<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 8, 1998
REGIONS FINANCIAL CORPORATION
-----------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-6159 63-0589368
- ---------------- ------------- ------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
417 North 20th Street, Birmingham, Alabama 35203
------------------------------------------------------------
(Address, including zip code, of principal executive office)
(205) 326-7100
----------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE> 2
ITEM 5. OTHER EVENTS.
On February 8, 1998, Regions Financial Corporation ("Regions") and First
Commercial Corporation ("FCC") entered into an Agreement and Plan of Merger (the
"Agreement"), pursuant to which FCC will be acquired by Regions. The Boards of
Directors of Regions and FCC approved the Agreement and the transactions
contemplated thereby at separate meetings held on February 8, 1998.
In accordance with the terms of the Agreement, Regions will acquire FCC
pursuant to the merger (the "Merger") of FCC with and into Regions, with Regions
as the surviving entity resulting from the Merger.
Upon consummation of the Merger, each share of the $3.00 par value common
stock of FCC ("FCC Common Stock")(including any associated preferred stock
purchase rights issued pursuant to FCC's Rights Agreement, but excluding shares
held by FCC, Regions, or any of their respective subsidiaries, in each case
other than in a fiduciary capacity or as a result of debts previously
contracted) issued and outstanding at the effective time of the Merger (as
defined in the Agreement, the "Effective Time") shall be converted into and
exchanged for 1.7 shares (subject to possible adjustment as described below, the
"Exchange Ratio") of the $.625 par value common stock of Regions ("Regions
Common Stock").
In addition, at the Effective Time, all rights with respect to FCC Common
Stock, pursuant to stock options, stock appreciation rights, or stock awards
granted by FCC under the existing stock plans of FCC, which are outstanding at
the Effective Time, whether or not exercisable, shall be converted into and
become rights with respect to Regions Common Stock on a basis that reflects the
Exchange Ratio.
The Merger is intended to constitute a tax-free transaction under the
Internal Revenue Code of 1986, as amended, and be accounted for as a pooling of
interests.
Consummation of the Merger is subject to various conditions, including: (i)
receipt of the approval by the stockholders of FCC of appropriate matters
relating to the Agreement and the Merger required to be approved under
applicable law; (ii) receipt of the approval by the stockholders of Regions of
appropriate matters relating to the Agreement and the Merger, including the
issuance of shares of Regions Common Stock pursuant to the Merger, as required
to be approved under applicable law; (iii) receipt of certain regulatory
approvals from the Board of Governors of the Federal Reserve System, certain
state regulatory authorities, and certain other regulatory authorities; (iv)
receipt of an opinion of counsel as to the tax-free nature of certain aspects of
the Merger; (v) receipt of a letter from Ernst & Young LLP to the effect that
the Merger will qualify for pooling-of-interests accounting treatment; and (vi)
satisfaction of certain other conditions.
Under the Agreement, FCC has the right to terminate the Agreement if the
Average Closing Price (as defined below) of Regions Common Stock (i) is less
than 0.80 times the Starting Price (as defined below) and (ii) reflects a
decline, on the Determination Date (as defined below) of more than 15% below a
weighted index of the stock prices of a group of 17 bank holding companies
designated in the Agreement. In the event that FCC gives notice of its intention
to terminate the Agreement based on such provision, Regions has the right,
within five (5) days of Regions' receipt of such notice, to elect to adjust the
Exchange Ratio in accordance with the terms of the Agreement, and, thereby
remove FCC's right to terminate.
For purposes of the Agreement, the Average Closing Price means the average
of the daily last sales prices of Regions Common Stock as reported on the
<PAGE> 3
Nasdaq NMS (as reported by The Wall Street Journal or, if not reported thereby,
another authoritative source as chosen by Regions) for the ten consecutive full
trading days in which such share are traded on the Nasdaq NMS ending at the
close of trading on the Determination Date. The Determination Date means the
later of (i) the date on which is received the consent of the Board of Governors
of the Federal Reserve System to the Merger and (ii) the date of approval by the
stockholders of FCC and Regions of the Merger and related matters as described
above.
