board of Directors. In addition, St. James has agreed to use
reasonable efforts to cause its advisors and other representatives not to engage
in any of the foregoing activities.

MANAGEMENT FOLLOWING THE MERGER

Upon consummation of the Merger, the present officers and directors of Regions
will retain their respective positions with Regions. Information pertaining to
the directors and executive officers of Regions, executive compensation, certain
relationships and related transactions, and other related matters is included in
Regions' Annual Report on Form 10-K for the year ended December 31, 1997,
incorporated herein by reference. See "Where You Can Find More Information."

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<PAGE> 33

INTERESTS OF CERTAIN PERSONS IN THE MERGER

The Agreement generally provides that Regions will indemnify and hold harmless
each person entitled to indemnification from St. James or any of its
subsidiaries to the full extent permitted by Louisiana law and by St. James'
Articles of Incorporation or Bylaws as 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 time of the Merger with respect to matters occurring at or prior
to the effective time.

The Agreement also provides that, after the effective time of the Merger,
Regions will provide generally to officers and employees of St. James and its
subsidiaries who, at or after the effective time, become officers or employees
of Regions or its subsidiaries, employee benefits under employee benefit plans
(other than stock option or other plans involving the potential issuance of
Regions Common Stock) on terms and conditions that, taken as a whole, are
substantially similar to those currently provided by Regions and its
subsidiaries to their similarly situated officers and employees. For purposes of
participation and vesting (but not benefit accrual) under such employee benefit
plans, service with St. James or its subsidiaries prior to the effective time
will be treated as service with Regions or its subsidiaries. The Agreement
further provides that Regions will cause St. James to honor all employment,
severance, consulting, and other compensation contracts previously disclosed to
Regions between St. James or its subsidiaries and any current or former
director, officer, or employee, and all provisions for vested amounts earned or
accrued through the effective time under St. James' benefit plans.

St. James Bank & Trust and Sharon B. Kell, President of the bank, are parties to
an employment agreement. The agreement has a term of three years and provides
for a base annual salary of $100,000. The employment agreement entitles Ms. Kell
to severance benefits equal to the accrued compensation in a lump sum payment
equal to the base salary for the remaining term of the contract if her
employment is terminated by the bank for other than "good cause," as defined in
agreement, or if Ms. Kell resigns her employment for "good reason," as defined
in the agreement. The employment agreement also entitles Ms. Kell to a retention
payment of $100,000 if she remains employed by the bank until the bank is
combined with Regions' principal banking subsidiary, which is anticipated to
occur in mid-1999.

As of the record date, directors and executive officers of St. James owned no
shares of Regions Common Stock.

DISSENTING STOCKHOLDERS

Each St. James stockholder who objects to the Merger shall be entitled to the
rights and remedies of dissenting stockholders provided in Section 131 of the
Louisiana Business Corporation Law.

The following is a summary of the steps to be taken by a St. James stockholder
who is interested in perfecting such holder's dissenters' rights and should be
read in conjunction with the full text of Section 131 of the Louisiana Business
Corporation Law. Each of the steps enumerated below must be taken in strict
compliance with the applicable provisions of the statute in order for holders of
St. James Common Stock to perfect their dissenters' rights. If the Merger is
approved by 80% or more of the total voting power of St. James, then dissenters'
rights, in accordance with the Louisiana Business Corporation Law, will not be
available.

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Any written objection, demand, or notice required by the Louisiana Business
Corporation Law in connection with the exercise of dissenters' rights should be
sent to St. James or, following the Merger, to Regions, in either case to St.
James Bancorporation, Inc., 1980 West Main Street, Lutcher, Louisiana, 70071,
Attention: Corporate Secretary. It is recommended that all required documents to
be delivered by mail be sent by registered or certified mail with return receipt
requested.

Any holder of St. James Common Stock who wishes to receive in cash the "fair
value" of such shares (determined as of the day before the Agreement is approved
by the stockholders) may elect to do so by taking all of the following steps:

- Such stockholder must file with St. James, prior to or at the Special
Meeting, a written objection to the proposed Merger.

- Such stockholder must also vote such holder's shares of St. James Common
Stock against the Merger. If the Merger is approved by the required vote,
but by less than 80% of the total voting power, and the Merger authorized
thereby is effected, the Corporation (referring to St. James or, if after
the Effective Date, Regions, as the then successor to St. James) promptly
thereafter shall give written notice thereof, by registered mail, to each
stockholder who both filed such written objection to, and voted such
holder's shares against, the Merger, at such stockholder's last address
on St. James' records.

- Each such stockholder, within 20 days after the mailing of such notice to
such holder, but not thereafter, must file with the Corporation a demand
in writing for the fair cash value of such holder's shares of St. James
Common Stock as of the day before such vote was taken, and such holder
must state in such demand the value demanded and a post office address to
which the reply of the Corporation may be sent.

- At the same time, such stockholder must deposit in escrow in a chartered
bank or trust company located in St. James Parish the certificates
representing such holder's shares of St. James Common Stock, duly
endorsed and transferred to the Corporation upon the sole condition that
such certificates shall be delivered to the Corporation upon payment of
the value of the shares determined in accordance with the provisions of
Section 131 of the Louisiana Business Corporation Law.

- With the demand, the stockholder must deliver to the Corporation the
written acknowledgment of such bank or trust company that it so holds
such holder's certificates of St. James Common Stock.

Any stockholder who fails to take each of the required actions outlined above in
a timely manner will not be entitled to exercise the rights of a dissenting
stockholder.

Unless the objection, demand, and acknowledgment are made and delivered by the
stockholder within the required time period, such holder conclusively shall be
presumed to have acquiesced in the Merger. If the Corporation does not agree to
the value so stated and demanded, or does not agree that a payment is due,
within 20 days after receipt of such demand and acknowledgment, it shall notify
the stockholder in writing, at the designated post office address, of its
disagreement and shall state in such notice the value it will agree to pay if
any payment should be held to be due; otherwise it shall be liable for, and
shall pay to the dissatisfied stockholder, the value demanded.

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In case of disagreement as to such fair cash value, or as to whether any payment
is due, after compliance by the parties with the provisions described above, the
dissatisfied stockholder, within 60 days after receipt of notice in writing of
the Corporation's disagreement, but not thereafter, may file suit against the
Corporation, in the district court of St. James Parish praying the court to fix
and decree the fair cash value of the dissatisfied stockholder's shares of St.
James Common Stock as of the day before the stockholder vote on the Agreement
was taken, and the court, on such evidence as may be adduced in relation
thereto, shall determine summarily whether any payment is due and, if so, shall
determine such cash value and render judgment accordingly. Any stockholder
entitled to file such suit, within such 60-day period, but not thereafter, may
intervene as a plaintiff in such suit filed by another stockholder and recover
therein judgment against the Corporation for the fair cash value of such
holder's shares of St. James Common Stock. Failure of the stockholder to bring
suit, or to intervene in such a suit, within 60 days after receipt of notice of
disagreement by the Corporation conclusively shall bind the stockholder (i) to
acquiesce in, and not contest, the Corporation's statement that no payment is
due or (ii) if the Corporation does not contend that no payment is due, to
accept the value of such holder's shares of St. James Common Stock as fixed by
the Corporation in its notice of disagreement.

A stockholder, upon filing a demand for the value of such holder's shares, shall
cease to have any of the rights of a stockholder, except the rights accorded by
Section 131 of the Louisiana Business Corporation Law. Such a demand may be
withdrawn by the stockholder at any time before the Corporation gives notice of
disagreement, as provided by the Louisiana Business Corporation Law. After such
notice of disagreement is given, withdrawal of the demand shall require the
consent of the Corporation. If a demand is withdrawn, or the Merger is abandoned
or rescinded, or a court shall determine that the stockholder is not entitled to
receive payment for such holder's shares of St. James Common Stock, or the
stockholder shall otherwise lose such holder's dissenters' rights, such holder
shall not have the right to receive a cash payment for such holder's shares of
St. James Common Stock, such holder's share certificates shall be returned (and,
on such holder's request, new certificates shall be issued in exchange for the
old ones endorsed to the Corporation), and such holder shall be reinstated to
all rights as a stockholder as of the filing of such holder's demand for value,
including the right to payment of any intervening dividend or other
distribution, or if any such rights have expired or any such dividend or
distribution other than in cash has been completed, in lieu thereof, at the
election of the Corporation, the fair value thereof in cash as determined by the
Corporation's Board as of the time of such expiration or completion, but without
prejudice otherwise to any corporate proceedings that may have been taken in the
interim.

Any dissenting St. James stockholder who perfects such holder's right to be paid
the value of such holder's shares will recognize taxable gain or loss upon
receipt of cash for such shares for federal income tax purposes. See "-- Federal
Income Tax Consequences of the Merger."

FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

THE FOLLOWING IS A DISCUSSION OF THE MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF
THE MERGER TO HOLDERS OF ST. JAMES COMMON STOCK. THIS DISCUSSION MAY NOT APPLY
TO SPECIAL SITUATIONS, SUCH AS ST. JAMES STOCKHOLDERS, IF ANY, WHO HOLD ST.
JAMES COMMON STOCK OTHER THAN AS A CAPITAL ASSET, WHO RECEIVED ST. JAMES COMMON
STOCK AS COMPENSATION, WHO HOLD ST. JAMES COMMON STOCK AS PART OF A "STRADDLE"
OR "CONVERSION TRANSACTION,"

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OR WHO ARE INSURANCE COMPANIES, SECURITIES DEALERS, FINANCIAL INSTITUTIONS OR
FOREIGN PERSONS, AND DOES NOT DISCUSS ANY ASPECTS OF STATE, LOCAL, OR FOREIGN
TAXATION. THIS DISCUSSION IS BASED UPON LAWS, REGULATIONS, RULINGS AND DECISIONS
NOW IN EFFECT AND ON PROPOSED REGULATIONS, ALL OF WHICH ARE SUBJECT TO CHANGE
(POSSIBLY WITH RETROACTIVE EFFECT) BY LEGISLATION, ADMINISTRATIVE ACTION, OR
JUDICIAL DECISION. NO RULING HAS BEEN OR WILL BE REQUESTED FROM THE INTERNAL
REVENUE SERVICE ON ANY MATTER RELATING TO THE TAX CONSEQUENCES OF THE MERGER.

Consummation of the Merger is conditioned upon receipt by Regions and St. James
of an opinion from Alston & Bird LLP, special counsel to Regions, concerning the
material federal income tax consequences of the Merger. Based upon the
assumption that the Merger is consummated in accordance with the Agreement and
upon factual statements and factual representations made by Regions and St.
James, it is such firm's opinion that:

- The Merger will constitute a reorganization within the meaning of Section
368(a) of the Internal Revenue Code, and St. James and Regions will each
be "a party to a reorganization" within the meaning of Section 368(b) of
the Code.

- No gain or loss will be recognized by holders of St. James Common Stock
upon the exchange in the Merger of all of their St. James Common Stock
solely for shares of Regions Common Stock (except with respect to any
cash received in lieu of fractional share interests in Regions Common
Stock).

- The aggregate tax basis of the Regions Common Stock received by the St.
James stockholders in the Merger will, in each instance, be the same as
the aggregate tax basis of the St. James Common Stock surrendered in
exchange therefor, less the basis of any fractional share of Regions
Common Stock settled by cash payment.

- The holding period of the Regions Common Stock received by the St. James
stockholders in the Merger will, in each instance, include the holding
period of the St. James Common Stock surrendered in exchange therefor,
provided that such St. James Common Stock is held as a capital asset at
the effective time of the Merger.

- The payment of cash to St. James stockholders in lieu of fractional share
interests of Regions Common Stock will be treated for federal income tax
purposes as if the fractional shares were distributed as part of the
exchange and then were redeemed by Regions. These cash payments will be
treated as having been received as distributions in full payment in
exchange for the stock redeemed, as provided in Section 302(a) of the
Internal Revenue Code.

- Where solely cash is received by a St. James stockholder in exchange for
St. James Common Stock pursuant to the exercise of dissenters' rights,
such cash will be treated as having been received in redemption of such
holder's St. James Common Stock, subject to the provisions and
limitations of Section 302 of the Internal Revenue Code.

THE TAX OPINION DOES NOT ADDRESS ANY STATE, LOCAL, FOREIGN, OR OTHER TAX
CONSEQUENCES OF THE MERGER. ST. JAMES STOCKHOLDERS SHOULD CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES OF THE PROPOSED TRANSACTION TO
THEM INDIVIDUALLY, INCLUDING TAX REPORTING REQUIREMENTS AND TAX CONSEQUENCES
UNDER STATE, LOCAL, AND FOREIGN LAW.

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ACCOUNTING TREATMENT

It is anticipated that the Merger will be accounted for as a "purchase," as that
term is used pursuant to generally accepted accounting principles, for
accounting and financial reporting purposes. Under the purchase method of
accounting, the assets and liabilities of St. James as of the effective time of
the Merger will be recorded at their estimated respective fair values and added
to those of Regions. Financial statements of Regions issued after the effective
time will reflect such values and will not be restated retroactively to reflect
the historical financial position or results of operations of St. James.

The Agreement originally conditioned Regions' obligation on the Merger
qualifying for pooling-of-interests accounting treatment, but Regions has since
waived this condition.

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.

RESALES OF REGIONS COMMON STOCK

The Regions Common Stock to be issued to St. James stockholders in the Merger
has been registered under the federal Securities Act of 1933, but that
registration does not cover resales of those shares by persons who control, are
controlled by, or are under common control with, St. James (such persons are
referred to hereinafter as "affiliates" and generally include executive
officers, directors, and 10% stockholders) at the time of the 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 in accordance with a
legal opinion satisfactory to Regions that such sale or transfer is otherwise
exempt from the Securities Act registration requirements.

Rule 145 under the Securities Act restricts the sale of Regions Common Stock
received in the Merger by affiliates and certain of their family members and
related interests. Under the rule, during the one-year period following the
effective time of the Merger, affiliates of St. James may resell publicly the
Regions Common Stock received by them in the Merger subject to certain
limitations as to the amount of Regions Common Stock sold in any three-month
period and as to the manner of sale, and subject to the currency of Regions'
periodic reporting obligations with the Securities and Exchange Commission.
After the one-year period and within two years following the effective time of
the Merger, affiliates of St. James who are not affiliates of Regions may effect
such resales subject only to the currency of Regions' periodic reporting
requirements. After two years, such affiliates of St. James who are not
affiliates of Regions may resell their shares without restriction. Persons who
are affiliates of Regions after the effective time may publicly resell the
Regions Common Stock received by them in the Merger subject to similar
limitations and subject to certain filing requirements specified in SEC Rule
144. Affiliates will receive additional information regarding the effect of Rule
145 on their ability to resell Regions Common Stock received in the Merger.
Affiliates also would be permitted to resell Regions Common Stock received in
the Merger pursuant to an effective registration statement under the Securities
Act or an available exemption from the Securities Act

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<PAGE> 38

registration requirements. This Joint Proxy Statement does not cover any resales
of Regions Common Stock received by persons who may be deemed to be affiliates
of St. James or Regions.

Each person who St. James reasonably believes will be an affiliate of St. James
has delivered 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.

EFFECT OF THE MERGER ON RIGHTS OF STOCKHOLDERS

As a result of the Merger, holders of St. James Common Stock will be exchanging
their shares of a Louisiana corporation governed by the Louisiana Business
Corporation Law and St. James' Articles of Incorporation, as amended (the
"Articles"), and Bylaws, for shares of Regions, a Delaware corporation governed
by the Delaware General Corporation Law and Regions' Certificate of
Incorporation (the "Certificate") and Bylaws. Significant differences exist
between the rights of St. James stockholders and those of Regions stockholders.
The material differences are summarized below. In particular, Regions'
Certificate and Bylaws contain several provisions that under certain
circumstances may 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 Louisiana Business Corporation Law
and the Delaware General Corporation Law as well as to Regions' Certificate and
Bylaws and St. James' Articles and Bylaws.

ANTITAKEOVER PROVISIONS GENERALLY

The provisions of Regions' Certificate and Bylaws described below under the
headings, "-- Authorized Capital Stock," "-- Amendment of Certificate or
Articles of Incorporation and Bylaws," "-- Classified Board of Directors and
Absence of Cumulative Voting," "-- Removal of Directors," "-- Limitations on
Director Liability," "-- Special Meetings of Stockholders," "-- Actions by
Stockholders Without a Meeting," "-- Stockholder Nominations," and "-- Mergers,
Consolidations, and Sales of Assets Generally," and the provisions of the
Delaware General Corporation Law 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

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and time-consuming process. To the extent that the Protective Provisions
discourage undesirable proposals, Regions may be able to avoid those
expenditures of time and money.

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

AUTHORIZED CAPITAL STOCK

Regions. The Certificate authorizes the issuance of up to 500,000,000 shares of
Regions Common Stock, of which 221,111,474 shares were issued as of September
30, 1998, none of which were held as treasury shares, and 5,000,000 shares of
preferred stock, none of which are outstanding. Regions' Board of Directors may
authorize the issuance of additional shares of Regions Common Stock or preferred
stock without further action by Regions' stockholders, unless such action is
required in a particular case by applicable laws or regulations or by any stock
exchange upon which Regions' capital stock may be listed. The Certificate does
not provide preemptive rights to Regions stockholders.

The authority to issue additional shares of Regions capital 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. Regions has committed not to
issue shares of preferred stock for any antitakeover purpose, including any
purpose to make a change in control of Regions more costly or difficult.

St. James. St. James' authorized capital stock consists of 1,000,000 shares of
St. James Common Stock, which is the only class of capital stock authorized and
of which 245,688 shares were issued and outstanding as of the record date.

Pursuant to the Louisiana Business Corporation Law, St. James' Board of
Directors may authorize the issuance of additional shares of St. James Common
Stock without further action by St. James' stockholders. St. James' Articles, do
not provide the stockholders of St. James with preemptive rights to purchase or
subscribe to any unissued authorized

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shares of St. James Common Stock or any option or warrant for the purchase
thereof, in accordance with the Louisiana Business Corporation Law.

AMENDMENT OF CERTIFICATE OR ARTICLES OF INCORPORATION AND BYLAWS

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

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 Common Stock.

St. James. The Louisiana Business Corporation Law generally provides that a
Louisiana corporation's articles of incorporation may be amended by the
affirmative vote of two-thirds of the voting power present at a meeting, unless
the articles of incorporation provide for a higher or lower voting requirement.

The Louisiana Business Corporation Law provides that the Board of Directors have
the power to amend or alter the Bylaws, provided shareholders may repeal any
bylaws so made.

CLASSIFIED BOARD OF DIRECTORS AND ABSENCE OF CUMULATIVE VOTING

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

The effect of Regions' having a classified Board of Directors is that only
approximately one-third of the members of the Board are elected each year;
consequently, two annual meetings are effectively required 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

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effectively may not be able to elect any person to the Board of Directors. The
absence of cumulative voting, therefore, 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.

St. James. St. James' Articles do not provide for a classified board of
directors, and do not provide that voting stock has cumulative voting rights.

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 Regions' voting stock.

St. James. The Louisiana Business Corporation Law permits stockholders to
remove any director, with or without cause, by vote of a majority of the total
voting power at any special meeting called 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 that a director
acted in violation of such director's 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.

St. James. The St. James Articles do not contain a comparable provision.

INDEMNIFICATION

Regions. The Certificate provides that Regions will indemnify its officers,
directors, employees, and agents to the full extent permitted by the Delaware
General Corporation Law. Under Section 145 of the Delaware General Corporation
Law 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

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<PAGE> 42

(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 indemnification 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, as discussed herein, whether civil, criminal, administrative, or
investigative, such person must be indemnified against reasonable expenses
incurred by such person in connection therewith.

St. James. St. James' Articles provide for mandatory indemnification of its
directors and officers with substantially the same effect as in the case of
Regions. The Louisiana Business Corporation Law permits, but does not require,
indemnification of employees and agents who meet specified standards of conduct
except that indemnification of directors, officers, employees, and agents is
mandatory, as is the case and to the same extent as under the Delaware General
Corporation Law described above, whenever any such person has been successful in
the defense of a claim.

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.

St. James. Under the Louisiana Business Corporation Law, a special meeting of
stockholders may be called by shareholders holding at least 20% of its voting
power.

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 meeting or special meeting called
by the Board of Directors, chief executive officer, or secretary, even if a
majority of the stockholders were in favor of such action.

St. James. Under the Louisiana Business Corporation Law, action requiring or
permitting stockholder approval may be approved by written consent of all
stockholders entitled to vote at a meeting of stockholders. In that it would be
impractical to obtain the consent of all stockholders, the inability of
stockholders to effect action without a meeting is substantially the same as for
Regions.

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STOCKHOLDER NOMINATIONS

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.

St. James. Neither St. James' Articles nor Bylaws contains any provisions
governing or restricting the means by which stockholders may nominate
individuals to be directors of St. James.

MERGERS, CONSOLIDATIONS, AND SALES OF ASSETS GENERALLY

Regions. The Certificate generally requires the affirmative vote of the holders
of at least 75% of the outstanding voting stock of Regions to effect (i) any
merger or consolidation with or into any other corporation, or (ii) any sale or
lease of any substantial part of the assets of Regions to any party that
beneficially owns 5.0% 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 Board of Directors after the party becomes such a 5.0% beneficial owner. In
addition, the Delaware General Corporation Law generally requires the approval
of a majority of the outstanding voting stock of Regions to effect (i) any
merger or consolidation with or into any other corporation, (ii) any sale,
lease, or exchange of all or substantially all of Regions property and assets,
or (iii) the dissolution of Regions. However, pursuant to the Delaware General
Corporation Law, Regions may enter into a merger transaction without stockholder
approval if (i) Regions is the surviving corporation, (ii) the agreement of
merger does not amend in any respect Regions' Certificate, (iii) each share of
Regions stock outstanding immediately prior to the effective date of the merger
is to be an identical outstanding or treasury share of Regions after the
effective date of the merger, and (iv) either no shares of Regions Common Stock
and no shares, securities, or obligations convertible into such stock are to be
issued or delivered under the plan of merger, or the authorized unissued shares
or the treasury shares of Regions Common Stock to be issued or delivered under
the plan of merger plus those initially issuable upon conversion of any other
shares, securities, or obligations to be issued or delivered under such plan do
not exceed 20% of the shares of Regions Common Stock outstanding immediately
prior to the effective date of the merger.

St. James. The Louisiana Business Corporation Law generally requires the
affirmative vote of at least two-thirds of the voting power present, or by such
larger or smaller vote,

36
<PAGE> 44

but not less than a majority of the voting power present or of the total voting
power, as the Articles of Incorporation may prescribe, to effect (i) any merger,
consolidation, or share exchange with or into any other corporation, or (ii) any
sale or lease of all or substantially all of the assets of the corporation if
the corporation is not insolvent. St. James' Articles do not provide for any
larger or smaller vote.

BUSINESS COMBINATIONS WITH CERTAIN PERSONS

Regions. Section 203 of the Delaware General Corporation Law ("Section 203")
places certain restrictions on "business combinations" (as defined in Section
203 to include, generally, mergers, sales and leases of assets, issuances of
securities, and similar transactions) by Delaware corporations with an
"interested stockholder" (as defined in Section 203 to include, 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.

St. James. Section 133 of the Louisiana Business Corporation Law ("Section
133") places similar restrictions on "business combinations" (as defined in
Section 132(4) of the Louisiana Business Corporation Law, generally including
mergers, consolidations, share exchanges, sales and leases of assets, issuances
of securities, and similar transactions) by Louisiana corporations with an
"interested stockholder" (as defined in Section 132(9) of the Louisiana Business
Corporation Law, generally the beneficial owner of 10% or more of the voting
power of the then outstanding voting stock). Section 133 generally applies to
business combinations of Louisiana corporations having greater than 100
beneficial owners of its stock or which did not have an interested stockholder
on January 1, 1985, unless the articles of incorporation expressly provide
otherwise. Section 133 generally does not apply if specified conditions are met,
including a condition that the stockholders receive in the business combination
consideration for their shares of stock in the corporation that is no less than
the highest of several different standards provided for by Section 134B, one of
which is that the price must be no less than the highest price as the interested
stockholder paid for shares of stock in the corporation acquired by such
interested stockholder within two years of such business combination.

37
<PAGE> 45

As St. James has not generally elected to avoid the application of Section 133,
Section 133 generally would prohibit a business combination by St. James with an
interested stockholder unless the consideration to be received meets the
standard described in the preceding sentence or unless the business combination
is recommended by St. James' Board and approved by the affirmative vote of at
least each of the following: (i) 80% of the votes entitled to be cast by
outstanding shares of St. James voting stock voting together as a single voting
group and (ii) two-thirds of the votes entitled to be cast by holders of St.
James voting stock, other than voting stock held by the interested stockholder
who is a party to the business combination with St. James, voting together as a
single voting group. As Regions is not an "interested stockholder" with respect
to St. James, Section 133 does not apply to the Merger.

Under Sections 135 through 140.2 of the Louisiana Business Corporation Law (the
"Control Share Law"), a person who acquires shares in certain Louisiana
corporations (including St. James) and as a result increases such person's
voting power in the corporation to or above any of three threshold levels (i.e.,
20%, 33 1/3%, and 50%), acquires the voting rights with respect to such shares
only to the extent granted by a majority in voting interest of the pre-existing,
disinterested stockholders of the corporation. Certain acquisitions of shares
are exempted from the provisions of the Control Share Law, including
acquisitions pursuant to a merger, consolidation, or share exchange agreement to
which the corporation is a party. Since Regions' acquisition of St. James Common
Stock is to be made pursuant to a merger and St. James and Regions are parties
to the Agreement with respect thereto, the Control Share Law does not apply to
the Merger.

DISSENTERS' RIGHTS

Regions. The rights of dissenting stockholders of Regions are governed by the
Delaware General Corporation Law. 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 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.

St. James. The rights of dissenting stockholders under Louisiana law are
generally similar to those afforded under the Delaware General Corporation Law.
See "Description of the Transaction -- Dissenting Stockholders." If the Merger
is consummated, stockholders of St. James will have dissenters' rights as
described unless the Merger receives the favorable vote of at least 80% of the
total outstanding shares.

38
<PAGE> 46

STOCKHOLDERS' RIGHTS TO EXAMINE BOOKS AND RECORDS

Regions. The Delaware General Corporation Law 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.

St. James. Pursuant to the Louisiana Business Corporation Law, upon written
notice of a demand to inspect corporate records, one or more stockholders who
have owned at least 2% of the outstanding stock (25% in the case of a business
competitor) for at least six months are entitled to inspect specified corporate
records.

DIVIDENDS

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

St. James. Pursuant to the Louisiana Business Corporation Law, a board of
directors may from time to time make distributions out of surplus, as defined in
the Louisiana Business Corporation Law, to its stockholders, subject to
restrictions in its articles of incorporation, except (i) when the corporation
is insolvent, or (ii) at a time when the corporation's assets are exceeded by
its liabilities, or when the net assets are less than the aggregate amount
payable on liquidation to any shares of St. James common stock which have
preferential rights in the event of liquidation. Substantially all of the funds
available for the payment of dividends by St. James are derived from St. James
Bank & Trust, which is subject to federal and state statutory limitations on its
ability to pay dividends. See "Comparative Market Prices And Dividends."

39
<PAGE> 47

COMPARATIVE MARKET PRICES AND DIVIDENDS

Regions Common Stock is quoted on the Nasdaq National Market under the symbol
"RGBK." St. James Common 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, to the extent known by management of St. James, for St.
James Common Stock and the cash dividends declared per share of Regions Common
Stock and St. James Common Stock for the indicated periods. The prices indicated
for St. James are based on actual transactions in St. James Common Stock of
which St. James 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 St. James Common Stock in the indicated
periods, and no assurance can be given that the indicated prices represent the
actual market value of the St. James Common Stock. The amounts indicated for
Regions have been adjusted to reflect a 2-for-1 stock split effected by Regions
on June 13, 1997.

<TABLE>
<CAPTION>
REGIONS ST. JAMES
--------------------------- ---------------------------
CASH CASH
PRICE RANGE DIVIDENDS PRICE RANGE DIVIDENDS
--------------- DECLARED --------------- DECLARED
HIGH LOW PER SHARE HIGH LOW PER SHARE
------ ------ --------- ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C>
1996
First Quarter................. $24.00 $20.38 $.175 $ -- $ -- $ --
Second Quarter................ 24.19 21.13 .175 -- -- .60
Third Quarter................. 24.32 21.82 .175 -- -- --
Fourth Quarter................ 26.88 24.38 .175 -- -- 1.90
1997
First Quarter................. 30.94 25.69 .20 55.00 55.00 --
Second Quarter................ 33.25 27.38 .20 -- -- 2.00
Third Quarter................. 39.13 32.06 .20 -- -- 1.00
Fourth Quarter................ 44.75 36.56 .20 61.00 61.00 1.50
1998
First Quarter................. 43.50 37.94 .23 -- -- 2.00
Second Quarter................ 45.25 38.66 .23 -- -- 2.00
Third Quarter................. 42.69 33.81 .23 -- -- 2.00
Fourth Quarter (through
, 1998)...........
</TABLE>

On , 1998, the last reported sale price of Regions Common Stock as
reported on the Nasdaq National Market was $ , and the price of
St. James Common Stock in the last known transaction, which occurred in
, was $ . On July 21, 1998, 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 was $41.88, and
the last known price of St. James Common Stock was $61.00.

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

40
<PAGE> 48

assurance that Regions' dividend policy will remain unchanged after completion
of the Merger. The declaration and payment of dividends thereafter will depend
upon business conditions, operating results, capital and reserve requirements,
and the Board of Directors' consideration of other relevant factors.

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. Regions' subsidiary depository institutions
are subject to certain legal restrictions on the amount of dividends they are
permitted to pay. See "Supervision and Regulation -- Payment of Dividends."

St. James' dividend policy has been to pay quarterly cash dividends of $2.00 per
share, and the Merger Agreement permits these dividends, but no more, to
continue to be paid.

41
<PAGE> 49

ST. JAMES BANCORPORATION MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION

OVERVIEW

St. James Bancorporation, Inc. and its subsidiary, St. James Bank & Trust
Company (SJB), reported net income of $1,425,000 for the nine months ended
September 30, 1998 which represents a 10.6% increase from the net income of
$1,288,000 for the comparable period in 1997. Net income per share was $5.80 for
the nine months ended September 30, 1998 and $5.24 for the same period in 1997.
SJB's net income for 1997 was $1,812,000, a 37.8% increase from 1996 net income
of $1,315,000. Net income per share was $7.37 in 1997 and $5.35 in 1996.

