Exhibit 99.1
REGIONS TO ACQUIRE MORGAN KEEGAN
BIRMINGHAM, Ala.--(BUSINESS WIRE)--Dec. 18, 2000--Regions Financial Corp.
(NASDAQ:RGBK) and Morgan Keegan, Inc. (NYSE:MOR)
o Creates leading diversified financial services company in the South
o Excellent strategic fit which accelerates Regions' wealth management
strategy
o Morgan Keegan is a premier regional broker-dealer
o Financially attractive
o Low-risk integration
Regions Financial Corp. (NASDAQ:RGBK - news) and Morgan Keegan, Inc. (NYSE:MOR -
news) today announced the signing of a definitive agreement under which Regions
will acquire the Memphis based Morgan Keegan. The acquisition will allow Regions
to offer a full range of retail and institutional brokerage and investment
banking services to its customers. Morgan Keegan will maintain its name and
operate as a separate subsidiary of Regions. Allen B. Morgan, Jr., currently
Chairman and Chief Executive Officer of Morgan Keegan, will continue in that
capacity and will join the Board of Directors of Regions.
"This transaction is about better serving our clients and accelerating our long
term earnings growth," Regions' President and Chief Executive Officer, Carl E.
Jones, Jr., explained. "The combined strengths of Regions and Morgan Keegan
coupled with a presence in the same regional markets means that we will be able
to offer our commercial, municipal, retail and private banking clients a broader
range of financial solutions and advisory services to satisfy their financial
needs. Our firms share a common commitment to providing the highest standard of
quality products and services to our regional customer base. I am excited about
the significant potential benefits from this transaction and, based on our
common operating culture and competitive strategies, I am convinced we can
realize them."
Allen Morgan said, "Regions is an ideal partner for Morgan Keegan. Together we
will create the full range financial services company our customers need and
want. Morgan Keegan significantly enhances Regions' retail and institutional
brokerage, fixed income and asset management capabilities and adds equity
capital markets, investment banking and mergers and acquisitions to Regions'
commercial and retail banking, trust, insurance and mortgage banking businesses.
Combining with Regions will provide us with a unique platform, which comes with
being part of a large financial services company. Retaining our identity as an
independent operating subsidiary will set us apart from other firms and will
allow us to maintain our entrepreneurial culture," Morgan Keegan's CEO
concluded.
Under the terms of the agreement, Regions will pay $27.00 per share for each
Morgan Keegan share in a transaction valued at $789 million. In addition,
Regions has established an employee retention pool of 5.55 million stock options
for key employees of Morgan Keegan. Morgan Keegan executive officers and
directors, owning approximately 23% of the Morgan Keegan stock, have agreed to
vote in favor of the merger. Additionally, Regions and Morgan Keegan
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have entered into a termination fee agreement under which Regions will receive a
fee of $25 million under certain circumstances in the event the transaction is
terminated.
The merger agreement provides for a tax-free exchange of Regions common shares
for shares of Morgan Keegan. The per share exchange ratio will be based on the
daily volume weighted average trading price per Regions share over the ten
trading days ending two days prior to the closing. In lieu of Regions shares,
Morgan Keegan shareholders may elect to receive $27.00 per share in cash at
closing subject to a maximum of 30% (which may be increased at Regions'
discretion) of Morgan Keegan's shares being exchanged for cash. Based on First
Call consensus estimates, the transaction is expected to be modestly dilutive to
Regions' 2001 earnings per share and accretive thereafter. The transaction will
be immediately accretive to Regions' cash earnings per share. As a result of
this transaction, Regions' non-interest income is expected to rise from
approximately 30% to approximately 40% of total revenue.
Regions' Board of Directors has authorized the Company to repurchase up to 100%
of the shares issued in connection with this transaction. These repurchases will
be in addition to Regions' previously announced repurchase plans. In addition,
Regions may purchase shares of common stock of Morgan Keegan, as well, prior to
consummation of the acquisition.
After the transaction, Morgan Keegan will become Regions' brokerage and capital
markets engine. As a result, Regions will merge its brokerage operations into
Morgan Keegan. This combination will result in a company with 54 offices
operating in 14 states with 961 Series 7 retail and institutional brokers. The
firm will maintain its headquarters in Memphis and the senior management of
Morgan Keegan will manage the combined operations of Morgan Keegan and Regions
Investment Company, Inc. "I am excited at the opportunities afforded Morgan
Keegan by the additional personnel and relationships which will come to our firm
with the merger with Regions" Allen Morgan said. "With our expanded capabilities
and access to Regions' customers, I am confident we can increase the penetration
in our commercial and retail businesses by offering a broader product array to
our joint customer bases," he concluded.