For purposes of the Agreement, the Starting Price means the last sales
price of Regions Common Stock as reported on the Nasdaq NMS (as reported by The
Wall Street Journal or, if not reported thereby, another authoritative source as
chosen by Regions) on February 6, 1998, the last full trading day preceding the
announcement by press release of the Merger.
In connection with executing the Agreement, Regions and FCC entered into a
stock option agreement (the "Stock Option Agreement") pursuant to which FCC
granted to Regions an option to purchase up to 7,480,450 shares of FCC Common
Stock (representing 19.9% of the outstanding shares of FCC Common Stock without
giving effect to the exercise of the option), at a purchase price of $59.00 per
share, upon certain terms and in accordance with certain conditions. Under the
terms of the Stock Option Agreement, the Total Profit (as defined in the Stock
Option Agreement) and the Notional Total Profit (as defined in the Stock Option
Agreement) that a holder may realize, including Regions, as a result of
exercising the Stock Option Agreement may not exceed $130 million.
The Agreement and the Merger will be submitted for approval at separate
meetings of the stockholders of FCC and Regions. Prior to such stockholders
meetings, Regions will file a registration statement with the Securities and
Exchange Commission registering under the Securities Act of 1933, as amended,
the shares of Regions Common Stock to be issued in exchange for the outstanding
shares of FCC Common Stock. Such shares of stock of Regions will be offered to
the FCC stockholders pursuant to a prospectus that will also serve as a joint
proxy statement for the separate meetings of the stockholders of FCC and
Regions, respectively.
A copy of a joint news release (the "News Release") relating to the Merger
is being filed as Exhibit 99.1 to this report and is incorporated herein by
reference.
On February 9, 1998, Regions intends to hold a meeting (the "Meeting") with
analysts and others with respect to the Merger. At the meeting, certain
financial and other information relating to the Merger is to be presented (the
"Presentation Materials"). The News Release and certain of the Presentation
Materials contain, among other things, certain forward-looking statements
regarding each of Regions, FCC, and the combined company following the Merger,
including statements relating to cost savings, enhanced revenues, and accretion
to reported earnings that may be realized from the Merger, and certain
restructuring charges expected to be incurred in connection with the Merger.
Such forward-looking statements involve certain risks and uncertainties,
including a variety of factors that may cause Regions' actual results to differ
materially from the anticipated results or other expectations expressed in such
forward-looking statements. Factors that might cause such a difference include,
but are not limited to: (i) expected cost savings from the Merger and Regions'
other pending acquisitions may not be fully realized or realized within the
expected time frame; (ii) revenues following the Merger and the other pending
acquisitions may be lower than expected, or deposit attrition, operating costs
or customer loss and business disruption following the Merger and the other
pending acquisitions may be greater than expected; (iii) competitive pressures
among depository and other financial institutions may increase significantly;
(iv) costs or difficulties related to the integration of the business of
Regions, FCC, and the other pending acquisitions may be greater than expected;
(v) changes in the interest rate environment may reduce margins; (vi) general
economic or business conditions, either nationally or in the states or regions
in which Regions does business, may be less favorable than expected, resulting
in, among other things, a deterioration in credit
<PAGE> 4
quality or a reduced demand for credit; (vii) legislative or regulatory changes
may adversely affect the businesses in which Regions is engaged; and (viii)
changes may occur in the securities markets. Additional information with respect
to factors that may cause results to differ materially from those contemplated
by such forward-looking statements is included in Regions' current and
subsequent filings with the Securities and Exchange Commission.
A copy of the visual portion of the Presentation Materials is being filed
as Exhibit 99.2 to this report, substantially in the form intended to be
presented at the Meeting, and such materials are incorporated herein by
reference.
