-----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, TdopvhNS7h8F/cVYIStgtBP38uPu8OlZXXkR5N6T/NNGeWe0TvvPKPsqwMeNXivR 7I2Wx7ut/4ZSNHvI6etXcw== 0000950144-02-010417.txt : 20021011 0000950144-02-010417.hdr.sgml : 20021011 20021010204810 ACCESSION NUMBER: 0000950144-02-010417 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20021010 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: FILED AS OF DATE: 20021011 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REGIONS FINANCIAL CORP CENTRAL INDEX KEY: 0000036032 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 630589368 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31307 FILM NUMBER: 02786874 BUSINESS ADDRESS: STREET 1: 417 NORTH 20TH STREET CITY: BIRMINGHAM STATE: AL ZIP: 35023 BUSINESS PHONE: 2059441300 MAIL ADDRESS: STREET 1: 417 NORTH 20TH STREET CITY: BIRMINGHAM STATE: AL ZIP: 35023 FORMER COMPANY: FORMER CONFORMED NAME: FIRST ALABAMA BANCSHARES INC DATE OF NAME CHANGE: 19920703 8-K 1 g78699e8vk.txt REGIONS FINANCIAL CORPORATION 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 10, 2002 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) (205) 944-1300 ---------------------------------------------------- (Registrant's telephone number, including area code) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. The exhibits listed in the exhibit index are furnished pursuant to Regulation FD as a part of this current report on Form 8-K. ITEM 9. REGULATION FD DISCLOSURE In accordance with general instruction B.2. of Form 8-K, the following information is furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934. On October 10, 2002, the registrant Regions Financial Corporation issued a press release reporting on its results of operations for the quarter and nine months ended September 30, 2002. The press release is included in this report as exhibit 99.1. 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/ D. Bryan Jordan D. Bryan Jordan Executive Vice President and Comptroller Date: October 10, 2002 INDEX TO EXHIBITS
Sequential Exhibit Page No. - ------- ---------- 99.1 Press release dated October 10, 2002.
EX-99.1 3 g78699exv99w1.txt PRESS RELEASE EXHIBIT 99.1 October 10, 2002 [REGIONS FINANCIAL CORP. LOGO] NEWS RELEASE REGIONS ANNOUNCES RECORD EARNINGS Regions Financial Corporation today announced record quarterly and year-to-date earnings. Net income for the quarter ended September 30, 2002, totaled $156.5 million or $.70 per diluted share, a 19% increase over the comparable quarter of last year. Year-to-date net income was a record $463.7 million or $2.03 per diluted share. "We are extremely pleased to report record earnings," said Regions Chairman and CEO, Carl E. Jones Jr. "Achieving this outstanding level of financial performance during the current challenging economic environment is quite an accomplishment, and the credit goes to Regions' some 16,000 associates throughout the South." "These men and women make the everyday decisions that affect our company's profitability, and it is because of their efforts that we continue to remain one of the strongest financial services providers in the nation," Jones said. "They are committed to both our customers and to fiscal soundness." Total revenues (excluding securities gains) for the third quarter of 2002 totaled $701.7 million, a 12% annualized increase over the second quarter of this year. Net interest income increased $4.8 million, with fee income up $15.3 million from the prior quarter. "We continue to emphasize the importance of growing customer relationships and related revenues in all of our markets and lines of business," Jones said. "Increased net interest income was fueled by good growth in loans from our community banking franchise, and strong fee income was attributable to Morgan Keegan and our mortgage banking activities." Morgan Keegan's pre-tax income increased 13% from the previous quarter. Single-family residential mortgage loan production from Regions' mortgage banking operations was at record levels of $1.7 billion in the third quarter. During the third quarter, total loans increased at an annualized rate of almost 5%, based on average balances compared to the prior quarter, with commercial and consumer loan categories experiencing the strongest growth. Total non-performing assets declined $34.3 million in the third quarter and totaled $340.5 million at September 30, 2002. Regions' allowance for loan losses as a percentage of loans increased to 1.43% at September 30, 2002. Net loan charge-offs for the third quarter of 2002 were .40% annualized, compared to .36% in the third quarter of last year. "It's encouraging to see meaningful improvement in our non-performing assets," Jones noted. "The diversification and granularity of our loan portfolio, combined with our prudent underwriting criteria and early identification procedures for problem credits, have served us well during these turbulent economic times." "With the solid financial performance of the third quarter now behind us, we are optimistic about Regions' ability to produce strong results for the full year 2002," Jones added. Regions Financial Corporation, with $47.4 billion in assets, ranks among the 25 largest financial services companies in the nation. Serving customers throughout the South, it provides traditional commercial and retail banking services and other financial services in the fields of investment banking, asset management, trust, mutual funds, securities brokerage, insurance, leasing and mortgage banking. Its banking affiliate, Regions Bank, offers banking services online from its Web site at www.regions.com and from more than 680 banking offices in Alabama, Arkansas, Florida, Georgia, Louisiana, North Carolina, South Carolina, Tennessee and Texas. Regions provides investment and brokerage services from more than 140 offices of Morgan Keegan & Co. Inc., one of the South's largest investment firms. Regions ranks on both the Forbes 500 and Fortune 500 listings of America's largest companies; its common stock is traded on the New York Stock Exchange under the symbol RF. Continued Next Page October 10, 2002 Page Two FINANCIAL HIGHLIGHTS (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended Nine Months Ended September 30 September 30 -------------------------- -------------------------- Earnings 2002 2001 Change 2002 2001 Change -------- -------- ------ -------- -------- ------ Net income $156,479 $135,199 16% $463,668 $370,750 25% Add back: excess purchase price amortization** -- 13,452 -- 33,132 -------- -------- -------- -------- Net income as adjusted for the adoption of FAS 142** $156,479 $148,651 5% $463,668 $403,882 15% Operating income* $156,479 $135,199 16% $463,668 $388,562 19% Add back: excess purchase price amortization** -- 13,452 -- 33,132 -------- -------- -------- -------- Operating income as adjusted for the adoption of FAS 142** $156,479 $148,651 5% $463,668 $421,694 10% Per share: Net income $0.71 $0.59 20% $2.06 $1.66 24% Net income-diluted $0.70 $0.59 19% $2.03 $1.64 24% Net income as adjusted for the adoption of FAS 142** $0.71 $0.65 9% $2.06 $1.81 14% Net income-diluted as adjusted for the adoption of FAS 142** $0.70 $0.65 8% $2.03 $1.79 13% Operating income* $0.71 $0.59 20% $2.06 $1.74 18% Operating income-diluted* $0.70 $0.59 19% $2.03 $1.72 18% Operating income* as adjusted for the adoption of FAS 142** $0.71 $0.65 9% $2.06 $1.89 9% Operating income-diluted* as adjusted for the adoption of FAS 142** $0.70 $0.65 8% $2.03 $1.87 9% Cash dividends declared $0.29 $0.28 4% $0.87 $0.84 4%
September 30 ------------------------------------ Financial Condition 2002 2001 Change ----------- ----------- ------ Total assets $47,393,496 $45,684,013 4% Loans, net of unearned income $30,572,317 $30,910,843 -1% Securities $ 8,973,193 $ 8,256,608 9% Total earning assets $43,293,638 $41,992,945 3% Total deposits $32,174,789 $30,573,191 5% Stockholders' equity $ 4,083,855 $ 3,948,795 3% Stockholders' equity per share $ 18.44 $ 17.36 6%
