-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TUpMpdTMW725CLf8D/rvBLj//zXB2TLD1Vf/rDa3+Q5Cf49RSGXuikIsw6zGNUkD 3VEd2UjA5yatzovY7f4VTg== /in/edgar/work/0000950144-00-012362/0000950144-00-012362.txt : 20001020 0000950144-00-012362.hdr.sgml : 20001020 ACCESSION NUMBER: 0000950144-00-012362 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001018 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20001019 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REGIONS FINANCIAL CORP CENTRAL INDEX KEY: 0000036032 STANDARD INDUSTRIAL CLASSIFICATION: [6021 ] IRS NUMBER: 630589368 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-06159 FILM NUMBER: 742311 BUSINESS ADDRESS: STREET 1: PO BOX 10247 CITY: BIRMINGHAM STATE: AL ZIP: 35202 BUSINESS PHONE: 2059441300 MAIL ADDRESS: STREET 1: PO BOX 10247 CITY: BIRMINGHAM STATE: AL ZIP: 35202 FORMER COMPANY: FORMER CONFORMED NAME: FIRST ALABAMA BANCSHARES INC DATE OF NAME CHANGE: 19920703 8-K 1 g64724e8-k.txt REGIONS FINANCIAL CORPORATION 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): October 18, 2000 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 of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (205) 944-1300 2 Item 5. Other Events On October 18, 2000, the registrant Regions Financial Corporation issued a Press Release and Financial Supplement reporting on its results of operations for the quarter and for the nine-month period ended September 30, 2000. The Press Release and Financial Supplement are included in this report as exhibit 99.1. Item 7. Financial Statements and Exhibits. (c) Exhibits. The exhibits listed in the exhibit index are filed as a part of or incorporated by reference in this current report on Form 8-K. 3 SIGNATURES 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/ D. Bryan Jordan Executive Vice President and Comptroller Date: October 18, 2000 4 EXHIBIT INDEX
Sequential Exhibit Page No. 99.1 Press Release and Financial Supplement dated October 18, 2000.
EX-99.1 2 g64724ex99-1.txt PRESS RELEASE AND FINANCIAL SUPPLEMENT 1 EXHIBIT 99.1 October 18, 2000 REGIONS ANNOUNCES THIRD QUARTER EARNINGS OF $127.9 MILLION OR $.58 PER SHARE Regions Financial Corporation today announced earnings for the quarter and nine months ended September 30, 2000. Third quarter 2000 net income totaled $127,859,000 or $.58 per diluted share, compared to third quarter 1999 net income of $130,958,000 or $.59 per diluted share. Year-to-date 2000 net income was $399,157,000 or $1.80 per diluted share, compared to net income through the first nine months of last year of $396,327,000 or $1.76 per diluted share. Operating income for the first nine months of 2000, which excludes a net after-tax gain of $17.8 million resulting from the sale of Regions' credit card portfolio and sales of securities during the first quarter of 2000, totaled $381,355,000 or $1.72 per diluted share. Regions continues to experience loan and deposit growth. In the third quarter of 2000, internal loan growth was 13% annualized, using linked-quarter average balances, excluding the effect of acquisitions. Real estate construction and mortgage loans, along with commercial loans, were the strongest categories of growth. For the nine months ended September 30, 2000, core deposits increased $1.7 billion or 9% annualized. This is the third consecutive quarter of steady growth in average core deposits. The third quarter of 2000 was also a strong period for growth in several categories of fee income. Trust fees, service charges on deposit accounts and other customer fees, including retail investment service fees, insurance commissions and international banking service fees, registered annualized double-digit increases compared to the prior quarter. Regions' good results in overhead management continue to reflect ongoing initiatives to enhance efficiency and productivity. In the third quarter of 2000, non-interest expenses increased less than 1% annualized over second quarter 2000 levels, including three acquisitions in the third quarter. "Regions continues to show solid profitability and growth, even with intense margin pressure from higher interest rates," Regions president and chief executive officer, Carl E. Jones, Jr., stated. "Our ongoing sales initiatives continue to produce excellent loan growth and double-digit increases in fee income. We continue to steadily increase core deposits, at a time when core deposit growth is especially challenging for our industry. I am also very pleased with our favorable results in managing overhead." "We are especially proud of our asset quality," Mr. Jones added. "Net loan losses through the first nine months of 2000 decreased $6.1 million compared to the same period last year. Regions' modest level of losses combined with limited exposure to syndicated credits and declining non-performing assets, including 90+ day past due loans, is a tribute to our credit culture and sound underwriting standards." In addition to the strong internal growth in the third quarter, Regions recently strengthened its franchise through the completion of three acquisitions. During the third quarter of 2000, Regions added banks in the Austin, Texas market area, the Alexandria, Louisiana market area and the Ormond Beach/Daytona, Florida market area. Combined, these banks added over $500 million in assets and 16 offices to Regions' eight-state franchise. Regions Financial Corporation is a $43.6 billion bank holding company providing banking services from more than 750 offices in Alabama, Arkansas, Florida, Georgia, Louisiana, South Carolina, Tennessee and Texas. Regions also provides banking-related services in the fields of mortgage banking, insurance, securities brokerage and mutual funds. Regions' common stock is traded in the Nasdaq National Market System under the symbol RGBK. Continued Next Page 2 October 18, 2000 Page Two FINANCIAL HIGHLIGHTS (UNAUDITED) (In thousands, except per share amounts)
Three Months Ended Nine Months Ended September 30 September 30 ----------------------- ------------------------ Earnings 2000 1999 Change 2000 1999 Change - -------- ---- ---- ------ ---- ---- ------ Operating income* $127,859 $130,958 -2% $381,355 $396,327 -4% Net income $127,859 $130,958 -2% $399,157 $396,327 1% Net income--cash basis(1) $134,510 $136,334 -1% $418,267 $410,141 2% Per share: Operating income* $0.58 $0.59 -2% $1.73 $1.78 -3% Operating income--diluted* $0.58 $0.59 -2% $1.72 $1.76 -2% Net income $0.58 $0.59 -2% $1.81 $1.78 2% Net income--diluted $0.58 $0.59 -2% $1.80 $1.76 2% Net income--cash basis(1) $0.61 $0.61 0% $1.90 $1.84 3% Net income--diluted cash basis(1) $0.61 $0.61 0% $1.89 $1.82 4% Cash dividends declared $0.27 $0.25 8% $0.81 $0.75 8%
September 30 ----------------------------------- Financial Condition 2000 1999 Change - ------------------- ---- ---- ------ Total assets $43,627,096 $41,229,164 6% Loans, net of unearned income $31,204,063 $27,511,472 13% Securities $ 9,153,323 $ 9,499,770 -4% Total earning assets $40,878,771 $38,397,136 6% Total deposits $31,985,650 $29,804,048 7% Stockholders' equity $ 3,359,908 $ 3,019,937 11% Stockholders' equity per share $ 15.16 $ 13.77 10% Selected Ratios Return on average stockholders' equity based on operating income* 16.04% 17.16% Return on average stockholders' equity based on net income 16.79% 17.16% Return on average total assets based on operating income* 1.19% 1.36% Return on average total assets based on net income 1.25% 1.36% Stockholders' equity to total assets 7.70% 7.32% Allowance for loan losses as a percentage of loans, net of unearned income 1.20% 1.20% Loans, net of unearned income, to total deposits 97.56% 92.31%