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
REGIONS FINANCIAL CORPORATION
(Registrant)
By: /s/ Robert P. Houston
---------------------------------------------
Robert P. Houston
Executive Vice President and Comptroller
Date: February 9, 1998
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequential
Exhibit Page No.
------- ----------
<S> <C> <C>
99.1 Text of News Release, dated February 9, 1998,
issued by Regions Financial Corporation and First
Commercial Corporation . . . . . . . . . . . . . . .
99.2 The Presentation Materials. . . . . . . . . . . . . .
</TABLE>
<PAGE> 1
EXHIBIT 99.1
February 9, 1998
NEWS RELEASE
REGIONS FINANCIAL AND FIRST COMMERCIAL CORP. TO MERGE
Regions Financial Corporation and First Commercial Corporation announced
jointly today that they have signed a definitive agreement that provides for the
merger of First Commercial into Regions.
The merger of First Commercial, Arkansas' largest bank holding company,
with Regions, headquartered in Birmingham, Alabama, will create the nation's
26th largest banking company with assets of $32.8 billion and 667 banking
locations in nine southern states. The addition of First Commercial, with $6.9
billion in assets, gives Regions the number one market share in Arkansas and new
banking locations in Texas, Louisiana and Tennessee.
Under the terms of the agreement, Regions will exchange 1.7 shares of its
common stock for each share of First Commercial common stock. Based on Regions'
closing stock price of $40.50 on February 6, 1998, the transaction would be
valued at approximately $2.7 billion and represent an exchange value of $68.85
for each share of First Commercial common stock. The merger, which is expected
to be a tax-free reorganization for federal income tax purposes and accounted
for as a pooling of interests, is expected to be consummated during the third
quarter of 1998, pending Regions and First Commercial shareholder approval,
regulatory approval and other customary conditions of closing. Approximately
65.9 million shares of Regions common stock are expected to be issued in the
transaction.
- -more-
<PAGE> 2
Regions Financial Corp.
February 9, 1998
Page 2
According to Carl E. Jones, Jr., president and chief executive officer of
Regions, "Affiliation with a high-performance bank like First Commercial fits
well with Regions' vision of becoming America's best-performing bank. I am
confident that First Commercial bankers will feel at home with Regions because
our styles are so similar. Customers will be pleased with the range of products
and services available from Regions and with the convenience of finding offices
of their bank wherever they go throughout the South. The strong asset base and
considerable earnings power of the combined franchises should result in
continued high returns to our shareholders."
Barnett Grace, chairman, president and CEO of First Commercial
Corporation, stated, "First Commercial has chosen a merger partner that will
generate superior long-term value for our stockholders. This merger between
First Commercial and Regions -- two highly respected and high-performing
institutions with remarkably similar cultures -- will be an excellent
combination and mean good things for our customers, bankers and stockholders.
Working together, we can bring our customers enhanced banking services through a
greatly expanded regional network of banks and a common commitment to quality
customer service and to the communities we serve."
To demonstrate Regions' ongoing commitment to the communities that First
Commercial serves, Regions is establishing a Small Business Investment
Corporation initially funded with $5 million. This will provide funds for the
development of new businesses in the communities that First Commercial
Corporation serves. Regions is also establishing a charitable foundation with a
commitment of $7.5 million.
The transaction is expected to be slightly dilutive to Regions' 1998
earnings per share and accretive thereafter. In connection with this
transaction, Regions anticipates incurring a pre-tax merger charge of
approximately $85 million.
In connection with the execution of the merger agreement, First Commercial
granted Regions an option to purchase, under certain circumstances, up to 19.9%
of First Commercial's outstanding shares of common stock. First Commercial has
38,790,428 shares of common stock outstanding, which includes 1.2 million shares
to be issued in connection with First Commercial's pending acquisition of
Federal Savings Bank of Rogers, Arkansas (total assets of $480 million), that is
expected to be consummated in March, 1998.
- -more-
<PAGE> 3
Regions Financial Corp.
