Regions Financial Corp. and AmSouth Bancorporation to Merge

Regions Financial Corp. and AmSouth Bancorporation announced today that they have agreed to merge, forming one of the top 10 bank holding companies in the United States. The new company will have almost $140 billion in assets, hold nearly $100 billion in deposits and operate 2,000 branches in 16 states across the South, Midwest and Texas. Combined, the two companies employ 37,000 people. The Regions name will be retained.

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

The combined company will have leading positions in some of the fastest growing markets in the United States as well as a broad, balanced mix of businesses including retail and commercial banking, trust and asset management, securities brokerage, mortgage and insurance services.

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

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

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

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

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

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

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

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

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

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