*Nine months ended 2000 data excludes gain on sale of credit card portfolio of $67.2 million pretax ($44.0 million after tax or $.20 per diluted share) and loss on sale of securities of $40.0 million pretax ($26.2 million after tax or $.12 per diluted share). (1) Net income excluding the amortization of excess purchase price. For additional information, please refer to Regions Form 8-K filed with the Securities and Exchange Commission on October 18, 2000, or visit Regions' Web site at http://www.regionsbank.com or contact Ronald C. Jackson, Senior Vice President and Director of Investor Relations, Regions Financial Corporation, Telephone 205/326-7374. Continued Next Page 3 October 18, 2000 Page Three The information contained in this press release may include forward-looking statements that reflect Regions' current views with respect to future events and financial performance. Regions' management believes that these forward-looking statements are reasonable, however, you should not place undue reliance on these statements as they are based only on current expectations and general assumptions and are subject to various risks, uncertainties, and other factors that may cause actual results to differ materially from the views, beliefs, and projections expressed in such statements. Such forward-looking statements are made in good faith by Regions pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The words "believe", "expect", "anticipate", "project", and similar expressions signify forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements made by or on behalf of Regions. Any such statement speaks only as of the date the statement was made. Regions undertakes no obligation to update or revise any forward-looking statements. Some factors which may affect the accuracy of our projections apply generally to the financial services industry, including: (a) the easing of restrictions on participants in the financial services industry, such as banks, securities brokers and dealers, investment companies, and finance companies, may increase our competitive pressures; (b) possible changes in interest rates may increase our funding costs and reduce our earning asset yields, thus reducing our margins; (c) possible changes in general economic and business conditions in the United States and the Southeast in general and in the communities we serve in particular may lead to a deterioration in credit quality, thereby increasing our provisioning costs, or a reduced demand for credit, thereby reducing our earning assets; (d) possible changes in trade, monetary and fiscal policies, laws, and regulations, and other activities of governments, agencies, and similar organizations, including changes in accounting standards, may have an adverse effect on our business; and (e) possible changes in consumer and business spending and saving habits could have an effect on our ability to grow our assets and to attract deposits. Other factors which may affect the accuracy of our projections are specific to Regions, including: (i) the cost and other effects of material contingencies, including litigation contingencies; (ii) our ability to expand into new markets and to maintain profit margins in the face of pricing pressures; (iii) our ability to keep pace with technological changes; (iv) our ability to develop competitive new products and services in a timely manner and the acceptance of such products and services by Regions' customers and potential Regions customers; (v) our ability to effectively manage interest rate risk, credit risk and operational risk; (vi) our ability to manage fluctuations in the value of our assets and liabilities and off-balance sheet exposures so as to maintain sufficient capital liquidity to support our business; and (vii) our ability to achieve the earnings expectations related to the businesses that we have recently acquired or may acquire in the future, which in turn depends on a variety of factors, including: our ability to achieve anticipated cost savings and revenue enhancements with respect to acquired operations; the assimilation of acquired operations to the Regions corporate culture, including the ability to instill our credit practices and efficient approach to acquired operations; and the continued growth of the markets that the acquired entities serve, consistent with recent historical experience. 4 FINANCIAL SUPPLEMENT TO THIRD QUARTER EARNINGS RELEASE SUMMARY Net income for the third quarter of 2000 totaled $127.9 million or $.58 per diluted share, compared to net income of $125.3 million or $.57 per share in the second quarter of 2000 and net income of $131.0 million or $.59 per share in the third quarter of 1999. Highlights of the current quarter include: (1) a continuation of strong loan growth (linked-quarter annualized internal loan growth was 13%, excluding the effect of acquisitions); (2) good growth in core deposits (4% linked-quarter annualized, excluding the effect of acquisitions); (3) continued improvement in non-performing assets and past due loans; (4) strong growth in non-interest income (up $9.1 million on a linked-quarter basis over the second quarter of this year and up $13.5 million over the third quarter of last year); (5) excellent expense control (linked-quarter annualized increase in overhead of less than 1%, even with three purchase acquisitions closing in the third quarter); and (6) a challenging net interest income environment (higher interest rates have resulted in a 44 basis point compression in the interest margin over the third quarter of last year). Annualized return on equity for the third quarter of 2000 was 15.56%, with a return on assets of 1.18%. During the third quarter of 2000 Regions strengthened its franchise through the completion of three purchase acquisitions. In early August, Regions entered the dynamic Austin, Texas market area through affiliation with Texas Heritage Bank, which has $114 million in assets. In mid-August, Regions completed the previously announced acquisition of Security First National Bank of Alexandria, Louisiana, with $304 million in assets. Then in mid-September, Regions consummated the acquisition of Bank at Ormond-By-The-Sea located on the east coast of Florida in the Ormond Beach/Daytona Beach area, which contributed $108 million in assets. BALANCE SHEET GROWTH Loan growth for the third quarter continued strong at 13% annualized, using linked-quarter average balances, excluding the effect of acquisitions. Real estate construction and mortgage loans and commercial loans were the strongest categories of growth. On a year-over-year comparison, adjusting for the effect of $874 million in loan securitizations in the fourth quarter of 1999 and the $278 million credit card loan sale in the first quarter of 2000, loans grew 18% over the last year, with internal growth accounting for 15% of this growth and 3% attributable to acquisitions. Geographically, the strongest areas of growth were the eastern and central regions of the franchise. Even though loan growth continues strong, Regions is experiencing some moderation in growth, relative to earlier quarters, and expects to continue to experience more moderate loan growth in most areas of its franchise during the next quarter. On a linked-quarter annualized basis, excluding the effect of acquisitions, average earning assets increased 8.8% (somewhat less than loans) because a portion of the maturities from the securities portfolio were used to reduce short-term borrowings. 