February 9, 1998
Page 3
First Commercial Corporation, headquartered in Little Rock, is a $6.9
billion multi-bank holding company with 26 affiliate banks in Arkansas,
Tennessee, Texas and Louisiana and a 50% interest in two banks in Oklahoma.
First Commercial has the highest market share among banks in Arkansas, where it
operates 64 banking offices. First Commercial also operates banking-related
affiliates in the areas of mortgage banking, trust services, securities
brokerage, asset management and accounts receivable factoring. First
Commercial's common stock is traded in the Nasdaq national market under the
symbol FCLR.
Regions Financial Corporation is a $23 billion regional multi-bank holding
company providing banking services from 435 full-service offices in Alabama,
Florida, Georgia, Louisiana and Tennessee. Regions also provides bank-related
services in the fields of mortgage banking, trust, insurance, securities
brokerage and mutual funds. In addition to the First Commercial transaction,
Regions currently has seven other pending acquisitions, three in South Carolina,
two in Georgia, one in Florida and one in Louisiana. After all pending
acquisitions (including First Commercial) are completed, Regions will have
assets of approximately $32.8 billion, loans of $22.5 billion, deposits of $26.0
billion and stockholders' equity of $2.8 billion. Regions' common stock is
traded in the Nasdaq National Market System under the symbol RGBK.
- -30-
For additional information contact:
At First Commercial:
Lynn Wright, Chief Financial Officer 501/371-7142
Kevin Sabin, Director of Marketing 501/371-6767
At Regions:
Robert P. Houston, Executive Vice President and Comptroller 334/832-8494
Ronald C. Jackson, Senior Vice President and Director of Investor Relations
205/326-7374
<PAGE> 1
EXHIBIT 99.2
February 9, 1998
[Regions Financial [First Commercial
Corporation Logo] Corporation Logo]
TWO OF A KIND
<PAGE> 2
FORWARD LOOKING INFORMATION
This presentation contains forward looking statements with respect to the
financial condition, results of operations and business of Regions and, assuming
the consummation of the merger, a combined Regions/First Commercial, including
statements relating to: (i) the cost savings and accretion to reported earnings
that will be realized from the merger and (ii) the restructuring charges
expected to be incurred in connection with the merger. These forward looking
statements involve certain risks and uncertainties. Factors that may cause
actual results to differ materially from those contemplated by such forward
looking statements include, among other things, the following possibilities: (1)
expected cost savings from the merger cannot be fully realized or realized
within the expected time frame; (2) revenues following the merger are lower than
expected; (3) competitive pressure among depository institutions increases
significantly; (4) costs of the difficulties related to the integration of the
business of Regions and First Commercial are greater than expected; (5) changes
in the interest rate environment reduces interest margins; (6) general economic
conditions, either nationally or in the states in which the combined company
will be doing business, are less favorable than expected; (7) legislation or
regulatory requirements or changes adversely affect the business in which the
combined company would be engaged; or (8) changes may occur in the securities
markets.