The acquisition, which will be accounted for as a purchase, is expected to close
during the first quarter of 2001, pending Morgan Keegan stockholder approval,
regulatory approval, as well as other customary conditions of closing.
Regions and Morgan Keegan will host a conference call to discuss this
transaction at 10:30 a.m. (Eastern Standard Time) on December 18, 2000.
Investors, analysts and other interested parties may dial in the conference call
at 973-628-7055. In addition, a slide presentation containing information
related to the transaction will be available on Regions' Web site at
http://www.regionsbank.com shortly before the conference call. A replay of the
conference call will be available through January 12, 2001, by dialing
402-220-2922.
Morgan Keegan & Company, Inc. is one of the South's largest investment firms.
Through their 54 offices in 13 states, Morgan Keegan serves individual investors
in the Southern United States and institutional clients throughout the United
States and abroad. With more than 2,000 employees and over $250 million in
equity capital, Morgan Keegan is an established leader in the financial services
industry in the South.
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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.
Investors and security holders are advised to read the proxy
statement/prospectus regarding the proposed transaction referenced in this press
release when it becomes available, because it will contain important
information. The proxy statement/prospectus will be filed with the Securities
and Exchange Commission by Regions and Morgan Keegan. Security holders may
receive a free copy of the proxy statement/prospectus (when available) and other
related documents filed by Regions and Morgan Keegan at the Commission's website
at http://www.sec.gov. Copies of the proxy statement/prospectus and other
related documents can also be obtained, without charge, by directing a request
to Regions Financial Corporation, 417 N. 20th Street, Birmingham, Alabama 35203,
Attention: Ronald C. Jackson (205-326-7374) or to Morgan Keegan, Inc., Fifty
North Front Street, Memphis, Tennessee 38103, Attention: Joseph C. Weller
(901-524-4100).
Morgan Keegan and its executive officers and directors may be deemed to be
participants in the solicitation of proxies from stockholders of Morgan Keegan
with respect to the transactions contemplated by the merger agreement.
Information regarding such officers and directors is included in Morgan Keegan's
proxy statement for its 2000 annual meeting of stockholders filed with the
Commission on October 20, 2000. This document is available free of charge at the
Commission's website at http://www.sec.gov and/or from Morgan Keegan.
For additional information, visit Regions' Web site at
http://www.regionsbank.com or contact: Media: For Regions, Kathie B. Martin at
205-326-7188 Investors: For Regions, Ronald C. Jackson at 205-326-7374
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
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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 (including the Morgan Keegan
transaction), which in turn depends on a variety of factors, including: our
ability to achieve in a timely manner 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; our ability
to retain existing customers and employees of acquired operations; and the
continued growth of the markets that the acquired entities serve, consistent
with recent historical experience.
Regions Financial Corporation/Morgan Keegan, Inc. Affiliation Q & A
Q What is this new affiliation between Regions and Morgan Keegan?
A On December 18, Regions Financial Corporation announced the signing of
a definitive agreement under which Regions would acquire the
Memphis-based securities firm, Morgan Keegan. The acquisition, which
will be accounted for as a purchase, is expected to close during the
first quarter of 2001, pending Morgan Keegan stockholder approval,
regulatory approval, as well as other customary conditions of closing.
Q Who is Morgan Keegan, Inc?
A Morgan Keegan & Company, Inc. is one of the South's largest investment
firms. With their 54 offices in 13 states, Morgan Keegan serves
individual investors in the southern United States and institutional
clients throughout the U.S. and abroad.
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Morgan Keegan & Company, Inc. is a subsidiary of Morgan Keegan Inc., a
financial services holding company listed on the New York Stock
Exchange as MOR.
Headquartered in Memphis, Tennessee, it operates offices in Alabama,
Arkansas, Florida, Georgia, Kentucky, Louisiana, Massachusetts,
Mississippi, New York, North Carolina, Tennessee, Texas and Virginia.
Morgan Keegan employs more than 2,000 individuals including 761
investment advisors.
Q What are the primary market sectors for Morgan Keegan?
A Morgan Keegan's primary sectors are Private Client Brokerage, Public
Finance, Agency and Corporate Fixed Income, Research, Equity Capital
Markets, Asset Management, and Corporate Finance Advisory.