*In 2001 excludes merger and other non-recurring charges of $23.3 million pretax ($17.8 million after tax or $.08 per diluted share). **On January 1, 2002, Regions adopted FAS 142 which eliminated amortization of excess purchase price. If FAS 142 had been in effect in 2001, net income per share and net income per diluted share would have increased by $.06 for the three months ended September 30, 2001 and $.15 for the nine months ended September 30, 2001. Continued Next Page October 10, 2002 Page Three
September 30 ------------------------------------------ Selected Ratios 2002 2001 ----------------- ----------------- Return on average stockholders' equity based on net income 15.35% 13.44% Return on average stockholders' equity based on net income as adjusted for the adoption of FAS 142** 15.35% 14.64% Return on average stockholders' equity based on operating income* 15.35% 14.09% Return on average stockholders' equity based on operating income* as adjusted for the adoption of FAS 142** 15.35% 15.29% Return on average total assets based on net income 1.36% 1.11% Return on average total assets based on net income as adjusted for the adoption of FAS 142** 1.36% 1.21% Return on average total assets based on operating income* 1.36% 1.17% Return on average total assets based on operating income* as adjusted for the adoption of FAS 142** 1.36% 1.27% Stockholders' equity to total assets 8.62% 8.64% Allowance for loan losses as a percentage of loans, net of unearned income 1.43% 1.25% Loans, net of unearned income, to total deposits 95.02% 101.10% Net charge-offs to average loans 0.35% 0.33%
*In 2001 excludes merger and other non-recurring charges of $23.3 million pretax ($17.8 million after tax or $.08 per diluted share). **On January 1, 2002, Regions adopted FAS 142 which eliminated amortization of excess purchase price. If FAS 142 had been in effect in 2001, net income per share and net income per diluted share would have increased by $.06 for the three months ended September 30, 2001 and $.15 for the nine months ended September 30, 2001. For additional information, including supplemental financial information, refer to Regions' Form 8-K filed with the Securities and Exchange Commission on October 11, 2002, or visit Regions' Web site at http://www.regions.com. Regions' Investor Relations contact is Ronald C. Jackson at 205/326-7374 or Kenneth Till at 205/326-7605; Regions' Media contact is Kristi Lamont Ellis at 205/326-7179. Statements made in this press release, other than those containing historical information, are forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Act of 1995. Such statements involve risks and uncertainties that may cause results to differ materially from those set forth in these statements. Regions cautions readers that results and events subject to forward-looking statements could differ materially due to the following factors: possible changes in economic and business conditions; the ability of Regions to integrate recent acquisitions and attract new customers; possible changes in monetary and fiscal policies, laws and regulations; the effects of easing of restrictions on participants in the financial services industry; the cost and other effects of legal and administrative cases; possible changes in the credit worthiness of customers and the possible impairment of collectibility of loans; the effects of changes in interest rates and other risks and factors identified in the company's filings with the Securities and Exchange Commission. FINANCIAL SUPPLEMENT TO THIRD QUARTER 2002 EARNINGS RELEASE SUMMARY Net income for the third quarter of 2002 totaled $156.5 million or $.70 per diluted share, compared to $153.1 million or $.67 per diluted share for the second quarter of 2002 and $135.2 million or $.59 per diluted share for the third quarter of 2001. Net income in 2002 excludes amortization of excess purchase price in accordance with the adoption of FAS 142. Excluding amortization of excess purchase price would result in net income per diluted share of $.65 for the third quarter of 2001. Total revenue increased $20.1 million (12% annualized) compared to the second quarter of 2002. Third quarter top-line revenue growth was driven by stronger loan and earning assets growth, combined with increased fee income, particularly in the mortgage banking and customer derivative business units. Net interest income increased $4.8 million over second quarter 2002 due to an 11%, annualized, increase in earning assets, primarily loans and securities. The interest margin declined 9 basis points (bps.) to 3.70% in the third quarter of 2002 as rates on interest-earning assets declined more than did rates on interest-bearing liabilities. Total loans increased 4.5% annualized, using linked-quarter averages balances, primarily in commercial and consumer categories. Average community banking loan balances grew 7.5% on a linked quarter, annualized basis. Non-performing assets total $340.5 million at September 30, 2002, a decline of $34.3 million (9.1%) from second quarter levels. This decrease was due primarily to a $32 million decline in non-accrual loans and a $9 million decline in renegotiated loans. Partially offsetting these declines, was a $7 million increase in other real estate. Regions continues to have limited exposure to shared national credits. In the third quarter of 2002, Regions initiated the process to sell or securitize approximately $1.1 billion of indirect consumer installment loans. These loans have been reclassified to the Loans held for Sale category. This reclassification did not impact average balances for the third quarter. No gain or loss was recognized on the transfer and subsequently these loans are carried at lower of cost or market. Non-interest income increased $15.3 million (21% annualized) from the second quarter. This increase was due to higher revenues associated with Regions' mortgage banking and customer derivative business units combined with higher service charges on deposit accounts. FINANCIAL SUPPLEMENT TO THIRD QUARTER 2002 EARNINGS RELEASE PAGE 2 Securities gains totaled $22.6 million in the third quarter of 2002. These gains were taken in connection with an impairment charge (approximately $20 million) related to mortgage servicing rights (MSR). Comparisons of Regions third quarter 2002 financial performance to certain prior periods are affected by the fourth quarter 2001 acquisitions of Park Meridian and First Texas Bancshares and the second quarter 2002 acquisitions of Brookhollow Bancshares and Independence Bank. BALANCE SHEET CHANGES Average total loans increased 4.5% annualized, using linked-quarter average balances, primarily due to growth in the commercial and consumer categories, partially offset by prepayments of residential mortgage loans due to prepayments. Excluding the effect of acquisitions, total loans increased approximately 3.7% annualized in the third quarter of 2002, using linked-quarter average balances. Growth in the commercial and industrial and consumer categories was partially offset by declines in residential mortgage loans. Community bank average loan balances grew 7.5% on a linked-quarter, annualized basis, excluding acquisitions. Compared to September 2001, total loans decreased 1%. In the third quarter of 2002, Regions initiated the process to sell or securitize approximately $1.1 billion of indirect consumer installment loans. These loans have been reclassified as Loans held for Sale. This reclassification did not impact average balances for the third quarter, but is reflected in the table below. Regions anticipates recognizing a gain in the fourth quarter of 2002 from this transaction. The amount of the gain is dependent on market conditions and other factors at the time the transaction is completed. The following table includes a distribution of Regions' loan portfolio.