[Regions Financial [First Commercial
Corporation Logo] Corporation Logo]
<PAGE> 3
Transaction Rationale
[bullet] Continuing to build a premier Southern franchise
-- Adding the #1 Arkansas franchise
-- Attractive, familiar market demographics
-- Logical extension to Regions' existing franchise
[bullet] Low risk affiliation
-- Similarities are numerous
[bullet] Franchise growth
[bullet] Performance
[bullet] Organization
[bullet] Culture
[bullet] Financially attractive
-- Accretive to 1999 EPS
-- Clear cost saving opportunities
-- Outstanding operating profile/statistics
Adds up to a value enhancing, low risk combination
[Regions Financial [First Commercial
Corporation Logo] Corporation Logo]
<PAGE> 4
Transaction terms
Fixed exchange ratio: [bullet] 1.70 shares of Regions stock for
each share of First Commercial
[bullet] Tax free exchange
Purchase price per share: [bullet] $68.85 (based on RGBK 2/6/98)
Other terms: [bullet] 19.9% stock option from FCLR to
RGBK
Transaction value: [bullet] $2.7 billion
Accounting: [bullet] Pooling of interests
Expected closing: [bullet] 3rd quarter of 1998
[Regions Financial [First Commercial
Corporation Logo] Corporation Logo]
<PAGE> 5
Transaction economics
[bullet] 2.5% accretive to EPS in 1999
[bullet] Significant synergy opportunities
-- Cost savings equal to 25% of FCLR's operating expenses
-- Balance sheet restructuring
-- Revenue enhancements opportunities
-- Ability to reinvest substantial excess capital
[bullet] Non-recurring charges--$85 million pre-tax taken at closing
[Regions Financial [First Commercial
Corporation Logo] Corporation Logo]
<PAGE> 6
Transaction rationale
[bullet] Continuing to build a premier Southern franchise
-- Adding the #1 Arkansas franchise
-- Attractive, familiar market demographics
-- Logical extension to Regions' existing franchise
[bullet] Low risk affiliation
-- Similarities are numerous
[bullet] Franchise growth
[bullet] Performance
[bullet] Organization
[bullet] Culture
[bullet] Financially attractive
-- Accretive to 1999 EPS
-- Clear cost saving opportunities
-- Outstanding operating profile/statistics
Adds up to a value enhancing, low risk combination
[Regions Financial [First Commercial
Corporation Logo] Corporation Logo]
<PAGE> 7
First Commercial Overview
[bullet] $7 billion bank holding company
[bullet] Headquartered in Little Rock, Arkansas
[bullet] #1 market share in Arkansas and Little Rock
[bullet] Over $1 billion deposits in east Texas and presence in Memphis
[bullet] Operates 155 banking offices serving more than 300 thousand
households
[bullet] Ten year compounded EPS growth of 14.3%
[bullet] Consensus estimated long term growth rate of 12%
[bullet] Excess capital with 8.9% tangible equity ratio
[Regions Financial [First Commercial
Corporation Logo] Corporation Logo]
<PAGE> 8
First Commercial's Geographic Presence
Arkansas
<TABLE>
<CAPTION>
Deposits Market
($BN) share(%)
<S> <C> <C>
Rank
1 First Commercial 4.4 15.9
2 NationsBank 3.0 10.9
3 Mercantile 1.6 5.8
</TABLE>
[MAP OF FCC's
SOUTHEASTERN MARKET
PRESENCE]
Little Rock
<TABLE>
<CAPTION>
Deposits Market
($BN) share(%)
<S> <C> <C>
Rank
1 First Commercial 1.8 31.4
2 NationsBank 1.4 24.1
3 Mercantile 0.9 15.2
</TABLE>
[Regions Financial [First Commercial
Corporation Logo] Corporation Logo]
<PAGE> 9
Attractive Demographics
<TABLE>
<CAPTION>
Income growth 1997-2002
-------------------------
Population (MM) Per capita Household
-------------- ---------- ---------
<S> <C> <C> <C>
Arkansas 2.5 28.9% 28.3%
Texas 19.4 23.6% 22.7%
Tennessee 5.4 27.7% 26.8%
Louisiana 4.4 28.8% 26.7%
U.S. 267.2 21.7% 20.7%
</TABLE>
Source: SNL Securities
[Regions Financial [First Commercial
Corporation Logo] Corporation Logo]
<PAGE> 10
A premier Southern banking franchise
[map of Southeastern United States showing Regions and FCC locations]
[Regions Financial [First Commercial
Corporation logo] Corporation logo]
<PAGE> 11
A diversified geographic profile
- --------------------------------
Pro forma assets by state
[pie chart graphic:
Alabama 36%
Georgia 20%
Arkansas 16%
Louisiana 10%
Florida 7%
Texas 4%
Tennessee 3%
South Carolina 3%
Oklahoma 1% ]
[Regions Financial [First Commercial
Corporation logo] Corporation logo]
<PAGE> 12
Transaction rationale
- --------------------------------------
[bullet] Continuing to build a premier Southern franchise
-- Adding the #1 Arkansas franchise
-- Attractive, familiar market demographics
-- Logical extension to Regions' existing franchise
[bullet] Low risk affiliation
-- Similarities are numerous.