5 FINANCIAL SUPPLEMENT TO THIRD QUARTER EARNINGS RELEASE PAGE 2 Internal core deposit growth continued during the third quarter at a 4% annualized rate, based on linked-quarter average balances, excluding the effect of deposits added by acquisitions and wholesale deposits sources. Certificates of deposit and time open accounts were the strongest categories of core deposit growth. This is the third consecutive quarter of internal core deposit growth for Regions, indicating that the initiatives put in place to increase core deposits (including targeted special pricing, increased use of incentives, sales campaigns and aggressive advertising) are working. Regions relied less on wholesale deposits and short-term borrowings during the third quarter of 2000, with these funding sources declining $836 million or 39% annualized over second quarter 2000 levels. An additional $1.5 billion in long-term Federal Home Loan Bank advances were added in the third quarter, which helped to reduce interest rate sensitivity and partially mitigate the unfavorable effects of further interest rate increases. OPERATING PERFORMANCE Total revenues (defined as net interest income on a taxable equivalent basis plus non-interest income, excluding securities transactions) increased $2.5 million or 2% annualized on a linked-quarter annualized basis over the second quarter of this year. Non-interest income increased $9.1 million, which offset the $6.6 million decrease in net interest income. Compared to the third quarter of last year, total revenues decreased $4.8 million, due to a $18.3 million decline in taxable equivalent net interest (as a result of the 44 bps. decline in the interest margin), partially offset by a $13.5 million increase in non-interest income. On a linked-quarter basis, the net interest margin decreased 20 bps. in the third quarter, resulting primarily from higher funding costs related to increases in market interest rates. The rate on interest-earning assets increased 2 bps, compared to 26 bps. increase in the rate on interest-bearing liabilities. Current modeling indicates that Regions' net interest margin is stabilizing near the third quarter level, with only minimal additional decline likely, assuming no further changes in market interest rates. Recent initiatives to reduce interest sensitivity (including lengthening maturities of liabilities, reducing reliance on short-term funding sources, generating core deposit growth, making more floating loans, etc.) have resulted in Regions' balance sheet being less sensitive to changes in market interest rates. However, if market interest rates continue to increase, further compression in Regions' net interest margin is likely. If market interest rates decline, Regions' interest margin should begin to improve. Total third quarter non-interest income increased $9.1 million or 27% annualized over second quarter levels. The three purchase acquisitions accounted for approximately $688,000 of this increase, primarily in service charges on deposit accounts. Overall, service charges on deposit accounts continued to reflect good growth--up $1.9 million over second quarter 2000 levels. Approximately one third of this increase was attributable to the three purchase acquisitions that closed in the third quarter and the remaining two thirds of the increase resulted from recent pricing and management initiatives in this area. Trust fees increased at an annualized rate of 15% in the third quarter, reflecting increased sales efforts and pricing initiatives. Mortgage servicing 6 FINANCIAL SUPPLEMENT TO THIRD QUARTER EARNINGS RELEASE PAGE 3 and origination fees continue to be unfavorably affected by higher interest rates, which slows new loan originations and refinance activity. Mortgage servicing and origination fees decreased $1.5 million from second quarter levels. Single-family mortgage production was $520 million in third quarter, compared to $762 million in second quarter. Regions' mortgage servicing portfolio totaled $23.1 billion at September 30, 2000, compared to $23.3 billion at June 30, 2000. Other non-interest income increased $8.2 million over second quarter levels. Categories of improvement included retail investment service fees, insurance fees and international banking service fees. In connection with Regions' ongoing business strategy of evaluating its lines of business to better rationalize its franchise, Regions divested a specialty consumer lending subsidiary during the third quarter, resulting in a $4.1 million pre-tax gain, which is included in other non-interest income. Also, during the third quarter Regions continued its ongoing strategy of exiting certain mortgage servicing portfolios that Regions' mortgage company is not equipped to adequately service and that do not fit well into its long-term mortgage servicing operations. This strategy resulted in a $2.0 million pre-tax gain, which is included in third quarter other non-interest income. Total non-interest expense increased less than 1% annualized over second quarter 2000 levels. Excluding the effect of the three purchase acquisitions during the third quarter, total non-interest expense decreased approximately 1% annualized from second quarter levels, reflecting continued realization of cost savings from earlier acquisitions and ongoing initiatives to enhance efficiency and productivity in back office operations and lines of business. Salaries and employee benefits decreased $1.4 million from the prior quarter, due primarily to lower incentive compensation accruals in the third quarter. Occupancy and furniture and equipment expense increased $3.3 million in the third quarter due to higher utilities, maintenance and depreciation charges. Other non-interest expense decreased $1.4 million or 6% annualized in the third quarter, compared to the second quarter of 2000, resulting from declines in numerous categories of expense, including advertising, insurance, travel and other outside services. The provision for loan losses in the third quarter of 2000 was increased to $32.7 million or 0.42% annualized of average loans, as a result of a higher level of net loan charge-offs, growth and other changes in the loan portfolio. Net loan charge-offs for the third quarter were $25.8 million (0.33% of average loans annualized), compared to $17.3 million (0.23% of average loans annualized) in the second quarter. On a year-to-date basis, net loan charge-offs declined $6.1 million to 0.27% annualized of average loans, compared to 0.34% annualized of average loans in the first nine months of last year. The higher level of net loan charge-offs in the third quarter occurred in commercial, real estate and consumer loans. The net charge-offs in the commercial and real estate portfolios were not concentrated in any one borrower or industry, but were spread among several mid-to-smaller credits. The higher level of consumer loan charge-offs in the third quarter resulted primarily from conforming Regions' consumer loan charge-off policies to recent changes in bank regulatory guidelines for charging-off delinquent consumer loans. Loans past due 90 days or more declined significantly at September 30, 2000 to $36.5 million from $67.4 million at June 30, 2000. Non-performing assets, excluding loans past due 90 days or more, increased to $237.1 million at September 30, 2000, from $214.4 million at June 30, 2000, due to the addition of several loans to non-accrual status. As a percentage of loans and other real estate, non-performing assets were 0.76% at September 30, 2000, compared to 0.71% at June 30, 2000. 