-------------------------------------------------------------------------------------------- Loan Portfolio (period end data) -------------------------------------------------------------------------------------------- ($ amounts in thousands) First Quarter Second Quarter Third Quarter 2002 2002 2002 -------------------------------------------------------------------------------------------- Commercial $10,047,659 $10,414,685 $10,843,901 Residential Mortgages 8,597,748 8,280,718 7,872,982 Real Estate 3,851,239 4,017,136 4,259,622 Construction 3,635,556 3,638,088 3,663,580 Branch Installment 1,680,452 1,690,493 1,674,325 Indirect Installment 1,349,760 1,496,196 491,321 Consumer Lines of Credit 1,029,961 1,120,240 1,174,465 Student Loans 559,270 564,279 592,120 ----------- ----------- ----------- $30,751,645 $31,221,835 $30,572,316
Average earning assets increased 11% on a linked-quarter annualized basis due primarily to growth in the commercial and consumer portfolios, combined with higher investment balances. FINANCIAL SUPPLEMENT TO THIRD QUARTER 2002 EARNINGS RELEASE PAGE 3 Total deposits increased 5.5%, annualized, based on linked-quarter average balances. Non-interest bearing deposits, interest-bearing checking, money market and savings accounts reflected a slight decline, down $34 million or 1% annualized based on linked-quarter average balances, excluding acquisitions. Retail certificates of deposit reflected a decline of approximately $206 million, based on linked-quarter average balances excluding acquisitions, due to continued efforts to less aggressively price these deposits. Total core deposits, which exclude wholesale deposit funding sources and deposits added in acquisitions, declined 2.4% annualized during the third quarter. Wholesale deposit funding sources increased $592 million, based on linked-quarter average balances, as rates on these deposits products were more favorable compared to other funding sources. OPERATING PERFORMANCE Total revenues (defined as net interest income on a taxable equivalent basis plus non-interest income, excluding securities transactions) increased $20.1 million or 12% annualized on a linked-quarter annualized basis compared to second quarter 2002. Taxable equivalent net interest income increased $4.8 million and non-interest income increased $15.3 million. Net interest income increased due to a higher level of earning assets, partially offset by lower spreads. The increase in non-interest income was due to higher fees in mortgage banking, as well as increased deposit service charge and customer derivative fees. Net interest income (taxable equivalent) increased $4.8 million due to an increase in earning assets partially offset by a 9 bps. decline in the net interest margin. The yield on interest-earning assets declined 20 bps. this quarter, while the rate on interest-bearing liabilities declined 17 bps. Current modeling indicates that Regions' net interest margin should decline slightly (6-8 bps.) in the fourth quarter of 2002, assuming no further changes in market interest rates. Regions remains in a slightly asset sensitive position at the end of the third quarter 2002. Total third quarter non-interest income (excluding securities transactions) increased $15.3 million (21% annualized) from second quarter levels. Brokerage and investment were flat compared to the second quarter. Service charges on deposit accounts increased $1.6 million compared to the second quarter, a reflection of an increased number of accounts and a modification of the structure of certain deposit accounts. Mortgage servicing and origination fees in the third quarter increased $3.6 million compared to the second quarter, primarily due to higher production levels partially offset by fewer number of loans serviced. Single-family mortgage production was $1.7 billion in the third quarter of 2002, compared to $1.2 billion in second quarter 2002. Historically low interest rates are currently fueling unusually high refinance activity. Regions' mortgage servicing portfolio totaled $17.7 billion at September 30, 2002, compared to $18.3 billion at June 30, 2002. Other non-interest income increased $10.3 million over the second quarter due to higher gains on mortgage loans sold and increased customer derivative fees. Beginning in the first quarter of 2002, Regions began classifying gains/losses related to the sale of mortgage loans held for sale in the other non-interest income category. In prior period these net gains/losses were classified in other non-interest expense. All comparable periods have been adjusted to reflect this change in classification. FINANCIAL SUPPLEMENT TO THIRD QUARTER 2002 EARNINGS RELEASE PAGE 4 Securities gains totaled $22.6 million in the third quarter 2002. These gains, taken primarily to offset charges related to the impairment of mortgage servicing rights (discussed below). In the third quarter of 2002, total non-interest expenses increased $31.4 million, compared to second quarter 2002. Salaries and employee benefits increased $8.0 million due to higher commissions and incentives primarily related to increased production in the mortgage banking area, combined with sales and other incentives costs. Net occupancy and furniture and equipment expense increased $824,000 in the third quarter of 2002 from the second quarter of 2002. Other non-interest expense increased $22.6 million from second quarter levels, due primarily to the impairment charge and increased amortization of mortgage servicing rights ($21.5 million), advertising, and write downs of other real estate. The following table illustrates the trends in operating expenses between the second and third quarters of 2002.
- ----------------------------------------------------------------------------------------------------------------- Non-Interest Expense Comparison - ----------------------------------------------------------------------------------------------------------------- Second Third Increase Third Quarter Quarter related to Quarter 2002 2002 mortgage 2002 As As banking As Dollar Percent ($ amounts in thousands) Reported Reported impairment Adjusted Change Change - ----------------------------------------------------------------------------------------------------------------- Salaries and employee benefits $250,283 $258,264 $0 $258,264 $7,981 3.2% Net occupancy and furniture & Equipment expense 47,131 47,955 0 47,955 824 1.7% Other non-interest expenses 123,659 146,232 21,492 124,740 1,081 0.9% -------- -------- ------- -------- ------ Total non-interest expenses $421,073 $452,451 $21,492 $430,959 $9,886 2.3%
The provision for loan losses in the third quarter of 2002 was $35.0 million or 0.45% annualized of average loans. Net loan charge-offs for the third quarter of 2002 were $31.8 million (0.40% of average loans annualized), compared to $29.3 million (0.38% of average loans annualized) in the second quarter of 2002 and $27.9 million (0.36% of average loans annualized) in the third quarter of last year. The higher level of net loan charge-offs in the third quarter of 2002 is due primarily to higher commercial loan losses. In light of management's assessment of economic conditions and the current levels of non-performing assets, Regions' allowance for loan losses was increased to $435.8 million at September 30, 2002, compared to $432.6 million at June 30, 2002, and $386.5 million at September 30, 2001. The allowance for loan losses as a percentage of loans (net of unearned income), increased to 1.43% at September 30, 2002, compared to 1.39% at June 30, 2002. Non-performing assets declined significantly during the third quarter of 2002. Total non-performing assets at September 30, 2002 were $340.5 million or 1.11% of loans and other real estate, a decrease of $34.3 million from the $374.8 million or 1.20% of loans and other real estate at June 30, 2002. This decline is attributable to a $32.0 million decrease in non-accrual loans primarily related to commercial credits and a $9.2 million decrease in renegotiated loans partially offset by a $7.0 million increase in other real estate. As of September 30, 2002, renegotiated loans and other real estate totaled $33.1 million and $59.1 million, respectively, with non-accrual loans totaling $248.3 FINANCIAL SUPPLEMENT TO THIRD QUARTER 2002 EARNINGS RELEASE PAGE 5 million at that date. Loans past due 90 days or more totaled $42.2 million at September 30, 2002, a $1.0 million decrease compared to $43.2 million at June 30, 2002. Regions' coverage ratio of allowance for loan losses to non-performing loans increased to 155% at September 30, 2002, compared to 134% at June 30, 2002. Regions' non-performing loan portfolio is comprised primarily of a number of small to medium size loans that are diversified geographically throughout its franchise. The 25 largest non-accrual loans range from $11.2 million to $1.3 million, with only one loan above $10 million. These loans are widely disbursed among a number of industries and are generally well collateralized. Of the total $248.3 million in non-accrual loans at September 30, 2002, approximately $83.0 million (33% of total non-accruing loans) are secured by single-family residences, which historically have had very low levels of losses. Management considers the current level of the allowance for loan losses adequate to absorb possible losses from loans in the portfolio. Management's determination of the adequacy of the allowance for loan losses requires the use of judgments and estimations that may change in the future. Unfavorable changes in the factors used by management to determine the adequacy of the reserve, or the availability of new information, could cause the allowance for loan losses to be increased or decreased in future periods. MORGAN KEEGAN PERFORMANCE Morgan Keegan's net income totaled $13.2 million for the quarter ended September 30, 2002. Compared to the second quarter of 2002, Morgan Keegan's third quarter net income increased $1.4 million, due primarily to higher commissions and fees in the fixed income division. Revenue associated with the fixed income group increased 9% in the third quarter compared to second, while revenue from the equity capital markets and private client areas decreased 16.2% and 2.8%, respectively. Morgan Keegan's fixed income capital markets division continues as the top revenue-producing line of business. Total revenues for Morgan Keegan during the third quarter of 2002 totaled $141.0 million compared to $140.6 million in total revenues reported for the second quarter of 2002. On a linked-quarter basis, Morgan Keegan's overhead decreased $1.9 million compared to the previous quarter due primarily to management's efforts to reduce costs. The total number of financial advisors at Morgan Keegan remains at approximately 940 and approximately 14,800 new customer accounts were opened during the third quarter. Total customer assets were $31.1 billion at September 30, 2002, down from approximately $32.0 billion at June 30, 2002. FINANCIAL SUPPLEMENT TO THIRD QUARTER 2002 EARNINGS RELEASE PAGE 6 The following table shows the components of revenue contributed by Morgan Keegan for the three months ended June 30, 2002 and September 30, 2002.