Q Why is Regions acquiring an investment firm?
A Regions was already expanding the investment services it offers to its
banking customers through a project called Regions Asset Management
Strategy (RAMS). This expansion would have taken several years to
achieve the market penetration enjoyed by Morgan Keegan so the merger
fast-forwards Regions into its five-year plan. This transaction also
should enable Regions to better serve its customers and is expected to
accelerate long-term earnings growth. The combined strengths and
presence in the same regional markets will provide commercial,
municipal, retail and private banking customers of the combined firm a
broader range of financial solutions and advisory services to satisfy
their financial needs. The addition of Morgan Keegan also brings
Regions a wealth of respected investment expertise that will allow it
to better serve the growing investment needs of its customers. The
many similarities Morgan Keegan shares with Regions in the areas of
management style, corporate culture and a focus on quality make this
an excellent combination that should benefit customers and
shareholders of both organizations.
Q Will Morgan Keegan continue to operate as it has?
A Morgan Keegan will maintain its name and operate as a separate
subsidiary of Regions. Allen B. Morgan, Jr., currently Chairman and
Chief Executive Officer of Morgan Keegan, will continue in that
capacity and will also join the Regions Corporate Board of Directors.
Regions Investment Company, Inc., will become part of the Morgan
Keegan operation. The combination of the two companies will greatly
enhance opportunities for both Morgan Keegan and Regions Investment
brokers and customers by broadening the financial services offered by
both organizations.
Q How does Morgan Keegan compare in size to Regions Investment Company?
A Morgan Keegan is approximately ten times larger than Regions' existing
investment operation.
Q When is the acquisition expected to close?
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A A first quarter 2001 closing is anticipated but this date is dependent
on regulatory timelines.
Q Will there be management changes within Morgan Keegan?
A Allen B. Morgan, Jr. and the existing Morgan Keegan management team
will continue to make all decisions relative to the management
structure within Morgan Keegan.
Q How will Regions Investment Company and Morgan Keegan customers be
affected?
A The combination of the two companies should be largely transparent to
the customers of Morgan Keegan. Once the merger is effective,
customers of Regions Investment Company will see the name of the
provider of the services they receive shift to Morgan Keegan, a
Regions company. The Morgan Keegan customers will only find a much
broader array of traditional banking services available to them.
Q Are there additional financing opportunities for the middle-market
commercial customers of Regions as a result of this merger?
A This combination will clearly enable Regions customers to have access
to capital markets that they have not heretofore been able to utilize
through Regions.
Q What happens to Morgan Keegan's branch offices?
A The offices are outstanding facilities and will remain intact to
augment the distribution channel of more than 750 Regions offices.
Morgan Keegan will explore the potential of opening new offices in
those Regions markets not having direct access to their services as
well as co-location in Regions offices as market demographics indicate
preferences and propensity to use these services.
Q Will the MOR asset management account be utilized by the Regions
branch distribution network?
A The MOR Account is an integrated asset management program with an
array of features including a Morgan Keegan margin securities account
- or a cash account, if preferred - four money market fund options, a
checking account, debit card, Internet access and other special
features. This product is new for Regions and will be offered
initially to Regions customers directly through the Morgan Keegan
offices. Distribution through Regions offices will be considered as a
future initiative.
Q What is the overriding value or theme that best describes Morgan
Keegan?
A Morgan Keegan is in the business of creating wealth for their clients.
Q Does Regions anticipate a change in its corporate structure as a
result of this transaction?
A Regions plans to file to become a Financial Services Holding Company
as permitted under the new Financial Modernization Act. The
convergence of the financial services industry
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has accelerated with the regulatory changes provided by this new
federal law. This new law allows more flexibility for companies,
enables more open competition for the financial services industry, and
creates opportunities for customers to obtain improved service
levels and expanded product offerings.
Q Will this merger affect the quality of service provided by either
company?
A The banking customers of Regions and Morgan Keegan clients will
experience no change really because there is no system conversion
required for either customer group. The investment customers of
Regions will be converted to the Morgan Keegan system during 2001
(planned for June time period). Morgan Keegan's system capability is
more advanced than Regions', so the customers should see improvements
in quality service as well as new product availability.
Note: A Photo is available at URL:
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Contact:
Regions Financial Corp.
Media:
Kathie B. Martin, 205/326-7188
or
Investors:
Ronald C. Jackson, 205/326-7374