The primary reasons for the improvement in net income during the first nine
months of 1998 over the first nine months of 1997 was 1) an increase in earning
assets and 2) an increase in net interest spread. Average Earning Assets were
$141,292,000 as of September 30, 1998, an increase of $12,337,000 over the
average earning assets of $128,955,000 at September 30, 1997. Net interest
spread and net interest margin as of September 30, 1998 were 3.72% and 4.34% as
compared to 3.65% and 4.40% as of September 30, 1997.

The improvement in net income over the two years ended December 31, 1997 may
also be attributed to increases in average earning assets, net interest spread
and net interest margin.

In addition to increases in average earning assets, changes in the asset mix
principally from investment securities to loans has resulted in increases in net
interest income. Net interest income during the first nine months of 1998
increased $415,000 to $4,855,000, which represents a 9.3% increase over the same
period of 1997. Of the $415,000 increase, $154,000 was attributable to an
increase in fees on loans.

At September 30, 1998, SJB has total assets and deposits of $150,331,000 and
$131,109,000, respectively, which represents decreases of 1.3% and 1.5%,
respectively, from amounts reported at December 31, 1997. Loans, net of the
reserve for possible loan losses, were $94,399,000 at September 30, 1998, an
increase of 20.3% from the amount reported at the end of 1997. The decrease in
assets as of September 30, 1998 is principally due to a decline in public fund
deposits. SJB's total assets and deposits are historically higher at year-end as
a result of deposits of public funds received from local taxing authorities.

A more detailed review of SJB's financial condition and results of operations
for the years ended December 31, 1997 and 1996 and the nine months ended
September 30, 1998 and 1997 follows. This discussion and analysis should be read
in conjunction with SJB's financial statements and the notes thereto appearing
elsewhere in this Proxy Statement-Prospectus.

42
<PAGE> 50

The following table sets forth certain information regarding SJB's results of
operations for the periods indicated.

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30 DECEMBER 31
--------------------- ---------------------
1998 1997 1997 1996
-------- -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net Income.......................... $1,425 $1,288 $1,812 $1,315
Net Income per share*............... 5.80 5.24 7.37 5.35
Return on average assets............ 1.24% 1.25% 1.30% 1.02%
Return on average equity............ 11.65 10.78 11.36 8.65
Average equity to average assets.... 10.65 11.63 11.47 11.81
Dividend pay-out ratio.............. 103.45 57.25 61.06 46.73
</TABLE>

* Per share data based upon weighted average number of shares outstanding of
245,688.

RESULT OF OPERATIONS

NET INTEREST INCOME

The principal component of SJB's net earnings is net interest income, which is
the difference between interest and fees earned on interest-earning assets and
interest paid on deposits and borrowed funds. Net interest income, when
expressed as a percentage of total average interest-earning assets, is referred
to as net interest margin. Net interest income for the nine months ended
September 30, 1998 increased to $4,855,000 from $4,440,000 recorded for the
comparable period in 1997, an increase of 9.3%. 1997 net interest income of
6,002,000 represents an increase of $626,000, or 11.6%, from net interest income
of $5,376,000 reported for the year ended December 31, 1996. The improvements in
1998 and 1997 were primarily the result of increases in average earning assets
and higher yields from changes in the asset mix.

Average interest-earning assets were $141,192,000 for the nine months ended
September 30, 1998, $130,778,000 for 1997 and $121,456,000 for 1996. Average
loans, the company's highest yielding assets, rose 10.9% from 1996 to 1997 and
17.4% from 1997 to September 30, 1998. Net interest margin decreased 1 basis
point to 4.58% for the nine months ended September 30, 1998 from 4.59% recorded
for 1997. 1997 net interest recorded a 16 basis point increase from 1996 net
interest margin of 4.43%.

43
<PAGE> 51

SJB's net interest margin is affected by the change in the amount and mix of
interest-earning assets and interest-bearing liabilities, and by changes in
yields earned on assets and rates paid on deposits and other borrowed funds. The
following tables sets forth certain information concerning average
interest-earning assets and interest-bearing liabilities and the yields and
rates thereon for the periods presented. Average balances are computed using
monthly average balances.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, 1998
-----------------------------
INTEREST AVERAGE
AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE
-------- -------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Interest-Earning Assets:
Loans.......................................... $ 85,697 $6,141 9.55%
Interest-bearing deposits with financial
institutions................................ 95 2 2.81
Investment securities.......................... 49,156 2,072 5.62
Federal funds sold............................. 6,244 249 5.32
-------- ------
Total interest-earning assets............... 141,192 8,464 7.99
Interest-Bearing Liabilities:
Deposits:
Money market demand............................ 11,758 281 3.19
Savings and other interest-bearing demand
deposits.................................... 39,932 777 2.59
Time deposits.................................. 66,880 2,496 4.98
Borrowed funds................................. 1,148 55 6.39
-------- ------
Total interest-bearing liabilities.......... 119,718 3,609 4.03
------
Net interest income................................... 4,855
Net interest margin................................... 4.58
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
-----------------------------
INTEREST AVERAGE
AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE
-------- -------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Interest-Earning Assets:
Loans......................................... $ 72,970 $ 6,949 9.52%
Interest-bearing deposits with financial
institutions............................... 57 1 1.75
Investment securities......................... 52,406 2,980 5.69
Federal funds sold............................ 5,345 296 5.54
-------- -------
Total interest-earning assets.............. 130,778 10,226 7.82
Interest-Bearing Liabilities:
Deposits:
Money market demand........................... 10,729 306 2.85
Savings and other interest-bearing demand
deposits................................... 33,126 806 2.43
Time deposits................................. 62,442 3,095 4.96
Borrowed funds................................ 295 17 5.76
-------- -------
Total interest-bearing liabilities......... 106,592 4,224 3.96
-------
Net interest income.................................. 6,002
Net interest margin.................................. 4.59
</TABLE>

44
<PAGE> 52

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1996
-----------------------------
INTEREST AVERAGE
AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE
-------- -------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Interest-Earning Assets:
Loans.......................................... $ 65,799 $6,101 9.27%
Interest-bearing deposits with financial
institutions................................ 47 1 2.13
Investment securities.......................... 51,923 2,815 5.42
Federal funds sold............................. 3,687 198 5.37
-------- ------
Total interest-earning assets............... 121,456 9,115 7.50
Interest-Bearing Liabilities:
Deposits:
Money market demand............................ 10,024 273 2.72
Savings and other interest-bearing demand
deposits.................................... 30,871 740 2.40
Time deposits.................................. 54,435 2,723 5.00
Borrowed funds................................. 44 3 6.82
-------- ------
Total interest-bearing liabilities.......... 95,374 3,739 3.92
------
Net interest income................................... 5,376
Net interest margin................................... 4.43
</TABLE>

The following table sets forth changes in interest income and interest expense
for each major category of interest-earning assets and interest-bearing
liabilities and the amount of change attributable to volume change and rate
changes for the periods indicated. The change in interest income due to both
volume change and rate change has been allocated to volume change.

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31, 1997
AND 1996
----------------------
NET
VOLUME RATE CHANGE
------ ---- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Interest-Earning Assets:
Loans.................................................. $644 $204 $ 848
Interest-bearing deposits with financial
institutions........................................ 0 0 0
Investment securities.................................. 28 137 165
Federal funds sold..................................... 88 10 98
---- ---- ------
Total.......................................... $760 $351 $1,111
==== ==== ======
Interest-Bearing Liabilities:
Deposits:
Money market demand.................................... $ 19 $ 14 $ 33
Savings and other interest-bearing demand deposits..... 54 12 66
Time deposits.......................................... 372 0 372
Borrowed funds......................................... 14 0 14
---- ---- ------
Total.......................................... $459 $ 26 $ 485
==== ==== ======
Interest Differential.................................. $301 $325 $ 626
</TABLE>

45
<PAGE> 53

PROVISION FOR LOAN LOSSES

The provision for loan losses is the periodic charge to earnings for potential
losses in the loan portfolio. The amounts provided for loan losses are
determined by management after evaluations of the loan portfolio. This
evaluation process requires that management apply various judgements,
assumptions and estimates concerning the impact certain factors may have on
amounts provided. Factors considered by management in its evaluation process
include known and inherent losses in the loan portfolio, the current economic
environment, the composition of and risk in the loan portfolio, prior loss
experience and underlying collateral values. While management considers the
amounts provided through September 30, 1998 to be adequate, subsequent changes
in these factors and related assumptions may warrant significant adjustments in
amounts provided, based on conditions prevailing at the time. In addition,
various regulatory agencies, as an integral part of the examination process,
review SJB's allowance for loan losses. Such agencies may require SJB to make
additions to the allowance based on their judgements of information available to
them at the time of their examinations.

The provision for loan losses for the nine months ended September 30, 1998 and
1997 was $170,000 and $180,000, respectively. Provisions for the years ended
1997 and 1996 were $250,000 and $310,000 respectively. Fewer nonperforming loans
and lower net charge-offs resulted in provisions declining.

NON-INTEREST INCOME

Non-interest income, excluding security transactions, was $900,000 for the nine
months ended September 30, 1998, compared to $891,000 for the comparable period
of 1997. Non-interest income, excluding security transactions, was $1,228,000
for the year ended December 31, 1997, compared to $1,079,000 for 1996. The
increase in non-interest income from 1996 to 1997 was attributable primarily to
increased service charges and NSF fees on deposit accounts.

INCOME TAXES

SJB's provision for income taxes was $601,000 for the nine months ended
September 30, 1998, compared to $522,000 for the nine months ended September 30,
1997. Such provision was $675,000 for 1997 compared to $506,000 for 1996. The
increases are due primarily to the increase in income, although the tax
effective rate has increased slightly due to the maturing of tax exempt
municipal securities.

46
<PAGE> 54

FINANCIAL CONDITION

The following table sets forth the SJB's average assets, liabilities and
shareholders' equity and the percentage distribution of these items for the
periods indicated.

<TABLE>
<CAPTION>
NINE MONTHS YEAR ENDED DECEMBER 31,
ENDED -----------------------------------
SEPT. 30, 1998 1997 1996
---------------- ---------------- ----------------
AVERAGE AVERAGE AVERAGE
BALANCE % BALANCE % BALANCE %
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks....... $ 5,414 3.5 $ 4,347 3.1 $ 4,314 3.3
Interest-bearing deposits
w/financial institutions.... 95 .1 57 0 47 0
Investment securities......... 49,157 32.0 52,405 37.7 51,923 40.3
Federal funds sold............ 6,244 4.1 5,345 3.8 3,687 2.9
Loans (net of allowance for
credit losses).............. 84,571 55.1 71,878 51.7 64,467 50.1
Other assets.................. 8,085 5.2 5,022 3.7 4,259 3.4
-------- ----- -------- ----- -------- -----
Total assets........ $153,566 100.0 $139,054 100.0 $128,697 100.0
======== ===== ======== ===== ======== =====

LIABILITIES AND SHAREHOLDER'S EQUITY
Demand deposits............... $ 16,281 10.6 $ 15,833 11.4 $ 17,126 13.3
Interest-bearing deposits..... 118,570 77.2 106,298 76.4 95,330 74.1
Borrowed funds................ 1,148 .7 295 .2 44 0
Other liabilities............. 1,210 .8 675 .6 994 .8
Shareholder's equity.......... 16,357 10.7 15,953 11.4 15,203 11.8
-------- ----- -------- ----- -------- -----
Total liabilities
and shareholder's
equity........... $153,566 100.0 $139,054 100.0 $128,697 100.0
======== ===== ======== ===== ======== =====
</TABLE>

TOTAL ASSETS

At September 30, 1998, total assets were approximately $150,331,000, compared to
$152,374,000 at December 31, 1997 and $139,555,000 at December 31, 1996. Total
average assets for the nine months ended September 30, 1998 were $153,566,000,
an increase of 10.4% from the $139,054,000 average for the year ended December
31, 1997. The increase in average assets during the first nine months of 1998
and the year ended December 31, 1997 reflect the increases in deposits and
borrowings. The mix of average assets during the first nine months of 1998 and
the year ended December 31, 1997 represent a decline in investment securities
and SJB's ability during these periods to increase its loan portfolio as
interest-bearing deposits increased.

INVESTMENT SECURITIES

At September 30, 1998, SJB's investment securities portfolio aggregated
$38,994,000, a decrease of $15,308,000 from the $54,302,000 reported at December
31, 1997, which reflects an increase of $3,114,000 from the $51,188,000 reported
at December 31, 1996.

47
<PAGE> 55

The following table sets forth the composition of SJB's investment portfolio at
the end of each period presented.

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, -----------------
1998 1997 1996
------------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
U.S. Treasuries.................................. $ 0 $ 0 $ 1,998
U.S. Government Agencies......................... 30,246 45,438 41,586
Municipal Securities............................. 8,748 8,864 7,604
------- ------- -------
$38,994 $54,302 $51,188
======= ======= =======
</TABLE>

Effective January 1, 1994, SJB adopted Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities" ("SFAS 115"), which requires the classification of securities into
one of three categories: Trading, Available-for-Sale, or Held-to-Maturity.
Management determines the appropriate classification of debt securities at the
time of purchase and re-evaluates this classification periodically. Trading
account securities are held for resale in anticipation of short-term market
movements. SJB has not engaged in trading activities related to any of its
investment securities and has no securities classified as trading. Debit
securities are classified as held-to-maturity when SJB has the positive intent
and ability to hold the securities to maturity. Held-to-maturity securities are
stated at amortized cost. Securities not classified as trading or
held-to-maturity are classified as available-for-sale. Available-for-sale
securities are stated at fair value, with unrealized gains and losses, net of
tax, reported in a separate component of shareholder's equity. SJB may sell
these securities in response to liquidity demands. Available-for-sale securities
also may be used as a means of adjusting the interest rate sensitivity of SJB's
balance sheet through sale and reinvestment.

The following table presents selected contractual maturity data for the debt
securities in SJB's portfolio at September 30, 1998 and December 31, 1997.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Due in one year or less............................... $14,106 $18,804
Due after one year through five years................. 13,895 25,549
Due after five years through ten years................ 3,567 4,827
Due after ten years................................... 7,426 5,122
------- -------
Total....................................... $38,994 $54,302
======= =======
</TABLE>

48
<PAGE> 56

The following table presents the amortized cost and fair value of each type of
security classified as either held-to-maturity or available-for sale for the
periods indicated.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
----------------------------
AMORTIZED FAIR GAIN
COST VALUE (LOSS)
--------- ------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
HELD-TO-MATURITY
U.S. Treasuries...................................... $ 0 $ 0 $ 0
U.S. Government Agencies............................. 8,776 8,881 105
Municipal Securities................................. 8,748 9,010 262
------- ------- ----
$17,524 $17,891 $367
======= ======= ====
</TABLE>

<TABLE>
<CAPTION>
AMORTIZED FAIR GAIN
COST VALUE (LOSS)
--------- ------- ------
<S> <C> <C> <C>
AVAILABLE-FOR-SALE
U.S. Treasuries...................................... $ 0 $ 0 $ 0
U.S. Government Agencies............................. 21,318 21,470 152
Municipal Securities................................. 0 0 0
------- ------- ----
$21,318 $21,470 $152
======= ======= ====
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1997
----------------------------
AMORTIZED FAIR GAIN
COST VALUE (LOSS)
--------- ------- ------
<S> <C> <C> <C>
HELD-TO-MATURITY
U.S. Treasuries...................................... $ 0 $ 0 $ 0
U.S. Government Agencies............................. 16,540 16,554 (14)
Municipal Securities................................. 8,884 9,000 136
------- ------- ----
$25,404 $25,554 $150
======= ======= ====
</TABLE>

<TABLE>
<CAPTION>
AMORTIZED FAIR GAIN
COST VALUE (LOSS)
--------- ------- ------
<S> <C> <C> <C>
AVAILABLE-FOR-SALE
U.S. Treasuries...................................... $ 0 $ 0 $ 0
U.S. Government Agencies............................. 28,922 28,899 (23)
Municipal Securities................................. 0 0 0
------- ------- ----
$28,922 $28,898 $(23)
======= ======= ====
</TABLE>

SJB engages in real estate lending through real estate construction and mortgage
loans, and commercial and consumer lending. The lending activities of SJB are
guided by the basic lending policy established by the Board of Directors. Each
loan is evaluated based on, among other things, character and leverage capacity
of the borrower, capital and investment in a particular property, if applicable,
cash flow, collateral, market conditions for the borrower's business or project
and prevailing economic trends and conditions.

49
<PAGE> 57

The following table sets forth the type and amount of loans outstanding as of
the dated indicated:

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, -----------------
1998 1997 1996
------------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Construction and Land Development................ $11,459 $ 5,479 $ 7,512
Residential Real Estate.......................... 38,998 37,702 29,586
Commercial Real Estate........................... 25,325 19,203 11,379
Agricultural..................................... 3,502 676 406
Commercial/Industrial............................ 6,879 6,153 6,352
Consumer/Installment............................. 8,177 8,364 9,052
All Other........................................ 1,245 1,936 1,094
------- ------- -------
$95,585 $79,513 $65,381
======= ======= =======
</TABLE>

Except as otherwise set forth in the table above, as of September 30, 1998, SJB
did not have any concentration of loans in any particular industry exceeding 10%
of total outstanding loans. A concentration is defined as amounts loaned to a
multiple number of borrowers engaged in similar activities, which would cause
them to be similarly impacted by economic or other conditions, where the amount
exceeds 10% of total outstanding loans.

At September 30, 1998, loans were $95,585,000, as compared to $79,513,000 at
December 31, 1997 and $65,381,000 at December 31, 1996. Average loans have
increased over these periods as well, from $65,799,000 and $72,970,000,
respectively, for 1996 and 1997, to $85,697,000 for the nine months ended
September 30, 1998. These increases in the amount of outstanding loans are
attributable primarily to increased loan demand in the market served by SJB as
the local economy strengthened. SJB's average loan to deposit ratio was 72.9%
during the first nine months of 1998 as compared to 58.9% and 52.1% during 1997
and 1996, respectively.

At September 30, 1998, the three largest category of loans, residential real
estate, commercial real estate and construction and land development comprised
approximately 41%, 27% and 12% respectively, of total outstanding loans. This
compares to 47%, 24% and 7% categorized as residential real estate, commercial
real estate and construction and land development, respectively, at December 31,
1997 and 45%, 17% and 11% categorized as residential real estate, commercial
real estate and construction and land development, respectively, at December 31,
1996.

50
<PAGE> 58

The following table provides information concerning loan portfolio maturity
(excluding non-accrual loans) as of September 30, 1998 and December 31, 1997.

<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
1998 1997
------------ -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Maturing or repricable within:
Three months or less................................... $17,311 $18,235
Over three months through twelve months................ 19,948 10,582
Over one year through three years...................... 25,945 25,246
Over three years through five years.................... 22,820 20,652
Over five years through fifteen years.................. 4,280 2,779
Over fifteen years..................................... 4,488 561
------- -------
Total........................................ $94,792 $78,055
</TABLE>

NONACCRUAL, PAST DUE AND MODIFIED LOANS

The performance of SJB's loan portfolio is evaluated regularly by Senior
Management and the Board of Directors. Interest on loans is accrued monthly as
earned. A loan is generally placed on nonaccrual status when principal or
interest is past due 90 days or more, except when management determines the loan
likely to be fully collectible. Upon being placed on nonaccrual status, the
accrual of income from the loan is discontinued and previously accrued but
unpaid interest is reversed against income. Each loan that is 90 days or more
past due is evaluated to determine its collectibility and the adequacy of its
collateral.

The following table sets forth the amount of SJB's nonperforming loans
(nonaccrual loans and loans past due 90 days or more and still accruing
interest) and loans with modified terms as of the dated indicated:

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, ---------------
1998 1997 1996
------------- ------ ------
<S> <C> <C> <C>
Nonaccrual loans................................... $ 792 $ 779 $1,047
Loans past due 90 days of more and still accruing
interest......................................... 149 101 141
Renegotiated debt, still accruing interest......... 195 204 213
------ ------ ------
$1,136 $1,084 $1,401
</TABLE>

As a percent of total loans, loans past due 90 days or more and not on
nonaccrual status were .16% as of September 30, 1998 compared to .13% and .22%
of total loans at December 31, 1997 and 1996. Nonaccrual loans were .83% of
total loans at September 30, 1998, .98% at year-end 1997 and 1.60% at year-end
1996. Loans with modified terms represented .20% of total loans at September 30,
1998, compared to .26% and .33% respectively, at December 31, 1997 and 1996. If
loans classified as nonperforming at September 30, 1998 and year-end 1997 and
1996 had performed in accordance with their original terms, interest income
would not have increased by material amounts. Income recognized on nonaccrual
loans was not material during these periods.

As of September 30, 1998, SJB was not aware of any other loans where known
information about possible credit problems of the borrower caused management to
have serious doubts as to the ability of such borrower to comply with the loan
repayment terms. SJB's primary regulators and internal auditors review the loan
portfolio as part of their regular examinations and their assessment of specific
credits, based on the information

51
<PAGE> 59

available to them at the time of their examination, may affect the level of
SJB's nonperforming loans. Additionally, the loan portfolio is regularly
monitored by Senior Management and the Board. Accordingly, there can be no
assurance that other loans will not be placed on nonaccrual, become 90 days or
more past due, or have terms modified in the future.

ALLOWANCE FOR LOAN LOSSES

A certain degree of risk is inherent in the extension of credit. Management has
credit policies in place to monitor and attempt to control the level of loan
losses and nonperforming loans. One product of SJB's credit risk management is
the maintenance of the allowance for loans losses at a level considered by
management to be adequate to absorb estimated, known and inherent losses in the
existing portfolio, including commitments and standby letters of credit. The
allowance for loan losses is established through charges to operations in the
form of provision for loan losses.

The allowance is based upon a regular review of current economic conditions,
which might affect a borrower's ability to pay, underlying collateral values,
risk in and the composition of the loan portfolio, prior loss experience and
industry averages. In addition, SJB's primary regulators, as an integral part of
their examination process, periodically review SJB's allowance for loan losses
and may recommend additions to the allowance based on their assessment of
information available to them at the time of their examination. Loans that are
deemed to be uncollectible are charged-off and deducted from the allowance. The
provision for loan losses and recoveries on loans previously charged-off are
added to the allowance.

The following table sets forth SJB's loan loss experience and certain
information relating to its allowance for loan losses as of the dates and for
the periods indicated.

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, ---------------
1998 1997 1996
------------- ------ ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Balance in allowance for loan losses at beginning of
period............................................ $1,058 $1,157 $1,494
Less: Charge-Offs................................... 142 455 841
Plus: Recoveries.................................... 99 106 194
Plus: Provisions for Loan Losses.................... 170 250 310
------ ------ ------
Balance of allowance for loan losses at end of
period............................................ $1,185 $1,058 $1,157
Ratio of net charge-offs to average loans
outstanding....................................... .05% .48% .98%
</TABLE>

The allowance for loans losses was $1,185,000 or 1.38% or average loans,
$1,058,000 or 1.45% of average loans, and $1,157,000 or 1.76% of average loans
at September 30, 1998, December 31, 1997 and December 31, 1996, respectively.
The allowance for credit losses should not be interpreted as an indication of
future charge-off trends.

Management believes that the allowance for loan losses at September 30, 1998 was
adequate to absorb the known and inherent risks in the loan portfolio at that
time. However, no assurance can be given that future changes in economic
conditions might adversely affect SJB's principal market area, borrowers or
collateral values, and other circumstances will not result in increased losses
in SJB's loan portfolio in the future.

52
<PAGE> 60

Although SJB does not normally allocate the allowance for loan losses to
specific loan categories, an allocation has been made for purposes of this
discussion as set forth below. The following table sets forth the approximate
dollar amount of the allowance for loan losses allocable to the stated loan
categories, and the percent of total loans in each such category for the period
presented.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, 1998
----------------------
ALLOWANCE % OF LOANS
--------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Commercial................................................ $ 467 50.6%
Mortgage.................................................. 175 40.8
Installment............................................... 122 8.6
Nonaccrual and Classified................................. 270 --
Unallocated............................................... 151 --
------ -----
Total........................................... $1,185 100.0%
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
----------------------
ALLOWANCE % OF LOANS
--------- ----------
<S> <C> <C>
Commercial................................................ $ 336 42.1%
Mortgage.................................................. 165 47.4
Installment............................................... 157 10.5
Nonaccrual and Classified................................. 328 --
Unallocated............................................... 72 --
------ -----
Total........................................... $1,058 100.0%
</TABLE>

The allocation of the allowance for loan losses should not be interpreted as an
indication of future credit trends or that losses will occur in these amounts or
proportions. Furthermore, the portion allocated to each loan category is not the
total amount available for future losses that might occur within such
categories, since even on the above basis there is a nominal unallocated portion
of the allowance, and the total allowance is a general allowance applicable to
the entire portfolio.

In determining the adequacy of the allowance for credit losses, management
considers such factors as known problem loans, evaluations made by bank
regulatory agencies and an independent firm retained to perform loan reviews,
assessment of economic conditions, concentrations and other appropriate data in
order to identify the risks on the portfolio. The adequacy of the allowance is
evaluated by applying a combination of specific reserves and a percentage
formula for graded loans and at least 1% of ungraded commercial and installment
loans. If, following a review of the allowance, the allowance is determined to
be inadequate or excessive, the amount of the allowance is adjusted accordingly.

53
<PAGE> 61

DEPOSITS

Deposits are the primary source of funding SJB's earning assets. Total deposits
at September 30, 1998 and the end of 1997 and 1996 were $131,109,000,
$133,068,000, and $122,957,000, respectively. Time certificates of deposit of
$100,000 or more, which were approximately $23,613,000 at September 30, 1998 and
$17,708,000 at December 31, 1997, had remaining maturities as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
MATURING WITHIN: 1998 1997
---------------- ------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Three months or less.................................. $ 9,662 $ 8,266
Over three months through twelve months............... 12,884 7,574
Over one year through three years..................... 1,067 1,868
Over three years...................................... 0 0
------- -------
Total....................................... $23,613 $17,708
</TABLE>

Average deposit balances are summarized for the periods indicated:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, -----------------------------------
1998 1997 1996
---------------- ---------------- ----------------
AVERAGE AVERAGE AVERAGE
BALANCE % BALANCE % BALANCE %
<S> <C> <C> <C> <C> <C> <C>
Demand deposits............... $ 16,281 12.1 $ 15,833 13.0 $ 17,126 15.2
Money market demand........... 11,758 8.7 10,729 8.8 10,024 8.9
Savings and other
interest-bearing deposits... 39,932 29.6 33,126 27.1 30,871 27.5
Time deposits................. 66,880 49.6 62,442 51.1 54,435 48.4
-------- ----- -------- ----- -------- -----
Total............... $134,851 100.0 $122,130 100.0 $112,456 100.0
</TABLE>

At September 30, 1998, December 31, 1997 and 1996, SJB had no brokered deposits.
BORROWED FUNDS

SJB in the normal course of business may from time to time borrow funds, either
short-term in nature or long-term to provide for liquidity and to match interest
rate risk positions.

Fed funds purchased is an overnight borrowing line of credit extended to SJB by
various upstream correspondent banks. The average balance of fed funds purchases
at September 30, 1998 was $12,000, $0 at December 31, 1997 and $44,000 at
December 31, 1996.

SJB has also made arrangements to borrow long-term from the Federal Home Loan
Bank of Dallas. These borrowings are usually made to fund loans made for longer
terms than normal such as fifteen to twenty year fixed rate mortgage loans.

54
<PAGE> 62

At September 30, 1998, SJB has made two such long term loans from the Federal
Home Loan Bank of Dallas. Details are as follows:

<TABLE>
<CAPTION>
AMORTIZATION
BALANCE RATE PERIOD MATURITY
-------- ---- ------------ ----------
<S> <C> <C> <C> <C>
Loan 103006263.......................... $490,358 6.26% 10 years 12/03/2007
Loan 103006263.......................... $472,156 6.12% 20 years 12/01/2017
</TABLE>

INTEREST RATE SENSITIVITY

Interest rate risk is the potential impact of changes in interest rates on net
interest income and results from disparities in repricing opportunities of
assets and liabilities over a period of time. Management estimates the effects
of changing interest rates and various balance sheet strategies on the level of
net interest income. Management may alter the mix of floating and fixed rate
assets and liabilities, change pricing schedules, and adjust maturities through
sales and purchases of securities available for sale as a means of limiting
interest rate risk.

The degree of interest rate sensitivity is not equal for all types of assets and
liabilities. SJB's experience has indicated that the repricing of
interest-bearing demand, savings and money market accounts does not move with
the same magnitude as general market rates. Additionally, these deposit
categories, along with non-interest demand, have historically been stable
sources of funds to SJB, which indicates a much longer implicit maturity than
their contractual availability.

LIQUIDITY

SJB seeks to manage its liquidity position to attempt to ensure that sufficient
funds are available to meet customers' needs for borrowing and deposit
withdrawals. Liquidity is derived from both the asset and liability sides of the
balance sheet. Asst liquidity arises from the ability to convert assets to cash
and self-liquidation or maturity of assets. Liquid asset balances include cash,
interest-bearing deposits with financial institutions, short-term investments
and federal funds sold. Liability liquidity arises from a diversity of funding
sources as well as from the ability of SJB to attract deposits of varying
maturities. If SJB were limited to only one source of funding or all its
deposits had the same maturity, its liquidity position would be adversely
impacted.

SJB's funding source is primarily its deposit base which is composed of
interest-bearing and noninterest-bearing accounts, augmented though federal
funds purchased and other short-term and long-term borrowings, which are
interest-bearing. SJB's non-interest bearing demand deposits are, by their very
nature, subject to withdrawal upon demand. Declines in one form of funding
source require SJB to obtain funds from another source. If SJB were to
experience a decline in noninterest-bearing demand deposits and was to have a
significant increase in loan volume without a commensurate increase in such
deposits, it would utilize alternative sources of funds, probably at a higher
cost, to maintain its liquidity and to meet its loan funding needs. This would
place downward pressure on SJB's net interest margin and might have a negative
impact on SJB's liquidity position.

55
<PAGE> 63

CAPITAL ADEQUACY

At September 30, 1998, SJB's total shareholders' equity was $16,418,000, an
increase of .41% from $16,351,000 at December 31, 1997. Book value per common
share is presented in the table below.