- ----------------------------------------------------------------------------------------- Morgan Keegan Summary Income Statement - ----------------------------------------------------------------------------------------- Three months Three months ($ amounts in thousands) Ended ended % Change Sept. 30, 2002 June 30, 2002 - ----------------------------------------------------------------------------------------- Revenues: Commissions $ 36,357 $ 35,471 2.5% Principal transaction 58,881 51,768 13.7 Investment banking 16,138 23,259 -30.6 Interest 13,606 13,704 -0.7 Investment advisory 13,142 13,188 -0.3 Other 2,893 3,163 -8.5 --------- -------- Total revenues 141,017 140,553 0.3 Expenses: Interest expense 7,275 7,685 -5.3 Non-interest expense 112,768 114,285 -1.3 --------- -------- Total expenses 120,043 121,970 -1.6 Income before income taxes 20,974 18,583 12.9 Income taxes 7,800 6,800 14.7 --------- -------- Net income $ 13,174 $ 11,783 11.8% ========= ========
- ---------------------------------------------------------------------------------------------- Morgan Keegan Breakout of Revenue by Division Three months ended September 30, 2002 - ---------------------------------------------------------------------------------------------- Fixed Income Equity Private Capital Capital Investment Interest ($ amounts in thousands) Client Markets Markets Advisory & Other - ---------------------------------------------------------------------------------------------- $ amount of revenue $42,308 $56,114 $14,468 $13,137 $14,989 % of gross revenue 30.0% 39.8% 10.3% 9.3% 10.6%
FINANCIAL SUPPLEMENT TO THIRD QUARTER 2002 EARNINGS RELEASE PAGE 7 ACQUISITION ACTIVITY Acquisitions completed since September 30, 2001 include the following (in thousands):
- ------------------------------------------------------------------------------------------------------------------ Total Total Accounting Date Company Acquired Total Assets Loans Deposits Method Offices - ------------------------------------------------------------------------------------------------------------------ November 2001 Park Meridian, Inc., $309,844 $237,937 $218,700 Purchase 3 headquartered in Charlotte, North Carolina December 2001 First Bancshares of Texas, $188,953 $87,293 $172,151 Purchase 6 Inc., headquartered in Houston, Texas April 2002 Brookhollow Bancshares, Inc., $165,392 $69,144 $154,451 Purchase 4 headquartered in Dallas, Texas April 2002 Independence Bank, National $112,408 $86,867 $98,508 Purchase 3 Association, headquartered in Houston, Texas - ------------------------------------------------------------------------------------------------------------------ Totals $776,597 $481,241 $643,810 16 - ------------------------------------------------------------------------------------------------------------------
At September 30, 2002, Regions had no pending acquisitions. STOCK BUYBACK PROGRAM No shares were repurchased in the third quarter. Under its general buyback program, Regions is authorized to repurchase up to 12 million shares. During the second quarter of 2002, Regions repurchased 9.1 million shares in connection with the general buyback program. 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 FINANCIAL SUPPLEMENT TO THIRD QUARTER 2002 EARNINGS RELEASE PAGE 8 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 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. Regions' Investor Relations contact is Ronald C. Jackson at (205) 326-7374 or Kenneth W. Till at (205) 326-7605; Regions' Media contact is Kristi Lamont Ellis at (205) 326-7179. REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CONDITION (Dollar Amounts in Thousands)
-------------------------------------------------------------------------------- 9/30/00 12/31/00 3/31/01 6/30/01 9/30/01 -------------------------------------------------------------------------------- ASSETS Cash and due from banks $ 1,076,869 $ 1,210,872 $ 1,043,984 $ 1,053,195 $ 1,103,077 Interest-bearing deposits in other banks 2,449 3,246 1,095,419 906,987 982,838 Investment securities 3,607,520 3,539,202 44,864 32,745 32,757 Securities available for sale 5,545,803 5,454,969 8,484,278 7,680,342 8,223,851 Trading account assets 21,317 13,437 601,374 554,059 605,376 Loans held for sale 251,063 222,902 466,614 601,838 452,613 Federal funds sold and securities purchased under agreement to resell 246,556 95,550 241,382 345,598 189,043 Margin receivables -- -- 523,118 550,749 595,624 Loans 31,299,305 31,472,656 31,214,746 31,057,354 31,128,869 Unearned income (95,242) (96,193) (91,506) (94,401) (218,026) ------------ ------------ ------------ ------------ ------------ Loans, net of unearned income 31,204,063 31,376,463 31,123,240 30,962,953 30,910,843 Allowance for loan losses (373,699) (376,508) (381,570) (384,324) (386,471) ------------ ------------ ------------ ------------ ------------ Net Loans 30,830,364 30,999,955 30,741,670 30,578,629 30,524,372 Premises and equipment 596,900 598,632 624,841 621,792 623,103 Interest receivable 333,294 349,637 310,474 291,590 286,584 Due from customers on acceptances 24,274 107,912 107,472 69,679 44,269 Other assets 1,090,687 1,091,979 1,857,745 1,851,886 2,020,506 ------------ ------------ ------------ ------------ ------------ $ 43,627,096 $ 43,688,293 $ 46,143,235 $ 45,139,089 $ 45,684,013 ============ ============ ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Deposits Non-interest-bearing $ 4,561,388 $ 4,512,883 $ 4,420,949 $ 4,650,209 $ 4,655,075 Interest-bearing 27,424,262 27,509,608 26,761,914 26,509,073 25,918,116 ------------ ------------ ------------ ------------ ------------ Total Deposits 31,985,650 32,022,491 31,182,863 31,159,282 30,573,191 Borrowed funds: Short-term borrowings: Federal funds purchased and securities sold under agreement to repurchase 1,862,753 1,996,812 2,548,869 1,939,036 2,817,611 Commercial paper 38,750 27,750 49,435 27,750 27,750 Other short-term borrowings 1,620,673 1,108,580 2,264,254 2,392,543 2,315,063 ------------ ------------ ------------ ------------ ------------ Total Short-term Borrowings 3,522,176 3,133,142 4,862,558 4,359,329 5,160,424 Long-term borrowings 4,392,399 4,478,027 5,220,594 4,936,855 4,810,542 ------------ ------------ ------------ ------------ ------------ Total Borrowed Funds 7,914,575 7,611,169 10,083,152 9,296,184 9,970,966 Bank acceptances outstanding 24,274 107,912 107,472 69,679 44,269 Other liabilities 342,689 488,777 968,289 787,584 1,146,792 ------------ ------------ ------------ ------------ ------------ Total Liabilities 40,267,188 40,230,349 42,341,776 41,312,729 41,735,218 Stockholders' equity: Common stock 139,050 139,105 142,825 143,209 143,275 Surplus 1,058,291 1,058,733 1,214,063 