Regions Financial Corporation and First Commercial Corporation Announce Merger

Strategic Insights -

Regions Financial Corporation and First Commercial Corporation have jointly announced that they have signed a definitive agreement for the merger of First Commercial into Regions. The combined entity will become the nation's 26th largest banking company, with assets of $32.8 billion and 667 banking locations in nine southern states. The addition of First Commercial's $6.9 billion in assets will give Regions the number one market share in Arkansas and provide new banking locations in Texas, Louisiana, and Tennessee.

The merger, which is expected to be consummated during the third quarter of 1998, pending shareholder and regulatory approval, will be valued at approximately $2.7 billion. Regions will exchange 1.7 shares of its common stock for each share of First Commercial common stock. The transaction is expected to be slightly dilutive to Regions' 1998 earnings per share and accretive thereafter. Regions will also incur a pre-tax merger charge of approximately $85 million.

Key Takeaways:

  • The merger of First Commercial into Regions will create the nation's 26th largest banking company with assets of $32.8 billion.
  • The combined entity will have 667 banking locations in nine southern states, with First Commercial's additions in Arkansas, Texas, Louisiana, and Tennessee.
  • Regions will exchange 1.7 shares of its common stock for each share of First Commercial common stock, valued at approximately $2.7 billion.
  • The transaction is expected to be slightly dilutive to Regions' 1998 earnings per share and accretive thereafter.
  • Regions will establish a Small Business Investment Corporation with an initial funding of $5 million, and a charitable foundation with a commitment of $7.5 million.
  • First Commercial has 38,790,428 shares of common stock outstanding, including 1.2 million shares to be issued in connection with its pending acquisition of Federal Savings Bank of Rogers, Arkansas.

Statistics:

  • $2.7 billion: approximate value of the merger transaction.
  • $32.8 billion: total assets of the combined entity.
  • 667: number of banking locations in the combined entity.
  • $6.9 billion: assets of First Commercial before the merger.
  • 1.7: number of Regions shares exchanged for each share of First Commercial common stock.
  • $40.50: Regions' closing stock price on February 6, 1998.
  • 65.9 million: number of Regions common stock shares expected to be issued in the transaction.
  • 1998: expected year for the merger to be consummated.

Sources:

  • Regions Financial Corporation. (1998, February 9). Regions Financial Corporation and First Commercial Corporation Announce Merger. Business Wire.
  • First Commercial Corporation. (1998, February 9). First Commercial Corporation and Regions Financial Corporation Announce Merger. Business Wire.