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, -------------------
1998 1997 1996
------------- -------- --------
(EXCEPT FOR PER SHARE DATA)
<S> <C> <C> <C>
Shares outstanding............................. 245,688 245,688 245,688
Shareholders' Equity ($000).................... $ 16,418 $ 16,351 $ 15,584
Book value per common share.................... 66.82 66.55 63.43
</TABLE>

Adequate levels of capital are necessary over time to sustain growth and absorb
losses. In the case of banks and bank holding companies, capital levels must
also meet minimum regulatory requirements. All risk-based capital ratios remain
well above regulatory minimums. At September 30, 1998, Tier 1 capital was 18.33%
of risk-weighted assets and total capital was 19.58% of risk-weighted assets,
compared to the regulatory minimums of 4.0% and 8.0%, respectively. SJB's
regulatory leverage ratio, which compares Tier 1 capital to adjusted total
assets, was 10.53% at September 30, 1998, compared to the regulatory minimum of
4.0%. Under present regulations, SJB was classified as "well-capitalized" based
upon its capital ratios at September 30, 1998 and December 31, 1997 and 1996.
The following table sets forth SJB's risk based capital and capital ratios for
the periods indicated.

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, -----------------
1998 1997 1996
------------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Capital:
Tier I......................................... $16,168 $16,319 $15,615
Tier II........................................ 1,103 980 922
------- ------- -------
Total capital.......................... 17,271 17,299 16,537
Risk-weighted assets............................. 88,205 78,419 73,795
Ratios:
Tier I capital to risk-weighted assets......... 18.33% 20.81% 21.16%
Tier II capital to risk-weighted assets........ 1.25 1.25 1.25
------- ------- -------
Total capital to risk-weighted
assets.............................. 19.58 22.06 22.41
Leverage ratio................................. 10.53 11.18 12.09
</TABLE>

56
<PAGE> 64

INFORMATION ABOUT ST. JAMES

St. James is a bank holding company organized under the laws of the state of
Louisiana with its principal executive office located in Lutcher, Louisiana. St.
James operates principally through St. James Bank and Trust Company, which is a
state-chartered commercial bank and which provides a range of consumer and
commercial banking services through its main office in Lutcher, Louisiana and
five branch offices in St. James and Ascension Parishes. At September 30, 1998,
St. James had total consolidated assets of approximately $150.3 million, total
consolidated deposits of approximately $131.1 million, and total consolidated
stockholders' equity of approximately $16.4 million. St. James' principal
executive office is located at 1980 West Main Street, Lutcher, Louisiana, 70071
and its telephone number at such address is (225) 869-9711.

PROPERTIES

St. James owns its main office and branch locations, with its exception of one
branch office which is under lease.

COMPETITION

St. James encounters vigorous competition in its market areas for the provision
of depository institution financial services from a number of sources, including
bank holding companies and commercial banks, savings and loan associations and
other thrift institutions, other financial institutions, and financial
intermediaries that operate in St. James' market area. Regional interstate
banking laws and other recent federal and state laws have resulted in increased
competition from both conventional banking institutions and other businesses
offering financial services and products. The Bank also competes for interest
bearing funds with a number of other financial intermediaries and nontraditional
consumer investment alternatives, including brokerage firms, consumer finance
companies, commercial finance companies, credit unions, money market funds, and
federal, state, and municipal issuers of short term obligations. Many of these
competitors have greater financial resources than St. James Bank & Trust. At
September 30, 1998, there were approximately 13 commercial banks and 5 credit
unions competing with the Bank in the Bank's southern Louisiana market area.

LEGAL PROCEEDINGS

St. James and St. James Bank & Trust are not parties to any material legal
proceedings other than ordinary routine litigation incidental to their business.

MANAGEMENT

The following table presents information about the directors and executive
officers of St. James. Unless otherwise indicated, each person has sole voting
and investment powers over the indicated shares. Information relating to
beneficial ownership of the St. James is based upon "beneficial ownership"
concepts set forth in rules promulgated under the Exchange Act. Under such rules
a person is deemed to be a "beneficial owner" of a security if that person has
or shares "voting power," which includes the power to vote or to direct the
voting of such security, or "investment power," which includes the power to
dispose or to direct the disposition of such security. Under the rules, more
than one person may be

57
<PAGE> 65

deemed to be a beneficial owner of the same securities. A person is also deemed
to be a beneficial owner of any security of which that person has the right to
acquire beneficial ownership within 60 days from the record date. The footnotes
to the table indicate how many shares each person has the right to acquire
within 60 days of the record date.

<TABLE>
<CAPTION>
NUMBER OF
SHARES
PRESENT OCCUPATION BENEFICIALLY OWNED
AND PRINCIPAL POSITION AND DIRECTOR OR AT THE RECORD
OCCUPATION FOR OFFICES HELD EXECUTIVE DATE AND
NAME LAST FIVE YEARS WITH ST. JAMES OFFICER SINCE PERCENT OF CLASS
- ---- ------------------ ----------------- ------------- --------------------
<S> <C> <C> <C> <C> <C>
Valfred J. Amato...... Mechanical Vice Chairman and 1975 400 .16%
Contractor Director
Paul G. Aucoin........ Lawyer President and 1981 7,164 2.91
Director
Riley F. Boudreaux.... Retired Treasurer 1972 7,930 3.22
Roy A. Breaud, Sr..... Retired Director 1981 6,444 2.62
Isabella Mayor of Crowley Vice President
delaHoussaye........ and Director 1995 3,720 1.51
Leon C. Greenblatt Investor Director
III................. 1997 24,743 10.07
A. C. Hymel........... Retired Director 1981 9,214 3.75
Sharon B. Kell........ Banker President and CEO 1996 427 .17
of Bank
Thomas J. Kliebert.... Retired Director 1995 526 .21
Willis J. Poirrier, Financing Director
Jr.................. 1972 7,518(a) 3.05
Gary L. Smith......... Dredging Director 1997 100 .04
Contractor
Henry A. Smith, Jr.... Consultant Chairman and 18,602 7.57
Director
</TABLE>

- -------------------------

(a) Mr. Poirrier disclaims beneficial ownership of 3,158 shares held of record
by Vacherie Loans, Inc.

TRANSACTIONS WITH MANAGEMENT

In the ordinary course of business, St. James Bank & Trust has loans, deposits
and other transactions with its executive officers, directors, and organizations
with which such persons are associated. Such transactions are on substantially
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with others. The aggregate amount of loans
to the aforementioned persons and company(s) in which they have a 10% or more
ownership interest as of September 30, 1998, were approximately $673,000.

58
<PAGE> 66

VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS OF ST. JAMES

The following table sets forth certain information concerning the beneficial
owners of more than 5.0% of St. James Common Stock, as of the record date.

<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE PERCENT OF
TITLE OF CLASS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS(1)
- -------------- ---------------------------- -------------------- ----------
<S> <C> <C> <C>
Common Stock............ Banco Panamericano Inc. and 24,743 direct 10.07%
Leon C. Greenblatt
Chicago, IL 60606
Common Stock............ Magnolia Holding Inc. 18,018 direct 7.00
River Ridge, LA 70123
Common Stock............ Michele M. Jahelka 23,274 direct 9.47
Hinsdale, IL 60521
Common Stock............ ROLJ Family LTD Partnership 13,016 direct 5.29
c/o Richard O. Nichols
Chicago, IL 60606
</TABLE>

- -------------------------

(1) The information shown above is based upon information furnished by the named
persons. Information relating to beneficial ownership is based upon
"beneficial ownership" concepts set forth in rules promulgated under the
Securities Exchange Act of 1934. Under such rules a person is deemed to be a
"beneficial owner" of a security if that person has or shares "voting
power," which includes the power to dispose or to direct the voting of such
security, or "investment power," which includes the power to dispose or to
direct the disposition of such security. A person is also deemed to be a
beneficial owner of any security of which that person has the right to
acquire beneficial ownership within 60 days. Under the rules, more than one
person may be deemed to be a beneficial owner of the same securities, and a
person may be deemed to be a beneficial owner of securities as to which he
or she has no beneficial interest.

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<PAGE> 67

INFORMATION ABOUT REGIONS

GENERAL

Regions is a regional bank holding company organized and existing under the laws
of the state of Delaware and headquartered in Birmingham, Alabama, with
approximately 713 banking offices located in Alabama, Arkansas, Florida,
Georgia, Louisiana, South Carolina, Tennessee, and Texas as of September 30,
1998. At that date, Regions had total consolidated assets of approximately $35.1
billion, total consolidated deposits of approximately $27.2 billion, and total
consolidated stockholders' equity of approximately $3.0 billion. Regions has
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.

Regions was organized under the laws of the state of Delaware and commenced
operations in 1971 under the name First Alabama Bancshares, Inc. In 1994, the
name of First Alabama Bancshares, Inc. was changed to Regions Financial
Corporation. Regions' principal executive offices are located at 417 North 20th
Street, Birmingham, Alabama 35203, and its telephone number at such address is
(205) 326-7100.

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

Additional information about Regions and its subsidiaries is included in
documents incorporated by reference in this Proxy Statement-Prospectus. See
"Where You Can Find More Information."

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<PAGE> 68

RECENT DEVELOPMENTS

Since December 31, 1997, and as of the date of this Proxy Statement-Prospectus,
Regions has completed the acquisitions of eleven financial institutions (the
"Recently Completed Acquisitions") and has entered into definitive agreements to
acquire four financial institutions in addition to the Merger (the "Other
Pending Acquisitions"). Certain aspects of the completed and other pending
acquisitions are presented in the following table:

<TABLE>
<CAPTION>
CONSIDERATION
---------------------------------------------
APPROXIMATE
------------------------ ACCOUNTING
INSTITUTION ASSET SIZE(1) VALUE(1) TYPE TREATMENT
----------- ------------- -------- ------ ----------
(IN MILLIONS)
<S> <C> <C> <C> <C>
RECENTLY COMPLETED ACQUISITIONS:
Greenville Financial Corporation,
located in Greenville, South
Carolina........................... $ 134 $ 34 Regions Pooling of
Common Interests
Stock
PALFED, Inc., located in Aiken, South
Carolina........................... 665 145 Regions Pooling of
Common Interests
Stock
First United Bancorporation, located
in Anderson, South Carolina........ 292 80 Regions Pooling of
Common Interests
Stock
St. Mary Holding Corporation, located
in Franklin, Louisiana............. 113 31 Regions Pooling of
Common Interests
Stock
Key Florida Bancorp, Inc., located in
Bradenton, Florida................. 212 39 Regions Pooling of
Common Interests
Stock
First State Corporation, located in
Albany, Georgia.................... 540 161 Regions Pooling of
Common Interests
Stock
First Commercial Corporation, located
in Little Rock, Arkansas........... 7,382 2,597 Regions Pooling of
Common Interests
Stock
Village Bankshares, Inc. located in
Tampa, Florida..................... 211 46 Regions Pooling of
Common Interests
Stock
</TABLE>

61
<PAGE> 69

<TABLE>
<CAPTION>
CONSIDERATION
---------------------------------------------
APPROXIMATE
------------------------ ACCOUNTING
INSTITUTION ASSET SIZE(1) VALUE(1) TYPE TREATMENT
----------- ------------- -------- ------ ----------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Jacobs Bank, located in Scottsboro,
Alabama............................ $ 186 $ 47 Regions Pooling of
Common Interests
Stock
Etowah Bank, located in Canton,
Georgia............................ 409 99 Regions Pooling of
Common Interests
Stock
First Community Banking Services,
Inc., located in Peachtree City,
Georgia............................ 125 30 Regions Pooling of
Common Interests
Stock
OTHER PENDING ACQUISITIONS:
VB&T Bancshares Corporation, located
in Valdosta, Georgia............... 75 18 Regions Pooling of
Common Interests
Stock
Meigs County Bancshares, Inc. located
in Decatur, Tennessee.............. 103 19 Regions Pooling of
Common Interests
Stock
Bullsboro BancShares, Inc., located
in Newnan, Georgia................. 108 36 Regions Pooling of
Common Interests
Stock
Arkansas Banking Company, located in
Jonesboro, Arkansas................ 343 64 Regions Purchase
Common
Stock
</TABLE>

- -------------------------

(1) Calculated as of the date of consummation in the case of the completed
acquisitions and as of the date of announcement of the transaction in the
case of pending acquisitions.

Consummation of the Other Pending Acquisitions is subject to the approval of
certain regulatory agencies and approval of the stockholders of the institutions
to be acquired. Moreover, the closing of each transaction is subject to various
contractual conditions precedent. No assurance can be given that the conditions
precedent to consummating the transactions will be satisfied in a manner that
will result in their consummation.

If the Other Pending Acquisitions and the Merger had been consummated on
September 30, 1998, as of that date Regions' total consolidated assets would
have been increased by approximately $751 million to approximately $35.8
billion; its total consolidated deposits would have increased by approximately
$696 million to approximately

62
<PAGE> 70

$27.9 billion; and its total consolidated stockholders' equity would have
increased by approximately $26 million to approximately $3.0 billion.

The First Commercial Acquisition. On July 31, 1998, Regions completed a
business combination with First Commercial Corporation, Little Rock, Arkansas.
Additional information concerning this business combination is included in
Regions' current reports on Form 8-K, dated as of February 8, 1998, July 31,
1998, and November 6, 1998. Such current reports are incorporated in this Proxy
Statement-Prospectus by reference.

Regions accounted for the First Commercial Acquisition as a pooling of
interests. All historical financial information of Regions presented in this
Proxy Statement-Prospectus has been restated to reflect Regions' business
combination with First Commercial Corporation and other significant business
combinations consummated in the first quarter of 1998, which were accounted for
as poolings of interests. Supplemental historical consolidated financial
statements of Regions giving effect to such poolings-of-interests combinations
are included in Regions' current report on Form 8-K dated November 6, 1998. See
"Where You Can Find More Information."

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<PAGE> 71

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 and St. James. Additional
information is available in Regions' Annual Report on Form 10-K for the fiscal
year ended December 31, 1997. See "Where You Can Find More Information."

GENERAL

Regions and St. James are both bank holding companies registered with the
Federal Reserve Board under the Bank Holding Company Act. As such, Regions and
St. James and their non-bank subsidiaries are subject to the supervision,
examination, and reporting requirements of the Bank Holding Company Act and the
regulations of the Federal Reserve Board.

The Bank Holding Company Act requires every bank holding company to obtain the
prior approval of the Federal Reserve Board before: (i) it may acquire direct or
indirect ownership or control of any voting shares of any bank if, after such
acquisition, the bank holding company will directly or indirectly own or control
more than 5.0% of the voting shares of the bank; (ii) it or any of its
subsidiaries, other than a bank, may acquire all or substantially all of the
assets of any bank; or (iii) it may merge or consolidate with any other bank
holding company.

The Bank Holding Company Act further provides that the Federal Reserve Board 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 Board
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.

The Bank Holding Company Act, as amended by the interstate banking provisions of
the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the
"Interstate Banking Act") permits any bank holding company located in Alabama to
acquire a bank located in any other state, and any bank holding company located
outside Alabama to acquire any Alabama-based bank, regardless of state law to
the contrary, subject to certain deposit-percentage, aging requirements, and
other restrictions. The Interstate Banking Act also generally provides that,
after June 1, 1997, national and state-chartered banks may branch interstate
through acquisitions of banks in other states, unless a state "opted out" and
prohibited interstate branching altogether. None of the states in which the
banking subsidiaries of Regions or St. James are located has "opted out."
Accordingly, Regions has the ability to consolidate all of its bank subsidiaries
into a single bank with interstate branches.

The Bank Holding Company Act generally prohibits Regions and St. James from
engaging in activities other than banking or managing or controlling banks or
other permissible subsidiaries and from acquiring or retaining direct or
indirect control of any company

64
<PAGE> 72

engaged in any activities other than those activities determined by the Federal
Reserve Board 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 Board 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.

Each of the subsidiary depository institutions of Regions and St. James is a
member of the Federal Deposit Insurance Corporation (the "FDIC"), and as such,
its deposits are insured by the FDIC to the extent provided by law. Each such
subsidiary is also subject to numerous state and federal statutes and
regulations that affect its business, activities, and operations, and each is
supervised and examined by one or more state or federal bank regulatory
agencies.

The regulatory agencies having supervisory jurisdiction over the respective
subsidiary institutions of Regions and St. James (the FDIC and the applicable
state authority) regularly examine the operations of such institutions and have
authority to approve or disapprove mergers, consolidations, the establishment of
branches, and similar corporate actions. The federal and state banking
regulators also have the power to prevent the continuance or development of
unsafe or unsound banking practices or other violations of law.

PAYMENT OF DIVIDENDS

Regions and St. James are legal entities separate and distinct from their
banking, thrift, and other subsidiaries. The principal sources of cash flow of
both Regions and St. James, including cash flow to pay dividends to their
respective stockholders, are dividends from their subsidiary depository
institutions. There are statutory and regulatory limitations on the payment of
dividends by these subsidiary depository institutions to Regions and St. James,
as well as by Regions and St. James to their stockholders.

As to the payment of dividends, the Bank and all of Regions' state-chartered
banking subsidiaries are subject to the respective laws and regulations of the
state in which the bank is located, and to the regulations of the bank's primary
federal regulator.

If, in the opinion of the federal banking regulatory agency, a depository
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
depository institution, could include the payment of dividends), such agency may
require, after notice and hearing, that such institution cease and desist from
such practice. The federal banking agencies have indicated that paying dividends
that deplete a depository institution's capital base to an inadequate level
would be an unsafe and unsound banking practice. Under current federal law, 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 agencies have issued policy statements which
provide that bank holding companies and insured banks should generally pay
dividends only out of current operating earnings.

At September 30, 1998, under dividend restrictions imposed under federal and
state laws, the subsidiary depository institutions of Regions and St. James,
without obtaining

65
<PAGE> 73

governmental approvals, could declare aggregate dividends to Regions and St.
James of approximately $252 million and $2 million, respectively.

The payment of dividends by Regions and St. James and their subsidiary
depository institutions may also be affected or limited by other factors, such
as the requirement to maintain adequate capital above regulatory guidelines.

CAPITAL ADEQUACY

Regions, St. James, and their respective subsidiary depository institutions are
required to comply with the capital adequacy standards established by the
Federal Reserve Board in the case of Regions and St. James and the appropriate
federal banking regulator in the case of each of their subsidiary depository
institutions. There are two basic measures of capital adequacy for bank holding
companies that have been promulgated by the Federal Reserve Board: 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 minimum guideline for the ratio (the "Total Capital Ratio") of total capital
("Total Capital") to risk-weighted assets (including certain off-balance-sheet
items, such as standby letters of credit) is 8.0%. At least half of Total
Capital must be composed of common equity, undivided profits, minority interests
in the equity accounts of consolidated subsidiaries, qualifying 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 certain subordinated debt, certain
hybrid capital instruments and other qualifying preferred stock, and a limited
amount of loan loss reserves ("Tier 2 Capital"). At September 30, 1998, Regions'
consolidated Total Capital Ratio was 11.84% and its Tier 1 Capital Ratio (i.e.,
the ratio of Tier 1 Capital to risk-weighted assets) was 10.64%. At that date
St. James' consolidated Total Capital Ratio was 19.58% and its Tier 1 Capital
Ratio was 18.33%.

In addition, the Federal Reserve Board 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 an
additional cushion of 100 to 200 basis points above the stated minimums. 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 Board has indicated that
it will consider a "tangible Tier 1 Capital leverage ratio" (deducting all
intangibles) and other indicators of capital strength in evaluating proposals
for expansion or new activities. At September 30, 1998 Regions' Leverage Ratio
was 7.84% and St. James Leverage Ratio was 10.53%.

Each of Regions' and St. James' subsidiary depository institutions is subject to
risk-based and leverage capital requirements adopted by its federal banking
regulator, which are substantially similar to those adopted by the Federal
Reserve Board. Each of the subsidiary depository institutions was in compliance
with applicable minimum capital requirements as of September 30, 1998. Neither
Regions, St. James, nor any of their subsidiary depository institutions has been
advised by any federal banking agency of any specific minimum capital ratio
requirement applicable to it.

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<PAGE> 74

Failure to meet capital guidelines could subject a bank or thrift institution to
a variety of enforcement remedies, including issuance of a capital directive,
the termination of deposit insurance by the FDIC, a prohibition on the taking of
brokered deposits, and to certain other restrictions on its business. As
described below, substantial additional restrictions can be imposed upon
FDIC-insured depository institutions that fail to meet applicable capital
requirements. See "-- Prompt Corrective Action."

The Federal Reserve Board, the Office of the Comptroller of the Currency, and
the FDIC also have recently adopted final regulations requiring regulators to
consider interest rate risk (when the interest rate sensitivity of an
institution's assets does not match the sensitivity of its liabilities or its
off-balance-sheet position) in the evaluation of a bank's capital adequacy. The
bank regulatory agencies' methodology for evaluating interest rate risk requires
banks with excessive interest rate risk exposure to hold additional amounts of
capital against such exposures.

PROMPT CORRECTIVE ACTION

Current federal law establishes a system of prompt corrective action to resolve
the problems of undercapitalized institutions. Under this system the federal
banking regulators have established five capital categories ("well capitalized,"
"adequately capitalized," "undercapitalized," "significantly undercapitalized,"
and "critically undercapitalized") and must 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, current federal law requires the
banking regulator to appoint a receiver or conservator for an institution that
is critically undercapitalized.

Under the final agency rules implementing the prompt corrective action
provisions, an institution that (i) has a Total Capital Ratio of 10% or greater,
a Tier 1 Capital Ratio of 6.0% or greater, and a Leverage Ratio of 5.0% or
greater and (ii) is not subject to any written agreement, order, capital
directive, or prompt corrective action directive issued by the appropriate
federal banking agency is deemed to be "well capitalized." An institution with a
Total Capital Ratio of 8.0% or greater, a Tier 1 Capital Ratio of 4.0% or
greater, and a Leverage Ratio of 4.0% or greater is considered to be "adequately
capitalized." A depository institution that has a Total Capital Ratio of less
than 8.0%, a Tier 1 Capital Ratio of less than 4.0%, or a Leverage Ratio of less
than 4.0% is considered to be "undercapitalized." A depository institution that
has a Total Capital Ratio of less than 6.0%, a Tier 1 Capital Ratio of less than
3.0%, or a Leverage Ratio of less than 3.0% is considered to be "significantly
undercapitalized," and an institution that has a tangible equity capital to
assets ratio equal to or less than 2.0% is deemed to be "critically
undercapitalized." For purposes of the regulation, the term "tangible equity"
includes core capital elements counted as Tier 1 Capital for purposes of the
risk-based capital standards plus the amount of outstanding cumulative perpetual
preferred stock (including related surplus), minus all intangible assets with
certain exceptions. A depository institution may be deemed to be in a
capitalization category that is lower than is indicated by its actual capital
position if it receives an unsatisfactory examination rating.

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. A
bank holding company must guarantee that a

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<PAGE> 75

subsidiary depository institution meets its capital restoration plan, subject to
certain limitations. The obligation of a controlling bank holding company to
fund a capital restoration plan is limited to the lesser of 5.0% of an
undercapitalized subsidiary's assets or the amount required to meet regulatory
capital requirements. An undercapitalized institution is also generally
prohibited from increasing its average total assets, making acquisitions,
establishing any branches, or engaging in any new line of business, except in
accordance with an accepted capital restoration plan or with the approval of the
FDIC. In addition, the appropriate federal banking agency is given authority
with respect to any undercapitalized depository institution to take any of the
actions it is required to or may take with respect to a significantly
undercapitalized institution as described below if it determines "that those
actions are necessary to carry out the purpose" of the law.

At September 30, 1998, all of the subsidiary depository institutions of Regions
and St. James had the requisite capital levels to qualify as well capitalized.

FDIC INSURANCE ASSESSMENTS

The FDIC currently uses 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 risk-based
assessment system, which went into effect on January 1, 1994, 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, there are nine
assessment risk classifications (i.e., combinations of capital groups and
supervisory subgroups) to which different assessment rates are applied.

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.

DESCRIPTION OF REGIONS COMMON STOCK

Regions is authorized to issue 500,000,000 shares of Regions Common Stock, of
which 221,111,474 shares were issued at September 30, 1998, none of which were
held as treasury shares, and 5,000,000 shares of preferred stock, none of which
are outstanding. 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 therefor. The
ability of Regions to pay dividends is affected by the ability of its subsidiary
institutions to pay

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<PAGE> 76

dividends, which is limited by applicable regulatory requirements and capital
guidelines. At September 30, 1998, under such requirements and guidelines,
Regions' subsidiary institutions had $252 million of undivided profits legally
available for the payment of dividends. See "Supervision and
Regulation -- Payment of 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 May 1999. Under SEC rules, proposals of Regions stockholders intended to
be presented at that meeting must be received by Regions at its principal
executive offices within a reasonable time prior to the mailing of Regions' 1999
annual meeting proxy statement, for consideration by Regions for possible
inclusion in such proxy statement.

EXPERTS

The consolidated financial statements and the supplemental 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 reports 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, 1997 and in its Current Report on
Form 8-K dated November 6, 1998. The financial statements audited by Ernst &
Young LLP have been incorporated by reference in reliance on their reports given
on their authority as experts in accounting and auditing.

The consolidated financial statements of St. James Bancorporation and
subsidiary, included in this Registration Statement, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report appearing
herein, and are include din reliance upon the report of such firm given upon
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 LLP, Birmingham,
Alabama. Henry E. Simpson, partner in the law firm of Lange, Simpson, Robinson &
Somerville LLP, is a member of the Board of Directors of Regions. As of
, 1998, attorneys in the law firm of Lange, Simpson, Robinson &
Somerville LLP owned an aggregate of shares of Regions Common
Stock.

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

WHERE YOU CAN FIND MORE INFORMATION

Regions files annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any reports, statements or other
information that

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<PAGE> 77

Regions files with the SEC at the SEC's public reference rooms in Washington,
D.C., New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. These
filings are also available at the Internet world wide web site maintained by the
SEC at "http://www.sec.gov."

Regions filed a Registration Statement on Form S-4 (the "Registration
Statement") to register with the SEC the Regions Common Stock to be issued to
St. James stockholders in the Merger. This Proxy Statement-Prospectus is a part
of that Registration Statement and constitutes a prospectus of Regions. As
allowed by SEC rules, this Proxy Statement-Prospectus does not contain all the
information you can find in Regions' Registration Statement or the exhibits to
that Registration Statement.

SEC regulations allow Regions to "incorporate by reference" information into
this Proxy Statement-Prospectus, which means that Regions can disclose important
information to you by referring you to another document filed separately with
the SEC. The information incorporated by reference is considered part of this
Proxy Statement-Prospectus, except for any information superseded by information
contained directly in this Proxy Statement-Prospectus or in later filed
documents incorporated by reference in this Proxy Statement-Prospectus.

This Proxy Statement-Prospectus incorporates by reference the documents set
forth below that Regions has previously filed with the SEC. These documents
contain important information about Regions and its finances. Some of these
filings have been amended by later filings, which are also listed.

<TABLE>
<CAPTION>
REGIONS SEC FILINGS (FILE NO. 0-6159) PERIOD/AS OF DATE
- ------------------------------------- -----------------
<S> <C>
Annual Report on Form 10-K........... Year ended December 31, 1997
Quarterly Reports on Form 10-Q....... Quarters ended March 31, June 30,
September 30, 1998
Current Reports on Form 8-K.......... February 8, 1998; July 31, 1998; and
November 6, 1998
</TABLE>

Regions also incorporates by reference additional documents that may be filed
with the SEC between the date of this Proxy Statement-Prospectus and the
consummation of the Merger or the termination of the Merger Agreement. These
include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K, as well as proxy statements.

Regions has supplied all information contained or incorporated by reference in
this Proxy Statement-Prospectus relating to Regions, and St. James has supplied
all such information relating to St. James.

If you are a stockholder, we may have sent you some of the documents
incorporated by reference, but you can obtain any of them through Regions, the
SEC or the SEC's Internet web site as described above.

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<PAGE> 78

Documents incorporated by reference are available from Regions without charge,
excluding all exhibits, except that if Regions has specifically incorporated by
reference an exhibit in this Proxy Statement-Prospectus, the exhibit will also
be available without charge. Stockholders may obtain documents incorporated by
reference in this Proxy Statement-Prospectus by requesting them in writing or by
telephone from Regions at the following address:

Regions Financial Corporation
417 North 20th Street
Birmingham, AL 35203

Attention: Shareholder Relations

Telephone: (205) 326-7090

You should rely only on the information contained or incorporated by reference
in this Proxy Statement-Prospectus. We have not authorized anyone to provide you
with information that is different from what is contained in this Proxy
Statement-Prospectus. This Proxy Statement-Prospectus is dated
1998. You should not assume that the information contained in this Proxy
Statement-Prospectus is accurate as of any date other than that date. Neither
the mailing of this Proxy Statement-Prospectus to stockholders nor the issuance
of Regions Common Stock in the Merger creates any implication to the contrary.

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<PAGE> 79

INDEX TO ST. JAMES FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Independent Auditors' Report................................ F-2
Financial Statements for the years ended December 31, 1997
and 1996:
Consolidated Statements of Condition...................... F-3
Consolidated Statements of Income......................... F-4
Consolidated Statements of Stockholders' Equity........... F-5
Consolidated Statements of Cash Flows..................... F-6
Notes to Consolidated Financial Statements................ F-7
Financial Statements for the nine months ended September 30,
1998 and 1997:
Consolidated Statements of Condition (Unaudited).......... F-20
Consolidated Statements of Income (Unaudited)............. F-21
Consolidated Statements of Stockholders' Equity F-22
(Unaudited)............................................
Consolidated Statements of Cash Flows (Unaudited)......... F-23
Consolidated Statements of Comprehensive Income F-24
(Unaudited)............................................
Notes to Unaudited Consolidated Interim Financial F-25
Statements.............................................
</TABLE>

F-1
<PAGE> 80

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders of
St. James Bancorporation, Inc.
Lutcher, Louisiana

We have audited the accompanying consolidated statements of condition of St.
James Bancorporation, Inc. and subsidiary as of December 31, 1997 and 1996, and
the related consolidated statements of income, stockholders' equity, and cash
flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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, such consolidated financial statements present fairly, in all
material respects, the financial position of St. James Bancorporation, Inc. and
subsidiary as of December 31, 1997 and 1996, and the results of their operations
and their cash flows for the years then ended in conformity with generally
accepted accounting principles.