1,227,186 1,228,574 Undivided profits 2,264,476 2,333,285 2,397,684 2,446,779 2,518,202 Treasury Stock (18,988) (67,135) 0 (43,398) (52,508) Unearned restricted stock (7,673) (6,952) (6,098) (13,899) (12,511) Accumulated other comprehensive income (loss) (75,248) 908 52,985 66,483 123,763 ------------ ------------ ------------ ------------ ------------ Total Stockholders' Equity 3,359,908 3,457,944 3,801,459 3,826,360 3,948,795 ------------ ------------ ------------ ------------ ------------ $ 43,627,096 $ 43,688,293 $ 46,143,235 $ 45,139,089 $ 45,684,013 ============ ============ ============ ============ ============ ------------------------------------------------------------------------------ 12/31/01 3/31/02 6/30/02 9/30/02 ------------------------------------------------------------------------------ ASSETS Cash and due from banks $ 1,239,598 $ 961,035 $ 938,871 $ 1,220,392 Interest-bearing deposits in other banks 667,186 251,668 271,990 226,252 Investment securities 34,050 34,513 34,785 34,938 Securities available for sale 7,813,109 7,818,728 8,533,371 8,938,255 Trading account assets 741,896 691,183 874,709 890,089 Loans held for sale 890,193 466,073 447,475 1,870,875 Federal funds sold and securities purchased under agreement to resell 92,543 199,051 602,972 245,684 Margin receivables 523,941 565,863 536,245 515,228 Loans 31,136,977 31,002,399 31,471,671 30,822,448 Unearned income (251,629) (250,754) (249,836) (250,131) ------------ ------------ ------------ ------------ Loans, net of unearned income 30,885,348 30,751,645 31,221,835 30,572,317 Allowance for loan losses (419,167) (429,577) (432,624) (435,798) ------------ ------------ ------------ ------------ Net Loans 30,466,181 30,322,068 30,789,211 30,136,519 Premises and equipment 647,176 644,264 644,584 642,376 Interest receivable 249,630 236,423 241,932 230,397 Due from customers on acceptances 63,854 70,039 53,844 36,064 Other assets 1,953,355 1,985,072 2,176,458 2,406,427 ------------ ------------ ------------ ------------ $ 45,382,712 $ 44,245,980 $ 46,146,447 $ 47,393,496 ============ ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Deposits Non-interest-bearing $ 5,085,337 $ 4,875,805 $ 4,876,717 $ 5,062,053 Interest-bearing 26,462,986 25,201,581 26,151,897 27,112,736 ------------ ------------ ------------ ------------ Total Deposits 31,548,323 30,077,386 31,028,614 32,174,789 Borrowed funds: Short-term borrowings: Federal funds purchased and securities sold under agreement to repurchase 1,803,177 2,277,608 2,496,069 2,551,283 Commercial paper 27,750 26,750 26,750 24,750 Other short-term borrowings 2,267,473 2,146,743 2,380,834 2,057,264 ------------ ------------ ------------ ------------ Total Short-term Borrowings 4,098,400 4,451,101 4,903,653 4,633,297 Long-term borrowings 4,747,674 4,711,218 5,369,468 5,543,753 ------------ ------------ ------------ ------------ Total Borrowed Funds 8,846,074 9,162,319 10,273,121 10,177,050 Bank acceptances outstanding 63,854 70,039 53,844 36,064 Other liabilities 888,696 849,160 853,274 921,738 ------------ ------------ ------------ ------------ Total Liabilities 41,346,947 40,158,904 42,208,853 43,309,641 Stockholders' equity: Common stock 143,801 144,272 144,547 144,811 Surplus 1,252,809 1,268,327 1,276,918 1,284,365 Undivided profits 2,591,962 2,679,307 2,768,357 2,860,604 Treasury Stock 0 (37,553) (358,199) (358,199) Unearned restricted stock (11,234) (19,470) (17,522) (15,441) Accumulated other comprehensive income (loss) 58,427 52,193 123,493 167,715 ------------ ------------ ------------ ------------ Total Stockholders' Equity 4,035,765 4,087,076 3,937,594 4,083,855 ------------ ------------ ------------ ------------ $ 45,382,712 $ 44,245,980 $ 46,146,447 $ 47,393,496 ============ ============ ============ ============
REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (Dollar Amounts in Thousands)
----------------------------------------------------------------------- 9/30/00 12/31/00 3/31/01 6/30/01 9/30/01 ----------------------------------------------------------------------- Interest Income: Interest and fees on loans $667,305 $ 684,013 $661,571 $ 634,945 $606,811 Interest on securities: Taxable interest income 136,452 133,351 127,082 110,720 104,008 Tax-exempt interest income 10,680 10,560 10,278 10,510 10,151 -------- --------- -------- --------- -------- Total Interest on Securities 147,132 143,911 137,360 121,230 114,159 Interest on mortgage loans held for sale 8,176 6,693 6,856 11,391 11,556 Interest on margin receivables -- -- -- 7,811 7,187 Income on federal funds sold and securities purchased under agreement to resell 1,672 1,366 522 7,461 6,250 Interest on time deposits in other banks 221 498 770 4,859 4,028 Interest on trading account assets 188 252 189 6,723 6,104 -------- --------- -------- --------- -------- Total Interest Income 824,694 836,733 807,268 794,420 756,095 Interest Expense: Interest on deposits 358,033 352,156 338,107 306,065 276,597 Interest on short-term borrowings 65,623 68,242 48,808 57,952 45,907 Interest on long-term borrowings 58,919 72,464 73,219 79,251 77,779 -------- --------- -------- --------- -------- Total Interest Expense 482,575 492,862 460,134 443,268 400,283 -------- --------- -------- --------- -------- Net Interest Income 342,119 343,871 347,134 351,152 355,812 Provision for loan losses 32,746 37,372 28,500 28,990 30,000 -------- --------- -------- --------- -------- Net Interest Income After Provision for Loan Losses 309,373 306,499 318,634 322,162 325,812 Non-Interest Income: Brokerage and investment banking 11,173 9,411 10,330 117,660 110,430 Trust department income 14,597 14,968 14,986 15,098 13,749 Service charges on deposit accounts 59,465 61,255 63,273 66,939 67,190 Mortgage servicing and origination fees 20,016 19,221 21,200 24,431 21,924 Securities gains (losses) 28 (5) 474 (7) 4,534 Other 40,197 44,262 37,158 51,749 46,398 -------- --------- -------- --------- -------- Total Non-Interest Income 145,476 149,112 147,421 275,870 264,225 Non-Interest Expense: Salaries and employee benefits 144,868 150,492 159,391 251,223 230,922 Net occupancy expense 18,583 19,423 18,508 22,468 22,950 Furniture and equipment expense 18,880 21,016 17,727 22,557 22,989 Other 89,737 112,081 97,746 139,962 121,800 -------- --------- -------- --------- -------- Total Non-Interest Expense 272,068 303,012 293,372 436,210 398,661 -------- --------- -------- --------- -------- Income Before Income Taxes 182,781 152,599 172,683 161,822 191,376 Applicable income taxes 54,922 24,233 49,931 49,023 56,177 -------- --------- -------- --------- -------- Net Income $127,859 $ 128,366 $122,752 $ 112,799 $135,199 ======== ========= ======== ========= ======== Operating