[bullet] Franchise growth
[bullet] Performance
[bullet] Organization
[bullet] Culture
[bullet] Financially attractive
-- Accretive to 1999 EPS
-- Clear cost saving opportunities
-- Outstanding operating profile/statistics
Adds up to a value enhancing, low risk combination
[Regions Financial [First Commercial
Corporation logo] Corporation logo]
<PAGE> 13
Similar history of growth
- ------------------------------------
[bar chart graphic:
<TABLE>
FCLR
Total Assets(1)
($ billions)
<S> <C>
1992 2.6
1993 3.4
1994 4.4
1995 5.4
1996 5.5
1997 7.4
CAGR 23.3%
</TABLE>
(1) as originally reported, 1997 includes pending deals]
[bar chart graphic:
<TABLE>
RGBK
Total Assets(1)
($ billions)
<S> <C>
1992 7.9
1993 10.5
1994 12.8
1995 13.7
1996 18.9
1997 25.4
CAGR 26.3%
</TABLE>
(1) as originally reported, 1997 includes pending deals]
[Regions Financial [First Commercial
Corporation logo] Corporation logo]
<PAGE> 14
Similar performance and credit history
- -----------------------------------------
[Bar chart graphic:
<TABLE>
Average ROA
1991-1997
<S> <C>
RGBK 1.30%
FCLR 1.21%
Peers(1) 1.19%
Average ROE
1991-1997
RGBK 15.2%
FCLR 14.5%
Peers(1) 15.1%
Average NCOs/avg. loans
1991-1997
RGBK 0.24%
FCLR 0.25%
Peers(1) 0.44%
</TABLE>
(1) U.S. banks with assets as of 12/97 between $10 and $25 billion.]
[Regions Financial [First Commercial
Corporation logo] Corporation logo]
<PAGE> 15
<TABLE>
<CAPTION>
Similar operating strategy
- -------------------------------------
<S> <C> <C>
Regions First Commercial
[bullet] Super community banking [bullet] Super community banking
structure structure
[bullet] Local autonomy and decision [bullet] Local autonomy and decision
making making
[bullet] Centralized back office [bullet] Centralized back office
[bullet] Meaningful mortgage banking [bullet] Meaningful mortgage banking
and trust operations and trust operations
[bullet] Operating banks rolled into [bullet] Operating banks in 28
single charter and regulatory separate charters and
institution regulatory institutions
[Regions Financial [First Commercial
Corporation logo] Corporation logo]
</TABLE>
<PAGE> 16
<TABLE>
<CAPTION>
Similar operating culture
- -------------------------------------------------------------------
<S> <C> <C>
Regions First Commercial
[bullet] Largely built by "affiliating" [bullet] Largely built by "affiliating"
with community banks with community banks
[bullet] Emphasis on maintaining [bullet] Emphasis on maintaining
community focus community focus
[bullet] Strong sales culture [bullet] Strong sales culture
[bullet] Strong credit culture [bullet] Strong credit culture
[bullet] Emphasis on quality [bullet] Emphasis on quality
customer service customer service
[Regions Financial [First Commercial
Corporation logo] Corporation logo]
</TABLE>
<PAGE> 17
Transaction rationale
- --------------------------------------
[bullet] Continuing to build a premier Southern franchise
-- Adding the #1 Arkansas franchise
-- Attractive, familiar market demographics
-- Logical extension to Regions' existing franchise
[bullet] Low risk affiliation
-- Similarities are numerous.