/s/ DELOITTE & TOUCHE LLP

January 16, 1998

F-2
<PAGE> 81

ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CONDITION
DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
ASSETS
Cash and due from banks............................. $ 8,303,625 $ 15,470,430
Federal funds sold.................................. 6,450,000 4,075,000
------------ ------------
Total cash and cash equivalents........... 14,753,625 19,545,430
Available-for-sale securities, at fair value
(amortized cost of $28,922,310 and $25,709,789 in
1997 and 1996, respectively)...................... 28,898,588 25,593,429
Held-to-maturity securities (fair value of
$25,553,593 and $25,374,517 in 1997 and 1996,
respectively)..................................... 25,403,620 25,594,804
Loans, net of allowance for loan losses of
$1,058,058 and $1,157,450 in 1997 and 1996,
respectively...................................... 78,455,167 64,223,119
Bank premises and equipment, net.................... 3,253,815 2,807,792
Accrued interest receivable......................... 1,140,997 1,074,217
Other real estate owned............................. 38,840 147,744
Deferred tax asset.................................. 179,115 386,880
Other assets........................................ 249,739 182,007
------------ ------------
$152,373,506 $139,555,422
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
DEPOSITS:
Demand....................................... $ 17,527,924 $ 18,494,234
Savings and NOW.............................. 52,652,804 50,226,201
Other time................................... 62,886,886 54,236,649
------------ ------------
Total deposits............................ 133,067,614 122,957,084
Notes payable....................................... 2,000,000 --
Accrued interest payable............................ 438,695 398,586
Other liabilities................................... 516,043 616,048
------------ ------------
Total liabilities......................... 136,022,352 123,971,718
------------ ------------
COMMITMENTS AND CONTINGENCIES....................... -- --
STOCKHOLDERS' EQUITY
Common stock, $2.50 par value; 1,000,000 shares
authorized, 288,000 shares issued and 245,688
outstanding at December 31, 1997 and 1996......... 720,000 720,000
Paid-in capital..................................... 1,657,712 1,657,712
Retained earnings................................... 14,701,237 13,994,928
Unrealized losses on securities available for sale,
net............................................... (15,657) (76,798)
------------ ------------
17,063,292 16,295,842
Less treasury stock, at cost (42,312 shares in 1997
and 1996)......................................... (712,138) (712,138)
------------ ------------
Total stockholders' equity................ 16,351,154 15,583,704
------------ ------------
$152,373,506 $139,555,422
============ ============
</TABLE>

See notes to consolidated financial statements.

F-3
<PAGE> 82

ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
1997 1996
----------- ----------
<S> <C> <C>
INTEREST INCOME:
Loans, including fees................................ $ 6,948,980 $6,101,310
Investment securities:
Taxable........................................... 2,579,309 2,407,752
Nontaxable........................................ 400,171 407,048
Federal funds sold................................... 296,262 197,973
Deposits in other depository institutions............ 1,485 1,077
----------- ----------
Total interest income........................ 10,226,207 9,115,160
----------- ----------
INTEREST EXPENSE:
Deposits............................................. 4,205,905 3,738,677
Note payable......................................... 18,482 --
----------- ----------
Total interest expense....................... 4,224,387 3,738,677
----------- ----------
Net interest income.................................... 6,001,820 5,376,483
Provision for loan losses.............................. 250,000 310,000
----------- ----------
Net interest income after provision
for loan losses...................................... 5,751,820 5,066,483
----------- ----------
NONINTEREST INCOME:
Customer service fees................................ 1,075,120 973,497
Other................................................ 152,657 77,718
----------- ----------
Total noninterest income..................... 1,227,777 1,051,215
----------- ----------
NONINTEREST EXPENSE:
Salaries............................................. 1,727,877 1,680,210
Employee benefits.................................... 461,800 371,910
Professional fees.................................... 123,743 176,075
Net occupancy expense................................ 868,253 722,575
Other operating expense.............................. 1,310,884 1,345,670
----------- ----------
Total noninterest expense.................... 4,492,557 4,296,440
----------- ----------
Income before income taxes............................. 2,487,040 1,821,258
Income tax expense..................................... 675,135 506,185
----------- ----------
Net income............................................. $ 1,811,905 $1,315,073
=========== ==========
Net income per common share............................ $ 7.37 $ 5.35
=========== ==========
</TABLE>

See notes to consolidated financial statements.

F-4
<PAGE> 83

ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
UNREALIZED
GAIN (LOSS)
ON
COMMON STOCK AVAILABLE-
------------------ PAID IN RETAINED TREASURY FOR-SALE
SHARES AMOUNT CAPITAL EARNINGS STOCK SECURITIES TOTAL
------- -------- ---------- ----------- --------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, January 1,
1996............... 245,688 $720,000 $1,657,712 $13,294,075 $(712,138) $(94,613) $14,865,036
Net income........... 1,315,073 1,315,073
Dividends on common
stock, $2.50 per
share.............. (614,220) (614,220)
Change in unrealized
gain (loss) on
available-for-sale
securities net of
taxes of $9,177.... 17,815 17,815
------- -------- ---------- ----------- --------- -------- -----------
BALANCE, December 31,
1996............... 245,688 720,000 1,657,712 13,994,928 (712,138) (76,798) 15,583,704
Net income........... 1,811,905 1,811,905
Dividends on common
stock, $4.50 per
share.............. (1,105,596) (1,105,596)
Change in unrealized
gain (loss) on
available-for-sale
securities net of
taxes of $31,497... 61,141 61,141
------- -------- ---------- ----------- --------- -------- -----------
BALANCE, December 31,
1997............... 245,688 $720,000 $1,657,712 $14,701,237 $(712,138) $(15,657) $16,351,154
======= ======== ========== =========== ========= ======== ===========
</TABLE>

See notes to consolidated financial statements.

F-5
<PAGE> 84

ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income........................................ $ 1,811,905 $ 1,315,073
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses...................... 250,000 310,000
Provision for losses on other real estate
owned........................................ -- 47,058
Discount accretion on securities, net.......... 79,672 4,665
Depreciation and amortization.................. 394,477 318,169
Loss on sale of other real estate owned........ 23,011 6,034
Loss on sale of securities..................... -- 28,438
Provision for deferred income taxes............ 176,268 63,688
Changes in assets and liabilities:
(Increase) decrease in accrued interest
receivable................................ (66,780) 120,034
(Decrease) in other liabilities.............. (100,005) (676,966)
Increase in accrued interest payable......... 40,109 25,450
(Increase) decrease in other assets.......... (67,732) 548,516
------------ ------------
Net cash provided by operating
activities............................. 2,540,925 2,110,159
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturities of held-to-maturity securities......... 4,380,586 3,037,793
Purchase of held-to-maturity securities........... (4,255,996) (11,948,561)
Maturities of available-for-sale securities....... 10,260,211 14,656,066
Proceeds from sales of available-for-sale
securities..................................... -- 7,471,561
Purchase of available-for-sale securities......... (13,485,810) (9,993,574)
Loan originations, net of repayments.............. (14,547,923) (178,060)
Purchase of bank premises and equipment........... (840,500) (956,567)
Proceeds from sales of other real estate owned.... 151,768 106,506
------------ ------------
Net cash (used in) provided by investing
activities............................. (18,337,664) 2,195,164
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits............... 10,110,530 (3,476,481)
Issuance of note payable.......................... 2,000,000 --
Dividends paid.................................... (1,105,596) (614,220)
------------ ------------
Net cash (used in) provided by financing
activities............................. 11,004,934 (4,090,701)
------------ ------------
Net (decrease) increase in cash and cash
equivalents....................................... $ (4,791,805) $ 214,622
Cash and cash equivalents at beginning of year...... 19,545,430 19,330,808
------------ ------------
Cash and cash equivalents at end of year............ $ 14,753,625 $ 19,545,430
============ ============
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest....................................... $ 4,184,278 $ 3,713,227
============ ============
Federal and state income taxes................. $ 683,010 $ 120,000
============ ============
Loans transferred to other real estate owned...... $ 65,875 $ 89,263
============ ============
</TABLE>

See notes to consolidated financial statements.

F-6
<PAGE> 85

ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES

St. James Bancorporation, Inc. (the Company) was incorporated under the laws of
the State of Louisiana in December 1982. The Company is currently engaged,
through its wholly-owned subsidiary, St. James Bank & Trust Company (the Bank),
in banking activities. The Bank is the principal asset and primary source of
revenue for the Company.

The Bank is community oriented and focuses primarily on utilizing the assets of
the Bank for maximum return to the stockholders through sound banking practices.
The Bank's operating strategy is to serve the financial needs of the markets
that it serves through prudent lending and investment policies and deposit
services.

BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary, the Bank. All significant intercompany
accounts and transactions are eliminated.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

SECURITIES

Securities are being accounted for in accordance with Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt
and Equity Securities." This statement requires that only debt securities that
the Bank has the positive intent and ability to hold to maturity be classified
as held-to-maturity and reported at amortized cost; all other debt securities
are reported at fair value. SFAS No. 115 further requires that realized and
unrealized gains and losses on securities classified as trading account assets
shall be recognized in current operations. Securities not classified as held-
to-maturity or trading are classified as available-for-sale, with the related
unrealized gains and losses excluded from earnings and reported, net of tax, as
a separate component of stockholders' equity until realized.

Held-to-maturity securities are carried at cost, adjusted for the amortization
of premiums and the accretion of discounts. Premiums and discounts are amortized
and accreted to operations using the level yield method adjusted for prepayments
as applicable. Management has the intent and the Bank has the ability to hold
these assets as long-term investments until their estimated maturities.

Available-for-sale securities are carried at fair value. Unrealized gains and
losses are excluded from earnings and reported, net of tax, as a separate
component of stockholders'

F-7
<PAGE> 86
ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

equity until realized. Securities within the available-for-sale portfolio may be
used as part of the Bank's asset/liability strategy and may be sold in response
to changes in interest rate risk, prepayment risk or other similar economic
factors. The specific identification method is used to compute gains and losses
on the sale of these assets. Interest earned on these assets is included in
interest income. Premiums and discounts are amortized and accreted to operations
using the level yield method adjusted for prepayments as applicable.

LOANS

Loans are stated at the principal amount outstanding. When the payment of
principal or interest on a loan is delinquent for 90 days, or earlier in some
cases, the loan is placed on non-accrual status, unless the loan is in the
process of collection and the underlying collateral fully supports the carrying
value of the loan. If the decision is made to continue accruing interest on the
loan, periodic reviews are made to confirm the accruing status of the loan. When
a loan is placed on non-accrual status, interest accrued during the current year
prior to the judgment of uncollectibility is charged to operations. Interest
accrued during prior periods is charged to allowance for loan losses. Generally,
any payments received on non-accrual loans are applied first to outstanding loan
amounts and next to the recovery of charged-off loan amounts. Any excess is
treated as recovery of lost interest.

The Bank considers a loan to be impaired when, based upon current information
and events, it believes it is probable that the Bank will be unable to collect
all amounts due according to the contractual terms of the loan agreement. The
Bank's impaired loans include troubled debt restructurings, and performing and
non-performing major loans for which full payment of principal or interest is
not expected. The Bank calculates a reserve required for impaired loans based on
the present value of expected future cash flows discounted at the loan's
effective interest rate, or at the loan's observable market price or the fair
value of its collateral.

Loan origination fees and certain direct origination costs are generally
recognized over the life of the related loan as an adjustment to the yield using
the interest method.

ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses is a valuation allowance available for future
potential losses incurred on loans. All losses are charged to the allowance when
the loss actually occurs or when a determination is made that a loss is likely
to occur. Recoveries are credited to the allowance at the time of recovery.

Throughout the year management estimates the likely level of future losses to
determine whether the allowance for loan losses is adequate to absorb reasonable
anticipated losses in the existing portfolio. Based on these estimates, an
amount is charged to the provision for loan losses and credited to the allowance
for loan losses in order to adjust the allowance to a level determined to be
adequate to absorb anticipated losses.

Management's judgment as to the level of anticipated losses on existing loans
involves the consideration of current and anticipated economic conditions and
their potential effects on specific borrowers; an evaluation of the existing
relationships among loans, potential credit

F-8
<PAGE> 87
ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

losses and the present level of the allowance; results of examinations of the
loan portfolio by regulatory agencies; and management's internal review of the
loan portfolio. In determining the collectibility of certain loans, management
also considers the fair value of any underlying collateral. The amounts
ultimately realized may differ from the carrying value of these assets due to
economic, operating or other conditions beyond the Bank's control.

It should be understood that estimates of anticipated loan losses involve
judgment. While it is possible that in particular periods the Bank may sustain
losses which are substantial relative to the allowance for loan losses, it is
the judgment of management that the allowance for loan losses reflected in the
consolidated statements of condition is adequate to absorb anticipated losses
which may exist in the current loan portfolio.

OTHER REAL ESTATE OWNED

Real estate properties acquired through, or in lieu of, loan foreclosure are to
be sold and are initially recorded at fair value at the date of foreclosure
establishing a new cost basis. After foreclosure, valuations are periodically
performed by management and the real estate is carried at the lower of carrying
amount or fair value less cost to sell. Revenues and expenses from operations
and changes in the valuation allowance are included in loss on foreclosed real
estate.

BANK PREMISES AND EQUIPMENT

Bank premises and equipment are stated at cost, less accumulated depreciation.
Depreciation is computed primarily on the straight-line basis over the estimated
useful lives of the respective assets.

INCOME TAXES

Provisions for deferred income taxes are made as a result of temporary
differences between financial and income tax accounting, consisting primarily of
differences in the accounting for the allowance for loan losses, depreciation
expense and expenses related to other real estate owned.

Deferred income taxes are computed based on the difference between the financial
statement and tax basis of assets and liabilities using enacted tax rates in
effect in the years in which the differences are expected to reverse.

EARNINGS PER SHARE

Earnings per share are computed on the basis of the weighted average number of
shares outstanding during the year. The average number of shares used in the
computation was 245,688 for the years ended December 31, 1997 and 1996.

F-9
<PAGE> 88
ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

STATEMENTS OF CASH FLOWS

For purposes of the statement of cash flows, cash and cash equivalents include
cash on hand, amounts due from banks, cash items in process of collection,
federal funds sold with a maturity not greater than one business day, and all
other highly-liquid investments purchased with original maturities of
approximately three months or less.

RECLASSIFICATIONS

Certain reclassifications have been made to prior years' amounts to conform them
to the current year presentation.

2. SECURITIES

The amortized cost and fair value of investments in debt securities are as
follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1996
---------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
AVAILABLE-FOR-SALE
U. S. Treasury securities......... $ 1,999,304 $ -- $ 912 $ 1,998,392
Obligations of other U.S. agencies
and corporations................ 23,710,485 26,101 141,549 23,595,037
----------- ------- -------- -----------
$25,709,789 $26,101 $142,461 $25,593,429
=========== ======= ======== ===========
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1997
---------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
HELD-TO-MATURITY
Obligations of other U.S. agencies
and corporations................ $16,539,264 $ 51,200 $36,696 $16,553,768
Obligations of states and
political subdivisions.......... 8,864,356 157,574 22,105 8,999,825
----------- -------- ------- -----------
$25,403,620 $208,774 $58,801 $25,553,593
=========== ======== ======= ===========
</TABLE>

F-10
<PAGE> 89
ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
DECEMBER 31, 1996
---------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
HELD-TO-MATURITY
Obligations of other U.S. agencies
and corporations................ $17,990,773 $ 13,376 $186,390 $17,817,759
Obligations of states and
political subdivisions.......... 7,604,031 61,109 108,382 7,556,758
----------- -------- -------- -----------
$25,594,804 $ 74,485 $294,772 $25,374,517
=========== ======== ======== ===========
</TABLE>

Proceeds from sales of available-for-sale securities during 1996 were
$7,471,561. Gross losses of $28,438 during 1996 were realized on those sales.
There were no sales of securities during 1997.

The amortized cost and fair value of debt securities at December 31, 1997, by
contractual maturity, are shown below. Expected maturities may differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
AMORTIZED FAIR
COST VALUE
----------- -----------
<S> <C> <C>
AVAILABLE-FOR-SALE
Due in one year or less............................... $15,032,004 $15,016,646
Due after one year through five years................. 12,560,655 12,547,305
Due after five years through ten years................ 1,329,651 1,334,637
Due after ten years................................... -- --
----------- -----------
$28,922,310 $28,898,588
=========== ===========
</TABLE>

<TABLE>
<CAPTION>
AMORTIZED FAIR
COST VALUE
----------- -----------
<S> <C> <C>
HELD-TO-MATURITY
Due in one year or less............................... $ 3,786,654 $ 3,781,630
Due after one year through five years................. 13,002,556 13,003,265
Due after five years through ten years................ 3,491,901 3,504,867
Due after ten years................................... 5,122,509 5,263,831
----------- -----------
$25,403,620 $25,553,593
=========== ===========
</TABLE>

Investment securities with carrying values of $49,419,431 and $37,450,227 at
December 31, 1997 and 1996, respectively, were pledged to secure public deposits
and for other purposes required by law.

At December 31, 1997 and 1996, the Bank did not hold any securities of a single
issuer, other than United States government securities, whose aggregate carrying
value was in excess of 10% of stockholders' equity.

F-11
<PAGE> 90
ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. LOANS

Major classifications of loans are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1997 1996
----------- -----------
<S> <C> <C>
Commercial............................................ $37,222,389 $26,638,462
Real estate........................................... 33,084,708 28,711,911
Consumer.............................................. 8,603,310 9,427,171
U.S. backed loans to foreign countries................ 602,818 603,025
----------- -----------
79,513,225 65,380,569
Less allowance for loan losses........................ (1,058,058) (1,157,450)
----------- -----------
$78,455,167 $64,223,119
=========== ===========
</TABLE>

The Bank has had transactions, in the ordinary course of business, with officers
and directors of the Company and of the Bank, their immediate families and
companies of which the directors are principal owners. The aggregate balance of
loans (both direct and indirect) to officers and directors was approximately
$95,000 and $734,000 at December 31, 1997 and 1996, respectively.

A summary of the activity in the allowance for loan losses follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1997 1996
---------- ----------
<S> <C> <C>
Balance at beginning of year............................ $1,157,450 $1,494,264
Losses charged to allowance............................. (455,397) (841,067)
Recoveries credited to allowance........................ 106,005 194,253
Provision charged to expense............................ 250,000 310,000
---------- ----------
$1,058,058 $1,157,450
========== ==========
</TABLE>

The Bank has nonaccrual loans of approximately $780,000 and $1,046,000 as of
December 31, 1997 and 1996, respectively. The additional amounts of income the
Bank would have recognized during 1997 and 1996, had the loans performed
according to their terms, were approximately $63,000 and $80,000, respectively.
Interest income on these loans, which is recorded only when received,
approximating $14,000 and $32,000, was recognized during 1997 and 1996,
respectively.

As of December 31, 1997 and 1996 the recorded investment in impaired loans was
not significant.

F-12
<PAGE> 91
ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. BANK PREMISES AND EQUIPMENT

A summary of bank premises and equipment and related accumulated depreciation at
December 31, follows:

<TABLE>
<CAPTION>
1997 1996
---------- -----------
<S> <C> <C>
Land................................................... $ 327,378 $ 308,978
Buildings.............................................. 4,199,709 3,650,197
Equipment.............................................. 1,995,253 1,862,098
Construction-in-progress............................... 86,084 30,269
---------- -----------
6,608,424 5,851,542
Less accumulated depreciation.......................... (3,354,609) (3,043,750)
---------- -----------
$3,253,815 $ 2,807,792
========== ===========
</TABLE>

Amounts charged to operating expenses for depreciation aggregated approximately
$394,000 and $318,000 in 1997 and 1996, respectively.

5. DEPOSITS

The aggregate amount of short-term jumbo CDs, each with a minimum denomination
of $100,000, was approximately $17,708,000 and $9,969,000 in 1997 and 1996,
respectively.

At December 31, 1997, the scheduled maturities of CDs are as follows:

F-13
<PAGE> 92
ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6. NOTES PAYABLE

Notes payable consist of one $1,000,000 advance payable to Federal Home Loan
Bank -- Dallas due November 2004 with a floating interest rate based on the U.S.
Department of Treasury three month Treasury Bill (6.025% at December 31, 1997)
and two $500,000 advances payable to Federal Home Loan Bank -- Dallas due
December 2007 and December 2017 with fixed interest rates of 6.12% and 6.26%,
respectively. All advances are secured by a blanket lien on real estate loans
held by the Bank.

7. INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.

Significant components of the Bank's deferred tax assets and liabilities as of
December 31, are as follows:

<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Deferred tax assets:
Depreciation............................................. $ 45,398 $ 77,425
Allowance for possible loan losses....................... 162,001 228,583
Writedowns of other real estate.......................... 371 60,905
Unrealized losses on available-for-sale securities....... 8,066 39,563
Other.................................................... 43,279 81,374
-------- --------
Total deferred tax assets........................ 259,115 487,850
-------- --------
Deferred tax liabilities:
Discount accretion of securities......................... 10,000 30,970
Other.................................................... 70,000 70,000
-------- --------
Total deferred tax liabilities................... 80,000 100,970
Net deferred tax asset........................... $179,115 $386,880
======== ========
</TABLE>

Components of income tax expense are as follows:

<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Current.................................................... $467,370 $442,497
Deferred................................................... 207,765 63,688
-------- --------
$675,135 $506,185
======== ========
</TABLE>

F-14
<PAGE> 93
ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The actual tax expense differs from the "expected" tax expense, computed by
applying the U.S. federal corporation tax rate of 34% to earnings before income
taxes in 1997 and 1996. A reconciliation between "expected" and actual tax
expense follows:

<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
Computed "expected" tax expense.......................... $ 845,594 $ 619,228
Increase (reduction) in tax resulting from:
Tax exempt interest.................................... (145,535) (131,632)
Municipal investment interest expense disallowance..... 20,152 14,456
Other, net............................................. (45,076) 4,133
--------- ---------
$ 675,135 $ 506,185
========= =========
</TABLE>

8. EMPLOYEE BENEFIT PLAN

Until the end of 1997, the Bank sponsored a noncontributory defined benefit
pension plan which covered substantially all employees. The Bank's funding
policy was to contribute annually at least the minimum amount required by
government funding standards, but not more than could be deducted for federal
income tax purposes. The benefits were based on years of service and the average
annual compensation of the five successive calendar years out of the ten
calendar years next preceding normal retirement date. The benefits were reduced
by a specified percentage of the employee's social security benefit. An employee
became fully vested upon the earlier of completion of five years of qualified
service or attainment of age 65. Pension expense was determined under the
provisions of Statement of Financial Accounting Standards No. 87, "Employers'
Accounting for Pensions."

The following table sets forth the plan's funded status and net pension cost for
the year ended December 31, 1996:

<TABLE>
<CAPTION>
<S> <C>
Actuarial present value of accumulated benefit obligations:
Vested.................................................... $ 1,220,324
Nonvested................................................. 213,921
-----------
$ 1,434,245
===========
Projected benefit obligation for service rendered to date... $(1,882,036)
Plan assets at fair value................................... 2,062,749
-----------
Plan assets in excess of projected benefit obligation....... 180,713
Unrecognized net assets at initial application being
recognized on a straight-line basis over 17 years......... (53,477)
Unrecognized net (gain) loss................................ (70,041)
-----------
Prepaid pension cost recognized in the consolidated
statements of condition................................... $ 57,195
===========
Net pension cost for the years ended December 31, 1996
included the following components:
Service cost -- benefits earned during the year............. $ 95,042
</TABLE>

F-15
<PAGE> 94
ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
Interest cost on projected benefit obligation. 127,348
<S> <C>
Actual return on plan assets................................ (181,539)
Net amortization of transition asset........................ 2,681
-----------
$ 43,532
===========
</TABLE>

At December 31, 1996, the pension plan's assets were invested in annuity
contracts with an insurance company. The weighted average discount rate used in
determining the actuarial present value of the projected benefit obligation was
7.5% in 1996.

During 1997, the Bank decided to terminate the pension plan and distribute all
plan assets to participants. Distributions of $2.27 million were made during the
fourth quarter of 1997. Total expenses of the pension plan in 1997, including
costs related to the termination, amounted to approximately $152,500.

9. COMMITMENTS AND CONTINGENCIES

The Company and its subsidiary are parties to various legal proceedings arising
in the ordinary course of business. In the opinion of management, the ultimate
resolution of these legal proceedings will not have a material effect on the
Company's financial position or results of operations.

In November 1996, the Company entered into a five year, noncancelable operating
lease for branch office space leased in a supermarket with three five-year
renewal options. Rental expense related to the lease was approximately $58,000
in fiscal year 1997. Approximate future minimum lease payments under the
noncancelable operating lease for the years ended December 31, are as follows:

10. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

To meet the financing needs of its customers and to reduce its own exposure to
fluctuations in interest rates, the Bank is a party to various financial
instruments with off-balance sheet risk in the normal course of business. These
financial instruments include commitments to extend credit, standby letters of
credit and financial guarantees. Those instruments involve, to varying degrees,
elements of credit and interest rate risk in excess of the amounts recognized in
the consolidated statements of financial condition. The contract or notional
amounts of those instruments reflect the extent of the 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 and
financial guarantees is represented by the contractual notional amount of those
instruments. The Bank uses the

F-16
<PAGE> 95
ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

same credit policies in making these commitments and conditional obligations as
it does for on-balance sheet instruments.

The following is a summary of the various financial instruments entered into by
the Bank as of December 31, 1997 and 1996:

<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Commitments to extend credit............................ $9,186,000 $3,670,000
Standby letters of credit............................... $ 64,000 $ 96,000
</TABLE>

Commitments 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 fully drawn upon, the total commitment amounts disclosed above do
not necessarily represent future cash requirements.

The Bank evaluates customers' creditworthiness on a case-by-case basis. The
amount of collateral obtained, if considered necessary by the Bank upon
extension of credit, is based on management's credit evaluation of the customer.

Standby letters of credit and financial guarantees are conditional commitments
issued by the Bank to guarantee the performance of a customer to a third party.
The credit risk involved in issuing letters of credit is essentially the same as
that involved in extending loan facilities to its customers.

11. REGULATORY MATTERS

The Company and the Bank are subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory and possibly additional
discretionary actions by regulators that, if undertaken, could have a direct
material effect on the financial statements. Under capital adequacy guidelines
the Company and the Bank must meet specific capital guidelines that involve
quantitative measures of assets, liabilities, and certain off-balance-sheet
items as calculated under regulatory accounting practices. The capital amounts
and classification are also subject to qualitative judgments by the regulators
about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Company and the Bank to maintain minimum amounts and ratios (set
forth in the table below) of total and Tier I capital (as defined in the
regulations) to risk-weighted assets (as defined), and of Tier I capital (as
defined) to average assets (as defined). Management believes, as of December 31,
1997, that all capital adequacy requirements to which it is subject have been
met.

As of December 31, 1997, the most recent notification from The Federal
Depository Institution Corporation (FDIC) categorized the Bank as well
capitalized under the regulatory framework for prompt corrective action. To be
categorized as well capitalized the Bank must maintain minimum total risk-based,
Tier I risk-based, Tier I leverage ratios

F-17
<PAGE> 96
ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

as set forth in the table. There are no conditions or events since that
notification that management believes have changed the institution's category.

The Bank's actual capital amounts and ratios are presented in the following
table. The Company's actual capital amounts and ratios are approximately the
same as the Bank's. The prompt corrective action ratios apply only to the Bank.

<TABLE>
<CAPTION>
TO BE WELL
CAPITALIZED UNDER
FOR CAPITAL PROMPT CORRECTIVE
ACTUAL ADEQUACY PURPOSES ACTION PROVISIONS
------------------- ------------------ ------------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
----------- ----- ---------- ----- ---------- -----
<S> <C> <C> <C> <C> <C> <C>
AS OF DECEMBER 31, 1997:
Total capital to risk
weighted assets.... $17,299,000 22.06% $6,273,000 8.0% $7,841,000 10.0%
Tier I capital to risk
weighted assets.... $16,319,000 20.81% $3,136,000 4.0% $4,705,000 6.0%
Tier I leverage
capital............ $16,319,000 11.18% $5,561,000 4.0% $6,951,000 5.0%
AS OF DECEMBER 31, 1996:
Total capital to risk
weighted assets.... $16,537,000 22.41% $5,904,000 8.0% $7,379,000 10.0%
Tier I capital to risk
weighted assets.... $15,615,000 21.16% $2,952,000 4.0% $4,428,000 6.0%
Tier I leverage
capital............ $15,615,000 12.09% $5,166,000 4.0% $7,063,000 5.0%
</TABLE>

12. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practical to estimate that
value.

CASH, SHORT-TERM INVESTMENTS AND FEDERAL FUNDS SOLD

For these short-term instruments, the carrying amount is a reasonable estimate
of fair value.

SECURITIES

For securities, the fair value equals quoted market price, if available. If a
quoted market price is not available, fair value is estimated using quoted
market prices for similar securities.

LOANS

The fair value of loans is estimated by discounting the future cash flows using
the current rates at which similar loans would be made to borrowers with similar
credit ratings and for the same remaining maturities.

F-18
<PAGE> 97
ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DEPOSITS

The fair value of demand deposits, savings accounts and certain money market
deposits is the amount payable at the reporting date. The fair value of
fixed-maturity certificates of deposit is estimated using the rates currently
offered for deposits of similar remaining maturities.

COMMITMENTS TO EXTEND CREDIT

The fair value of commitments to extend credit was not significant.

The estimated fair values of the Bank's financial instruments are as follows (in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31, 1997 DECEMBER 31, 1996
------------------- -------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- -------- -------- --------
<S> <C> <C> <C> <C>
FINANCIAL ASSETS:
Cash, short-term investments and
federal funds sold................. $ 14,754 $ 14,754 $ 19,545 $ 19,545
Available-for-sale securities......... 28,899 28,899 25,593 25,593
Held-to-maturity securities........... 25,404 25,554 25,595 25,375
Loans-net............................. 78,455 78,315 64,223 64,116
FINANCIAL LIABILITIES:
Noninterest-bearing deposits.......... 17,528 17,528 18,494 18,494
Interest-bearing deposits............. 115,540 115,847 104,463 104,584
</TABLE>

13. NEW ACCOUNTING STANDARDS

In June 1997, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
("SFAS No. 130"). SFAS No. 130 establishes disclosure standards for reporting
comprehensive income in a full set of general purpose financial statements.
Comprehensive income for the years ended December 31, 1997, 1996 and 1995 was
approximately $1,873,000, $1,333,000 and $1,428,000 (net of income taxes),
respectively. In June 1997, the FASB also issued Statement of Financial
Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and
Related Information" which establishes annual and interim reporting standards
for an enterprise's operating segments and related disclosures about its
products, services, geographic areas and major customers. Adoption of these
statements will not impact the Bank's consolidated financial position, results
of operations or cash flows, and any effect will be limited to the form and
content of its disclosures. Both statements are effective for fiscal years
beginning after December 15, 1997.