Income $127,859 $ 128,366 $122,752 $130,611 (a) $135,199 ======== ========= ======== ========= ======== ----------------------------------------------------- 12/31/01 3/31/02 6/30/02 9/30/02 ----------------------------------------------------- Interest Income: Interest and fees on loans $555,176 $512,435 $506,410 $502,923 Interest on securities: Taxable interest income 104,109 95,382 101,419 104,479 Tax-exempt interest income 9,495 8,666 7,402 7,053 -------- -------- -------- -------- Total Interest on Securities 113,604 104,048 108,821 111,532 Interest on mortgage loans held for sale 11,937 12,816 9,376 12,146 Interest on margin receivables 5,733 4,970 5,061 4,951 Income on federal funds sold and securities purchased under agreement to resell 3,657 1,616 2,251 2,530 Interest on time deposits in other banks 1,426 211 71 120 Interest on trading account assets 6,321 5,480 6,729 6,492 -------- -------- -------- -------- Total Interest Income 697,854 641,576 638,719 640,694 Interest Expense: Interest on deposits 214,926 173,422 165,231 162,493 Interest on short-term borrowings 35,441 29,986 32,236 33,953 Interest on long-term borrowings 76,092 68,382 66,161 64,103 -------- -------- -------- -------- Total Interest Expense 326,459 271,790 263,628 260,549 -------- -------- -------- -------- Net Interest Income 371,395 369,786 375,091 380,145 Provision for loan losses 77,912 30,000 30,000 35,000 -------- -------- -------- -------- Net Interest Income After Provision for Loan Losses 293,483 339,786 345,091 345,145 Non-Interest Income: Brokerage and investment banking 120,554 112,855 123,296 123,294 Trust department income 12,848 15,747 15,807 15,605 Service charges on deposit accounts 69,861 66,034 68,943 70,581 Mortgage servicing and origination fees 29,527 24,679 23,283 26,863 Securities gains (losses) 27,105 1,856 1,928 22,642 Other 57,370 57,437 57,443 67,696 -------- -------- -------- -------- Total Non-Interest Income 317,265 278,608 290,700 326,681 Non-Interest Expense: Salaries and employee benefits 238,152 237,362 250,283 258,264 Net occupancy expense 22,975 22,548 23,964 25,093 Furniture and equipment expense 24,454 22,100 23,167 22,862 Other 133,097 120,350 123,659 146,232 -------- -------- -------- -------- Total Non-Interest Expense 418,678 402,360 421,073 452,451 -------- -------- -------- -------- Income Before Income Taxes 192,070 216,034 214,718 219,375 Applicable income taxes 53,886 61,971 61,592 62,896 -------- -------- -------- -------- Net Income $138,184 $154,063 $153,126 $156,479 ======== ======== ======== ======== Operating Income $138,184 $154,063 $153,126 $156,479 ======== ======== ======== ========
REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES (Dollar Amounts in Thousands)
-------------------------------------------------------------------- 9/30/00 12/31/00 3/31/01 6/30/01 9/30/01 -------------------------------------------------------------------- Average shares outstanding--during quarter 220,424 221,062 214,872 227,603 227,657 Average shares outstanding--during quarter, diluted 221,615 222,366 216,648 230,422 230,383 Actual shares outstanding--end of quarter 221,612 219,769 228,520 227,634 227,410 Operating income per share $ 0.58 $ 0.58 $ 0.57 $ 0.57 $ 0.59 Operating income per share, diluted $ 0.58 $ 0.58 $ 0.57 $ 0.57 $ 0.59 Operating income per share, diluted as adjusted for the adoption of FAS 142* $ 0.61 $ 0.61 $ 0.60 $ 0.62 $ 0.65 Net income per share $ 0.58 $ 0.58 $ 0.57 $ 0.50 $ 0.59 Net income per share, diluted $ 0.58 $ 0.58 $ 0.57 $ 0.49 $ 0.59 Dividends per share $ 0.27 $ 0.27 $ 0.28 $ 0.28 $ 0.28 Taxable equivalent net interest income $ 347,956 $ 359,154 $ 368,365 $ 373,008 $ 378,177 ------------------------------------------------------ 12/31/01 3/31/02 6/30/02 9/30/02 ------------------------------------------------------ Average shares outstanding--during quarter 228,618 229,958 224,878 221,282 Average shares outstanding--during quarter, diluted 230,610 233,165 229,112 224,438 Actual shares outstanding--end of quarter 230,081 229,684 221,054 221,476 Operating income per share $ 0.60 $ 0.67 $ 0.68 $ 0.71 Operating income per share, diluted $ 0.60 $ 0.66 $ 0.67 $ 0.70 Operating income per share, diluted as adjusted for the adoption of FAS 142* $ 0.66 $ 0.66 $ 0.67 $ 0.70 Net income per share $ 0.60 $ 0.67 $ 0.68 $ 0.71 Net income per share, diluted $ 0.60 $ 0.66 $ 0.67 $ 0.70 Dividends per share $ 0.28 $ 0.29 $ 0.29 $ 0.29 Taxable equivalent net interest income $ 394,499 $ 388,104 $ 392,856 $ 397,668
(a) Operating income excludes merger and other non-recurring charges of $23.3 million pre-tax ($17.8 million after tax or $.08 per diluted share). * Operating income assuming FAS 142 (which eliminated amortization of excess purchase price) was adopted at the beginning of the period ended 3/31/02. REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (Dollar Amounts in Thousands)
Nine Months Ended September 30 ------------------------------ 2002 2001 ---------- ---------- Interest Income: Interest and fees on loans $1,521,768 $1,903,327 Interest on securities: Taxable interest income 301,280 341,810 Tax-exempt interest income 23,121 30,939 ---------- ---------- Total Interest on Securities 324,401 372,749 Interest on mortgage loans held for sale 34,338 29,803 Interest on margin receivables 14,982 14,998 Income on federal funds sold and securities purchased under agreement to resell 6,397 14,233 Interest on time deposits in other banks 402 9,657 Interest on trading account assets 18,701 13,016 ---------- ---------- Total Interest Income 1,920,989 2,357,783 Interest Expense: Interest on deposits 501,146 920,769 Interest on short-term borrowings 96,175 152,667 Interest on long-term borrowings 198,646 230,249 ---------- ---------- Total Interest Expense 795,967 1,303,685 ---------- ---------- Net Interest Income 1,125,022 1,054,098 Provision for loan losses 95,000 87,490 ---------- ---------- Net Interest Income After Provision for Loan Losses 1,030,022 966,608 Non-Interest Income: Brokerage and investment banking 359,445 238,420 Trust department income 47,159 43,833 Service charges on deposit accounts 205,558 197,402 Mortgage servicing and origination fees 74,825 67,555 Securities gains (losses) 26,426 5,001 Other 182,576 123,519 ---------- ---------- Total Non-Interest Income 895,989 675,730 Non-Interest Expense: Salaries and employee benefits 745,909 641,536 Net occupancy expense 71,605 63,926 Furniture and equipment expense 68,129 63,273 Other 390,241 347,722 ---------- ---------- Total Non-Interest Expense 1,275,884 1,116,457 ---------- ---------- Income Before Income Taxes 650,127 525,881 Applicable income taxes 186,459 155,131 ---------- ---------- Net Income $ 463,668 $ 370,750 ========== ========== Operating Income $ 463,668 $ 388,562 (a) ========== ==========
REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES (Dollar Amounts in Thousands)
Nine Months Ended September 30 --------------------------- 2002 2001 ---------- ---------- Average shares outstanding--year-to-date 225,341 223,424 Average shares outstanding--year-to-date, diluted 228,873 225,868 Actual shares outstanding--end of quarter 221,476 227,410 Operating income per share $ 2.06 $ 1.74 Operating income per share, diluted $ 2.03 $ 1.72 Operating income per share, as adjusted for the adoption of FAS 142* $ 2.06 $ 1.89 Operating income per share, diluted as adjusted for the adoption of FAS 142* $ 2.03 $ 1.87 Net income per share $ 2.06 $ 1.66 Net income per share, diluted $ 2.03 $ 1.64 Net income per share, as adjusted for the adoption of FAS 142* $ 2.06 $ 1.81 Net income per share, diluted as adjusted for the adoption of FAS 142* $ 2.03 $ 1.79 Dividends per share $ 0.87 $ 0.84 Taxable equivalent net interest income $1,178,629 $1,119,551
(a) In 2001 excludes merger and other non-recurring charges of $23.3 million pretax ($17.8 million after tax or $.08 per diluted share). *Operating income assuming FAS 142 (which eliminated amortization of excess purchase price) was adopted at the beginning of the period ended 3/31/02. 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 3/31/01 6/30/01 9/30/01 ------------------------ ------------------------- ------------------------- Average Yield/ Average Yield/ Average Yield/ Balance Rate Balance Rate Balance Rate ----------- ----- ----------- ----- ----------- ----- ASSETS Earning assets: Taxable securities $ 7,951,812 6.59% $ 7,200,791 6.28% $ 6,956,357 6.04% Non-taxable securities 800,267 7.67% 806,045 7.76% 783,282 8.64% Federal funds sold 36,995 5.72% 675,822 4.43% 747,409 3.32% Margin receivables -- 554,202 5.65% 538,694 5.29% Loans, net of unearned income 31,274,169 8.76% 30,965,337 8.41% 30,839,867 7.99% Int. bear. deposits in oth. bnks 82,118 3.80% 504,709 3.86% 459,378 3.48% Mortgages held for sale 316,661 8.78% 597,253 7.65% 578,576 7.92% Trading account assets 15,598 5.62% 557,452 5.15% 511,547 5.01% ----------- ----------- ----------- Total earning assets 40,477,620 8.30% 41,861,611 7.82% 41,415,110 7.47% Allowance for loan losses (381,552) (385,317) (386,641) Cash and due from banks 993,091 911,506 901,067 Other non-earning assets 2,273,684 2,876,167 2,952,938 ----------- ----------- ----------- $43,362,843 $45,263,967 $44,882,474 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing liabilities: Savings accounts $ 1,230,782 1.45% $ 1,243,006 1.35% $ 1,261,356 1.09% Interest bearing transaction accounts 430,375 3.24% 517,484 1.94% 578,406 1.79% Money market accounts 11,483,296 4.16% 12,132,752 3.42% 12,441,249 2.84% Certificates of deposit of $100,000 or more 4,257,824 6.33% 4,419,525 6.02% 4,086,712 5.65% Other interest-bearing accounts 9,531,435 6.21% 8,004,372 6.49% 7,729,754 6.38% Federal funds purchased 2,153,236 5.76% 2,203,347 4.69% 1,986,078 3.64% Commercial paper 28,232 6.52% 27,273 6.74% 27,750 6.55% Other short-term borrowings 1,108,518 6.49% 2,436,632 5.22% 2,362,939 4.57% Long-term borrowings 4,540,679 6.54% 4,974,303 6.39% 4,867,355 6.34% ----------- ----------- ----------- Total int-bearing liabilities 34,764,377 5.37% 35,958,694 4.94% 35,341,599 4.51% Non-interest bearing deposits 4,422,644 4,579,814 4,682,012 Other liabilities 817,322 938,886 947,713 Stockholders' equity 3,358,500 3,786,573 3,911,150 ----------- ----------- ----------- $43,362,843 $45,263,967 $44,882,474 =========== =========== =========== Net yield on interest earning assets 3.69% 3.57% 3.62% Quarter Ended Quarter Ended Quarter Ended 12/31/01 3/31/02 6/30/02 ------------------------- ------------------------- -------------------------- Average Yield/ Average Yield/ Average Yield/ Balance Rate Balance Rate Balance Rate ----------- ----- ----------- ----- --------- ----- ASSETS Earning assets: Taxable securities $ 7,333,574 5.75% $ 7,205,061 5.49% 7,764,138 5.35% Non-taxable securities 759,771 7.71% 670,362 8.16% 571,618 8.08% Federal funds sold 757,139 1.92% 498,187 1.32% 568,723 1.59% Margin receivables 501,965 4.53% 541,069 3.50% 544,407 3.95% Loans, net of unearned income 30,714,891 7.35% 30,642,779 6.93% 30,972,742 6.70% Int. bear. deposits in oth. bnks 192,941 2.93% 38,512 2.22% 8,581 3.32% Mortgages held for sale 703,039 6.74% 729,369 7.13% 470,493 7.99% Trading account assets 604,931 4.40% 603,486 3.90% 691,707 3.82% ----------- ----------- ----------- Total earning assets 41,568,251 6.87% 40,928,825 6.54% 41,592,409 6.33% Allowance for loan losses (385,010) (423,057) (435,206) Cash and due from banks 926,564 963,186 939,159 Other non-earning assets 2,979,964 3,241,602 3,286,227 ----------- ----------- ----------- $45,089,769 $44,710,556 $45,382,589 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing liabilities: Savings accounts $ 1,309,170 0.62% $ 1,361,590 0.53% $ 1,452,647 0.61% Interest bearing transaction accounts 697,458 1.29% 797,264 1.24% 803,547 1.02% Money market accounts 12,459,037 1.82% 13,125,489 1.44% 12,940,340 1.43% Certificates of deposit of $100,000 or more 3,494,586 5.11% 3,119,462 4.37% 2,985,615 4.08% Other interest-bearing accounts 8,306,278 5.12% 7,614,430 4.74% 7,858,342 4.31% Federal funds purchased 1,756,757 2.27% 1,611,494 1.79% 1,990,013 1.75% Commercial paper 27,750 6.18% 27,272 5.06% 26,751 4.90% Other short-term borrowings 2,398,048 4.13% 2,261,062 4.05% 2,283,037 4.08% Long-term borrowings 4,788,755 6.30% 4,741,976 5.85% 5,020,740 5.29% ----------- ----------- ----------- Total int-bearing liabilities 35,237,839 3.66% 34,660,039 3.18% 35,361,032 2.99% Non-interest bearing deposits 4,847,132 4,842,479 4,936,834 Other liabilities 981,737 1,126,828 1,068,349 Stockholders' equity 4,023,061 4,081,210 4,016,374 ----------- ----------- ----------- $45,089,769 $44,710,556 $45,382,589 =========== =========== =========== Net yield on interest earning assets 3.77% 3.85% 3.79% Quarter Ended 9/30/02 ------------------------- Average Yield/ Balance Rate ----------- ----- ASSETS Earning assets: Taxable securities $ 8,268,921 5.11% Non-taxable securities 553,283 7.87% Federal funds sold 621,687 1.61% Margin receivables 527,723 3.72% Loans, net of unearned income 31,288,244 6.52% Int. bear. deposits in oth. bnks 13,847 3.44% Mortgages held for sale 650,439 7.41% Trading account assets 679,995 3.84% ----------- Total earning assets 42,604,139 6.13% Allowance for loan losses (432,402) Cash and due from banks 923,634 Other non-earning assets 3,572,182 ----------- $46,667,553 =========== LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing liabilities: Savings accounts $ 1,477,448 0.70% Interest bearing transaction accounts 924,890 0.94% Money market accounts 12,655,337 1.36% Certificates of deposit of $100,000 or more 3,190,838 3.69% Other interest-bearing accounts 8,246,344 4.07% Federal funds purchased 2,541,163 1.75% Commercial paper 26,728 4.88% Other short-term borrowings 2,177,578 4.09% Long-term borrowings 5,369,578 4.74% ----------- Total int-bearing liabilities 36,609,904 2.82% Non-interest bearing deposits 4,906,377 Other liabilities 1,134,182 Stockholders' equity 4,017,090 ----------- $46,667,553 =========== Net yield on interest earning assets 3.70%
REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES QUARTERLY ALLOWANCE FOR LOAN LOSSES AND NON-PERFORMING ASSETS (Dollar Amounts in Thousands)
3/31/01 6/30/01 9/30/01 12/31/01 3/31/02 6/30/02 9/30/02 -------- -------- -------- -------- -------- -------- -------- Balance at beginning of period $376,508 $381,570 $384,324 $386,471 $419,167 $429,577 $432,624 Net loans charged off (recovered): Commercial 14,390 16,048 17,361 36,647 7,304 20,024 21,501 Real estate 804 2,035 1,798 2,041 3,024 2,571 3,610 Installment 8,244 8,153 8,694 10,626 9,262 6,686 6,715 -------- -------- -------- -------- -------- -------- -------- Total 23,438 26,236 27,853 49,314 19,590 29,281 31,826 Allowance of acquired banks 0 0 0 4,098 0 2,328 0 Provision charged to expense 28,500 28,990 30,000 77,912 30,000 30,000 35,000 -------- -------- -------- -------- -------- -------- -------- Balance at end of period $381,570 $384,324 $386,471 $419,167 $429,577 $432,624 $435,798 ======== ======== ======== ======== ======== ======== ======== Non-performing Assets: Loans on a non-accruing basis $227,552 $259,291 $256,810 $269,764 $277,939 $280,371 $248,345 Renegotiated loans 11,024 14,223 18,150 42,807 42,183 42,332 33,085 Foreclosed property ("Other real estate") 29,012 29,257 31,198 40,872 44,008 52,092 59,103 -------- -------- -------- -------- -------- -------- -------- Total NPA excluding past due loans $267,588 $302,771 $306,158 $353,443 $364,130 $374,795 $340,533 -------- -------- -------- -------- -------- -------- -------- Loans past due 90 days or more $ 40,923 $ 41,736 $ 41,895 $ 46,845 $ 44,914 $ 43,224 $ 42,167 -------- -------- -------- -------- -------- -------- -------- Total NPA including past due loans $308,511 $344,507 $348,053 $400,288 $409,044 $418,019 $382,700 ======== ======== ======== ======== ======== ======== ========
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 ---------------------------------------------- 2002 2001 --------------------- ---------------------- Average Yield/ Average Yield/ Balance Rate Balance Rate ----------- ------ ----------- ------ ASSETS Earning assets: Taxable securities $ 7,749,937 5.31% $ 7,366,007 6.32% Non-taxable securities 597,992 8.04% 796,469 8.02% Federal funds sold 563,318 1.52% 489,344 3.89% Margin receivables 537,684 3.73% 366,272 5.47% Loans, net of unearned income 30,970,286 6.72% 31,024,867 8.39% Int. bear. deposits in oth. bnks 20,223 2.66% 350,117 3.69% Mortgages held for sale 616,478 7.45% 498,456 7.99% Trading account assets 658,676 3.85% 363,349 5.09% ----------- ----------- Total earning assets 41,714,594 6.33% 41,254,881 7.86% Allowance for loan losses (430,256) (384,522) Cash and due from banks 941,848 934,884 Other non-earning assets 3,367,882 2,703,418 ----------- ----------- $45,594,068 $44,508,661 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing liabilities: Savings accounts $ 1,430,986 0.62% $ 1,245,160 1.29% Interest bearing transaction accounts 842,368 1.06% 509,297 2.25% Money market accounts 12,905,333 1.41% 12,022,608 3.45% Certificates of deposit of $100,000 or more 3,098,900 4.04% 4,254,060 6.00% Other int-bearing accounts 7,908,687 4.37% 8,415,254 6.35% Federal funds purchased 2,050,962 1.76% 2,113,608 4.72% Commercial paper 26,915 4.95% 27,750 6.60% Other short-term borrowings 2,240,253 4.07% 1,973,958 5.20% Long-term borrowings 5,046,397 5.26% 4,795,309 6.42% ----------- ----------- Total int-bearing liabilities 35,550,801 2.99% 35,357,004 4.93% Non-interest bearing deposits 4,895,464 4,562,440 Other liabilities 1,109,813 901,785 Stockholders' equity 4,037,990 3,687,432 ----------- ----------- $45,594,068 $44,508,661 =========== =========== Net yield on int. earning assets 3.78% 3.63%
Nine Months Ended September 30 ------------------------ Allowance For Loan Losses: 2002 2001 --------- -------- Balance at beginning of year $419,167 $376,508 Net loans charged off: Commercial 48,829 47,799 Real estate 9,205 4,637 Installment 22,663 25,091 --------- -------- Total 80,697 77,527 Allowance of acquired banks 2,328 0 Provision charged to expense 95,000 87,490 --------- -------- Balance at end of period $435,798 $386,471 ========= ========
REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES SELECTED RATIOS
9/30/00 12/31/00 3/31/01 6/30/01 9/30/01 ------- -------- ------- ------- ------- Return on average assets* 1.18% 1.17% 1.15% 1.16% 1.20% Return on average equity* 15.56% 14.97% 14.82% 13.84% 13.71% Stockholders' equity per share $15.16 $15.73 $16.64 $16.81 $ 17.36 Stockholders' equity to total assets 7.70% 7.92% 8.24% 8.48% 8.64% Allowance for loan losses as a percentage of loans, net of unearned income 1.20% 1.20% 1.23% 1.24% 1.25% Loans, net of unearned income, to total deposits 97.56% 97.98% 99.81% 99.37% 101.10% Net charge-offs as a percentage of average loans** 0.33% 0.44% 0.30% 0.34% 0.36% Total non-performing assets (excluding loans 90 days past due) as a percentage of loans and other real estate 0.76% 0.76% 0.86% 0.98% 0.99% Total non-performing assets (including loans 90 days past due) as a percentage of loans and other real estate 0.88% 0.87% 0.99% 1.11% 1.12% 12/31/01 3/31/02 6/30/02 9/30/02 -------- ------- ------- ------- Return on average assets* 1.22% 1.40% 1.35% 1.33% Return on average equity* 13.63% 15.31% 15.29% 15.45% Stockholders' equity per share $17.54 $ 17.79 $ 17.81 $18.44 Stockholders' equity to total assets 8.89% 9.24% 8.53% 8.62% Allowance for loan losses as a percentage of loans, net of unearned income 1.36% 1.40% 1.39% 1.43% Loans, net of unearned income, to total deposits 97.90% 102.24% 100.62% 95.02% Net charge-offs as a percentage of average loans** 0.64% 0.26% 0.38% 0.40% Total non-performing assets (excluding loans 90 days past due) as a percentage of loans and other real estate 1.14% 1.18% 1.20% 1.11% Total non-performing assets (including loans 90 days past due) as a percentage of loans and other real estate 1.29% 1.33% 1.34% 1.25%
* Annualized based on operating income. ** Annualized -----END PRIVACY-ENHANCED MESSAGE-----