7 FINANCIAL SUPPLEMENT TO THIRD QUARTER EARNINGS RELEASE PAGE 4 The effective tax rate declined in the third quarter, compared to the first two quarters of this year, due to increased realization of certain tax benefits from tax planning strategies. ACQUISITION ACTIVITY During the third quarter of 2000 Regions strengthened its franchise through the completion of three purchase acquisitions. In early August, Regions entered the dynamic Austin, Texas market area through affiliation with Texas Heritage Bank, which has $114 million in assets, $80 million in loans and $107 million in deposits. This acquisition gives Regions an entrance into one of the fastest growing markets in the country and enables Texas Heritage Bank to offer a much broader product array to customers. In mid-August, Regions completed the previously announced acquisition of Security First National Bank of Alexandria, Louisiana, with $304 million in assets, $135 million in loans and $209 million in deposits. This transaction offers Regions the opportunity to expand its Louisiana franchise through affiliation with a high-performing community bank. Then in mid-September, Regions consummated the acquisition of Bank at Ormond-By-The-Sea located on the east coast of Florida in the Ormond Beach/Daytona Beach area, which contributed $108 million in assets, $52 million in loans and $98 million in deposits. Bank at Ormond-By-The-Sea is located in a growing Florida market area that has excellent potential for enhancing Regions' franchise. Initially, these acquisitions should be slightly accretive to earnings, and should become more accretive as cost savings and revenue enhancements are realized over the next several quarters. Regions issued 3.7 million shares in connection with these purchase acquisitions, all of which had been previously purchased and held as treasury stock. Acquisitions completed since September 30, 1999 include the following (in thousands):
Total Total Accounting Banking Date Company Acquired Total Assets Loans Deposits Method Offices - ---- ---------------- ------------ -------- ---------- ---------- ------- December 1999 Minden Bancshares of $ 319,441 $140,059 $ 270,138 Purchase 7 Minden, Louisiana January 2000 LCB Corporation of $ 169,737 $112,403 $ 152,035 Purchase 5 Fayetteville, Tennessee May 2000 Five Branches in Fort Smith, $ 186,361 $115,172 $ 185,745 Purchase 5 Arkansas August 2000 Heritage Bancorp, Inc. of $ 114,370 $ 79,550 $ 106,791 Purchase 6 Hutto, Texas August 2000 First National Bancshares of $ 303,793 $135,293 $ 209,001 Purchase 7 Louisiana, Inc. headquartered in Alexandria, Louisiana September 2000 East Coast Bank Corporation of $ 107,779 $ 51,664 $ 98,173 Purchase 3 Ormond Beach, Florida ---------- -------- ---------- -- Totals $1,201,481 $634,141 $1,021,883 33 ========== ======== ========== ==
8 FINANCIAL SUPPLEMENT TO THIRD QUARTER EARNINGS RELEASE PAGE 5 Regions currently has no pending acquisitions, but as a part of its ongoing business strategy continually evaluates business combination opportunities. STOCK BUYBACK PROGRAM During the third quarter of 2000, Regions repurchased approximately 1.3 million shares in connection with its share buyback program. Since this 12 million share buyback program was announced in July 1999, Regions has repurchased a total of 3.3 million shares of its common stock (net of reissuances for completed acquisitions). FORWARD-LOOKING STATEMENTS The information contained in this press release may include forward-looking statements that reflect Regions' current views with respect to future events and financial performance. Regions' management believes that these forward-looking statements are reasonable, however, you should not place undue reliance on these statements as they are based only on current expectations and general assumptions and are subject to various risks, uncertainties, and other factors that may cause actual results to differ materially from the views, beliefs, and projections expressed in such statements. Such forward-looking statements are made in good faith by Regions pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The words "believe", "expect", "anticipate", "project", and similar expressions signify forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements made by or on behalf of Regions. Any such statement speaks only as of the date the statement was made. Regions undertakes no obligation to update or revise any forward-looking statements. Some factors which may affect the accuracy of our projections apply generally to the financial services industry, including: (a) the easing of restrictions on participants in the financial services industry, such as banks, securities brokers and dealers, investment companies, and finance companies, may increase our competitive pressures; (b) possible changes in interest rates may increase our funding costs and reduce our earning asset yields, thus reducing our margins; (c) possible changes in general economic and business conditions in the United States and the Southeast in general and in the communities we serve in particular may lead to a deterioration in credit quality, thereby increasing our provisioning costs, or a reduced demand for credit, thereby reducing our earning assets; (d) possible changes in trade, monetary and fiscal policies, laws, and regulations, and other activities of governments, agencies, and similar organizations, including changes in accounting standards, may have an adverse effect on our business; and (e) possible changes in consumer and business spending and saving habits could have an effect on our ability to grow our assets and to attract deposits. Other factors which may affect the accuracy of our projections are specific to Regions, including: (i) the cost and other effects of material contingencies, including litigation contingencies; (ii) our ability to expand into new markets and to maintain profit margins in the face of pricing pressures; 9 FINANCIAL SUPPLEMENT TO THIRD QUARTER EARNINGS RELEASE PAGE 6 (iii) our ability to keep pace with technological changes; (iv) our ability to develop competitive new products and services in a timely manner and the acceptance of such products and services by Regions' customers and potential Regions customers; (v) our ability to effectively manage interest rate risk, credit risk and operational risk; (vi) our ability to manage fluctuations in the value of our assets and liabilities and off-balance sheet exposures so as to maintain sufficient capital and liquidity to support our business; and (vii) our ability to achieve the earnings expectations related to the businesses that we have recently acquired or may acquire in the future, which in turn depends on a variety of factors, including: our ability to achieve anticipated cost savings and revenue enhancements with respect to acquired operations; the assimilation of acquired operations to the Regions corporate culture, including the ability to instill our credit practices and efficient approach to acquired operations; and the continued growth of the markets that the acquired entities serve, consistent with recent historical experience. For questions or additional information, please contact Ronald C. Jackson at (205) 326-7374 or Kenneth W. Till at (205) 326-7605. 10 REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CONDITION (Dollar Amounts in Thousands)