F-19
<PAGE> 98

ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CONDITION
SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)

<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
Cash and due from banks............................. $ 2,678,481 $ 5,712,938
Federal Funds Sold.................................. 4,750,000 1,050,000
------------ ------------
Total cash and cash equivalents........... 7,428,481 6,762,938
Available-for-sale securities, at fair value
(amortized cost of $21,317,958 in 1998 and
$21,992,007 in 1997).............................. 21,470,019 21,965,016
Held-to-maturity securities (fair value of
$17,890,436 and $27,623,004 in 1998 and 1997,
respectively)..................................... 17,523,746 27,530,599
Loans, net of allowance for loan losses of
$1,184,844 and $1,021,623 in 1998 and 1997,
respectively...................................... 94,399,379 77,812,460
Bank premises and equipment, net.................... 3,726,809 2,980,492
Accrued interest receivable......................... 1,053,823 1,031,915
Other real estate owned............................. 10,600 53,294
Deferred tax asset.................................. 101,474 181,490
Other assets........................................ 4,616,546 922,517
------------ ------------
$150,330,877 $139,240,721
============ ============

LIABILITIES AND STOCKHOLDER'S EQUITY
DEPOSITS:
Demand............................................ $ 15,903,604 $ 15,539,700
Savings and NOW................................... 45,901,524 39,800,179
Other time........................................ 69,303,489 66,668,510
------------ ------------
Total deposits............................ 131,108,617 122,008,389
Notes payable....................................... 962,514 --
Accrued interest payable............................ 505,903 428,055
Other liabilities................................... 1,336,183 610,247
------------ ------------
Total liabilities......................... 133,913,217 123,046,691
------------ ------------
COMMITMENTS AND CONTINGENCIES....................... -- --
STOCKHOLDER'S EQUITY
Common stock, $2.50 par value, 1,000,000 shares
authorized, 288,000 shares issued and 245,688
outstanding at September 30, 1998 and 1997........ 720,000 720,000
Paid-in capital..................................... 1,657,712 1,657,712
Retained earnings................................... 14,651,726 14,546,270
Unrealized gains (losses) on securities
available-for-sale, net........................... 100,360 (17,814)
------------ ------------
17,129,798 16,906,168
------------ ------------
Less treasury stock, at cost (42,312 shares in 1998
and 1997)......................................... (712,138) (712,138)
------------ ------------
Total stockholder's equity................ 16,417,660 16,194,030
------------ ------------
$150,330,877 $139,240,721
============ ============
</TABLE>

See notes to consolidated financial statements.

F-20
<PAGE> 99

ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)

<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
INTEREST INCOME:
Loans, including fees................................. $6,141,450 $5,031,379
Investment Securities:
Taxable............................................ 1,770,751 1,996,123
Nontaxable......................................... 300,820 299,641
Federal Funds Sold.................................... 249,151 228,166
Deposits in other depository institutions............. 2,252 979
---------- ----------
Total interest income......................... 8,464,424 7,556,288
---------- ----------
INTEREST EXPENSE
Deposits.............................................. 3,554,110 3,113,773
Notes payable......................................... 54,742 1,840
---------- ----------
Total interest expense........................ 3,608,852 3,115,613
---------- ----------
Net interest income..................................... 4,855,572 4,440,675
Provision for loan losses............................... 170,000 180,000
---------- ----------
Net interest income after provision for loan
losses..................................... 4,685,572 4,260,675
---------- ----------
NONINTEREST INCOME:
Customer service fees................................. 843,359 853,207
Other................................................. 54,980 39,080
---------- ----------
Total noninterest income...................... 898,339 892,287
---------- ----------
NONINTEREST EXPENSE:
Salaries.............................................. 1,466,051 1,298,028
Employee Benefits..................................... 366,219 345,420
Professional fees..................................... 132,209 164,480
Net occupancy expense................................. 685,339 623,381
Other operating expense............................... 908,248 910,955
---------- ----------
Total noninterest expense..................... 3,558,066 3,342,264
---------- ----------
Income before income taxes.............................. 2,025,845 1,810,698
Income tax expense...................................... 601,228 522,293
---------- ----------
Net income.................................... $1,424,617 $1,288,405
========== ==========
Net income per common share................... $ 5.80 $ 5.24
========== ==========
Net income per common share -- diluted $ 4.95 $ 4.47
</TABLE>

See notes to consolidated financial statements.

F-21
<PAGE> 100

ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND DECEMBER 31, 1997 (UNAUDITED)

<TABLE>
<CAPTION>
UNREALIZED
GAIN(LOSS)
COMMON STOCK ON AVAILABLE-
------------------ PAID IN RETAINED TREASURY FOR-SALE
SHARES AMOUNT CAPITAL EARNINGS STOCK SECURITIES TOTAL
------- -------- ---------- ----------- --------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE,
December 31, 1997... 245,688 $720,000 $1,657,712 $14,701,237 $(712,138) $(15,657) $16,351,154
Net Income............ 1,424,617 1,424,617
Dividends on Common
Stock, $6.00 per
share............... (1,474,128) (1,474,128)
Change in unrealized
gain (loss) on
available-for-sale
securities net of
taxes of $51,701.... 116,017 116,017
------- -------- ---------- ----------- --------- -------- -----------
BALANCE,
September 30,
1998.............. 245,688 $720,000 $1,657,712 $14,651,726 $(712,138) $100,360 $16,417,660
======= ======== ========== =========== ========= ======== ===========
</TABLE>

See notes to consolidated financial statements.

F-22
<PAGE> 101

ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1997
(UNAUDITED)

<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income........................................ $ 1,424,617 $ 1,288,405
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses...................... 170,000 180,000
Provision for losses on other real estate
owned........................................ 3,000 --
Discount accretion on securities, net.......... (7,000) 48,541
Depreciation and amortization.................. 331,307 289,099
(Gain) loss on sale of other real estate
owned........................................ (1,819) 12,917
Loss on sale of securities..................... 2,064 604
Provision for deferred income taxes............ (77,641) (205,390)
Changes in assets and liabilities
Decrease in accrued interest receivable...... 87,174 42,302
Increase (decrease) in other liabilities..... 820,438 (5,801)
Increase in accrued interest payable......... 67,208 29,469
Increase in other assets..................... (4,366,807) (740,510)
Net cash (used in) provided by operating
activities............................. (1,547,459) 939,636
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturities of held-to-maturity securities......... 8,359,938 2,015,990
Purchase of held-to-maturity securities........... (545,250) (4,255,996)
Maturities of available-for-sale-securities....... 30,807,458 9,739,219
Proceeds from sales of available-for-sale
securities..................................... 1,989,758 268,298
Purchase of available-for-sale securities......... (25,004,043) (6,043,076)
Loan originations, net of repayments.............. (16,070,997) (13,453,514)
Purchase of bank premises and equipment........... (977,510) (461,799)
Proceeds from sales of other real estate owned.... 133,572 154,509
Net cash (used in) provided by investing
activities............................. (1,307,074) (12,036,369)
CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in deposits.......................... (1,958,997) (948,695)
Principal payments on notes payable............... (1,037,486) --
Dividends paid.................................... (1,474,128) (737,064)
Net cash (used in) provided by financing
activities............................. (4,470,611) (1,685,759)
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS....................................... (7,325,144) (12,782,492)
Cash and Cash Equivalents at beginning of Year...... 14,753,625 19,545,430
Cash and Cash Equivalents at September 30, 1998..... 7,428,481 6,762,938
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest....................................... 3,593,201 3,086,144
Federal and state income taxes................. 384,154 447,167
Loans transferred to other real estate owned...... 135,088 65,874
</TABLE>

See notes to consolidated financial statements.

F-23
<PAGE> 102

ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------
1998 1997
---------- ----------
<S> <C> <C>
Net income.................................................. $1,424,617 $1,288,405
---------- ----------
Other comprehensive income, net of tax:
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during
period............................................... 116,017 58,984
Less: reclassification adjustment for (gains) losses
included in net income............................... 0 0
---------- ----------
Other comprehensive income................................ 116,017 58,984
---------- ----------
Comprehensive Income........................................ $1,540,634 $1,347,389
========== ==========
</TABLE>

F-24
<PAGE> 103

ST. JAMES BANCORPORATION, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NOTE 1. BASIS OF FINANCIAL STATEMENT PRESENTATION

The accompanying consolidated interim financial statements do not include
information or footnotes necessary for a complete presentation of financial
position, results of operations and cash flows in conformity with generally
accepted accounting principles. All normal, recurring adjustments which, in the
opinion of management, are necessary for a fair presentation of financial
statements, have been included. These interim financial statements should be
read in conjunction with the audited financial statements and the notes thereto
included in this Proxy Statement-Prospectus.

NOTE 2. AGREEMENT TO MERGE WITH REGIONS

An Agreement and Plan of Merger between St. James Bancorporation and Regions
Financial Corporation was signed on July 17, 1998. The Agreement provides for a
merger of the companies in a stock for stock exchange accounted for as a
purchase. On the effective date of the merger each share of St. James
Bancorporation stock will be exchanged for shares of Regions stock. The merger
is contingent upon regulatory and shareholder approval.

F-25
<PAGE> 104

APPENDIX A

AGREEMENT AND PLAN OF MERGER

BY AND BETWEEN

ST. JAMES BANCORPORATION, INC.

AND

REGIONS FINANCIAL CORPORATION

DATED AS OF JULY 17, 1998

A-1
<PAGE> 105

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Parties............................................................ A-6
Preamble........................................................... A-6
ARTICLE 1 -- TRANSACTIONS AND TERMS OF MERGER...................... A-6
1.1 Merger...................................................... A-6
1.2 Time and Place of Closing................................... A-7
1.3 Effective Time.............................................. A-7
1.4 Execution of Support Agreements............................. A-7
ARTICLE 2 -- TERMS OF MERGER....................................... A-7
2.1 Certificate of Incorporation................................ A-7
2.2 Bylaws...................................................... A-7
2.3 Directors and Officers...................................... A-7
ARTICLE 3 -- MANNER OF CONVERTING SHARES........................... A-8
3.1 Conversion of Shares........................................ A-8
3.2 Anti-Dilution Provisions.................................... A-8
3.3 Shares Held by St. James or Regions......................... A-8
3.4 Dissenting Stockholders..................................... A-8
3.5 Fractional Shares........................................... A-9
ARTICLE 4 -- EXCHANGE OF SHARES.................................... A-9
4.1 Exchange Procedures......................................... A-9
4.2 Rights of Former St. James Stockholders..................... A-10
ARTICLE 5 -- REPRESENTATIONS AND WARRANTIES OF ST. JAMES........... A-10
5.1 Organization, Standing, and Power........................... A-10
5.2 Authority; No Breach By Agreement........................... A-11
5.3 Capital Stock............................................... A-11
5.4 St. James Subsidiaries...................................... A-12
5.5 Financial Statements........................................ A-12
5.6 Absence of Undisclosed Liabilities.......................... A-13
5.7 Absence of Certain Changes or Events........................ A-13
5.8 Tax Matters................................................. A-13
5.9 Assets...................................................... A-14
5.10 Environmental Matters....................................... A-15
5.11 Compliance with Laws........................................ A-16
5.12 Labor Relations............................................. A-16
5.13 Employee Benefit Plans...................................... A-16
5.14 Material Contracts.......................................... A-19
5.15 Legal Proceedings........................................... A-19
5.16 Reports..................................................... A-20
5.17 Statements True and Correct................................. A-20
5.18 Accounting, Tax, and Regulatory Matters..................... A-20
5.19 State Takeover Laws......................................... A-20
5.20 Charter Provisions.......................................... A-21
5.21 Support Agreements.......................................... A-21
5.22 Derivatives................................................. A-21
5.23 Year 2000................................................... A-21
</TABLE>

A-2
<PAGE> 106

<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
ARTICLE 6 -- REPRESENTATIONS AND WARRANTIES OF REGIONS............. A-21
6.1 Organization, Standing, and Power........................... A-21
6.2 Authority; No Breach By Agreement........................... A-21
6.3 Capital Stock............................................... A-22
6.4 Regions Subsidiaries........................................ A-22
6.5 SEC Filings; Financial Statements........................... A-23
6.6 Absence of Undisclosed Liabilities.......................... A-23
6.7 Absence of Certain Changes or Events........................ A-24
6.8 Compliance with Laws........................................ A-24
6.9 Legal Proceedings........................................... A-24
6.10 Reports..................................................... A-24
6.11 Statements True and Correct................................. A-25
6.12 Accounting, Tax, and Regulatory Matters..................... A-25
6.13 Derivatives................................................. A-25
6.14 Year 2000................................................... A-25
ARTICLE 7 -- CONDUCT OF BUSINESS PENDING CONSUMMATION.............. A-26
7.1 Affirmative Covenants of Both Parties....................... A-26
7.2 Negative Covenants of St. James............................. A-26
7.3 Adverse Changes in Condition................................ A-28
7.4 Reports..................................................... A-28
ARTICLE 8 -- ADDITIONAL AGREEMENTS................................. A-28
8.1 Registration Statement; Proxy Statement; Stockholder
Approval.................................................... A-28
8.2 Exchange Listing............................................ A-29
8.3 Applications................................................ A-29
8.4 Filings with State Offices.................................. A-29
8.5 Agreement as to Efforts to Consummate....................... A-29
8.6 Investigation and Confidentiality........................... A-29
8.7 Press Releases.............................................. A-30
8.8 Certain Actions............................................. A-30
8.9 Accounting and Tax Treatment................................ A-31
8.10 State Takeover Laws......................................... A-31
8.11 Charter Provisions.......................................... A-31
8.12 Agreement of Affiliates..................................... A-31
8.13 Employee Benefits and Contracts............................. A-32
8.14 Indemnification............................................. A-32
8.15 Certain Modifications....................................... A-33
ARTICLE 9 -- CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE.....
A-34
9.1 Conditions to Obligations of Each Party..................... A-34
9.2 Conditions to Obligations of Regions........................ A-35
9.3 Conditions to Obligations of St. James...................... A-36
ARTICLE 10 -- TERMINATION.......................................... A-37
10.1 Termination................................................. A-37
10.2 Effect of Termination....................................... A-38
10.3 Non-Survival of Representations and Covenants............... A-38
</TABLE>

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<PAGE> 107

<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
ARTICLE 11 -- MISCELLANEOUS........................................ A-39
11.1 Definitions................................................. A-39
11.2 Expenses.................................................... A-45
11.3 Brokers and Finders......................................... A-45
11.4 Entire Agreement............................................ A-46
11.5 Amendments.................................................. A-46
11.6 Waivers..................................................... A-46
11.7 Assignment.................................................. A-47
11.8 Notices..................................................... A-47
11.9 Governing Law............................................... A-47
11.10 Counterparts................................................ A-48
11.11 Captions.................................................... A-48
11.12 Interpretations............................................. A-48
11.13 Enforcement of Agreement.................................... A-48
11.14 Severability................................................ A-48
Signatures......................................................... A-49
</TABLE>

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<PAGE> 108

LIST OF EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <C> <S>
1. -- Form of Support Agreement. (sec. 1.4).
2. -- Form of Affiliate Agreement. (sec.sec. 8.12, 9.2(d)).
3. -- Form of Claims Letter. (sec. 9.2(e)).
4. -- Opinion of St. James Counsel (sec. 9.2(f)).
5. -- Opinion of Regions Counsel (sec. 9.3(d)).
</TABLE>

[EXHIBITS OMITTED].

A-5
<PAGE> 109

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered into as
of July 17, 1998, by and between ST. JAMES BANCORPORATION, INC. ("St. James"), a
corporation organized and existing under the Laws of the State of Louisiana,
with its principal office located in Lutcher, Louisiana; 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 St. James and Regions are of the opinion that the
transactions described herein are in the best interests of the parties to this
Agreement and their respective stockholders. This Agreement provides for the
acquisition of St. James by Regions pursuant to the merger (the "Merger") of St.
James with and into Regions. At the effective time of the Merger, the
outstanding shares of the capital stock of St. James shall be converted into
shares of the common stock of Regions (except as provided herein). As a result,
stockholders of St. James shall become stockholders of Regions, and each of the
subsidiaries of St. James shall continue to conduct its business and operations
as a subsidiary of Regions. The transactions described in this Agreement are
subject to the approvals of the stockholders of St. James, the Board of
Governors of the Federal Reserve System, and certain 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 (ii) for
accounting purposes shall qualify for treatment as a pooling of interests.

As a condition and inducement to Regions' willingness to enter into this
Agreement, each of St. James' directors is executing and delivering to Regions
an agreement (a "Support Agreement"), in substantially the form of Exhibit 1.

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

NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the Parties agree
as follows:

ARTICLE 1

TRANSACTIONS AND TERMS OF MERGER

1.1 Merger. Subject to the terms and conditions of this Agreement, at the
Effective Time, St. James shall be merged with and into Regions in accordance
with the provisions of Section 12:115 of the LBCL and Section 252 of the DGCL
and with the effect provided in Section 259 of the DGCL (the "Merger"). Regions
shall be the Surviving Corporation resulting from the Merger and shall continue
to be governed by the Laws of the State of Delaware. 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 St. James and Regions.

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<PAGE> 110

1.2 Time and Place of Closing. The consummation of the Merger (the "Closing")
shall 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 duly authorized
officers, may mutually agree. The place of Closing shall be at such location as
may be mutually agreed upon by the Parties.

1.3 Effective Time. The Merger and the other transactions contemplated by this
Agreement shall become effective on the date and at the time the Louisiana
Certificate of Merger reflecting the Merger shall become effective with the
Secretary of State of the State of Louisiana and the Delaware Certificate of
Merger reflecting the Merger shall become effective with the Secretary of State
of the State of Delaware (the "Effective Time"). Subject to the terms and
conditions hereof, unless otherwise mutually agreed upon by the duly authorized
officers of each Party, the Parties shall use their reasonable efforts to cause
the Effective Time to occur on the last business day of the month in which the
last of the following occurs: (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 St. James approve the matters relating to
this Agreement required to be approved by such stockholders by applicable Law;
or such later day within 30 days thereof as may be specified by Regions.

1.4 Execution of Support Agreements. Immediately prior to the execution of this
Agreement and as a condition hereto, each of the directors of St. James is
executing and delivering to Regions a Support Agreement.

ARTICLE 2

TERMS OF MERGER

2.1 Certificate of Incorporation. The Certificate of Incorporation of Regions
in effect immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation after the Effective Time until
otherwise amended or repealed.

2.2 Bylaws. The Bylaws of Regions in effect immediately prior to the Effective
Time shall be the Bylaws of the Surviving Corporation after the Effective Time
until otherwise amended or repealed.

2.3 Directors and Officers. The directors of Regions 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 Corporation
from and after the Effective Time in accordance with the Bylaws of the Surviving
Corporation. The officers of Regions 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 Corporation from and after
the Effective Time in accordance with the Bylaws of the Surviving Corporation.

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<PAGE> 111

ARTICLE 3

MANNER OF CONVERTING SHARES

3.1 Conversion of Shares. Subject to the provisions of this Article 3, at the
Effective Time, by virtue of the Merger and without any action on the part of
Regions or St. James, or the stockholders of either of the foregoing, the shares
of the constituent corporations shall be converted as follows:

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

(b) Each share of St. James Common Stock (excluding shares held by any St.
James Company or any Regions Company, in each case other than in a
fiduciary capacity or as a result of debts previously contracted) issued
and outstanding at the Effective Time shall be converted into that number
of shares of Regions Common Stock equal to the quotient (rounded to the
nearest one-ten-thousandth) obtained by dividing (a) $175.00 by (b) the
Average Closing Price (defined to mean the average of the daily last sales
price for the shares of Regions Common Stock for the 20 consecutive trading
days ending at the close of trading on the last trading day immediately
preceding the date of the Stockholders' Meeting (the "Exchange Ratio").

3.2 Anti-Dilution Provisions. In the event St. James changes the number of
shares of St. James Common Stock issued and outstanding prior to the Effective
Time as a result of a stock split, stock dividend or similar recapitalization
with respect to such stock, the Exchange Ratio shall be proportionately
adjusted. In the event Regions changes the number of shares of Regions Common
Stock issued and outstanding prior to the Effective Time as a result of a stock
split, stock dividend, or similar recapitalization with respect to such stock
and the record date therefor (in the case of a stock dividend) or the effective
date thereof (in the case of a stock split or similar recapitalization for which
a record date is not established) shall be prior to the Effective Time, the
Exchange Ratio shall be proportionately adjusted.

3.3 Shares Held by St. James or Regions. Each of the shares of St. James Common
Stock held by any St. James Company or by any Regions Company, in each case
other than in a fiduciary capacity or as a result of debts previously
contracted, shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.

3.4. Dissenting Stockholders. Any holder of shares of St. James Common Stock
who perfects such holder's dissenters' rights of appraisal in accordance with
and as contemplated by Part XIII of the LBCL shall be entitled to receive the
value of such shares in cash as determined pursuant to such provision of Law;
provided, that no such payment shall be made to any dissenting stockholder
unless and until such dissenting stockholder has complied with the applicable
provisions of the LBCL, including the provisions of Section 131 thereof relating
to the deposit in escrow, endorsement, and transfer of the certificate or
certificates representing the shares for which payment is being made. In the
event that a dissenting stockholder of St. James fails to perfect, or
effectively withdraws or loses, his right to appraisal and of payment for his
shares, such Person shall not have the right to receive payment in cash for his
shares and, instead, as of the Effective Time the shares of St. James Common
Stock held by such Person shall be

A-8
<PAGE> 112

converted into and exchanged for that number of shares of Regions Common Stock
determined under Section 3.1 of this Agreement and the delivery of certificates
representing such Regions Common Stock and any dividends or other distributions
in respect thereof to which such holder may be entitled shall be governed by
Section 4.1 of this Agreement.

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

ARTICLE 4

EXCHANGE OF SHARES

4.1 Exchange Procedures. Promptly after the Effective Time, Regions and St.
James shall cause the exchange agent selected by Regions (the "Exchange Agent")
to mail to the former stockholders of St. James appropriate transmittal
materials (which shall specify that delivery shall be effected, and risk of loss
and title to the certificates theretofore representing shares of St. James
Common Stock shall pass, only upon proper delivery of such certificates to the
Exchange Agent). After the Effective Time, each holder of shares of St. James
Common Stock (other than shares to be canceled pursuant to Section 3.3 of this
Agreement or as to which dissenters' rights of appraisal have been perfected and
not withdrawn or forfeited under Section 131 of the LBCL) issued and outstanding
at the Effective Time promptly upon surrender the certificate or certificates
representing such shares to the Exchange Agent, shall receive in exchange
therefor the consideration provided in Section 3.1 of this Agreement, together
with all undelivered dividends and other 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 St.
James Common Stock issued and outstanding at the Effective Time also shall
receive, upon surrender of the certificate or certificates representing such
shares, cash in lieu of any fractional share of Regions Common Stock to which
such holder may be otherwise entitled (without interest). Until so surrendered,
each outstanding certificate of St. James Common Stock shall be deemed for all
purposes, other than as provided below with respect to the payment of dividends
or other distributions payable to the holders of shares of Regions Common Stock,
to represent the consideration into which the number of shares of St. James
Common Stock represented thereby prior to the Effective Time shall have been
converted. Regions shall not be obligated to deliver the consideration to which
any former holder of St. James Common Stock is entitled as a result of the
Merger until such holder surrenders such holder's certificate or certificates
representing the shares of St. James Common Stock for exchange as provided in
this Section 4.1. The certificate or certificates of St. James Common Stock so
surrendered shall be duly endorsed as the Exchange Agent may require. Any other
provision of this

A-9
<PAGE> 113

Agreement notwithstanding, neither the Surviving Corporation, St. James, nor the
Exchange Agent shall be liable to a holder of St. James Common Stock for any
amounts paid or property delivered in good faith to a public official pursuant
to any applicable abandoned property Law.

4.2 Rights of Former St. James Stockholders. At the Effective Time, the stock
transfer books of St. James shall be closed as to holders of St. James Common
Stock immediately prior to the Effective Time and no transfer of St. James
Common Stock by any such holder shall thereafter be made or recognized. Until
surrendered for exchange in accordance with the provisions of Section 4.1 of
this Agreement, each certificate theretofore representing shares of St. James
Common Stock (other than shares to be canceled pursuant to Sections 3.3 and 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, subject, however, to the
Surviving Corporation's obligation to pay any dividends or make any other
distributions with a record date prior to the Effective Time which have been
declared or made by St. James in respect of such shares of St. James Common
Stock in accordance with the terms of this Agreement and which remain unpaid at
the Effective Time. To the extent permitted by Law, former stockholders of
record of St. James 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 St. James Common Stock are
converted, regardless of whether such holders have exchanged their certificates
representing St. James Common Stock for certificates representing Regions Common
Stock in accordance with the provisions of this Agreement. Whenever a dividend
or other distribution is declared by Regions on the Regions Common Stock, the
record date for which is at or after the Effective Time, the declaration shall
include dividends or other distributions on all shares of Regions Common Stock
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 St. James Common Stock issued and outstanding
at the Effective Time until such holder surrenders such certificate for exchange
as provided in Section 4.1 of this Agreement. However, upon surrender of such
St. James Common Stock certificate, both the Regions Common Stock certificate
(together with all such undelivered dividends or other distributions without
interest) and any undelivered dividends and cash payments to be paid for
fractional share interests (without interest) shall be delivered and paid with
respect to each share represented by such certificate.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF ST. JAMES

St. James hereby represents and warrants to Regions as follows:

5.1 Organization, Standing, and Power. St. James is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Louisiana, and has the corporate power and authority to carry on its business as
now conducted and to own, lease, and operate its Material Assets. St. James 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

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<PAGE> 114

to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on St. James.

5.2 Authority; No Breach By Agreement.

(a) St. James has the corporate power and authority necessary to execute,
deliver, and perform its obligations under this Agreement and to consummate
the transactions contemplated hereby. The execution, delivery, and
performance of this Agreement, and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly
authorized by all necessary corporate action in respect thereof on the part
of St. James, subject to the approval of this Agreement by the holders of
two-thirds of the shares of St. James Common Stock present at the
Stockholders Meeting, which is the only stockholder vote required for
approval of this Agreement and consummation of the Merger by St. James.
Subject to such requisite stockholder approval, this Agreement represents a
legal, valid, and binding obligation of St. James, enforceable against St.
James in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, 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 St. James, nor
the consummation by St. James of the transactions contemplated hereby, nor
compliance by St. James with any of the provisions hereof or thereof, will
(i) conflict with or result in a breach of any provision of St. James'
Articles of Incorporation or Bylaws, or (ii) constitute or result in a
Default under, or require any Consent pursuant to, or result in the
creation of any Lien on any Asset of any St. James Company under, any
Contract or Permit of any St. James Company, where such Default or Lien, or
any failure to obtain such Consent, is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on St. James,
or (iii) subject to receipt of the requisite Consents referred to in
Section 9.1(b) of this Agreement, violate any Law or Order applicable to
any St. James Company or any of their respective Material Assets.

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

5.3 Capital Stock.

(a) The authorized capital stock of St. James consists, as of the date of
this Agreement, of 1,000,000 shares of St. James Common Stock, of which
245,688 shares are issued and outstanding as of the date of this Agreement
and not more than 245,688 shares will be issued and outstanding at the
Effective Time. All of the issued

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<PAGE> 115

and outstanding shares of St. James Common Stock are duly and validly issued and
outstanding and are fully paid and nonassessable under the LBCL. None of the
outstanding shares of St. James Common Stock has been issued in violation of any
preemptive rights of the current or past stockholders of St. James.

(b) Except as set forth in Section 5.3(a) of this Agreement or Section
5.3(b) of the St. James Disclosure Memorandum, there are no shares of
capital stock or other equity securities of St. James outstanding and no
outstanding Rights relating to the capital stock of St. James.

5.4 St. James Subsidiaries. St. James has disclosed in Section 5.4 of the St.
James Disclosure Memorandum all of the St. James Subsidiaries as of the date of
this Agreement. St. James or one of its Subsidiaries owns all of the issued and
outstanding shares of capital stock of each St. James Subsidiary. No equity
securities of any St. James Subsidiary are or may become required to be issued
(other than to another St. James Company) by reason of any Rights, and there are
no Contracts by which any St. James Subsidiary is bound to issue (other than to
another St. James Company) additional shares of its capital stock or Rights or
by which any St. James Company is or may be bound to transfer any shares of the
capital stock of any St. James Subsidiary (other than to another St. James
Company). There are no Contracts relating to the rights of any St. James Company
to vote or to dispose of any shares of the capital stock of any St. James
Subsidiary. Except as provided in Section 6:262 of the LBL, all of the shares of
capital stock of each St. James Subsidiary held by a St. James Company are fully
paid and, nonassessable under the applicable corporation or banking Law of the
jurisdiction in which such Subsidiary is incorporated or organized and are owned
by the St. James Company free and clear of any Lien. Each St. James Subsidiary
is either a bank or a corporation, and is duly organized, validly existing, and
(as to corporations) in good standing under the Laws of the jurisdiction in
which it is incorporated or organized, and has the corporate power and authority
necessary for it to own, lease, and operate its Assets and to carry on its
business as now conducted. Each St. James 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 St. James. Each St. James Subsidiary
that is a depository institution is an "insured depository institution" as
defined in the Federal Deposit Insurance Act and applicable regulations
thereunder, and the deposits in which are insured by the Bank Insurance Fund or
Savings Association Insurance Fund.

5.5 Financial Statements. St. James has disclosed in Section 5.5 of the St.
James Disclosure Memorandum, and has delivered to Regions copies of, all St.
James Financial Statements prepared for periods ended prior to the date hereof
and will deliver to Regions copies of all St. James Financial Statements
prepared subsequent to the date hereof. The St. James 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 St. James 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 past business practices, and (ii) present or will
present, as the case may be, fairly the consolidated financial position of the
St. James Companies as of the dates indicated and the consolidated results of
operations, changes in stockholders' equity, and cash flows of the St. James
Companies for the periods indicated, in accordance

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<PAGE> 116

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 which were not or are not
expected to be Material in amount or effect).

