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SECURITIES AND EXCHANGE COMMISSION |
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Washington, D.C. 20549 |
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Form 11-K |
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(Mark One) |
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[X] |
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE |
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SECURITIES EXCHANGE ACT OF 1934 |
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For the fiscal year ended December 31, 2004 |
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Or |
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[ ] |
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE |
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SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from ____________________ to ____________________ |
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COMMISSION FILE NUMBER 0-6159 |
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A. |
Full title of the plan and address, if different from that of the issuer named below: |
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REGIONS FINANCIAL CORPORATION |
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401(k) PLAN |
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B. |
Name of issuer of the securities held pursuant to the plan and the address of its |
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principal executive office: |
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REGIONS FINANCIAL CORPORATION |
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P.0. BOX 10247 |
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BIRMINGHAM, ALABAMA 35202 |
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Audited Financial Statements and Supplemental Schedules |
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As of December 31, 2004 and 2003 and for the Year ended December 31, 2004 |
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| Report of Independent Registered Public Accounting Firm |
1 |
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Audited Financial Statements |
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| Statements of Net Assets Available for Benefits |
2 |
| Statement of Changes in Net Assets Available for Benefits |
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| Notes to Financial Statements |
4 |
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Supplemental Schedules |
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| Schedule H, Line 4i - Schedule of Assets (Held at End of Year) |
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| Schedule H, Line 4j - Reportable Transactions |
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| SIGNATURES |
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| Exhibits |
14 |
Report of Independent Registered Public Accounting Firm
Nominating and Corporate Governance Committee
Regions Financial Corporation 401(k) Plan
We have audited the accompanying statements of net assets available for benefits of the Regions Financial Corporation 401(k) Plan as of December 31, 2004 and 2003, and the related statement of changes in net assets available for benefits for the year ended December 31, 2004. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2004 and 2003, and the changes in its net assets available for benefits for the year ended December 31, 2004, in conformity with U.S. generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets (held at end of year) as of December 31, 2004, and reportable transactions for the year then ended are presented for purposes of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Birmingham, Alabama
June 23, 2005
Regions Financial Corporation 401(k) Plan
Statements of Net Assets Available for Benefits
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December 31, |
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2004 |
2003 |
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Assets |
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Cash |
$ 6,287 |
$ 350,407 |
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Mutual funds, at fair value |
338,157,522 |
326,994,230 |
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Regions Financial Stock Fund, at fair value |
172,045,881 |
133,545,535 |
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Loans to participants |
5,611,800 |
5,405,907 |
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Contributions receivable-employer |
1,760,047 |
3,075,267 |
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Interest and dividend income receivable |
268,116 |
197,106 |
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Net assets available for benefits |
$ 517,849,653 |
$ 469,568,452 |
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See accompanying notes.
Regions Financial Corporation 401(k) Plan
Statement of Changes in Net Assets Available for Benefits
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Year ended |
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December 31, |
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2004 |
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Additions: |
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Contributions from employer |
$ 17,819,850 |
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Contributions from participants |
26,637,834 |
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Dividend income |
13,801,227 |
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Interest income |
254,874 |
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Net appreciation in fair value of investments |
32,024,128 |
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90,537,913 |
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Deductions: |
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Distributions to participants |
42,121,725 |
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Other disbursements |
111,895 |
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Transfers to affiliated plan |
23,092 |
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Net increase |
48,281,201 |
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Net assets available for benefits at beginning of year |
469,568,452 |
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Net assets available for benefits at end of year |
$ 517,849,653 |
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See accompanying notes.
Regions Financial Corporation 401(k) Plan
Notes to Financial Statements
December 31, 2004
1. Summary of Significant Accounting Policies
Basis of Presentation
The financial statements of Regions Financial Corporation 401(k) Plan (the Plan) have been prepared on the accrual basis of accounting.
Investment Valuation and Income Recognition
Marketable securities are stated at aggregate fair value. Securities, which are traded on a national securities exchange, are valued at the last reported sales price on the last business day of the year. Investments traded in the over-the-counter market are valued at the average of last reported bid and ask prices and listed securities for which no sale was reported on that date are valued at last reported sales price. The participant loans are valued at their outstanding balance, which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
2. Description of the Plan
The following description of the Plan provides only general information. Participants should refer to the Plan Document and the Summary Plan Description for a more complete description of the Plan's provisions.
Regions Financial Corporation 401(k) Plan
Notes to Financial Statements (continued)
2. Description of the Plan (continued)
General
The Plan is a defined contribution plan covering certain employees of Regions Financial Corporation (the Company). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA).