9/30/98 12/31/98 3/31/99 6/30/99 9/30/99 ------------ ------------ ------------ ------------ ------------ ASSETS Cash and due from banks $ 1,225,990 $ 1,619,006 $ 1,243,942 $ 1,350,476 $ 1,249,061 Interest-bearing deposits in other banks 141,595 143,965 75,492 77,255 48,228 Investment securities 2,972,053 3,125,114 3,480,541 3,327,552 3,560,934 Securities available for sale 4,723,955 4,844,023 5,489,283 5,512,854 5,938,836 Trading account assets 24,553 49,387 24,447 23,982 19,929 Mortgage loans held for sale 728,746 927,668 1,046,924 1,266,412 1,227,275 Federal funds sold and securities purchased under agreement to resell 117,148 233,941 49,089 58,192 90,462 Loans 23,923,417 24,430,113 25,602,677 26,621,557 27,587,448 Unearned income (71,211) (64,526) (62,441) (68,872) (75,976) ------------ ------------ ------------ ------------ ------------ Loans, net of unearned income 23,852,206 24,365,587 25,540,236 26,552,685 27,511,472 Allowance for loan losses (325,238) (315,412) (330,151) (326,982) (330,679) ------------ ------------ ------------ ------------ ------------ Net Loans 23,526,968 24,050,175 25,210,085 26,225,703 27,180,793 Premises and equipment 514,082 534,425 559,241 571,564 575,139 Interest receivable 287,317 292,036 297,737 302,125 293,467 Due from customers on acceptances 16,814 57,046 73,036 54,339 29,614 Other assets 797,043 955,154 1,051,946 1,016,127 1,015,426 ------------ ------------ ------------ ------------ ------------ $ 35,076,264 $ 36,831,940 $ 38,601,763 $ 39,786,581 $ 41,229,164 ============ ============ ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Deposits Non-interest-bearing $ 3,875,059 $ 4,577,125 $ 4,473,304 $ 4,569,264 $ 4,624,868 Interest-bearing 23,309,836 23,772,941 24,657,747 23,857,947 25,179,180 ------------ ------------ ------------ ------------ ------------ Total Deposits 27,184,895 28,350,066 29,131,051 28,427,211 29,804,048 Borrowed funds: Short-term borrowings: Federal funds purchased and securities sold under agreement to repurchase 1,289,513 2,067,278 2,506,805 3,922,436 4,158,091 Commercial paper 56,750 56,750 56,750 56,750 59,250 Other short-term borrowings 2,551,480 2,372,700 2,934,584 3,457,604 3,436,292 ------------ ------------ ------------ ------------ ------------ Total Short-term Borrowings 3,897,743 4,496,728 5,498,139 7,436,790 7,653,633 Long-term borrowings 424,176 571,040 497,430 388,377 371,148 ------------ ------------ ------------ ------------ ------------ Total Borrowed Funds 4,321,919 5,067,768 5,995,569 7,825,167 8,024,781 Bank acceptances outstanding 16,814 57,046 73,036 54,339 29,614 Other liabilities 594,983 356,659 283,586 348,423 350,784 ------------ ------------ ------------ ------------ ------------ Total Liabilities 32,118,611 33,831,539 35,483,242 36,655,140 38,209,227 Stockholders' equity: Common stock 138,195 138,316 139,944 140,012 140,107 Surplus 1,142,592 1,147,357 1,167,184 1,167,994 1,169,324 Undivided profits 1,649,105 1,729,334 1,813,790 1,893,778 1,969,670 Treasury Stock 0 (32,603) (34) (34) (172,056) Unearned restricted stock (7,224) (6,955) (6,294) (5,765) (5,236) Accumulated other comprehensive income 34,985 24,952 3,931 (64,544) (81,872) ------------ ------------ ------------ ------------ ------------ Total Stockholders' Equity 2,957,653 3,000,401 3,118,521 3,131,441 3,019,937 ------------ ------------ ------------ ------------ ------------ $ 35,076,264 $ 36,831,940 $ 38,601,763 $ 39,786,581 $ 41,229,164 ============ ============ ============ ============ ============ 12/31/99 3/31/00 6/30/00 9/30/00 ------------ ------------ ------------ ------------ ASSETS Cash and due from banks $ 1,393,418 $ 1,038,303 $ 1,140,766 $ 1,076,869 Interest-bearing deposits in other banks 9,653 51,875 2,202 2,449 Investment securities 4,054,279 3,602,979 3,626,457 3,607,520 Securities available for sale 6,858,765 5,528,877 5,619,226 5,545,803 Trading account assets 14,543 24,155 18,652 21,317 Mortgage loans held for sale 567,131 351,978 356,801 251,063 Federal funds sold and securities purchased under agreement to resell 66,078 61,863 72,108 246,556 Loans 28,221,240 29,164,121 30,479,546 31,299,305 Unearned income (76,565) (82,834) (88,556) (95,242) ------------ ------------ ------------ ------------ Loans, net of unearned income 28,144,675 29,081,287 30,390,990 31,204,063 Allowance for loan losses (338,375) (352,998) (363,475) (373,699) ------------ ------------ ------------ ------------ Net Loans 27,806,300 28,728,289 30,027,515 30,830,364 Premises and equipment 580,707 585,934 588,697 596,900 Interest receivable 306,707 300,445 326,815 333,294 Due from customers on acceptances 72,098 85,624 53,969 24,274 Other assets 984,716 1,058,081 1,068,306 1,090,687 ------------ ------------ ------------ ------------ $ 42,714,395 $ 41,418,403 $ 42,901,514 $ 43,627,096 ============ ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Deposits Non-interest-bearing $ 4,419,693 $ 4,853,155 $ 4,573,881 $ 4,561,388 Interest-bearing 25,569,401 27,101,228 27,935,020 27,424,262 ------------ ------------ ------------ ------------ Total Deposits 29,989,094 31,954,383 32,508,901 31,985,650 Borrowed funds: Short-term borrowings: Federal funds purchased and securities sold under agreement to repurchase 5,614,613 3,136,794 2,630,399 1,862,753 Commercial paper 56,750 26,750 36,750 38,750 Other short-term borrowings 1,953,622 725,045 1,816,220 1,620,673 ------------ ------------ ------------ ------------ Total Short-term Borrowings 7,624,985 3,888,589 4,483,369 3,522,176 Long-term borrowings 1,750,861 2,032,411 2,370,148 4,392,399 ------------ ------------ ------------ ------------ Total Borrowed Funds 9,375,846 5,921,000 6,853,517 7,914,575 Bank acceptances outstanding 72,098 85,624 53,969 24,274 Other liabilities 212,245 316,662 297,692 342,689 ------------ ------------ ------------ ------------ Total Liabilities 39,649,283 38,277,669 39,714,079 40,267,188 Stockholders' equity: Common stock 137,897 138,857 139,028 139,050 Surplus 1,022,825 1,051,634 1,056,452 1,058,291 Undivided profits 2,044,209 2,130,595 2,196,513 2,264,476 Treasury Stock 0 (38,696) (73,941) (18,988) Unearned restricted stock (4,719) (4,216) (8,088) (7,673) Accumulated other comprehensive income (135,100) (137,440) (122,529) (75,248) ------------ ------------ ------------ ------------ Total Stockholders' Equity 3,065,112 3,140,734 3,187,435 3,359,908 ------------ ------------ ------------ ------------ $ 42,714,395 $ 41,418,403 $ 42,901,514 $ 43,627,096 ============ ============ ============ ============