[bullet] Franchise growth
[bullet] Performance
[bullet] Organization
[bullet] Culture
[bullet] Financially attractive
-- Accretive to 1999 EPS
-- Clear cost saving opportunities
-- Outstanding operating profile/statistics
Adds up to a value enhancing, low risk combination
[Regions Financial [First Commercial
Corporation logo] Corporation logo]
<PAGE> 18
Accretive to earnings
- -----------------------------------------------------
<TABLE>
<CAPTION>
1998 1999
------------------------- -------------------------
$MM EPS $MM EPS
------- ------- ------ -------
<S> <C> <C> <C> <C>
Regions Financial(1) $364.2 $2.35 $400.7 $2.59
First Commercial(2) 117.7 2.99 131.8 3.35
Estimated after tax adjustments:
Expense efficiencies $ 9.9 $ 37.2
Revenue enhancements 1.9 4.1
Balance sheet restructuring 9.9 3.7
Earnings on excess capital(3) 4.6 10.4
GAAP earnings on a combined basis $508.3 $2.29 $587.9 $2.65
Percent accretion (dilution):
EPS (2.5%) 2.5%
</TABLE>
(1) Based on First Call consensus EPS estimates assuming 154.996 million shares
outstanding
(2) Based on First Call consensus EPS estimates assuming 39.358
million shares outstanding
(3) Assumes a 6.00% reinvestment rate on Tier 1
capital in excess of 7.00%
Note: 1998 estimates exclude restructuring charge
[Regions Financial [First Commercial
Corporation logo] Corporation logo]
<PAGE> 19
Synergy opportunities
- ----------------------------------------------------
[bullet] Expected cost savings of $60 MM pre-tax
-- 25% of First Commercial's expense base
-- Synergies fully phased in by 1999
[bullet] Expected benefits of balance sheet restructuring $16 MM pre-tax
-- $16MM pre-tax in 1998
-- $6MM pre-tax in 1999
[bullet] Expected revenue enhancements of $6.6 MM pre-tax
-- Equivalent to 5% of First Commercial's non interest income
-- Benefits begin immediately
[Regions Financial [First Commercial
Corporation logo] Corporation logo]
<PAGE> 20
Transaction pricing comparison
---------------------------------------------------------------
<TABLE>
<CAPTION>
Acquiree Acquiree Transaction
EPS median 1993-1997 forward year
Acquiror / Acquiree LTG rate(1) EPS CAGR P/E multiple
- -------------------------------- ---------- ---------- ----------
<S> <C> <C> <C>
First American/Deposit Guaranty 8.0% 4.2% 25.3x
National City/First of America 9.5 6.3 22.4
First Union/Core States 10.0 12.6 20.3
Banc One/First Commerce 10.0 (6.3) 20.5
NationsBank/Barnett 11.0 12.8 21.6
First Union/Signet 13.0 (1.3) 21.3
Regions/First Commercial 12.0% 13.7% 22.4x
(1) I/B/E/S consensus
</TABLE>
[Regions Financial [First Commercial
Corporation logo] Corporation logo]
<PAGE> 21
Clear cost savings
$ millions
<TABLE>
<CAPTION>
Projected cost savings
----------------------
FCLR 1998E
expenses ($) (%)
---------- ----- -----
<S> <C> <C> <C>
Information technology 11.3 5.7 50%
G&A 8.8 6.0 68%
Operations 12.8 5.8 45%
Mortgage 29.2 11.0 38%
Trust 8.7 1.3 15%
Broker dealer 3.7 0.6 16%
Community banks 158.9 25.4 16%
Other 4.2 4.2 100%
----- ---- ----
Total 237.6 60.0 25%
</TABLE>
[Regions Financial [First Commercial
Corporation Logo] Corporation Logo]
<PAGE> 22
Systems integration will be straightforward
[bullet] FCLR maintains common systems which will ease conversion
[bullet] FCLR back office operated as Regions did under old separate
charter format
[bullet] Similar to recent consolidation by Regions of Georgia
acquisition in 1996
-- $3.2 billion assets and 20 separate bank charters
[Regions Financial [First Commercial