5.6 Absence of Undisclosed Liabilities. No St. James Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on St. James, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of St. James as
of March 31, 1998, included in the St. James Financial Statements or reflected
in the notes thereto and except for Liabilities incurred in the ordinary course
of business subsequent to March 31, 1998. No St. James Company has incurred or
paid any Liability since March 31, 1998, 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 St. James.

5.7 Absence of Certain Changes or Events. Since March 31, 1998, except as
disclosed in the St. James Financial Statements delivered prior to the date of
the Agreement or as otherwise disclosed in the St. James Disclosure Memorandum
to the Knowledge of St. James, (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 St. James, and (ii) the St. James
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 St. James provided in Article 7 of this
Agreement, other than conducting the process that has led up to the execution
and consummation of this Agreement.

5.8 Tax Matters.

(a) All Tax Returns required to be filed by or on behalf of any of the St.
James 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, 1997, and, to the Knowledge of St. James, all Tax
Returns filed are complete and accurate in all Material respects. All Tax
Returns for periods ending on or before the date of the most recent fiscal
year end immediately preceding the Effective Time will be timely filed or
requests for extensions will be timely filed. All Taxes shown on filed Tax
Returns have been paid. There is no audit examination, deficiency, or
refund Litigation with respect to any Taxes, that is reasonably likely to
result in a determination that would have, individually or in the
aggregate, a Material Adverse Effect on St. James, except to the extent
reserved against in the St. James 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) None of the St. James 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
St. James Companies for the period or periods through and including the
date of the respective

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St. James Financial Statements has been made and is reflected on such St. James
Financial Statements.

(d) Each of the St. James Companies is in compliance with, and its records
contain the information and documents (including properly completed IRS
Forms W-9) necessary to comply with, in all material respects, applicable
information reporting and Tax withholding requirements under federal,
state, and local Tax Laws, and such records identify with specificity all
accounts subject to backup withholding under Section 3406 of the Internal
Revenue Code.

(e) None of the St. James Companies has made any payments, is obligated to
make any payments, or is a party to any contract, agreement, or other
arrangement that could obligate it to make any payments that would be
disallowed as a deduction under Section 280G or 162(m) of the Internal
Revenue Code.

(f) There are no Material Liens with respect to Taxes upon any of the
Assets of the St. James Companies.

(g) There has not been an ownership change, as defined in Internal Revenue
Code Section 382(g), of the St. James Companies that occurred during or
after any Taxable Period in which the St. James Companies incurred a net
operating loss that carries over to any Taxable Period ending after
December 31, 1997.

(h) No St. James Company has filed any consent under Section 341(f) of the
Internal Revenue Code concerning collapsible corporations.

(i) After the date of this Agreement, no Material election with respect to
Taxes will be made without the prior consent of Regions, which consent will
not be unreasonably withheld.

(j) No St. James Company has or has had a permanent establishment in any
foreign country, as defined in any applicable tax treaty or convention
between the United States and such foreign country.

5.9 Assets. The St. James Companies have good and marketable title, free and
clear of all Liens, to all of their respective Assets. All tangible properties
used in the businesses of the St. James Companies are in good condition,
reasonable wear and tear excepted, and are usable in the ordinary course of
business consistent with St. James' past practices. All Assets which are
Material to St. James' business on a consolidated basis, held under leases or
subleases by any of the St. James Companies, are held under valid Contracts
enforceable in accordance with their respective terms (except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
or other Laws affecting the enforcement of creditors' rights generally and
except that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceedings may be brought), and each such Contract is in full force and effect.
The St. James Companies currently maintain insurance in amounts, scope, and
coverage reasonably necessary for their operations. None of the St. James
Companies has received notice from any insurance carrier that (i) such insurance
will be canceled or that coverage thereunder will be reduced or eliminated, or
(ii) premium costs with respect to such policies of insurance will be
substantially increased. There are presently no claims pending under such
policies of insurance and no notices have been given by any St. James Company
under such policies. The Assets of the St. James Companies include all Material
Assets required to operate the business of the St. James Companies as presently
conducted.

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5.10 Environmental Matters.

(a) To the Knowledge of St. James, each St. James Company, its
Participation Facilities, and its Loan Properties are, and have been, in
compliance with all Environmental Laws, except those instances of
non-compliance which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on St. James.

(b) There is no Litigation pending or, to the Knowledge of St. James,
threatened before any court, governmental agency, or authority, or other
forum in which any St. James Company or any of its Participation Facilities
has been or, with respect to threatened Litigation, may reasonably be
expected to 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, whether or
not occurring at, on, under, or involving a site owned, leased, or operated
by any St. James 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 St.
James.

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

(d) To the Knowledge of St. James, 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 St. James.

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

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5.11 Compliance with Laws. St. James is duly registered as a bank holding
company under the BHC Act. Each St. James Company has in effect all Permits
necessary for it to own, lease, or operate its Material Assets and to carry on
its business as now conducted, except for those Permits the absence of which are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on St. James, 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 St. James. None
of the St. James 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 St. James; 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 St. James Company is
not in compliance with any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on St. James, (ii) threatening to revoke any Permits, the
revocation of which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on St. James, or (iii) requiring any
St. James 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 material
manner relates to its capital adequacy, its credit or reserve policies, its
management, or the payment of dividends.

5.12 Labor Relations. No St. James Company is the subject of any Litigation
asserting that it or any other St. James 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 St. James Company to bargain
with any labor organization as to wages or conditions of employment, nor is any
St. James 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 St.
James Company, pending or threatened, or to the Knowledge of St. James, is there
any activity involving any St. James Company's employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.

5.13 Employee Benefit Plans.

(a) St. James has disclosed to Regions in writing prior to the execution of
the Agreement and in Section 5.13 of the St. James 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 Material
St. James Benefits Plans. For purposes of this Agreement, "St. James
Benefit Plans" means all written 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 written
health plans, all life insurance plans, and all other written employee
benefit plans or fringe benefit plans, including written "employee benefit
plans" as that term is defined in Section 3(3) of ERISA maintained by,
sponsored in whole or in part by, or

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contributed to by, any St. James 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. Any of the St.
James Benefit Plans which is an "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 "St. James
ERISA Plan." Any St. James ERISA Plan which is also a "defined benefit plan" (as
defined in Section 414(j) of the Internal Revenue Code or Section 3(35) of
ERISA) is referred to herein as a "St. James Pension Plan." Neither St. James
nor any St. James Company has 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)). Each "employee pension benefit plan," as defined in Section 3(2)
of ERISA, ever maintained by any St. James Company that was intended to qualify
under Section 401(a) of the Internal Revenue Code and with respect to which any
St. James Company has any Liability, is disclosed as such in Section 5.13 of the
St. James Disclosure Memorandum.

(b) St. James 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
St. James Benefit Plans (including insurance contracts), and all amendments
thereto, (ii) with respect to any such St. James Benefit Plans or
amendments, all determination letters, Material rulings, Material opinion
letters, Material information letters, or Material advisory opinions issued
by the Internal Revenue Service, the United States Department of Labor, or
the Pension Benefit Guaranty Corporation after December 31, 1994, (iii)
annual reports or returns, audited or unaudited financial statements,
actuarial valuations and reports, and summary annual reports prepared for
any St. James Benefit Plan with respect to the most recent plan year, and
(iv) the most recent summary plan descriptions and any Material
modifications thereto.

(c) All St. James 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 is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on St. James. Each St. James
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 St. James is not aware of any
circumstances likely to result in revocation of any such favorable
determination letter. Each trust created under any St. James ERISA Plan has
been determined to be exempt from Tax under Section 501(a) of the Internal
Revenue Code and St. James is not aware of any circumstance which will or
could reasonably result in revocation of such exemption. With respect to
each St. James Benefit Plan to the Knowledge of St. James, no event has
occurred which will or could reasonably 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 that is reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect on St.
James. There is no Material pending or, to the Knowledge of St. James,
threatened Litigation relating to any St. James ERISA Plan.

(d) No St. James Company has engaged in a transaction with respect to any
St. James Benefit Plan that, assuming the Taxable Period of such
transaction expired

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as of the date of this Agreement, would subject any St. James Company to a
Material 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 St. James.
Neither St. James nor any administrator or fiduciary of any St. James Benefit
Plan (or any agent of any of the foregoing) has engaged in any transaction, or
acted or failed to act in any manner which could subject St. James to any direct
or indirect Liability (by indemnity or otherwise) for breach of any fiduciary,
co-fiduciary, or other duty under ERISA, where such Liability, individually or
in the aggregate, is reasonably likely to have a Material Adverse Effect on St.
James. No oral or written representation or communication with respect to any
aspect of the St. James Benefit Plans has been made to employees of any St.
James Company which is not in accordance with the written or otherwise
preexisting terms and provisions of such plans, where any Liability with respect
to such representation or disclosure is reasonably likely to have a Material
Adverse Effect on St. James.

(e) No St. James Pension Plan has any "unfunded current liability," as that
term is defined in Section 302(d)(8)(A) of ERISA, and the fair market value
of the Assets of any such plan exceeds the plan's "benefit liabilities," as
that term is defined in Section 4001(a)(16) of ERISA, when determined under
actuarial factors that would apply if the plan terminated in accordance
with all applicable legal requirements. Since the date of the most recent
actuarial valuation, there has been (i) no Material change in the financial
position or funded status of any St. James Pension Plan, (ii) no change in
the actuarial assumptions with respect to any St. James Pension Plan, and
(iii) no increase in benefits under any St. James Pension Plan as a result
of plan amendments or changes in applicable Law, any of which is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
on St. James. Neither any St. James Pension Plan nor any "single-employer
plan," within the meaning of Section 4001(a)(15) of ERISA, currently or
formerly maintained by any St. James Company, or the single-employer plan
of any entity which is considered one employer with St. James under Section
4001 of ERISA or Section 414 of the Internal Revenue Code or Section 302 of
ERISA (whether or not waived) (a "St. James ERISA Affiliate") has an
"accumulated funding deficiency" within the meaning of Section 412 of the
Internal Revenue Code or Section 302 of ERISA. All contributions with
respect to a St. James Pension Plan or any single-employer plan of a St.
James ERISA Affiliate have or will be timely made and there is no lien or
expected to be a lien under Internal Revenue Code Section 412(n) or ERISA
Section 302(f) or Tax under Internal Revenue Code Section 4971. No St.
James Company has provided, or is required to provide, security to a St.
James Pension Plan or to any single-employer plan of a St. James ERISA
Affiliate pursuant to Section 401(a)(29) of the Internal Revenue Code. All
premiums required to be paid under ERISA Section 4006 have been timely paid
by St. James, except to the extent any failure would not have a Material
Adverse Effect on St. James.

(f) No Liability under Title IV of ERISA has been or is expected to be
incurred by any St. James Company with respect to any defined benefit plan
currently or formerly maintained by any of them or by any St. James ERISA
Affiliate that has not been satisfied in full (other than Liability for
Pension Benefit Guaranty Corporation premiums, which have been paid when
due, except to the extent any failure would not have a Material Adverse
Effect on St. James).

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(g) No St. James Company has any obligations for retiree health and retiree
life benefits under any of the St. James Benefit Plans other than with
respect to benefit coverage mandated by applicable Law.

(h) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will, by themselves,
(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 St. James Company from any St. James
Company under any St. James Benefit Plan or otherwise, (ii) increase any
benefits otherwise payable under any St. James Benefit Plan, or (iii)
result in any acceleration of the time of payment or vesting of any such
benefit.

5.14 Material Contracts. Except as set forth in Section 5.14 of the St. James
Disclosure Memorandum, none of the St. James 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 St. James Company or the guarantee by
any St. James Company of any such obligation (other than Contracts evidencing
deposit liabilities, purchases of federal funds, fully-secured repurchase
agreements, and Federal Home Loan Bank advances of depository institution
Subsidiaries, trade payables, and Contracts relating to borrowings or guarantees
made in the ordinary course of business), and (iii) any other Contract or
amendment thereto that would be required to be filed as an exhibit to a Form
10-K filed by St. James with the SEC as of the date of this Agreement if St.
James were required to file a Form 10-K with the SEC (together with all
Contracts referred to in Sections 5.9 and 5.13(a) of this Agreement, the "St.
James Contracts"). With respect to each St. James Contract: (i) the Contract is
in full force and effect; (ii) no St. James Company is in Default thereunder,
other than Defaults which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on St. James; (iii) no St. James
Company has repudiated or waived any Material provision of any such Contract;
and (iv) no other party to any such Contract is, to the Knowledge of St. James,
in Default in any respect, other than Defaults which are not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on St.
James, or has repudiated or waived any Material provision thereunder. Except for
Federal Home Loan Bank advances, all of the indebtedness of any St. James
Company for money borrowed is prepayable at any time by such St. James Company
without penalty or premium.

5.15 Legal Proceedings.

(a) There is no Litigation instituted or pending, or, to the Knowledge of
St. James, threatened against any St. James Company, or against any Asset,
employee benefit plan, interest, or right of any of them, that is
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on St. James, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding
against any St. James Company, that are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on St. James.

(b) Section 5.15(b) of the St. James Disclosure Memorandum includes a
summary report of all Litigation as of the date of this Agreement to which
any St. James

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Company is a party and which names a St. James Company as a defendant or cross-
defendant.

5.16 Reports. Since December 31, 1994, or the date of organization if later,
each St. James Company has timely filed all reports and statements, together
with any amendments required to be made with respect thereto, that it was
required to file with any Regulatory Authorities, except failures to file which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on St. James. 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.

5.17 Statements True and Correct. None of the information supplied or to be
supplied by any St. James Company or any Affiliate thereof regarding St. James
or such Affiliate 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 St. James Company or
any Affiliate thereof for inclusion in the Proxy Statement to be mailed to St.
James' stockholders in connection with the Stockholders' Meeting will, when
first mailed to the stockholders of St. James, 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 St. James
Company or any Affiliate thereof is responsible for filing with any Regulatory
Authority in connection with the transactions contemplated hereby will comply as
to form in all Material respects with the provisions of applicable Law.

5.18 Accounting, Tax, and Regulatory Matters. Except as specifically
contemplated by this Agreement, no St. James Company or any Affiliate thereof
has taken or agreed to take any action, and St. James has no Knowledge of any
fact or circumstance that is reasonably likely to (i) prevent the transactions
contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, or (ii) materially
impede or delay receipt of any Consents of Regulatory Authorities referred to in
Section 9.1(b) of this Agreement. To the Knowledge of St. James 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 last sentence of such
Section 9.1(b).

5.19 State Takeover Laws. Each St. James Company has taken all necessary action
to exempt the transactions contemplated by this Agreement from any applicable
"moratorium," "control share," "fair price," "business combination," or other
anti-takeover laws and regulations of the State of Louisiana (collectively,
"Takeover Laws") including those Laws contained within Sections 14-2-1110 et
seq. and 14-2-1131 et seq. of the LBCL.

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5.20 Charter Provisions. Each St. James 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 under the Articles of Incorporation,
Bylaws, or other governing instruments of any St. James Company or restrict or
impair the ability of Regions or any of its Subsidiaries to vote, or otherwise
to exercise the rights of a stockholder with respect to, shares of any St. James
Company that may be directly or indirectly acquired or controlled by it.

5.21 Support Agreements. Each of the directors of St. James has executed and
delivered to Regions a Support Agreement in substantially the form as Exhibit 1
to this Agreement.

5.22 Derivatives. All interest rate swaps, caps, floors, option agreements,
futures and forward contracts, and other similar risk management arrangements,
whether entered into for St. James' own account, or for the account of one or
more the St. James Subsidiaries or their customers, were entered into (i) in
accordance with prudent business practices and all applicable Laws, and (ii)
with counterparties believed to be financially responsible.

5.23 Year 2000. St. James has disclosed to Regions a complete and accurate copy
of St. James' plan, including an estimate of the anticipated associated costs,
for implementing modifications to St. James' hardware, software, and computer
systems, chips, and microprocessors, to ensure proper execution and accurate
processing of all date-related data, whether from years in the same century or
in different centuries. Between the date of this Agreement and the Effective
Time, St. James shall endeavor to continue its efforts to implement such plan.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF REGIONS

Regions hereby represents and warrants to St. James as follows:

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

6.2 Authority; No Breach By Agreement.

(a) Regions has the corporate power and authority necessary to execute,
deliver, and perform its obligations under this Agreement and to consummate
the transactions contemplated hereby. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly
authorized by all necessary corporate action in respect thereof on the part
of Regions. 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,

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insolvency, reorganization, receivership, conservatorship, moratorium, or
similar Laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding may be brought).

(b) Neither the execution and delivery of this Agreement by Regions, nor
the consummation by Regions of the transactions contemplated hereby, nor
compliance by Regions with any of the provisions hereof, will (i) conflict
with or result in a breach of any provision of Regions' Certificate of
Incorporation or Bylaws, (ii) constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on
any Asset of any Regions Company under, any Contract or Permit of any
Regions Company, where such Default or Lien, or any failure to obtain such
Consent, is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions, or (iii) subject to receipt of the
requisite Consents referred to in Section 9.1(b) of this Agreement, violate
any Law or Order applicable to any Regions Company or any of their
respective Material Assets.

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

6.3 Capital Stock. The authorized capital stock of Regions consists, as of the
date of this Agreement, of 240,000,000 shares of Regions Common Stock, of which
136,696,150 shares were issued and outstanding and 322,221 shares were held as
treasury shares as of December 31, 1997. 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 St. James Common Stock upon
consummation of the Merger, when issued in accordance with the terms of this
Agreement, will be, duly and validly issued and outstanding and fully paid and
nonassessable under the DGCL. None of the outstanding shares of Regions Common
Stock has been, and none of the shares of Regions Common Stock to be issued in
exchange for shares of St. James Common Stock upon consummation of the Merger
will be, issued in violation of any preemptive rights of the current or past
stockholders of Regions.

6.4 Regions Subsidiaries. Regions or one of its Subsidiaries owns all of the
issued and outstanding shares of capital stock of each Regions Subsidiary. No
equity securities of any Regions Subsidiary are or may become required to be
issued (other than to another Regions Company) by reason of any Rights, and
there are no Contracts by which any Regions Subsidiary is bound to issue (other
than to another Regions Company) additional shares of its capital stock or
Rights or by which any Regions Company is or may be bound to transfer any shares
of the capital stock of any Regions Subsidiary (other than to another Regions
Company). There are no Contracts relating to the rights of any Regions Company
to vote or to dispose of any shares of the capital stock of any Regions
Subsidiary. All of the shares of capital stock of each Regions Subsidiary held
by a Regions Company are fully paid and, except as provided in statutes pursuant
to which depository institution

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Subsidiaries are organized, nonassessable under the applicable corporation Law
of the jurisdiction in which such Subsidiary is incorporated or organized and
are owned by the Regions Company free and clear of any Lien. Each Regions
Subsidiary is either a bank or a corporation, and is duly organized, validly
existing, and (as to corporations) in good standing under the Laws of the
jurisdiction in which it is incorporated or organized, and has the corporate
power and authority necessary for it to own, lease, and operate its Assets and
to carry on its business as now conducted. Each Regions Subsidiary is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Regions. Each Regions Subsidiary
that is a depository institution is an "insured depository institution" as
defined in the Federal Deposit Insurance Act and applicable regulations
thereunder, and the deposits in which are insured by the Bank Insurance Fund or
Savings Association Insurance Fund.

6.5 SEC Filings; Financial Statements.

(a) Regions has filed and made available to St. James all forms, reports,
and documents required to be filed by Regions with the SEC since December
31, 1995 (collectively, the "Regions SEC Reports"). The Regions SEC Reports
(i) at the time filed, complied in all Material respects with the
applicable requirements of the 1933 Act and the 1934 Act, as the case may
be, and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the
date of such filing) contain any untrue statement of a Material fact or
omit to state a Material fact required to be stated in such Regions SEC
Reports or necessary in order to make the statements in such Regions SEC
Reports, in light of the circumstances under which they were made, not
misleading. Except for Regions Subsidiaries that are registered as a
broker, dealer, or investment advisor or filings required due to fiduciary
holdings of the Regions Subsidiaries, none of Regions Subsidiaries is
required to file any forms, reports, or other documents with the SEC.

(b) Each of the Regions Financial Statements (including, in each case, any
related notes) contained in the Regions SEC Reports, including any Regions
SEC Reports filed after the date of this Agreement until the Effective
Time, complied or will comply as to form in all Material respects with the
applicable published rules and regulations of the SEC with respect thereto,
was or will be prepared in accordance with GAAP applied on a consistent
basis throughout the periods involved (except as may be indicated in the
notes to such financial statements or, in the case of unaudited statements,
as permitted by Form 10-Q of the SEC), and fairly presented or will fairly
present the consolidated financial position of Regions and its Subsidiaries
as at the respective dates and the consolidated results of its operations
and cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments which were not or are not expected to be Material in amount or
effect.

6.6 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 December 31, 1997,
included in the Regions Financial Statements or reflected in the notes thereto
and except for Liabilities incurred in the

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ordinary course of business subsequent to December 31, 1997. No Regions Company
has incurred or paid any Liability since December 31, 1997, except for such
Liabilities incurred or paid in the ordinary course of business consistent with
past business practice and which are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Regions.

6.7 Absence of Certain Changes or Events. Since December 31, 1997, except as
disclosed in the Regions Financial Statements delivered 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 Regions, and (ii) the Regions Companies have
conducted their respective businesses in the ordinary and usual course
(excluding the incurrence of expenses in connection with this Agreement and the
transactions contemplated hereby).

6.8 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 Material Assets and to carry on its business as
now conducted, except for those Permits the absence of which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Regions, and there has occurred no Default under any such Permit, other than
Defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions. 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 Laws or Orders which such governmental
authority or Regulatory Authority enforces, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Regions, (ii) threatening to revoke any Permits, the
revocation of which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions, or (iii) requiring any
Regions Company (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 credit or reserve policies, its
management, or the payment of dividends.

6.9 Legal Proceedings. There is no Litigation instituted or pending, or, to the
Knowledge of Regions, threatened against any Regions Company, or against any
Asset, employee benefit plan, interest, or right of any of them, that is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on 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.

6.10 Reports. Since December 31, 1994, or the date of organization if later,
each Regions Company has timely filed all reports and statements, together with
any

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amendments required to be made with respect thereto, that it was required to
file with any Regulatory Authorities, except 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.

6.11 Statements True and Correct. None of the information supplied or to be
supplied by any Regions Company or any Affiliate thereof regarding Regions or
such Affiliate 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 St.
James' stockholders in connection with the Stockholders' Meeting, will, when
first mailed to the stockholders of St. James, 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 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.

6.12 Accounting, Tax, and Regulatory Matters. No Regions Company or any
Affiliate thereof has taken or agreed to take any action, and Regions has no
Knowledge of any fact or circumstance that is reasonably likely to (i) prevent
the transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, or (ii) materially
impede or delay receipt of any Consents of Regulatory Authorities referred to in
Section 9.1(b) of this Agreement or result in the imposition of a condition or
restriction of the type referred to in the last sentence of such Section.

6.13 Derivatives. All interest rate swaps, caps, floors, option agreements,
futures and forward contracts, and other similar risk management arrangements,
whether entered into for Regions' own account, or for the account of one or more
the Regions Subsidiaries or their customers, were entered into (i) in accordance
with prudent business practices and all applicable Laws, and (ii) with
counterparties believed to be financially responsible.

6.14 Year 2000. Regions has disclosed to St. James a complete and accurate copy
of Regions' plan, including an estimate of the anticipated associated costs, for
implementing modifications to Regions' hardware, software, and computer systems,
chips, and microprocessors, to ensure proper execution and accurate processing
of all date-related data, whether from years in the same century or in different
centuries. Between the date of this Agreement and the Effective Time, Regions
shall endeavor to continue its efforts to implement such plan.

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ARTICLE 7

CONDUCT OF BUSINESS PENDING CONSUMMATION

7.1 Affirmative 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 (i) operate its business only in the usual, regular, and ordinary course,
(ii) preserve intact its business organization and Assets and maintain its
rights and franchises, (iii) use its reasonable efforts to maintain its current
employee relationships, and (iv) take no action which would (a) adversely affect
the ability of any Party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the type
referred to in the last sentence of Section 9.1(b) of this Agreement, or (b)
adversely affect the ability of any Party to perform its covenants and
agreements under this Agreement; 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 Negative Covenants of St. James. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, St. James
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 Regions, which consent shall not be unreasonably
withheld:

(a) amend the Articles of Incorporation, Bylaws, or other governing
instruments of any St. James 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 St. James Company to another St. James Company) in excess
of an aggregate of $100,000 (for the St. James Companies on a consolidated
basis), except in the ordinary course of the business consistent with past
practices (which shall include, for St. James Subsidiaries that are
depository institutions, creation of deposit liabilities, purchases of
federal funds, advances from the Federal Reserve Bank or Federal Home Loan
Bank, and entry into repurchase agreements fully secured by U.S. government
or agency securities), or impose, or suffer the imposition, on any Asset of
any St. James Company of any Lien or permit any such Lien to exist (other
than in connection with deposits, repurchase agreements, bankers
acceptances, "treasury tax and loan" accounts established in the ordinary
course of business, the satisfaction of legal requirements in the exercise
of trust powers, and Liens in effect as of the date hereof that are
disclosed in the St. James Disclosure Memorandum); or

(c) repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any shares, or any securities convertible into any shares, of
the capital stock of any St. James Company, or declare or pay any dividend
or make any other distribution in respect of St. James' capital stock,
except that St. James shall be permitted to pay dividends with payment and
record dates consistent with past practice with respect to timing and
amount; or

(d) except for this Agreement or pursuant to the exercise of Rights
outstanding as of the date of this Agreement and pursuant to the terms
thereof in existence on the date
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of this Agreement, issue, sell, pledge, encumber, authorize the issuance of,
enter into any Contract to issue, sell, pledge, encumber, or authorize the
issuance of, or otherwise permit to become outstanding, any additional shares of
St. James Common Stock or any other capital stock of any St. James 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 St.
James Company or issue or authorize the issuance of any other securities in
respect of or in substitution for shares of St. James Common Stock, or
sell, lease, mortgage, or otherwise dispose of or otherwise encumber (i)
any shares of capital stock of any St. James Subsidiary (unless any such
shares of stock are sold or otherwise transferred to another St. James
Company) or (ii) any Asset other than in the ordinary course of business
for reasonable and adequate consideration and other than dispositions in
the ordinary course of business of (i) investment securities, (ii) loans,
including dispositions thereof through loan participation agreements, and
(iii) other real estate owned by any St. James Company; or

(f) except for purchases of U.S. Treasury securities or U.S. Government
agency securities, which in either case have maturities of three years or
less, purchase any securities or make any Material investment, either by
purchase of stock or securities, contributions to capital, Asset transfers,
or purchase of any Assets, in any Person other than a wholly-owned St.
James Subsidiary, or otherwise acquire direct or indirect control over any
Person, other than in connection with (i) foreclosures in the ordinary
course of business, (ii) acquisitions of control by a depository
institution Subsidiary in its fiduciary capacity, or (iii) the creation of
new wholly-owned Subsidiaries organized to conduct or continue activities
otherwise permitted by this Agreement; or

(g) grant any increase in compensation or benefits to the employees or
officers of any St. James Company, except as required by Law; pay any
severance or termination pay or any bonus other than pursuant to written
policies or written Contracts in effect on the date of this Agreement;
enter into or amend any severance agreements with officers of any St. James
Company; grant any increase in fees or other increases in compensation or
other benefits to directors of any St. James Company; or voluntarily
accelerate the vesting of any stock options or other stock-based
compensation or employee benefits; or

(h) enter into or amend any employment Contract between any St. James
Company and any Person (unless such amendment is required by Law) that the
St. James Company does not have the unconditional right to terminate
without Liability (other than Liability for services already rendered), at
any time on or after the Effective Time; or

(i) adopt any new employee benefit plan of any St. James Company or make
any Material change in or to any existing employee benefit plans of any St.
James 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

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

(k) commence any Litigation other than as necessary for the prudent
operation of its business or settle any Litigation involving any Liability
of any St. James Company for Material money damages or restrictions upon
the operations of any St. James Company; or

(l) except in the ordinary course of business, modify, amend, or terminate
any Material Contract or waive, release, compromise, or assign any Material
rights or claims.

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

7.4 Reports. Each Party and its Subsidiaries shall file all reports required to
be filed by it with Regulatory Authorities between the date of this Agreement
and the Effective Time and shall deliver to the other Party copies of all such
reports promptly after the same are filed. If financial statements are contained
in any such reports filed with the SEC, such financial statements will fairly
present the consolidated financial position of the entity filing such statements
as of the dates indicated and the consolidated results of operations, changes in
stockholders' equity, and cash flows for the periods then ended in accordance
with GAAP (subject in the case of interim financial statements to normal
recurring year-end adjustments that are not Material). As of their respective
dates, such reports filed with the SEC will comply in all Material respects with
the Securities Laws and will not contain any untrue statement of a Material fact
or omit to state a Material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Any financial statements contained in any other
reports to another Regulatory Authority shall be prepared in accordance with
Laws applicable to such reports.

ARTICLE 8

ADDITIONAL AGREEMENTS

8.1 Registration Statement; Proxy Statement; Stockholder Approval. As soon as
reasonably practicable after execution of this Agreement, Regions shall file the
Registration Statement with the SEC, and shall use its reasonable efforts to
cause the Registration Statement to become effective under the 1933 Act 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. St. James shall furnish all information
concerning it and the holders of its capital stock as Regions may reasonably
request in connection with such action. St. James shall call a Stockholders'
Meeting, to be held as soon as reasonably practicable after the Registration
Statement is declared effective by the SEC, for the purpose of voting upon
approval of this

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Agreement and such other related matters as it deems appropriate. In connection
with the Stockholders' Meeting, (i) St. James shall prepare and file with the
SEC a Proxy Statement and mail such Proxy Statement 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 St. James shall recommend to its stockholders the approval
of the matters submitted for approval, and (iv) the Board of Directors and
officers of St. James shall use their reasonable efforts to obtain such
stockholders' approval, provided that each of Regions and St. James may
withdraw, modify, or change in an adverse manner to the other Party its
recommendations if the Board of Directors of such Party, after having consulted
with and based upon the advice of outside counsel, determines in good faith that
the failure to so withdraw, modify, or change its recommendation could
constitute a breach of the fiduciary duties of St. James' Board of Directors
under applicable Law. In addition, nothing in this Section 8.1 or elsewhere in
this Agreement shall prohibit accurate disclosure by St. James of information
that is required to be disclosed in the Registration Statement or the Proxy
Statement or in any other document required to be filed with the SEC (including,
without limitation, a Solicitation/Recommendation Statement on Schedule 14D-9)
or otherwise required to be publicly disclosed by applicable Law or regulations
or rules of the NASD.