11 REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (Dollar Amounts in Thousands)
9/30/98 12/31/98 3/31/99 6/30/99 9/30/99 ---------- ---------- ---------- ---------- ---------- Interest Income: Interest and fees on loans $ 521,428 $ 526,305 $ 512,478 $ 540,192 $ 562,484 Interest on securities: Taxable interest income 105,163 111,687 121,762 128,773 135,346 Tax-exempt interest income 9,318 9,011 9,798 9,761 9,756 ---------- ---------- ---------- ---------- ---------- Total Interest on Securities 114,481 120,698 131,560 138,534 145,102 Interest on mortgage loans held for sale 13,880 12,865 20,636 17,548 22,506 Income on federal funds sold and securities purchased under agreement to resell 5,563 3,965 938 937 1,046 Interest on time deposits in other banks 1,782 927 514 573 372 Interest on trading account assets 172 520 315 352 476 ---------- ---------- ---------- ---------- ---------- Total Interest Income 657,306 665,280 666,441 698,136 731,986 Interest Expense: Interest on deposits 269,086 265,876 257,455 255,257 258,847 Interest on short-term borrowings 53,614 50,088 57,599 72,928 105,719 Interest on long-term borrowings 8,818 8,757 8,790 7,685 6,972 ---------- ---------- ---------- ---------- ---------- Total Interest Expense 331,518 324,721 323,844 335,870 371,538 ---------- ---------- ---------- ---------- ---------- Net Interest Income 325,788 340,559 342,597 362,266 360,448 Provision for loan losses 12,547 19,023 20,738 23,944 30,707 ---------- ---------- ---------- ---------- ---------- Net Interest Income After Provision for Loan Losses 313,241 321,536 321,859 338,322 329,741 Non-Interest Income: Trust department income 14,231 15,556 12,751 12,610 14,530 Service charges on deposit accounts 40,816 48,463 44,812 46,845 50,453 Mortgage servicing and origination fees 27,524 27,635 33,084 26,453 22,675 Securities gains (losses) 85 3,875 16 22 3 Other 31,606 35,206 52,452 35,861 45,611 ---------- ---------- ---------- ---------- ---------- Total Non-Interest Income 114,262 130,735 143,115 121,791 133,272 Non-Interest Expense: Salaries and employee benefits 125,371 137,350 136,649 138,723 140,577 Net occupancy expense 15,253 16,223 14,656 14,334 16,422 Furniture and equipment expense 18,296 19,416 16,530 16,322 18,370 Other 75,772 84,070 94,740 90,845 89,851 ---------- ---------- ---------- ---------- ---------- Total Operating Expense 234,692 257,059 262,575 260,224 265,220 Merger and restructuring costs 114,728 6,710 0 0 0 ---------- ---------- ---------- ---------- ---------- Total Non-Interest Expense 349,420 263,769 262,575 260,224 265,220 ---------- ---------- ---------- ---------- ---------- Income Before Income Taxes 78,083 188,502 202,399 199,889 197,793 Applicable income taxes 26,799 61,495 73,019 63,900 66,835 ---------- ---------- ---------- ---------- ---------- Net Income $ 51,284 $ 127,007 $ 129,380 $ 135,989 $ 130,958 ========== ========== ========== ========== ========== Operating Income $ 127,809(a) $ 131,194(b) $ 129,380 $ 135,989 $ 130,958 ========== ========== ========== ========== ========== 12/31/99 3/31/00 6/30/00 9/30/00 ---------- ---------- ---------- ---------- Interest Income: Interest and fees on loans $ 586,632 $ 602,957 $ 633,868 $ 667,305 Interest on securities: Taxable interest income 139,054 155,067 137,104 136,452 Tax-exempt interest income 10,169 10,161 10,325 10,680 ---------- ---------- ---------- ---------- Total Interest on Securities 149,223 165,228 147,429 147,132 Interest on mortgage loans held for sale 20,312 10,313 9,329 8,176 Income on federal funds sold and securities purchased under agreement to resell 1,335 1,129 1,370 1,672 Interest on time deposits in other banks 282 193 184 221 Interest on trading account assets 339 409 407 188 ---------- ---------- ---------- ---------- Total Interest Income 758,123 780,229 792,587 824,694 Interest Expense: Interest on deposits 285,240 319,177 342,894 358,033 Interest on short-term borrowings 93,272 77,956 64,422 65,623 Interest on long-term borrowings 19,067 28,980 36,580 58,919 ---------- ---------- ---------- ---------- Total Interest Expense 397,579 426,113 443,896 482,575 ---------- ---------- ---------- ---------- Net Interest Income 360,544 354,116 348,691 342,119 Provision for loan losses 38,269 29,177 27,804 32,746 ---------- ---------- ---------- ---------- Net Interest Income After Provision for Loan Losses 322,275 324,939 320,887 309,373 Non-Interest Income: Trust department income 13,543 14,051 14,059 14,597 Service charges on deposit accounts 52,874 53,408 57,542 59,465 Mortgage servicing and origination fees 20,906 21,956 21,539 20,016 Securities gains (losses) 119 (40,018) 67 28 Other 51,521 117,395 44,443 52,641 ---------- ---------- ---------- ---------- Total Non-Interest Income 138,963 166,792 137,650 146,747 Non-Interest Expense: Salaries and employee benefits 135,620 147,253 146,244 144,868 Net occupancy expense 16,223 15,858 16,811 18,583 Furniture and equipment expense 20,791 16,997 17,320 18,880 Other 103,659 91,027 92,412 91,008 ---------- ---------- ---------- ---------- Total Operating Expense 276,293 271,135 272,787 273,339 Merger and restructuring costs 0 0 0 0 ---------- ---------- ---------- ---------- Total Non-Interest Expense 276,293 271,135 272,787 273,339 ---------- ---------- ---------- ---------- Income Before Income Taxes 184,945 220,596 185,750 182,781 Applicable income taxes 55,886 74,591 60,457 54,922 ---------- ---------- ---------- ---------- Net Income $ 129,059 $ 146,005 $ 125,293 $ 127,859 ========== ========== ========== ========== Operating Income $ 129,059 $ 128,203(c) $ 125,293 $ 127,859 ========== ========== ========== ==========
12 REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES (Dollar Amounts in Thousands)
9/30/98 12/31/98 3/31/99 6/30/99 9/30/99 ------------ ------------ ------------ ------------ ------------ Average shares outstanding--during quarter 220,809 219,798 222,408 223,995 221,696 Average shares outstanding--during quarter, diluted 223,711 223,325 225,467 226,887 223,715 Actual shares outstanding--end of quarter 221,111 220,454 223,910 224,018 219,289 Operating income per share $ 0.58 $ 0.60 $ 0.58 $ 0.61 $ 0.59 Operating income per share, diluted $ 0.57 $ 0.59 $ 0.57 $ 0.60 $ 0.59 Net income per share $ 0.23 $ 0.58 $ 0.58 $ 0.61 $ 0.59 Net income per share, diluted $ 0.23 $ 0.57 $ 0.57 $ 0.60 $ 0.59 Dividends per share $ 0.23 $ 0.23 $ 0.25 $ 0.25 $ 0.25 Taxable equivalent net interest income $ 331,523 $ 344,902 $ 348,084 $ 367,831 $ 366,236 12/31/99 3/31/00 6/30/00 9/30/00 ------------ ------------ ------------ ------------ Average shares outstanding--during quarter 218,414 221,299 220,264 220,424 Average shares outstanding--during quarter, diluted 219,862 222,549 221,426 221,615 Actual shares outstanding--end of quarter 220,636 220,422 219,095 221,612 Operating income per share $ 0.59 $ 0.58 $ 0.57 $ 0.58 Operating income per share, diluted $ 0.59 $ 0.58 $ 0.57 $ 0.58 Net income per share $ 0.59 $ 0.66 $ 0.57 $ 0.58 Net income per share, diluted $ 0.59 $ 0.66 $ 0.57 $ 0.58 Dividends per share $ 0.25 $ 0.27 $ 0.27 $ 0.27 Taxable equivalent net interest income $ 366,479 $ 359,914 $ 354,571 $ 347,956