Contributions
Each year, participants may contribute up to 25% of pretax annual compensation, as defined in the Plan, and defer up to 100% of payments from Regions Profit Sharing Bonus Plan subject to Internal Revenue Code limitations. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. All employees who are eligible to make elective deferrals under this plan and who have attained age 50 before the close of the plan year shall be eligible to make catch-up contributions. The Company makes matching contributions based on years of service, up to 3% of pretax annual compensation. The Company also contributes profit-sharing amounts and 401(K) contributions at the option of the Company's board of directors.
Participant Accounts
Each participant's account is credited with the participant's contributions and allocations of (a) the Company's contributions and (b) Plan earnings. Allocations are based on participant earnings or account balances, as defined in the Plan Document. In addition, the Company annually grants eligible participants profit sharing bonuses, which the participant can elect to receive in cash, 401(k) allocation, or a percentage in each source, based on 10% increments. Forfeited balances of terminated participants' nonvested accounts are used to reduce future Company contributions. The Company used $688,365 in forfeited balances of terminated employees to reduce 2004 Company match contributions. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. The remaining balance in the forfeitures account was $0 at December 31, 2004 and 2003.
Regions Financial Corporation 401(k) Plan
Notes to Financial Statements (continued)
2. Description of the Plan (continued)
Vesting
Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Company's 401(k) contribution and profit-sharing contribution portion of their accounts plus actual earnings thereon is based on three years continuous service.
Participant Loans
Participants may borrow from their fund accounts a minimum of $500 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. Loan transactions are treated as a transfer from (to) the investment fund to (from) the loan fund. Loan terms range from 2-5 years or up to 30 years for the purchase of a primary residence. The loans are secured by the balance in the participant's account and bear interest at a rate commensurate with local prevailing rates as determined quarterly by the Plan administrator. Principal and interest is paid ratably through biweekly payroll deductions.
Payment of Benefits
On termination of service, a participant may receive a lump-sum amount equal to the vested value of his or her account or can roll the amount over into another qualified plan, or upon death, disability or retirement, elect to receive annual installments over a 10-year period.
Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100 percent vested in their accounts.
Regions Financial Corporation 401(k) Plan
Notes to Financial Statements (continued)
3. Investments
Regions Morgan Keegan Trust (an affiliate of the Company) serves as corporate trustee and custodian of the Plan holding the Plan's investment assets and executing transactions therein. All investments held by the Plan are participant directed. Regions Morgan Keegan Trust serves as the investment adviser to the Regions mutual funds which are managed by Federated Securities Corporation, in Pittsburgh, Pennsylvania.
During 2004, the Plan's investments (including investments purchased, sold as well as held during the year) appreciated in fair value as determined by quoted market prices as follows:
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Net Realized and Unrealized |
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Appreciation (Depreciation) |
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in Fair Value of Investment |
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Mutual Funds: |
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RMK Select Balanced Fund |
$ 582,493 |
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RMK Select Ltd. Maturity Government Fund |
(849,528) |
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RMK Select Growth Fund |
13,002 |
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RMK Select Value Fund |
1,596,864 |
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RMK Select Fixed Income Fund |
(489,676) |
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RMK Select Mid Cap Growth Fund |
3,927,180 |
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RMK Select Mid Cap Value Fund |
729,475 |
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RMK Select High Income Fund |
226,958 |
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RMK Select Intermediate Bond Fund |
(21,983) |
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AIM Small Cap Growth Fund |
318,922 |
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Federated International Max Cap Inst Fund |
396,557 |
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Fidelity Adv Divers International Fund |
1,206,063 |
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Regions Financial Stock Fund |
24,387,801 |
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$32,024,128 |
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Regions Financial Corporation 401(k) Plan
Notes to Financial Statements (continued)
3. Investments (continued)
The fair value of individual investments that represent 5% or more of the Plan's net assets are as follows:
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December 31, |
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2004 |
2003 |
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RMK Select Balanced Fund |
$ 67,493,895 |
$ 71,203,160 |
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RMK Select Ltd. Maturity Government Fund |
(a) |
28,770,114 |
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RMK Select Growth Fund |
61,173,698 |
65,649,088 |
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RMK Select Value Fund |
(a) |
24,181,804 |
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RMK Select Mid Cap Growth Fund |
51,839,248 |
48,195,397 |
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RMK Select Treasury Money Market Fund |
54,605,039 |
54,481,227 |
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Regions Financial Stock Fund Participant-Directed |
61,446,313 |
51,109,194 |
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Regions Financial Stock Fund Nonparticipant-Directed |
110,599,568 |
82,436,341 |
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(a) Less than 5%
Information about the Regions Financial Stock Fund net assets is as follows:
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December 31, |
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2004 |
2003 |
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Investments, at fair value as determined by |
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quoted market prices: |
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Regions Financial Stock Fund Participant-Directed |
$ 61,446,313 |
$ 51,109,194 |
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Regions Financial Stock Fund Nonparticipant-Directed |
110,599,568 |
82,436,341 |
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$172,045,881 |
$133,545,535 |
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Regions Financial Corporation 401(k) Plan
Notes to Financial Statements (continued)
3. Investments (continued)
Significant components of changes in net assets for both the participant-directed and nonparticipant-directed components of the Regions Financial Stock Fund are presented below.