8.2 Exchange Listing. Regions shall use its reasonable efforts to list, prior
to the Effective Time, on the Nasdaq NMS, subject to official notice of
issuance, the shares of Regions Common Stock to be issued to the holders of St.
James Common Stock pursuant to the Merger.

8.3 Applications. Regions shall promptly prepare and file, and St. James shall
cooperate in the preparation and, where appropriate, filing of, applications
with all Regulatory Authorities having jurisdiction over the transactions
contemplated by this Agreement seeking the requisite Consents necessary to
consummate the transactions contemplated by this Agreement.

8.4 Filings with State Offices. Upon the terms and subject to the conditions of
this Agreement, Regions shall execute and file the Delaware Certificate of
Merger with the Secretary of State of the State of Delaware and the Louisiana
Certificate of Merger with the Secretary of State of the State of Louisiana in
connection with the Closing.

8.5 Agreement as to Efforts to Consummate. Subject to the terms and conditions
of this Agreement, each Party agrees to use, and to cause its Subsidiaries to
use, its reasonable efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, all things necessary, proper, or advisable under
applicable Laws to consummate and make effective, as soon as reasonably
practicable after the date of this Agreement, the transactions contemplated by
this Agreement, including, 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
referred to in Article 9 of this Agreement; provided, that nothing herein shall
preclude either Party from exercising its rights under this Agreement. Each
Party shall use, and shall cause each of its Subsidiaries to use, its reasonable
efforts to obtain all Consents necessary or desirable for the consummation of
the transactions contemplated by this Agreement.

8.6 Investigation and Confidentiality.

(a) Prior to the Effective Time, each Party shall keep the other Party
advised of all Material developments relevant to its business and to
consummation of the Merger

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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 shall not interfere unnecessarily 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 or certify the destruction of all documents and
copies thereof, and all work papers containing confidential information
received from the other Party.

(c) Each Party agrees to give the other Party notice as soon as practicable
after any determination by it of any fact or occurrence relating to the
other Party which it has discovered through the course of its investigation
and which represents, or is reasonably likely to represent, either a
Material breach of any representation, warranty, covenant, or agreement of
the other Party or which has had or is reasonably likely to have a Material
Adverse Effect on the other Party.

(d) Neither Party nor any of their respective Subsidiaries shall be
required to provide access to or to disclose information where such access
or disclosure would violate or prejudice the rights of its customers,
jeopardize the attorney-client or similar privilege with respect to such
information or contravene any Law, rule, regulation, Order, judgment,
decree, fiduciary duty, or agreement entered into prior to the date of this
Agreement. The Parties will use their reasonable efforts to make
appropriate substitute disclosure arrangements, to the extent practicable,
in circumstances in which the restrictions of the preceding sentence apply.

8.7 Press Releases. Prior to the Effective Time, Regions and St. James shall
consult with each other as to the form and substance of any press release or
other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in this Section 8.7
shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.

8.8 Certain Actions. Except with respect to this Agreement and the transactions
contemplated hereby, no St. James Company nor any Affiliate thereof nor any
Representatives thereof retained by any St. James Company shall directly or
indirectly solicit or engage in negotiations concerning any Acquisition
Proposal, or provide any confidential information or assistance to, or have any
discussions with, any Person with respect to an Acquisition Proposal.
Notwithstanding the foregoing, St. James may, and may authorize and permit its
Representatives to, provide Persons with confidential information, have
discussions or negotiations with, or otherwise facilitate an effort or attempt
by such Person to make or implement an Acquisition Proposal not solicited in
violation of this Agreement if St. James' Board of Directors, after having
consulted with, and based upon the advice of, outside counsel, determines in
good faith that the failure to take such actions could constitute a breach of
the fiduciary duties of St. James' Board of Directors under applicable Law;
provided, that St. James shall promptly advise Regions

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following the receipt of any Acquisition Proposal and the Material details
thereof; and, provided further, that prior to delivery of confidential
information relating to St. James or access to St. James' books, records, or
properties in connection therewith, the other Person shall have entered into a
confidentiality agreement substantially similar to the Confidentiality Agreement
previously entered into between St. James and Regions. Nothing contained in this
Section 8.8 shall prohibit the Board of Directors of St. James from complying
with Rule 14e-2, promulgated under the 1934 Act. St. James shall (i) immediately
cease and cause to be terminated any existing activities, discussions, or
negotiations with any Persons conducted heretofore with respect to any of the
foregoing, and (ii) direct and use its reasonable efforts to cause of all its
Representatives not to engage in any of the foregoing.

8.9 Accounting and Tax Treatment. Each of the Parties undertakes and agrees to
use its reasonable efforts to cause the Merger, and to take no action which
would cause the Merger not, to qualify for treatment as a pooling of interests
for accounting purposes or as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code for federal income tax purposes.

8.10 State Takeover Laws. Each St. James Company shall take all necessary steps
to exempt the transactions contemplated by this Agreement from, or if necessary
challenge the validity or applicability of, any applicable Takeover Laws.

8.11 Charter Provisions. Each St. James Company shall take all necessary action
to ensure that the entering into of this Agreement and the consummation of the
Merger and the other transactions contemplated hereby do not and will not result
in the grant of any rights to any Person under the Articles of Incorporation,
Bylaws, or other governing instruments of any St. James Company or restrict or
impair the ability of Regions or any of its Subsidiaries to vote, or otherwise
to exercise the rights of a stockholder with respect to, shares of any St. James
Company that may be directly or indirectly acquired or controlled by it.

8.12 Agreement of Affiliates. St. James has disclosed in Section 8.12 of the
St. James Disclosure Memorandum each Person whom it reasonably believes may be
deemed an "affiliate" of St. James for purposes of Rule 145 under the 1933 Act.
St. James shall use its reasonable efforts to cause each such Person to deliver
to Regions not later than 30 days prior to the Effective Time, a written
agreement, in substantially the form of Exhibit 2, providing that such Person
will not sell, pledge, transfer, or otherwise dispose of the shares of St. James
Common Stock held by such Person except as contemplated by such agreement or by
this Agreement and will not sell, pledge, transfer, or otherwise dispose of the
shares of Regions Common Stock to be received by such Person upon consummation
of the Merger except in compliance with applicable provisions of the 1933 Act
and the rules and regulations thereunder and until such time as financial
results covering at least 30 days of combined operations of Regions and St.
James have been published within the meaning of Section 201.01 of the SEC's
Codification of Financial Reporting Policies, except as otherwise permitted
thereby. Shares of Regions Common Stock issued to such affiliates of St. James
in exchange for shares of St. James Common Stock shall not be transferable until
such time as financial results covering at least 30 days of combined operations
of Regions and St. James have been published within the meaning of Section
201.01 of the SEC's Codification of Financial Reporting Policies, except as
otherwise permitted thereby, regardless of whether each such affiliate has
provided the written agreement referred to in this Section 8.12 (and Regions
shall be entitled to place restrictive legends upon certificates for shares of
Regions Common Stock issued to

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affiliates of St. James pursuant to this Agreement to enforce the provisions of
this Section 8.12). Regions shall not be required to maintain the effectiveness
of the Registration Statement under the 1933 Act for the purposes of resale of
Regions Common Stock by such affiliates.

8.13. Employee Benefits and Contracts. Following the Effective Time, Regions
shall provide generally to officers and employees of the St. James Companies,
who at or after the Effective Time become employees of a Regions Company,
employee benefits under employee benefit plans (other than stock option or other
plans involving the potential issuance of Regions Common Stock except as set
forth in this Section 8.13), on terms and conditions which when taken as a whole
are substantially similar to those currently provided by the Regions Companies
to their similarly situated officers and employees. For purposes of
participation and vesting (but not accrual of benefits) under such employee
benefit plans, (i) service under any qualified defined benefit plans of St.
James shall be treated as service under Regions' qualified defined benefit
plans, (ii) service under any qualified defined contribution plans of St. James
shall be treated as service under Regions' qualified defined contribution plans,
and (iii) service under any other employee benefit plans of St. James shall be
treated as service under any similar employee benefit plans maintained by
Regions. Regions also shall cause St. James and its Subsidiaries to honor all
employment, severance, consulting, and other compensation Contracts disclosed in
Section 8.13 of the St. James Disclosure Memorandum to Regions between any St.
James 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 St. James Benefit Plans.

8.14 Indemnification.

(a) From and after the Effective Time, in the event of any threatened or
actual claim, action, suit, proceeding, or investigation, whether civil,
criminal, or administrative, including, without limitation, any such claim,
action, suit, proceeding or investigation in which any person who is now,
or has been at any time prior to the date of this Agreement, or who becomes
prior to the Effective Time, a director or officer of St. James or any St.
James Subsidiary (the "Indemnified Parties") is, or is threatened to be,
made a party based in whole or in part on, or arising in whole or in part
out of, or pertaining to (i) the fact that he is or was a director,
officer, or employee of St. James, any of the St. James Subsidiaries, or
any of their respective predecessors or (ii) this Agreement or any of the
transactions contemplated hereby, whether in any case asserted or arising
before or after the Effective Time, Regions shall indemnify and hold
harmless, as and to the fullest extent permitted by Law, each such
Indemnified Party against any Liability (including reasonable attorneys'
fees and expenses in advance of the final disposition of any claim, suit,
proceeding, or investigation to each Indemnified Party to the fullest
extent permitted by Law upon receipt of any undertaking required by
applicable Law), judgments, fines, and amounts paid in settlement in
connection with any such threatened or actual claim, action, suit,
proceeding, or investigation, and in the event of any such threatened or
actual claim, action, suit, proceeding, or investigation (whether asserted
or arising before or after the Effective Time), the Indemnified Parties may
retain counsel reasonably satisfactory to them; provided, however, that (a)
Regions shall have the right to assume the defense thereof and upon such
assumption Regions shall not be liable to any Indemnified Party for any
legal expenses of other counsel or any other expenses subsequently incurred
by any Indemnified Party in connection with the

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defense thereof, except that if Regions elects not to assume such defense or
counsel for the Indemnified Parties reasonably advises the Indemnified Parties
that there are issues which raise conflicts of interest between Regions and the
Indemnified Parties, the Indemnified Parties may retain counsel reasonably
satisfactory to them, and Regions shall pay the reasonable fees and expenses of
such counsel for the Indemnified Parties, (b) Regions shall not be liable for
any settlement effected without its prior written consent (which consent shall
not be unreasonably withheld), and (c) Regions shall have no obligation
hereunder to any Indemnified Party when and if a court of competent jurisdiction
shall ultimately determine, and such determination shall have become final and
nonappealable, that indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable Law. Regions' obligations under
this Section 8.14(a) continue in full force and effect for a period of six years
after the Effective Time; provided, however, that all rights to indemnification
in respect of any claim (a "Claim") asserted or made within such period shall
continue until the final disposition of such Claim.

(b) Regions agrees that all rights to indemnification and all limitations
on Liability existing in favor of the directors, officers, and employees of
St. James and its Subsidiaries (the "Covered Parties") as provided in their
respective Articles of Incorporation, Bylaws, or similar governing
instruments as in effect as of the date of this Agreement with respect to
matters occurring prior to the Effective Time shall survive the Merger and
shall continue in full force and effect, and shall be honored by such
entities or their respective successors as if they were the indemnifying
party thereunder, without any amendment thereto, for a period of six years
after the Effective Time; provided, however, that all rights to
indemnification in respect of any Claim asserted or made within such period
shall continue until the final disposition of such Claim; provided,
further, however, that nothing contained in this Section 8.14(b) shall be
deemed to preclude the liquidation, consolidation, or merger of St. James
or any St. James Subsidiary, in which case all of such rights to
indemnification and limitations on Liability shall be deemed to so survive
and continue notwithstanding any such liquidation, consolidation, or
merger. Without limiting the foregoing, in any case in which approval by
Regions is required to effectuate any indemnification, Regions shall
direct, at the election of the Indemnified Party, that the determination of
any such approval shall be made by independent counsel mutually agreed upon
between Regions and the Indemnified Party.

(c) If Regions or any of its successors or assigns shall consolidate with
or merge into any other Person and shall not be the continuing or surviving
Person of such consolidation or merger or shall transfer all or
substantially all of its Assets to any Person, then and in each case,
proper provision shall be made so that the successors and assigns of
Regions shall assume the obligations set forth in this Section 8.14.

(d) The provisions of this Section 8.14 are intended to be for the benefit
of and shall be enforceable by, each Indemnified Party, his or her heirs
and representatives.

8.15 Certain Modifications. Regions and St. James shall consult with respect to
their loan, litigation, and real estate valuation policies and practices
(including loan classifications and levels of reserves) and St. James shall make
such modifications or changes to its policies and practices, if any, prior to
the Effective Time, as may be mutually agreed upon. Regions and St. James also
shall consult with respect to the character, amount, and timing of restructuring
and Merger-related expense charges to be taken by each of the Parties in
connection with the transactions contemplated by this Agreement and shall take
such

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charges in accordance with GAAP as may be mutually agreed upon by the Parties.
Neither Party's representations, warranties, and covenants contained in this
Agreement shall be deemed to be inaccurate or breached in any respect or deemed
to have a Material Adverse Effect on St. James as a consequence of any
modifications or charges undertaken solely on account of this Section 8.15.

ARTICLE 9

CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE

9.1 Conditions to Obligations of Each Party. The respective obligations of each
Party to perform this Agreement and to 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) Stockholder Approval. The stockholders of St. James shall have
approved this Agreement, and the consummation of the transactions
contemplated hereby, including the Merger, as and to the extent required by
Law and 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 obtained from any Regulatory Authority which is necessary to
consummate the transactions contemplated hereby shall be conditioned or
restricted in a manner (excluding requirements relating to the raising of
additional capital or the disposition of Assets or deposits) which in the
reasonable good faith judgment of the Board of Directors of Regions would
so materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement so as to render inadvisable the
consummation of the Merger.

(c) Consents and Approvals. Each Party shall have obtained any and all
Consents required for consummation of the Merger (other than those referred
to in Section 9.1(b) of this Agreement) or for the preventing of any
Default under any Contract or Permit of such Party which, if not obtained
or made, is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on such Party. No Consent obtained which is
necessary to consummate the transactions 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 or business benefits of the transactions contemplated
by this Agreement so as to render inadvisable the consummation of the
Merger.

(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

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suspend the effectiveness thereof shall have been initiated and be continuing,
and all necessary approvals under state securities Laws or the 1933 Act or 1934
Act relating to the issuance or trading of the shares of Regions Common Stock
issuable pursuant to the Merger shall have been received.

(f) Exchange Listing. The shares of Regions Common Stock issuable pursuant
to the Merger shall have been approved for listing on the Nasdaq NMS,
subject to official notice of issuance.

(g) Tax Matters. Each Party shall have received a written opinion from
Alston & Bird LLP, in a form reasonably satisfactory to such Party (the
"Tax Opinion"), dated the date of the Effective Time, substantially to the
effect that (i) the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, (ii) no gain or
loss will be recognized by holders of St. James Common Stock who exchange
all of their St. James Common Stock solely for Regions Common Stock
pursuant to the Merger (except with respect to any cash received in lieu of
a fractional share interest in Regions Common Stock), (iii) the tax basis
of the Regions Common Stock received by holders of St. James Common Stock
who exchange all of their St. James Common Stock solely for Regions Common
Stock in the Merger will be the same as the tax basis of the St. James
Common Stock surrendered in exchange for the Regions Common Stock (reduced
by an amount allocable to a fractional share interest in Regions Common
Stock for which cash is received), and (iv) the holding period of the
Regions Common Stock received by holders who exchange all of their St.
James Common Stock solely for Regions Common Stock in the Merger will be
the same as the holding period of the St. James Common Stock surrendered in
exchange therefor, provided that such St. James Common Stock is held as a
capital asset at the Effective Time. In rendering such Tax Opinion, such
counsel shall be entitled to rely upon representations of officers of St.
James and Regions reasonably satisfactory in form and substance to such
counsel.

(h) Pooling Letter. Each Party shall have received a letter, dated as of
the Effective Time, in a form reasonably acceptable to such Party, from
Ernst & Young LLP to the effect that the Merger will qualify for
pooling-of-interests accounting treatment.

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

(a) Representations and Warranties. For purposes of this Section 9.2(a),
the accuracy of the representations and warranties of St. James set forth
in this Agreement shall be assessed as of the date of this Agreement and as
of the Effective Time with the same effect as though all such
representations and warranties had been made on and as of the Effective
Time (provided that representations and warranties which are confined to a
specified date shall speak only as of such date). The representations and
warranties of St. James set forth in Section 5.3 of this Agreement shall be
true and correct (except for inaccuracies which are de minimis in amount).
The representations and warranties of St. James set forth in Sections 5.18,
5.19, and 5.20 of this Agreement shall be true and correct in all Material
respects. There shall not exist inaccuracies in the representations and
warranties of St. James set forth in this Agreement (including the
representations and warranties set forth in Sections 5.3,

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5.18, 5.19, and 5.20) such that the aggregate effect of such inaccuracies has,
or is reasonably likely to have, a Material Adverse Effect on St. James;
provided that, for purposes of this sentence only, those representations and
warranties which are qualified by references to "material, "Material," "Material
Adverse Effect," or variations thereof, or to the "Knowledge" of St. James or to
a matter being "known" by St. James shall be deemed not to include such
qualifications.

(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of St. James 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. St. James shall have delivered to Regions (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
duly authorized officers, to the effect that the conditions of its
obligations set forth in Section 9.2(a) and 9.2(b) of this Agreement have
been satisfied, and (ii) certified copies of resolutions duly adopted by
St. James' 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) Affiliate Agreements. Regions shall have received from each affiliate
of St. James the affiliates agreement referred to in Section 8.12 of this
Agreement, to the extent necessary to assure in the reasonable judgment of
Regions that the transactions contemplated hereby will qualify for
pooling-of-interests accounting treatment.

(e) Claims Letters. Each of the directors and executive officers of St.
James shall have executed and delivered to Regions, letters in
substantially the form of Exhibit 3.

(f) Legal Opinion. Regions shall have received a written opinion, dated as
of the Effective Time, of counsel to St. James, in substantially the form
of Exhibit 4.

(e) Fairness Opinion. St. James shall have received a letter from Chaffe &
Associates, Inc. or another financial adviser selected by St. James dated
not more than five 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 St. James is fair to the stockholders
of St. James from a financial point of view.

9.3 Conditions to Obligations of St. James. The obligations of St. James 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 St. James pursuant to Section 11.6(b) of this Agreement:

(a) Representations and Warranties. For purposes of this Section 9.3(a),
the accuracy of the representations and warranties of Regions set forth in
this Agreement shall be assessed as of the date of this Agreement and as of
the Effective Time with the same effect as though all such representations
and warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date). The representations and warranties of Regions
set forth in Section 6.3 of this Agreement shall be true and correct
(except for inaccuracies which are de minimis in amount). The representa-

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tions and warranties of Regions set forth in Section 6.12 of this Agreement
shall be true and correct in all Material respects. There shall not exist
inaccuracies in the representations and warranties of Regions set forth in this
Agreement (including the representations and warranties set forth in Sections
6.3 and 6.12) such that the aggregate effect of such inaccuracies has, or is
reasonably likely to have, a Material Adverse Effect on Regions; provided that,
for purposes of this sentence only, those representations and warranties which
are qualified by references to "material," "Material," "Material Adverse
Effect," or variations thereof, or to the "Knowledge" of Regions or to a matter
being "known" by Regions shall be deemed not to include such qualifications.

(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of Regions to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied
with in all Material respects.

(c) Certificates. Regions shall have delivered to St. James (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
duly authorized officers, to the effect that the conditions of its
obligations set forth in Section 9.3(a) and 9.3(b) of this Agreement have
been satisfied, and (ii) certified copies of resolutions duly adopted by
Regions' Board of Directors and stockholders evidencing the taking of all
corporate action necessary to authorize the execution, delivery, and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as St. James and its
counsel shall request.

(d) Legal Opinion. St. James shall have received a written opinion, dated
as of the Effective Time, of counsel to Regions, in substantially the form
of Exhibit 5.

ARTICLE 10

TERMINATION

10.1 Termination. Notwithstanding any other provision of this Agreement, and
notwithstanding the approval of this Agreement by the stockholders of St. James
or Regions, 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 St. James; or

(b) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in
Section 9.2(a) of this Agreement in the case of St. James and Section
9.3(a) of this Agreement in the case of Regions or in Material breach of
any covenant or other agreement contained in this Agreement) in the event
of an inaccuracy of any representation or warranty of the other Party
contained in this Agreement which cannot be or has not been cured within 30
days after the giving of written notice to the breaching Party of such
inaccuracy and which inaccuracy would provide the terminating Party the
ability to refuse to consummate the Merger under the applicable standard
set forth in Section 9.2(a) of this Agreement in the case of St. James and
Section 9.3(a) of this Agreement in the case of Regions; or

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(c) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in
Section 9.2(a) of this Agreement in the case of St. James and Section
9.3(a) in the case of Regions) in the event of a Material breach by the
other Party of any covenant or agreement contained in this Agreement which
cannot be or has not been cured within 30 days after the giving of written
notice to the breaching Party of such breach; or

(d) By the Board of Directors of either Party in the event (i) any Consent
of any Regulatory Authority required for consummation of the Merger and the
other transactions contemplated hereby shall have been denied by final
nonappealable action of such authority or if any action taken by such
authority is not appealed within the time limit for appeal, or (ii) the
stockholders of Regions or St. James fail to vote their approval of the
matters submitted for the approval by such stockholders 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 either Party in the event that the Merger
shall not have been consummated by March 31, 1999, if the failure to
consummate the transactions contemplated hereby on or before such date is
not caused by any breach of this Agreement by the Party electing to
terminate pursuant to this Section 10.1(e); or

(f) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in
Section 9.2(a) of this Agreement in the case of St. James and Section
9.3(a) of this Agreement in the case of Regions or in Material breach of
any covenant or other agreement contained in this Agreement) in the event
that any of the conditions precedent to the obligations of such Party to
consummate the Merger cannot be satisfied or fulfilled by the date
specified in Section 10.1(e) of this Agreement.

10.2 Effect of Termination. In the event of the termination and abandonment of
this Agreement pursuant to Section 10.1 of this Agreement, this Agreement shall
become void and have no effect, except that (i) the provisions of this Section
10.2 and Article 11 and Section 8.6(b) of this Agreement shall survive any such
termination and abandonment, and (ii) a termination pursuant to Sections
10.1(b), 10.1(c), or 10.1(f) of this Agreement shall not relieve the breaching
Party from Liability for an uncured willful breach of a representation,
warranty, covenant, or agreement giving rise to such termination.

10.3 Non-Survival of Representations and Covenants. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except this Section 10.3 and
Articles 2, 3, 4, and 11 and Sections 8.12 and 8.14 of this Agreement.

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ARTICLE 11

MISCELLANEOUS

11.1 Definitions.

(a) Except as otherwise provided herein, the capitalized terms set forth
below shall have the following meanings:

"ACQUISITION PROPOSAL" with respect to a Party shall mean any tender offer
or exchange offer or any proposal for a merger, acquisition of all of the
stock or Assets of, or other business combination involving such Party or
any of its Subsidiaries or the acquisition of a substantial equity interest
in, or a substantial portion of the Assets of, such Party or any of its
Subsidiaries.

"AFFILIATE" of a Person shall mean: (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by
or under common control with such Person; (ii) any officer, director,
partner, employer, or direct or indirect beneficial owner of any 10% or
greater equity or voting interest of such Person; or (iii) any other Person
for which a Person described in clause (ii) acts in any such capacity.

"AGREEMENT" shall mean this Agreement and Plan of Merger, including the
Exhibits delivered pursuant hereto and incorporated herein by reference.

"ASSETS" of a Person shall mean all of the assets, properties, businesses,
and rights of such Person of every kind, nature, character, and
description, whether real, personal, or mixed, tangible or intangible,
accrued or contingent, or otherwise relating to or utilized in such
Person's business, directly or indirectly, in whole or in part, whether or
not carried on the books and records of such Person, and whether or not
owned in the name of such Person or any Affiliate of such Person and
wherever located.

"BHC ACT" shall mean the federal Bank Holding Company Act of 1956, as
amended.

"CONFIDENTIALITY AGREEMENT" shall mean that certain Confidentiality
Agreement, entered into prior to the date of this Agreement, between St.
James and Regions.

"CONSENT" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.

"CONTRACT" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding, or undertaking of
any kind or character, or other document to which any Person is a party or
that is binding on any Person or its capital stock, Assets, or business.

"DEFAULT" shall mean (i) any breach or violation of or default under any
Contract, Order, or Permit, (ii) any occurrence of any event that with the
passage of time or the giving of notice or both would constitute a breach
or violation of or default under any Contract, Order, or Permit, or (iii)
any occurrence of any event that with or without the passage of time or the
giving of notice would give rise to a right to terminate or revoke, change
the current terms of, or renegotiate, or to accelerate, increase, or impose
any Liability under, any Contract, Order, or Permit, where, in any

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such event, such Default is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on a Party.

"DELAWARE CERTIFICATE OF MERGER" shall mean the certificate of merger to be
executed by Regions and filed with the Secretary of State of the State of
Delaware, relating to the Merger as contemplated by Section 1.1 of this
Agreement.

"DGCL" shall mean the Delaware General Corporation Law.

"ENVIRONMENTAL LAWS" shall mean all Laws relating to pollution or
protection of human health or the environment (including ambient air,
surface water, ground water, land surface, or subsurface strata) and which
are administered, interpreted, or enforced by the United States
Environmental Protection Agency and state and local agencies with
jurisdiction over, and including common law in respect of, pollution or
protection of the environment, including the Comprehensive Environmental
Response Compensation and Liability Act, as amended, 42 U.S.C. 9601 et seq.
("CERCLA"), the Resource Conservation and Recovery Act, as amended, 42
U.S.C. 6901 et seq. ("RCRA"), and other Laws relating to emissions,
discharges, releases, or threatened releases of any Hazardous Material, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of any Hazardous
Material.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.

"EXHIBITS" 1 through 5, 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.

"GAAP" shall mean generally accepted accounting principles, consistently
applied during the periods involved.

"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance, hazardous
material, hazardous waste, regulated substance, or toxic substance (as
those terms are defined by any applicable Environmental Laws) and (ii) any
chemicals, pollutants, contaminants, petroleum, petroleum products, or oil
(and specifically shall include asbestos requiring abatement, removal, or
encapsulation pursuant to the requirements of governmental authorities and
any polychlorinated biphenyls).

"HSR ACT" shall mean Section 7A of the Clayton Act, as added by Title II of
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and
the rules and regulations promulgated thereunder.

"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.

"KNOWLEDGE" as used with respect to a Person (including references to such
Person being aware of a particular matter) shall mean the personal
knowledge of the chairman, president, or chief financial officer 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

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business, including those promulgated, interpreted, or enforced by any
Regulatory Authority.

"LBCL" shall mean the Louisiana Business Corporation Law as amended.

"LBL" shall mean the Louisiana Banking Law as amended.

"LIABILITY" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost, or expense (including
costs of investigation, collection, and defense), claim, deficiency,
guaranty, or endorsement of or by any Person (other than endorsements of
notes, bills, checks, and drafts presented for collection or deposit in the
ordinary course of business) of any type, whether accrued, absolute or
contingent, liquidated or unliquidated, matured or unmatured, or otherwise.

"LIEN" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title
retention, or other security arrangement, or any adverse right or interest,
charge, or claim of any nature whatsoever of, on, or with respect to any
property or property interest, other than (i) Liens for property Taxes not
yet due and payable, and (ii) for depository institution Subsidiaries of a
Party, pledges to secure deposits, and other Liens incurred in the ordinary
course of the banking business.

"LITIGATION" shall mean any action, arbitration, cause of action, claim,
complaint, criminal prosecution, demand letter, governmental or other
examination or investigation, hearing, inquiry, administrative or other
proceeding, or notice (written or oral) by any Person alleging potential
Liability or requesting information relating to or affecting a Party, its
business, its Assets (including Contracts related to it), or the
transactions contemplated by this Agreement, but shall not include regular,
periodic examinations of depository institutions and their Affiliates by
Regulatory Authorities.

"LOAN PROPERTY" shall mean any property owned, leased, or operated by the
Party in question or by any of its Subsidiaries or in which such Party or
Subsidiary holds a security or other interest (including an interest in a
fiduciary capacity), and, where required by the context, includes the owner
or operator of such property, but only with respect to such property.

"LOUISIANA CERTIFICATE OF MERGER" shall mean the Certificate of Merger to
be executed by Regions and filed with the Secretary of State of the State
of Louisiana relating to the Merger as contemplated by Section 1.1 of this
Agreement.

"MATERIAL" for purposes of this Agreement shall be determined in light of
the facts and circumstances of the matter in question; provided that any
specific monetary amount stated in this Agreement shall determine
materiality in that instance.

"MATERIAL ADVERSE EFFECT" on a Party shall mean an event, change, or
occurrence which, individually or together with any other event, change, or
occurrence, has a Material adverse impact on (i) the financial condition,
results of operations, or business of such Party and its Subsidiaries,
taken as a whole, or (ii) the ability of such Party to perform its
obligations under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement, provided that "Material
Adverse Effect" shall not be deemed to include the impact of (a) changes in
banking and similar Laws of general applicability or interpretations
thereof by

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courts or governmental authorities, (b) changes in GAAP or regulatory accounting
principles generally applicable to banks and their holding companies, (c)
actions and omissions of a Party (or any of its Subsidiaries) taken with the
prior informed consent of the other Party in contemplation of the transactions
contemplated hereby, and (d) the Merger and compliance with the provisions of
this Agreement on the operating performance of the Parties.

"NASD" shall mean the National Association of Securities Dealers, Inc.

"NASDAQ NMS" shall mean the National Market System of The Nasdaq Stock
Market.

"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.

"PARTICIPATION FACILITY" shall mean any facility or property in which the
Party in question or any of its Subsidiaries participates in the management
(including, but not limited to, participating in a fiduciary capacity) and,
where required by the context, said term means the owner or operator of
such facility or property, but only with respect to such facility or
property.

"PARTY" shall mean either St. James or Regions, and "Parties" shall mean
both St. James 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.