(a) Operating income excludes non-recurring consolidation charges ($80.1 million pre-tax or $54.9 million after tax) and non-recurring consolidation charges ($34.6 million pretax or $21.6 million after tax). (b) Operating income excludes non-recurring merger charges of $6.7 million pre-tax or $4.2 million after tax. (c) Operating income excludes gain on sale of credit card portfolio ($67.2 million pre-tax or $44.0 million after tax) and loss on sale of securities ($40.0 million pre-tax or $26.2 million after tax). 13 REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (Dollar Amounts in Thousands)
Nine Months Ended September 30 ----------------------------- 2000 1999 ------------ ------------ Interest Income: Interest and fees on loans $ 1,904,130 $ 1,615,154 Interest on securities: Taxable interest income 428,623 385,881 Tax-exempt interest income 31,166 29,315 ------------ ------------ Total Interest on Securities 459,789 415,196 Interest on mortgage loans held for sale 27,818 60,690 Income on federal funds sold and securities purchased under agreement to resell 4,171 2,921 Interest on time deposits in other banks 598 1,459 Interest on trading account assets 1,004 1,143 ------------ ------------ Total Interest Income 2,397,510 2,096,563 Interest Expense: Interest on deposits 1,020,104 771,559 Interest on short-term borrowings 208,001 236,246 Interest on long-term borrowings 124,479 23,447 ------------ ------------ Total Interest Expense 1,352,584 1,031,252 ------------ ------------ Net Interest Income 1,044,926 1,065,311 Provision for loan losses 89,727 75,389 ------------ ------------ Net Interest Income After Provision for Loan Losses 955,199 989,922 Non-Interest Income: Trust department income 42,707 39,891 Service charges on deposit accounts 170,415 142,110 Mortgage servicing and origination fees 63,511 82,212 Securities gains (losses) (39,923) 41 Other 214,479 133,924 ------------ ------------ Total Non-Interest Income 451,189 398,178 Non-Interest Expense: Salaries and employee benefits 438,365 415,949 Net occupancy expense 51,252 45,412 Furniture and equipment expense 53,197 51,222 Other 274,447 275,436 ------------ ------------ Total Non-Interest Expense 817,261 788,019 ------------ ------------ Income Before Income Taxes 589,127 600,081 Applicable income taxes 189,970 203,754 ------------ ------------ Net Income $ 399,157 $ 396,327 ============ ============ Operating Income $ 381,355 $ 396,327 ============ ============
14 REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES (Dollar Amounts in Thousands)
Nine Months Ended September 30 ------------------------- 2000 1999 ---------- ---------- Average shares outstanding--year-to-date 220,661 222,697 Average shares outstanding--year-to-date, diluted 221,862 225,350 Actual shares outstanding--end of quarter 221,612 219,289 Operating income per share $ 1.73 $ 1.78 Operating income per share, diluted $ 1.72 $ 1.76 Net income per share $ 1.81 $ 1.78 Net income per share, diluted $ 1.80 $ 1.76 Dividends per share $ 0.81 $ 0.75 Taxable equivalent net interest income 1,062,441 1,082,151
15 REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED AVERAGE DAILY BALANCES AND YIELD/RATE ANALYSIS (Dollar Amounts in Thousands, Yields on Taxable Equivalent Basis)
Quarter Ended Quarter Ended Quarter Ended Quarter Ended 3/31/99 6/30/99 9/30/99 12/31/99 --------------------- --------------------- --------------------- --------------------- Average Yield/ Average Yield/ Average Yield/ Average Yield/ Balance Rate Balance Rate Balance Rate Balance Rate ------------ ------ ------------ ------ ------------ ------ ------------ ------ ASSETS Earning assets: Taxable securities $ 7,708,474 6.39% $ 8,141,637 6.33% $ 8,451,738 6.34% $ 8,663,789 6.36% Non-taxable securities 742,753 8.06% 741,393 7.83% 739,665 7.87% 756,355 7.88% Federal funds sold 103,522 3.67% 95,142 3.95% 79,125 5.24% 101,902 5.20% Loans, net of unearned income 24,667,458 8.44% 26,101,980 8.32% 27,020,688 8.27% 28,079,812 8.31% Int. bear. deposits in oth. bnks 55,360 3.77% 50,919 4.51% 43,293 3.41% 25,640 4.36% Mortgages held for sale 1,192,527 7.02% 989,377 7.11% 1,260,046 7.09% 1,078,896 7.47% Trading account assets 22,854 6.14% 21,975 7.49% 22,370 9.47% 19,839 7.50% ------------ ------------ ------------ ------------ Total earning assets 34,492,948 7.90% 36,142,423 7.81% 37,616,925 7.78% 38,726,233 7.83% Allowance for loan losses (327,717) (329,447) (323,925) (331,666) Cash and due from banks 1,247,831 1,272,902 1,211,370 1,217,784 Other non-earning assets 1,905,838 1,918,007 2,004,159 1,931,737 ------------ ------------ ------------ ------------ $ 37,318,900 $ 39,003,885 $ 40,508,529 $ 41,544,088 ============ ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing liabilities: Savings accounts $ 1,507,187 1.71% $ 1,523,845 1.62% $ 1,470,113 1.57% $ 1,410,750 1.53% Interest bearing transaction accounts 533,181 4.24% 516,085 3.93% 434,837 4.00% 350,535 4.89% Money market accounts 8,880,431 3.10% 9,231,649 3.16% 9,079,236 3.34% 9,187,763 3.47% Certificates of deposit of $100,000 or more 4,014,884 5.35% 4,065,120 5.30% 4,198,193 5.32% 4,591,010 5.47% Other interest-bearing accounts 9,231,979 5.48% 8,832,472 5.34% 8,909,144 5.17% 9,882,913 5.30% Federal funds purchased 2,177,374 4.92% 2,899,138 4.87% 4,490,354 5.24% 4,527,000 5.52% Commercial paper 56,750 5.95% 56,750 6.01% 57,343 6.52% 58,061 5.86% Other short-term borrowings 2,506,897 4.91% 3,392,371 4.35% 3,434,210 5.25% 2,315,210 5.04% Long-term borrowings 522,407 6.96% 471,331 6.39% 385,291 7.18% 1,302,209 5.81% ------------ ------------ ------------ ------------ Total int-bearing liabilities 29,431,090 4.46% 30,988,761 4.34% 32,458,721 4.54% 33,625,451 4.69% Non-interest bearing deposits 4,388,902 4,510,618 4,596,807 4,582,329 Other liabilities 449,178 367,156 375,602 332,596 Stockholders' equity 3,049,730 3,137,350 3,077,399 3,003,712 ------------ ------------ ------------ ------------ $ 37,318,900 $ 39,003,885 $ 40,508,529 $ 41,544,088 ============ ============ ============ ============ Net yield on interest earning assets 4.09% 4.08% 3.86% 3.75% Quarter Ended Quarter Ended Quarter Ended 3/31/00 6/30/00 9/30/00 ---------------------- ---------------------- ---------------------- Average Yield/ Average Yield/ Average Yield/ Balance Rate Balance Rate Balance Rate ------------ ------ ------------ ------ ------------ ------ ASSETS Earning assets: Taxable securities $ 9,551,271 6.52% $ 8,408,489 6.55% $ 8,405,165 6.45% Non-taxable securities 782,857 7.76% 792,115 7.71% 820,542 7.59% Federal funds sold 79,591 5.71% 87,145 6.32% 102,581 6.48% Loans, net of unearned income 28,669,394 8.47% 29,714,554 8.60% 30,799,374 8.63% Int. bear. deposits in oth. bnks 12,376 6.27% 10,818 6.84% 12,845 6.84% Mortgages held for sale 508,777 8.15% 411,105 9.13% 330,682 9.84% Trading account assets 31,354 5.65% 21,434 8.06% 11,961 7.11% ------------ ---- ------------ ---- ------------ ---- Total earning assets 39,635,620 7.98% 39,445,660 8.14% 40,483,150 8.16% Allowance for loan losses (345,530) (357,364) (363,586) Cash and due from banks 1,239,194 1,084,622 1,046,548 Other non-earning assets 2,059,622 2,053,414 2,055,988 ------------ ------------ ------------ $ 42,588,906 $ 42,226,332 $ 43,222,100 ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing liabilities: Savings accounts $ 1,389,361 