Some branches will close with Regions, AmSouth merger

BIRMINGHAM - AmSouth's top officer says some branches will be closed or sold with the merger of AmSouth and Regions Bank, which has offices in Gainesville.

At a news conference, Dow Ritter did not say which ones, only that the new company would have to divest itself of some of its holdings, and downplayed that aspect of the merger, saying those employees will be retained by the new owners, reducing the net job loss resulting from the deal. Ritter cited a ten percent "headcount reduction" in discussing possible cutbacks.

"And, the employees that work there will come off of our payroll and count in that number when I say we may have ten percent headcount reduction."

The merger will create one of the top 10 bank holding companies in the country.

The new company will have almost $140 billion in assets, hold nearly $100 billion in deposits and operate 2,000 branches in 16 states across the South, Midwest and Texas. Combined, the two companies employ 37,000 people. The Regions name will be retained.

Regions entered the Gainesville/northeast Georgia market in 1996 when it merged with Gainesville-based First National Bancorp.

Jackson W. Moore, 57, chairman, president and chief executive officer of Regions, will be chairman of the combined company. C. Dowd Ritter, 58, chairman, president and chief executive officer of AmSouth, will be the president and chief executive officer of Regions.

"AmSouth shares Regions' passion for delivering superior customer service, and the combined company will be in an excellent position to raise service standards," said Moore. "Our companies have similar goals, shared values and solid experience in putting organizations together. We will take a deliberate, methodical approach to integrating our companies, making certain that customers continue to receive high quality service.

"I am confident the new Regions will emerge as the leading regional financial services provider, delivering superior shareholder returns on a consistent basis."

"Combining AmSouth and Regions creates a company with market-leading positions in some of the best markets in the country," said Ritter.

"These companies complement each other in many ways, and together, led by one of the strongest management teams in the business, we will have an even greater ability to deliver superior service to our customers. All of that translates to a greater opportunity for increased shareholder value. The appeal of this combination by every measure - strategically, financially or operationally - is extraordinary."

The agreement provides for a stock-for-stock merger in which 0.7974 shares of Regions will be exchanged, on a tax-free basis, for each share of AmSouth common stock. Based upon closing stock prices of both companies on May 24, 2006, the proforma combined market capitalization of the new institution would be approximately $26 billion.

As part of the transaction, it currently is expected that the new company will initially pay a dividend of 35 cents per share per quarter, which is the current Regions quarterly dividend rate and represents an increase of approximately 7 percent for AmSouth shareholders. All dividends are subject to applicable law and the discretion of the applicable company's board of directors.

BOARDS OF DIRECTORS

The boards of directors of Regions and AmSouth will be combined to form a consolidated board of directors. Regions and AmSouth also have designated other key members of the new company's senior management team. Reporting to Moore will be R. Alan Deer, general counsel and corporate secretary and Allen B. Morgan Jr., chairman of Morgan Keegan and head of financial services, which includes Regions Insurance Group. Reporting to Ritter will be O.B. Grayson Hall Jr., head of business lines; Richard D. Horsley, head of transaction and integration; D. Bryan Jordan, chief financial officer; Samuel E. Upchurch Jr., head of the general bank; and William C. Wells II, chief risk officer.

Reporting to Horsley will be David B. Edmonds, head of human resources and David C. Gordon, head of operations and technology. Reporting to Morgan will be G. Douglas Edwards, president and CEO of Morgan Keegan & Company Inc.

EXPECTED SAVINGS

The combined company expects to realize cost savings of $400 million pre-tax. Approximately $150 million of this benefit is expected to be realized in 2007, and the full run rate of cost savings is expected to be achieved by spring 2008. The expected annual cost savings represent approximately 10 percent of the combined operating expense base. The combined company expects to incur restructuring costs of approximately $700 million pre-tax.

In connection with the merger agreement, the companies entered into customary reciprocal 19.9 percent stock option agreements.

ABOUT REGIONS FINANCIAL CORPORATION

Regions Financial Corporation (NYSE: RF), headquartered in Birmingham, Ala., is a full-service provider of retail and commercial banking, trust, securities brokerage, mortgage and insurance products and services. Regions had $84.6 billion in assets as of March 31, 2006, making it one of the nation's top 15 banks. Regions' banking subsidiary, Regions Bank, operates some 1,300 offices and a 1,600-ATM network across a 16-state geographic footprint in the South, Midwest and Texas. Its investment and securities brokerage, trust and asset management division, Morgan Keegan & Company Inc., provides services from over 300 offices. Additional information about Regions, which is a member of both the Forbes and Fortune 500, can be found at www.regions.com.

ABOUT REGIONS FINANCIAL CORPORATION

AmSouth is a regional bank holding company with $53 billion in assets, more than 680 branch banking offices and 1,200 ATMs. AmSouth operates in Florida, Tennessee, Alabama, Mississippi, Louisiana and Georgia. AmSouth is a leader among regional banks in the Southeast in several key business segments, including consumer and commercial banking, small business banking, mortgage lending, equipment leasing, and trust and investment management services. AmSouth also offers a complete line of banking products and services at its web site, www.amsouth.com.