"PROXY STATEMENT" shall mean the proxy statement used by St. James to
solicit the approval of its stockholders of the transactions contemplated
by this Agreement, which shall include the prospectus of Regions relating
to the issuance of the Regions Common Stock to holders of St. James Common
Stock.

"REGIONS COMMON STOCK" shall mean the $.625 par value common stock of
Regions.

"REGIONS COMPANIES" shall mean, collectively, Regions and all Regions
Subsidiaries.

"REGIONS FINANCIAL STATEMENTS" shall mean (i) the consolidated statements
of condition (including related notes and schedules, if any) of Regions as
of December 31, 1997, 1996, and 1995, and the related statements of income,
changes in stockholders' equity, and cash flows (including related notes
and schedules, if any) for each of the three years ended December 31, 1997,
1996, and 1995, as filed by Regions in SEC Documents, and (ii) the
consolidated statements of condition of Regions

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(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 December 31, 1997.

"REGIONS SUBSIDIARIES" shall mean the Subsidiaries of Regions and any
corporation, bank, savings association, or other organization acquired as a
Subsidiary of Regions in the future and owned by Regions at the Effective
Time.

"REGISTRATION STATEMENT" shall mean the Registration Statement on Form S-4,
or other appropriate form, including any pre-effective or post-effective
amendments or supplements thereto, filed with the SEC by Regions under the
1933 Act with respect to the shares of Regions Common Stock to be issued to
the stockholders of St. James in connection with the transactions
contemplated by this Agreement.

"REGULATORY AUTHORITIES" shall mean, collectively, the Federal Trade
Commission, the United States Department of Justice, the Board of the
Governors of the Federal Reserve System, the Office of the Comptroller of
the Currency, the Federal Deposit Insurance Corporation, the Office of
Thrift Supervision, all state regulatory agencies having jurisdiction over
the Parties and their respective Subsidiaries, the NASD, and the SEC.

"REPRESENTATIVE" shall mean any investment banker, financial advisor,
attorney, accountant, consultant, or other representative of a Person.

"RIGHTS" shall mean all arrangements, calls, commitments, Contracts,
options, rights to subscribe to, scrip, understandings, warrants, or other
binding obligations of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for, shares of the capital stock
of a Person or by which a Person is or may be bound to issue additional
shares of its capital stock or other Rights.

"SEC" shall mean the United States Securities and Exchange Commission.

"SEC DOCUMENTS" shall mean all forms, proxy statements, registration
statements, reports, schedules, and other documents filed, or required to
be filed, by a Party or any of its Subsidiaries with any Regulatory
Authority pursuant to the Securities Laws.

"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the Investment
Company Act of 1940, as amended, the Investment Advisors Act of 1940, as
amended, the Trust Indenture Act of 1939, as amended, and the rules and
regulations of any Regulatory Authority promulgated thereunder.

"ST. JAMES COMMON STOCK" shall mean the $2.50 par value common stock of St.
James.

"ST. JAMES COMPANIES" shall mean, collectively, St. James and all St. James
Subsidiaries.

"ST. JAMES DISCLOSURE MEMORANDUM" shall mean the written information
entitled "St. James Disclosure Memorandum" delivered prior to the execution
of this Agreement to Regions describing in reasonable detail the matters
contained therein and, with respect to each disclosure made therein,
specifically referencing each Section or subsection of this Agreement under
which such disclosure is being made. Information disclosed with respect to
one Section or subsection shall not be deemed

A-43
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to be disclosed for any other purpose hereunder. The inclusion of any matter in
this document shall not be deemed an admission or otherwise to imply that any
such matter is Material for purposes of this Agreement.

"ST. JAMES FINANCIAL STATEMENTS" shall mean (i) the consolidated statements
of condition (including related notes and schedules, if any) of St. James
as of December 31, 1997, 1996, and 1995, and the related statements of
income, changes in stockholders' equity, and cash flows (including related
notes and schedules, if any) for each of the three years ended December 31,
1997, 1996, and 1995, included in the St. James Disclosure Memorandum, and
(ii) the consolidated statements of condition of St. James (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 December
31, 1997.

"ST. JAMES STOCK PLANS" shall mean the existing stock option and other
stock-based compensation plans of St. James.

"ST. JAMES SUBSIDIARIES" shall mean the Subsidiaries of St. James, which
shall include the St. James Subsidiaries described in Section 5.4 of this
Agreement and any corporation, bank, savings association, or other
organization acquired as a Subsidiary of St. James in the future and owned
by St. James at the Effective Time.

"STOCKHOLDERS' MEETING" shall mean the meeting of the stockholders of St.
James to be held pursuant to Section 8.1 of this Agreement, including any
adjournment or adjournments thereof.

"SUBSIDIARIES" shall mean all those corporations, banks, associations, or
other entities of which the entity in question owns or controls 50% or more
of the outstanding equity securities either directly or through an unbroken
chain of entities as to each of which 50% or more of the outstanding equity
securities is owned directly or indirectly by its parent; provided, there
shall not be included any such entity acquired through foreclosure or any
such entity the equity securities of which are owned or controlled in a
fiduciary capacity.

"SURVIVING CORPORATION" shall mean Regions as the surviving corporation
resulting from the Merger.

"TAX" or "TAXES" shall mean all federal, state, local, and foreign taxes,
charges, fees, levies, imposts, duties, or other assessments, including
income, gross receipts, excise, employment, sales, use, transfer, license,
payroll, franchise, severance, stamp, occupation, windfall profits,
environmental, federal highway use, commercial rent, customs duties,
capital stock, paid-up capital, profits, withholding, Social Security,
single business and unemployment, disability, real property, personal
property, registration, ad valorem, value added, alternative or add-on
minimum, estimated, or other tax or governmental fee of any kind
whatsoever, imposed or required to be withheld by the United States or any
state, local, or foreign government or subdivision or agency thereof,
including any interest, penalties, or additions thereto.

"TAXABLE PERIOD" shall mean any period prescribed by any governmental
authority, including the United States or any state, local, or foreign
government or subdivision or agency thereof for which a Tax Return is
required to be filed or Tax is required to be paid.

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"TAX RETURN" shall mean any report, return, information return, or other
information required to be supplied to a taxing authority in connection
with Taxes, including any return of an affiliated or combined or unitary
group that includes a Party or its Subsidiaries.

(b) The terms set forth below shall have the meanings ascribed thereto in
the referenced sections:

<TABLE>
<S> <C>
Average Closing Price..... Section 3.1
Closing................... Section 1.2
Effective Time............ Section 1.3
Exchange Agent............ Section 4.1
Exchange Ratio............ Section 3.1(b)
Indemnified Party......... Section 8.14
Merger.................... Section 1.1
Regions SEC Reports....... Section 6.5(a)
St. James Benefit Plans... Section 5.13(a)
St. James Contracts....... Section 5.14
St. James ERISA Section 5.13(e)
Affiliate...............
St. James ERISA Plan...... Section 5.13(a)
St. James Rights.......... Section 3.6(a)
St. James Pension Plan.... Section 5.13(a)
St. James SEC Reports..... Section 5.5(a)
Takeover Laws............. Section 5.19
Tax Opinion............... Section 9.1(g)
</TABLE>

(c) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes," or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."

11.2 Expenses.

(a) Except as otherwise provided in this Section 11.2, each of the Parties
shall bear and pay all direct costs and expenses incurred by it or on its
behalf in connection with the transactions contemplated hereunder,
including filing, registration, and application fees, printing fees, and
fees and expenses of its own financial or other consultants, investment
bankers, accountants, and counsel, except that Regions shall bear and pay
the filing fees payable in connection with the Registration Statement and
the Proxy Statement and one-half of the printing costs incurred in
connection with the printing of the Registration Statement and the Proxy
Statement.

(b) Nothing contained in this Section 11.2 shall constitute or shall be
deemed to constitute liquidated damages for the willful breach by a Party
of the terms of this Agreement or otherwise limit the rights of the
nonbreaching Party.

11.3 Brokers and Finders. Except for Chaffe & Associates as to St. James, 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, her, or its representing or being retained
by or allegedly representing or being retained by St. James or Regions, each of
St. James and

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<PAGE> 149

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, other than the
Confidentiality Agreement, which shall remain in effect. Nothing in this
Agreement expressed or implied, is intended to confer upon any Person, other
than the Parties or their respective successors, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, other than as
provided in Sections 8.12 and 8.14 of this Agreement.

11.5 Amendments. To the extent permitted by Law, this Agreement may be amended
by a subsequent writing signed by each of the Parties upon the approval of the
Boards of Directors of each of the Parties, whether before or after stockholder
approval of this Agreement has been obtained; provided, that the provisions of
this Agreement relating to the manner or basis in which shares of St. James
Common Stock will be exchanged for Regions Common Stock shall not be amended
after the Stockholders' Meeting without the requisite approval of the holders of
the issued and outstanding shares of Regions Common Stock and St. James Common
Stock, as the case may be, entitled to vote thereon.

11.6 Waivers.

(a) Prior to or at the Effective Time, Regions, acting through its Board of
Directors, chief executive officer, chief financial officer, or other
authorized officer, shall have the right to waive any Default in the
performance of any term of this Agreement by St. James, to waive or extend
the time for the compliance or fulfillment by St. James 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 except that any unfulfilled conditions
shall be deemed to have been waived at the Effective Time.

(b) Prior to or at the Effective Time, St. James, acting through its Board
of Directors, chief executive officer, chief financial officer, or other
authorized officer, shall have the right to waive any Default in the
performance of any term of this Agreement by Regions, to waive or extend
the time for the compliance or fulfillment by Regions of any and all of its
obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of St. James 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 St. James except that any unfulfilled conditions
shall be deemed to have been waived at the Effective Time.

(c) The failure of any Party at any time or times to require performance of
any provision hereof shall in no manner affect the right of such Party at a
later time to enforce the same or any other provision of this Agreement. No
waiver of any condition or of the breach of any term contained in this
Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such

A-46
<PAGE> 150

condition or breach or a waiver of any other condition or of the breach of any
other term of this Agreement.

11.7 Assignment. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests, or obligations hereunder shall be
assigned by any Party hereto (whether by operation of Law or otherwise) without
the prior written consent of the other Party. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by the Parties and their respective successors and assigns.

11.8 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage 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 delivered:

<TABLE>
<S> <C>
St. James: ST. JAMES BANCORPORATION, INC.
1980 West Main Street
Lutcher, Louisiana 70071
Telecopy Number: (504) 869-4482
Attention: Paul Aucoin
President

Copy to Counsel: CORRERO FISHMAN HAYGOOD PHELPS
WEISS WALMSLEY & CASTEIX, LLP
Forty-sixth Floor
201 St. Charles Avenue
New Orleans, Louisiana 70170-4600
Telecopy Number: (504) 586-5250
Attention: Anthony J. Correro III

Regions: REGIONS FINANCIAL CORPORATION
417 N. 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7571
Attention: Richard D. Horsley
Vice Chairman and Executive
Financial Officer

Copy to Counsel: REGIONS FINANCIAL CORPORATION
417 N. 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7751
Attention: Samuel E. Upchurch, Jr.
General Counsel
</TABLE>

11.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the Laws of the State of Delaware, without regard to any
applicable conflicts of Laws, except to the extent that the Laws of the State of
Louisiana relate to the consummation of the Merger.

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<PAGE> 151

11.10 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.

11.11 Captions. The captions contained in this Agreement are for reference
purposes only and are not part of this Agreement.

11.12 Interpretations. Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed or resolved against any Party, whether under any rule
of construction or otherwise. No Party to this Agreement shall be considered the
draftsman. The Parties acknowledge and agree that this Agreement has been
reviewed, negotiated, and accepted by all Parties and their attorneys and shall
be construed and interpreted according to the ordinary meaning of the words used
so as fairly to accomplish the purposes and intentions of the Parties.

11.13 Enforcement of Agreement. The Parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.

11.14 Severability. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, the provision shall be interpreted to be only
so broad as is enforceable.

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<PAGE> 152

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: ST. JAMES BANCORPORATION, INC.
By: By:
--------------------------------------------- ---------------------------------------------
Cindy D. Martin Paul G. Aucoin
Secretary President

[CORPORATE SEAL]

ATTEST: REGIONS FINANCIAL CORPORATION

By: By:
--------------------------------------------- ---------------------------------------------
Samuel E. Upchurch, Jr. Richard D. Horsley
Corporate Secretary Vice Chairman

[CORPORATE SEAL]
</TABLE>

A-49
<PAGE> 153

APPENDIX B

November , 1998

The Board of Directors
St. James Bancorporation
Lutcher, LA

Attention: Mr. Paul Aucoin
Chairman

Gentlemen:

We understand that St. James Bancorporation ("SJB") and Regions Financial
Corporation ("Regions") have entered into an Agreement and Plan of Merger, dated
as of July 30, 1998 (the "Merger Agreement") which provides, among other things,
for the merger of SJB into Regions ("Bank Merger"). Pursuant to the Merger
Agreement, each share of SJB Common Stock shall be converted into the Merger
Consideration, as defined in the Merger Agreement.

You have asked our opinion as to whether the Merger Consideration is fair, from
a financial point view, to the stockholders of SJB.

Chaffe & Associates, Inc. ("Chaffe"), through its experience in the securities
industry, investment analysis and appraisal, and in related corporate finance
and investment banking activities, including mergers and acquisitions, corporate
recapitalization, and valuations for corporate and other purposes, states that
it is competent to provide the opinion as to the fairness of the Merger
Consideration. Neither Chaffe nor any of its officers or employees has an
interest in SJB, St. James Bank & Trust Co. (the "Bank"), or Regions Common
Stock; however, Chaffe has recently performed a valuation of one of its
subsidiaries for Regions for which it will receive a fee from Regions. The fee
received for the preparation and delivery of the opinion is not dependent or
contingent upon any transaction.

In connection with rendering its opinion, Chaffe, among other things: (i)
reviewed a copy of the Merger Agreement; (ii) reviewed and analyzed certain
publicly-available financial statements and other information of Regions; (iii)
reviewed and analyzed certain internal financial statements and other financial
and operating data concerning SJB and the Bank, prepared by the management of
SJB, including budget projections; (iv) discussed the past and current
operations and financial condition, and the prospects of SJB and the Bank with
senior executives of SJB; (v) reviewed the historical prices and trading volumes
of the shares of Regions Common Stock; (vi) compared the financial performance
of Regions, and the prices and trading activity of the Regions Common Stock,
with that of certain other comparable publicly-traded companies and their
securities; (vii) reviewed the financial terms of business combinations in the
commercial banking industry specifically and other industries generally, which
Chaffe deemed generally comparable to the proposed transaction; (viii)
considered a number of valuation methodologies, including among others, those
that incorporate book value, deposit base premium and capitalization of
earnings; and (ix) performed such valuations and such other studies and analyses
as we deemed appropriate to this opinion.

In its review, Chaffe relied, without independent verification, upon the
accuracy and completeness of the historical and projected financial information
and all other information

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<PAGE> 154
The Board of Directors
St. James Bancorporation
November , 1998
Page 2

reviewed by it for purposes of its opinion. Chaffe did not make or obtain an
independent review of SJB's assets or liabilities, nor was Chaffe furnished with
any such appraisals. Chaffe relied solely on SJB for information as to the
adequacy of their respective loan loss reserves and values of other real estate
owned. With respect to SJB's projected financial results, Chaffe has assumed
that they were reasonably prepared on bases reflecting the best currently
available estimates and judgments of the management of SJB of future financial
performance of SJB. This opinion was necessarily based upon market, economic and
other conditions as they existed on, and could be evaluated as of, the date
hereof. Chaffe expressed no opinion on the tax consequences of the proposed
transaction or the effect of any tax consequences on the value to be received by
the holders of SJB Common Stock.

Based upon and subject to the foregoing and based upon such other matters as we
considered relevant, it is our opinion on the date hereof that the Merger
Consideration is fair, from a financial point of view, to the holders of SJB
Common Stock.

Very truly yours,

CHAFFE & ASSOCIATES, INC.

B-2
<PAGE> 155

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 Registrant
to indemnify its officers and directors under certain circumstances. The
pertinent provisions of that statute read as follows:

"(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be
in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

"(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request

II-1
<PAGE> 156

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.

"(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.

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<PAGE> 157

"(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.

"(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 Registrant has purchased a directors' and officers' liability
insurance contract which provides, within stated limits, reimbursement either
to a

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<PAGE> 158

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 Merger, dated as of July 17, 1998, by and between St. James Bancorporation, Inc. and
Regions Financial Corporation -- included as Appendix A 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. 333-67153
4.2 -- By-laws of Regions Financial Corporation--incorporated by reference from S-4 Registration Statement
of Regions Financial Corporation, file no. 333-67153.
5. -- Opinion re: legality.
8. -- Opinion re: tax matters.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Deloitte & Touche LLP
23.3 -- Consent of Lange, Simpson, Robinson & Somerville LLP -- included in Exhibit 5.
23.4 -- Consent of Alston & Bird LLP -- included in Exhibit 8.
23.5 Consent of Chaffe & Associates
24. -- Power of Attorney -- the manually signed power of attorney is set forth in the signature page of the
registration statement.
99. -- Form of proxy.
</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
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

II-4
<PAGE> 159

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-5
<PAGE> 160

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 17th day of November, 1998.

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/ Carl E. Jones, Jr.
- -------------------------- President and Chief Executive November 17, 1998
Carl E. Jones, Jr. Officer and Director
(principal executive officer)

/s/ Richard D. Horsley
- -------------------------- Vice Chairman of the Board and November 17, 1998
Richard D. Horsley Executive Financial Officer
and Director
(principal financial officer)
/s/ Robert P. Houston
- -------------------------- Executive Vice President and November 17, 1998
Robert P. Houston Comptroller
(principal accounting officer)
</TABLE>

II-6
<PAGE> 161

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -------------------------- ----------------------------- -----------------

<S> <C> <C>
/s/ Sheila S. Blair
- -------------------------- Director November 17, 1998
Sheila S. Blair

/s/ James B. Boone, Jr.
- -------------------------- Director November 17, 1998
James B. Boone, Jr.

/s/ Albert P. Brewer
- -------------------------- Director November 17, 1998
Albert P. Brewer

/s/ James S.M. French
- -------------------------- Director November 17, 1998
James S.M. French

- -------------------------- Director
Barnett Grace

- -------------------------- Director
Frank D. Hickingbotham

/s/ Olin B. King
- -------------------------- Director November 17, 1998
Olin B. King

/s/ J. Stanley Mackin
- -------------------------- Chairman of the Board November 17, 1998
J. Stanley Mackin and Director

- -------------------------- Director
Michael W. Murphy

/s/ Henry E. Simpson
- -------------------------- Director November 17, 1998
Henry E. Simpson

/s/ Lee J. Styslinger, Jr.
- -------------------------- Director November 17, 1998
Lee J. Styslinger, Jr.

- -------------------------- Director
Robert J. Williams
</TABLE>

II-7
<PAGE> 162

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ------------------------------------------------------------------------------------------ ------------

<S> <C> <C> <C>
2.1 -- Agreement and Plan of Merger, dated as of July 17, 1998, by and between St. James
Bancorporation, Inc. and Regions Financial Corporation -- included as Appendix A
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. 333-67153.
4.2 -- By-laws of Regions Financial Corporation--incorporated by reference from S-4 Registration
Statement of Regions Financial Corporation, file no. 333-67153.
5. -- Opinion re: legality.
8. -- Opinion re: tax matters.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Deloitte & Touche LLP
23.3 -- Consent of Lange, Simpson, Robinson & Somerville LLP -- included in Exhibit 5.
23.4 -- Consent of Alston & Bird LLP -- included in Exhibit 8.
23.5 Consent of Chaffe & Associates
24. -- Power of Attorney -- the manually signed power of attorney is set forth in the signature page
of the registration statement.
99. -- Form of proxy.
</TABLE>

<PAGE> 1

EXHIBIT 5

[Letterhead of Lange, Simpson, Robinson & Somerville LLP]

November 17, 1998

Regions Financial Corporation
417 North 20th Street
Birmingham, Alabama 35203

Re: Regions Financial Corporation
S-4 Registration Statement
Combination with St. James Bancorporation, Inc.

Ladies and Gentlemen:

We have acted as counsel for Regions Financial Corporation, a Delaware
corporation ("Regions") in connection with the merger of St. James
Bancorporation, Inc. ("St. James") with and into 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 common
stock of Regions, par value $.625 per share, to the stockholders of St. James
upon consummation of the Merger. The maximum number of shares of Regions to be
issued in the Merger is estimated to be 1,433,180.

We have examined and are familiar with the registration statement on Form
S-4 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.

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 LLP under the caption "Opinions" in the proxy statement/prospectus
forming a part of the registration statement.

Very truly yours,

/s/ Lange, Simpson, Robinson & Somerville LLP

<PAGE> 1
EXHIBIT 8

[ALSTON&BIRD LLP LETTERHEAD]

Philip C. Cook Direct Dial: 404-881-7000

November 18, 1998

Regions Financial Corporation
417 North 20th Street
Birmingham, Alabama 35203

St. James Bancorporation, Inc.
1980 West Main Street
Lutcher, Louisiana 70071

Re: Merger Involving Regions Financial Corporation and St. James
Bancorporation, Inc.

Ladies and Gentlemen:

We have served as special counsel to Regions Financial Corporation, a
corporation organized under the laws of the State of Delaware ("Regions"), in
connection with the reorganization of Regions and St. James Bancorporation,
Inc., a corporation organized under the laws of the State of Louisiana ("St.
James"), pursuant to the Agreement and Plan of Merger dated as of July 16, 1998
(the "Agreement"), which sets forth the terms of the merger of St. James with
and into Regions (the "Merger"). In our capacity as special counsel to Regions,
our opinion has been requested with respect to certain of the federal income tax
consequences of the Merger.

Pursuant to the Merger, and as more fully described in the Agreement, at
the Effective Time, each share of St. James Common Stock issued and outstanding
at the Effective Time shall be converted into a certain number of shares of
Regions Common Stock as computed using the Exchange Ratio. As a result,
stockholders of St. James shall become stockholders of Regions, and each of the
subsidiaries of St. James shall continue to conduct its business and operations
as a subsidiary of Regions. All terms used herein without definition shall have
the respective meanings specified in the Agreement, and unless otherwise
specified, all section references herein are to the Internal Revenue Code of
1986, as amended (the "Code").

<PAGE> 2

Regions Financial Corporation
St. James Bancorporation
November 18, 1998
Page 2

In rendering the opinions expressed herein, we have examined such
documents as we deemed appropriate, including (i) the Agreement and (ii) the
Registration Statement on Form S-4 filed by Regions with the Securities and
Exchange Commission under the Securities Act of 1933, on November 18, 1998, as
amended, including the Proxy Statement/Prospectus constituting part thereof
(together the "Registration Statement"). In rendering the opinions expressed
herein, we have assumed with the consent of Regions and St. James, that the
Agreement and the Registration Statement accurately and completely describe the
Merger and that the Merger will be consummated in accordance with the Agreement
and as described in the Registration Statement.

In rendering the opinions expressed herein, we have relied with the
consent of Regions and St. James, upon the accuracy and completeness of the
factual statements and factual representations (which factual statements and
factual representations we have neither investigated nor verified) contained in
the certificates of Regions and St. James to us dated November 5, 1998 and
November 6, 1998, respectively (together, the "Certificates"), which we have
assumed are complete and accurate as of the date hereof and will be complete and
accurate as of the date on which the Merger is consummated.

Based on the foregoing, we are of the opinion that, under presently
applicable federal income tax law:

(1) The Merger will constitute a reorganization within the meaning of
Section 368(a) of the Code, and St. James and Regions will each be a party to
the reorganization within the meaning of Section 368(b) of the Code.

(2) No gain or loss will be recognized by holders of St. James Common
Stock upon the exchange in the Merger of all of their St. James Common Stock
solely for shares of Regions Common Stock (except with respect to any cash
received in lieu of a fractional share interest in Regions Common Stock).

(3) The aggregate tax basis of the Regions Common Stock received by
holders of St. James Common Stock who exchange all of their St. James Common
Stock solely for Regions Common Stock in the Merger will be the same as the tax
basis of the St. James Common Stock surrendered in exchange therefor, less the
basis of any fractional share of Regions Common Stock settled by cash payment.

(4) The holding period of the Regions Common Stock received by holders who
exchange all of their St. James Common Stock solely for Regions Common Stock in
the Merger will include the holding period of the St. James Common Stock
surrendered in

<PAGE> 3

Regions Financial Corporation
St. James Bancorporation
November 18, 1998
Page 3

exchange therefor, provided that such St. James Common Stock is held as a
capital asset at the Effective Time.

(5) The payment of cash to holders of St. James Common Stock in lieu of
fractional share interests of Regions Common Stock will be treated for federal
income tax purposes as if the fractional shares were distributed as part of the
exchange and then were redeemed by Regions. These cash payments will be treated
as having been received as distributions in full payment in exchange for the
Regions Common Stock redeemed, as provided in Section 302(a) of the Code.

(6) Where solely cash is received by a holder of St. James Common Stock in
exchange for St. James Common Stock pursuant to the exercise of dissenters'
rights, such cash will be treated as having been received in redemption of such
holder's St. James Common 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. The federal income tax consequences described herein may not
apply to certain shareholders of St. James with special situations, including,
without limitation, shareholders who hold their St. James Common Stock other
than as a capital asset, who received their St. James Common Stock upon the
exercise of employee stock options or otherwise as compensation, who hold their
St. James Common Stock as part of a "straddle" or "conversion transaction" for
federal income tax purposes, or are foreign persons, insurance companies, or
securities dealers.

In addition, our opinions are based solely on the documents that we have
examined, and the factual statements and factual representations set out in the
Certificates, which we have assumed were true on the date of the Certificates,
and are true on the date hereof. Our opinions cannot be relied upon if any of
the facts pertinent to the Federal income tax treatment of the Merger stated in
such documents or any of the factual statements or factual representations set
out in the Certificates is, or later becomes, inaccurate. 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
Merger, including for example any issues related to intercompany transactions,
accounting methods, or changes in accounting methods resulting from the Merger,
or the consequences of the Merger under state, local or foreign law. These
opinions are provided solely for the benefit and use of Regions and St. James.
No other party or person is entitled to rely on the opinions.

<PAGE> 4
Regions Financial Corporation
St. James Bancorporation
November 18, 1998
Page 4

We hereby consent to the use of this opinion and to the references made to
Alston & Bird LLP in the Registration Statement under the captions
"Summary--Federal Income Tax Consequences of the Merger" and "Description of
Transaction--Federal Income Tax Consequences of the Merger" and to the filing of
this opinion as an exhibit to the Registration Statement.

Very truly yours,

ALSTON & BIRD LLP

By: /s/ Philip C. Cook
-------------------------
Philip C. Cook, Partner

<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 1,433,180 shares of its common stock
and to the incorporation by reference therein of our report dated February 9,
1998 (except for Note Q as to which the date is February 13, 1998) with
respect to the consolidated financial statements of Regions Financial
Corporation incorporated by reference in its Annual Report (Form 10-K) for the
year ended December 31, 1997 and our report dated July 31, 1998 (except for
Note Q as to which the date is November 3, 1998) with respect to the
supplemental consolidated financial statements of Regions Financial Corporation
included in its Current Report on Form 8-K dated November 6, 1998, filed with
the Securities and Exchange Commission.

/s/ ERNST & YOUNG LLP

Birmingham, Alabama
November 12, 1998

<PAGE> 1
EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Regions Financial
Corporation on Form S-4 of our report dated January 16, 1998 of St. James
Bancorporation, Inc. and subsidiary for the years ended December 31, 1997 and
1996, and to the reference to us under the heading "Experts" in the Prospectus,
which is a part of this Registration Statement.

/s/ DELOITTE & TOUCHE LLP

New Orleans, Louisiana
November 18, 1998

<PAGE> 1
EXHIBIT 23.5

[Chaffe & Associates, Inc. Letterhead]

CONSENT OF CHAFFE & ASSOCIATES, INC.

We hereby consent to the inclusion as Appendix B to the Proxy
Statement/Prospectus constituting part of the Registration Statement on Form
S-4 of Regions Financial Corporation of our letter to the Board of Directors of
St. James Bancorporation and to the references made to such letter and to the
firm in such Proxy Statement/Prospectus. In giving such consent, we do not
thereby admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933 of the rules and
regulations of the Securities and Exchange Commission thereunder.

CHAFFE & ASSOCIATES, INC.

By: /s/ Sherwood G. Briggs
--------------------------
Sherwood G. Briggs
Managing Director

New Orleans, Louisiana
November 17, 1998

<PAGE> 1
EXHIBIT 99

ST. JAMES BANCORPORATION, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned stockholder hereby appoints ________ _______, ________
_______, and _______ _______, and each or any one of them, with full power of
substitution, as Proxies to represent and to vote as designated below, all the
shares of common stock of St. James Bancorporation, Inc. (the "Company") held
of record by the undersigned on _______, 1998, at the Special Meeting of
Stockholders (the "Special Meeting") to be held on _______, 1998, or any
adjournments thereof.

1. Proposal to approve the Agreement and Plan of Merger, dated as of
July 17, 1998 (the "Agreement"), by and between the Company and Regions
Financial Corporation ("Regions") pursuant to which the Company will merge with
and into Regions and each share of the Company's common stock (except for
certain shares held by the Company, Regions, or their respective subsidiaries)
will be converted into that portion of a share of Regions common stock
determined by dividing $175.00 by the average of the closing prices of Regions
common stock over a specified period, and under such other terms and conditions
as are set forth in the Agreement:

FOR AGAINST ABSTAIN
- ----- ----- -----

2. To transact such other business as may properly come before the
meeting or any adjournment thereof.

This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder, and in the discretion of the persons
named as Proxies on all other matters which may properly come before the
Special Meeting or any adjournment thereof. If no direction is made, this proxy
will be voted in favor of Proposal 1.

[Reverse]

This Proxy revokes all prior proxies with respect to the Special
Meeting and may be revoked prior to its exercise.

Please date and sign exactly as name appears on your stock certificate.
When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in full corporate name by president or
other authorized officer. If a partnership, please sign in partnership name by
authorized person.

Dated: , 1998.
-------------------------------------------

- -------------------------------------------------
(Print Name of Stockholder)

- -------------------------------------------------
(Signature of Stockholder)

- -------------------------------------------------
(Print Name of Stockholder)

- -------------------------------------------------
(Signature of Stockholder)

PLEASE MARK, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.

<PAGE> 2