1.53% $ 1,362,045 1.51% $ 1,305,032 1.50% Interest bearing transaction accounts 415,351 4.22% 416,655 4.07% 393,976 4.48% Money market accounts 10,052,953 3.84% 10,341,395 4.20% 10,014,333 4.33% Certificates of deposit of $100,000 or more 4,907,081 5.74% 4,654,185 6.00% 4,212,396 6.22% Other interest-bearing accounts 10,610,269 5.44% 10,961,131 5.73% 11,522,007 6.00% Federal funds purchased 4,355,968 5.83% 2,935,116 6.25% 2,231,550 6.64% Commercial paper 56,140 6.31% 35,432 6.29% 36,815 6.30% Other short-term borrowings 944,198 5.89% 1,161,176 6.33% 1,728,085 6.40% Long-term borrowings 1,925,296 6.05% 2,344,772 6.27% 3,583,967 6.54% ------------ ---- ------------ ---- ------------ ---- Total int-bearing liabilities 34,656,617 4.95% 34,211,907 5.22% 35,028,161 5.48% Non-interest bearing deposits 4,532,369 4,544,703 4,579,901 Other liabilities 293,243 322,007 344,654 Stockholders' equity 3,106,677 3,147,715 3,269,384 ------------ ------------ ------------ $ 42,588,906 $ 42,226,332 $ 43,222,100 ============ ============ ============ Net yield on interest earning assets 3.65% 3.62% 3.42%
16 REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES QUARTERLY ALLOWANCE FOR LOAN LOSSES AND NON-PERFORMING ASSETS (Dollar Amounts in Thousands)
3/31/99 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 9/30/00 -------- -------- -------- -------- -------- -------- -------- Balance at beginning of period $315,412 $330,151 $326,982 $330,679 $338,375 $352,998 $363,475 Net loans charged off (recovered): Commercial 1,833 8,833 2,805 9,184 2,345 3,308 7,480 Real estate 366 805 8,379 5,122 559 3,483 4,881 Installment 9,334 17,475 15,826 19,226 13,509 10,536 13,444 -------- -------- -------- -------- -------- -------- -------- Total 11,533 27,113 27,010 33,532 16,413 17,327 25,805 Allowance of acquired banks 5,534 0 0 2,959 1,859 0 3,283 Provision charged to expense 20,738 23,944 30,707 38,269 29,177 27,804 32,746 -------- -------- -------- -------- -------- -------- -------- Balance at end of period $330,151 $326,982 $330,679 $338,375 $352,998 $363,475 $373,699 ======== ======== ======== ======== ======== ======== ======== Non-performing Assets: Loans on a non-accruing basis $152,630 $159,103 $161,837 $169,904 $189,260 $184,934 $200,419 Renegotiated loans 5,084 5,849 10,219 8,390 12,969 12,616 13,403 Foreclosed property ("Other real estate") 15,069 13,942 13,371 12,662 13,474 16,837 23,270 -------- -------- -------- -------- -------- -------- -------- Total NPA excluding past due loans $172,783 $178,894 $185,427 $190,956 $215,703 $214,387 $237,092 -------- -------- -------- -------- -------- -------- -------- Loans past due 90 days or more $121,393 $ 99,575 $ 77,918 $ 71,952 $ 64,117 $ 67,388 $ 36,543 -------- -------- -------- -------- -------- -------- -------- Total NPA including past due loans $294,176 $278,469 $263,345 $262,908 $279,820 $281,775 $273,635 ======== ======== ======== ======== ======== ======== ========
17 REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED AVERAGE DAILY BALANCES AND YIELD/RATE ANALYSIS (Dollar Amounts in Thousands, Yields on Taxable Equivalent Basis)
Nine Months Ended September 30 ---------------------------------------------------------------------------------- 2000 1999 ------------------------------------ ------------------------------------- Average Yield/ Average Yield/ Balance Rate Balance Rate ------------ ------ ------------ ------ ASSETS Earning assets: Taxable securities $ 8,786,910 6.51% $ 8,103,339 6.35% Non-taxable securities 798,585 7.68% 741,259 7.92% Federal funds sold 89,819 6.20% 92,507 4.22% Loans, net of unearned income 29,731,685 8.57% 25,938,662 8.34% Int. bear. deposits in oth. bnks 12,016 6.65% 49,813 3.92% Mortgages held for sale 416,540 8.92% 1,147,564 7.07% Trading account assets 21,548 6.72% 22,398 7.70% ------------ ------------ Total earning assets 39,857,103 8.09% 36,095,542 7.83% Allowance for loan losses (355,523) (327,016) Cash and due from banks 1,123,174 1,243,901 Other non-earning assets 2,056,340 1,943,028 ------------ ------------ $ 42,681,094 $ 38,955,455 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing liabilities: Savings accounts $ 1,351,974 1.51% $ 1,500,246 1.63% Interest bearing transaction accounts 408,607 4.25% 494,341 4.06% Money market accounts 10,135,782 4.13% 9,064,500 3.20% Certificates of deposit of $100,000 or more 4,589,838 5.97% 4,093,404 5.32% Other int-bearing accounts 11,032,927 5.73% 8,990,016 5.33% Federal funds purchased 3,170,771 6.15% 3,197,428 5.06% Commercial paper 42,774 6.30% 56,950 6.17% Other short-term borrowings 1,279,463 6.25% 3,114,556 4.83% Long-term borrowings 2,621,537 6.34% 459,174 6.83% ------------ ------------ Total int-bearing liabilities 34,633,673 5.22% 30,970,615 4.45% Non-interest bearing deposits 4,552,425 4,499,537 Other liabilities 320,058 397,042 Stockholders' equity 3,174,938 3,088,261 ------------ ------------ $ 42,681,094 $ 38,955,455 ============ ============ Net yield on int. earning assets 3.56% 4.01%
Nine Months Ended September 30 ---------------------------------------------------------- Allowance For Loan Losses: 2000 1999 ------------ ------------ Balance at beginning of year $ 338,375 $ 315,412 Net loans charged off: Commercial 13,133 13,471 Real estate 8,923 9,550 Installment 37,489 42,635 ------------ ------------ Total 59,545 65,656 Allowance of acquired banks 5,142 5,534 Provision charged to expense 89,727 75,389 ------------ ------------ Balance at end of period $ 373,699 $ 330,679 ============ ============
18 REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES SELECTED RATIOS
12/31/98 3/31/99 6/30/99 9/30/99 -------- ------- ------- ------- Return on average assets* 1.47% 1.41% 1.40% 1.28% Return on average equity* 17.56% 17.21% 17.39% 16.88% Stockholders' equity per share $13.61 $13.93 $13.98 $13.77 Stockholders' equity to total assets 8.15% 8.08% 7.87% 7.32% Allowance for loan losses as a percentage of loans, net of unearned income 1.29% 1.29% 1.23% 1.20% Loans, net of unearned income, to total deposits 85.95% 87.67% 93.41% 92.31% Net charge-offs as a percentage of average loans** 0.48% 0.19% 0.42% 0.40% Total non-performing assets (excluding loans 90 days past due) as a percentage of loans and other real estate 0.60% 0.68% 0.67% 0.67% Total non-performing assets (including loans 90 days past due) as a percentage of loans and other real estate 1.15% 1.15% 1.05% 0.96% 12/31/99 3/31/00 6/30/00 9/30/00 -------- ------- ------- ------- Return on average assets* 1.23% 1.21% 1.19% 1.18% Return on average equity* 17.05% 16.60% 16.01% 15.56% Stockholders' equity per share $13.89 $14.25 $14.55 $15.16 Stockholders' equity to total assets 7.18% 7.58% 7.43% 7.70% Allowance for loan losses as a percentage of loans, net of unearned income 1.20% 1.21% 1.20% 1.20% Loans, net of unearned income, to total deposits 93.85% 91.01% 93.49% 97.56% Net charge-offs as a percentage of average loans** 0.47% 0.23% 0.23% 0.33% Total non-performing assets (excluding loans 90 days past due) as a percentage of loans and other real estate 0.68% 0.74% 0.71% 0.76% Total non-performing assets (including loans 90 days past due) as a percentage of loans and other real estate 0.93% 0.96% 0.93% 0.88%
*Annualized based on operating income. **Annualized -----END PRIVACY-ENHANCED MESSAGE-----