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Year ended |
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December 31, |
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2004 |
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Change in net assets: |
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Additions: |
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Contributions |
$ 40,594,269 |
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Investment income |
7,199,768 |
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Net appreciation in fair value of investments |
24,387,801 |
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72,181,838 |
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Deductions: |
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Distributions |
31,233,115 |
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Transfers to participant-directed investments |
2,448,377 |
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Net increase |
$ 38,500,346 |
4. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service dated November 27, 2002, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Subsequent to this determination by the Internal Revenue Service, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan, as amended, is qualified and the related trust is tax exempt.
Regions Financial Corporation 401(k) Plan
Notes to Financial Statements (continued)
5. Transactions with Parties-In-Interest
During the years ended December 31, 2004 and 2003, substantially all investment transactions were with investment funds managed by Regions Morgan Keegan Trust and are therefore related party transactions. In addition, the Plan owns and has transactions in Regions Financial Corporation common stock.
All expenses incurred in the administration of the Plan including trustee fees, legal and accounting fees, are paid directly by the Company.
6. Transfer to Affiliated Plan
During the year ended December 31, 2004, $23,092 of net assets was transferred at fair value from the Plan to an affiliated plan.
7. Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits.
Regions Financial Corporation 401(k) Plan
(Plan Number 002)
(Employee Identification Number 63-0589368)
Schedule H, Line 4i
Schedule of Assets (Held at End of Year)
December 31, 2004
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(b) Identity of Issue, Borrower, Lessor, or Similar Party |
(c) Description of Investment, Including Maturity Date, Rate of Interest and Par Value |
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* |
RMK (Regions Morgan Keegan) Select |
Balanced Fund |
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$ 67,493,895 |
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* |
RMK Select |
Ltd. Maturity Government Fund |
** |
25,126,805 |
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* |
RMK Select |
Growth Fund |
** |
61,173,698 |
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* |
RMK Select |
Value Fund |
** |
24,968,823 |
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* |
RMK Select |
Fixed Income Fund |
** |
16,407,688 |
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* |
RMK Select |
Mid Cap Growth Fund |
** |
51,839,248 |
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* |
RMK Select |
Mid Cap Value Fund |
** |
5,684,996 |
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* |
RMK Select |
High Income Fund |
** |
8,574,589 |
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* |
RMK Select |
Intermediate Bond Fund |
** |
2,817,179 |
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* |
RMK Select |
Treasury Money Market Fund |
** |
54,605,039 |
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* |
Regions Financial Corporation |
Financial Stock Fund |
$119,700,112 |
172,045,881 |
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Fidelity Investments |
Adv Divers International Fund |
** |
9,031,848 |
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Federated International |
Max Cap Inst Fund |
** |
5,184,874 |
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AIM Investments |
Small Cap Growth Fund |
** |
5,248,840 |
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Loans to Participants |
Interest rates range from 2% to 10% |
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5,611,800 |
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$515,815,203 |
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* Indicates party-in-interest to the Plan.
**Column (d) has not been presented for this fund as this information is not applicable for participant-directed investments.
Regions Financial Corporation 401(k) Plan
(Plan Number 002)
(Employee Identification Number 63-0589368)
Schedule H, Line 4j
Schedule of Reportable Transactions
Year Ended December 31, 2004
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(b) Description of Asset Including Interest Rate and Maturity in Case of a Loan |
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(h) Current Value of Asset on Transaction Date |
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Category (iii) - Series of transactions in excess of 5% of Plan assets: |
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Regions Financial Corporation |
Stock Fund* |
$ 40,578,953 |
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$40,578,953 |
$ 40,578,953 |
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$24,026,222 |
18,108,260 |
24,026,222 |
$5,917,962 |
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*Includes both participant and nonparticipant-directed components of the Regions Financial Corporation Stock Fund
There were no category (i), (ii), or (iv) reportable transactions for the year ended December 31, 2004.
Columns (e) and (f) have not been presented as this information is not applicable.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused the annual report to be signed by the undersigned thereunto duly authorized.
EMPLOYEES' 401(k) PLAN
REGIONS FINANCIAL CORPORATION
Date: June 28, 2005
By: /s/ John M. Daniel
John M. Daniel
Executive Vice President--Human Resources
Regions Financial Corporation
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Exhibit No. |
Description |
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(23) |
Independent Registered Public Accounting Firm's Consent |