uploads///Regions acquisitions

Why inorganic growth works for Regions Financial

Rekha Khandelwal, CFA - Author

Mar. 11 2015, Updated 5:06 p.m. ET

Acquisitions helped the bank’s growth

A substantial portion of Regions Financial’s (RF) growth has been through the acquisition of other financial institutions—including commercial banks and thrift institutions. The bank was formed in 1971 with the combination of three banks:

  1. First National Bank of Huntsville
  2. First National Bank of Montgomery
  3. Exchange Security Bank of Birmingham

The above chart lists some of the bank’s key mergers and acquisitions.

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Key acquisitions

The most notable was Regions Financial’s merger with AmSouth for $10 billion. Founded in 1873, the bank had a network of more than 650 branches. It strengthened Regions Financial’s presence in Alabama, Florida, Tennessee, Georgia, Kentucky, Virginia, and Mississippi. It made Regions Financial one of the biggest banks in the US.

Regions Financial’s $5 billion merger with Union Planters significantly increased its presence in Tennessee. At the time of the merger, Union Planters was the largest Tennessee-based bank.

Morgan Keegan is a brokerage firm. It was acquired in 2000. It was sold to Raymond James in 2012. Regions Financial retained its asset management and trust operations under its wealth management business.

Acquisitions will continue in the future

Regions Financial regularly evaluates complementary portfolios—including banks and non-banks—as part of its strategic plan. The bank has enough capital to support any strategic opportunity.

You can invest in regional banks—like Regions Financial, BB&T (BBT), SunTrust Banks (STI), and First Horizon National (FHN)—through ETFs like the SPDR S&P Regional Banking ETF (KRE).


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