Corporation Logo] Corporation Logo]
<PAGE> 23
Regions' capabilities will enhance FCLR's operations
[bullet] "Sellstation" platform will enhance sales capabilities of
FCLR's line bankers
[bullet] Call center capabilities
[bullet] Imaging capabilities
[bullet] Home PC banking product
[bullet] Commercial PC banking/cash management product
[Regions Financial [First Commercial
Corporation Logo] Corporation Logo]
<PAGE> 24
Restructuring and merger-related costs
$ millions
<TABLE>
<S> <C>
Employee-related $24.0
Occupancy and equipment 10.0
Conversion 15.0
Other 28.5
----
Subtotal 77.5
Charitable foundation 7.5
----
Gross charge 85.0
Taxes 22.0
----
After-tax charge 63.0
</TABLE>
[Regions Financial [First Commercial
Corporation Logo] Corporation Logo]
<PAGE> 25
Pro forma combination results
<TABLE>
<CAPTION>
RGBK FCLR
Measure 1997(1) 1997(1) Pro forma(2)
- ------- ------- ------- ------------
<S> <C> <C> <C>
ROAE 16.3% 16.2% 18.1%
ROAA 1.41 1.48 1.58
NIM 4.27 4.69 4.37
Efficiency 53.9 57.4 50.4
Tangible equity/assets 7.4% 8.5% 7.7%
</TABLE>
(1) Core results
(2) Performance ratios reflect fully phased in synergies
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Conclusion: strategically enhancing and financially compelling with low risk
Strategic --Logical extension of existing franchise
geography
--Provides #1 market share in state and
dominant MSA
Financial --Accretive to EPS
--Clear, readily achievable synergies
--Similarly strong, consistent financial
profile
--Additive to pro forma financial profile
Fit --Same operating strategy
--Same operating culture
--Same strategic history
--Same values
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Supplemental data
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Regions Financial: an experienced and disciplined acquirer
[bullet] Completed 35 acquisitions over last five years
[bullet] Experienced in merging separate legal banks
[bullet] Experienced in managing customer relationships during
acquisition and conversion process
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Balance sheet--12/31/97
$ millions
<TABLE>
<CAPTION>
RGBK FCLR Pro forma
<S> <C> <C> <C>
Loans 17,778 4,680 22,458
Other assets 7,596 2,725 10,321
------ ----- ------
Total assets 25,374 7,405 32,779
Total deposits 19,751 6,295 26,046
Other liabilities 3,521 404 3,924
Stockholders' equity 2,102 706 2,809
----- ----- ------
Total liabilities and equity 25,374 7,405 32,779
Note: Includes pending transactions
</TABLE>
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Loan portfolio
$ millions
<TABLE>
<CAPTION>
RGBK FCLR Pro forma
<S> <C> <C> <C>
Commercial 14.9% 22.2% 16.4%
Commercial real estate 15.5 18.2 16.1
---- ---- ----
Total commercial 30.5 40.5 32.4
Residential mortgage 39.8 28.1 37.5
Consumer 19.3 25.6 20.5
---- ---- ----
Total retail 59.1 53.7 58.0
Construction 7.0 5.4 6.6
Other 3.5 0.4 2.9
Total loans(1) 100.0% 100.0% 100.0%
Loans/deposits(2) 90.0 74.3 86.2
</TABLE>
(1) Loan portfolio as of September 30, 1997
(2) Loans/deposits are pro forma for pending acquisitions as of December 31,
1997
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Asset quality--12/31/97
<TABLE>
<CAPTION>
RGBK FCLR Pro forma
<S> <C> <C> <C>
NPAs/loans 0.71% 0.90% 0.75%
Reserve/loans 1.19 1.85 1.32
Reserve/NPLs 187 240 200
Net charge-off ratio 0.25 0.33 0.28
</TABLE>
Note: Not updated for pending acquisitions
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