417 North 20th Street

Birmingham, Alabama 35203

Telephone 205 944-1300

To the Stockholders:

      You are cordially invited to attend the annual meeting of the stockholders of Regions Financial Corporation, to be held at 10:00 a.m., local time, on May 18, 2006, at the Regions Bank Operations Center, 201 Milan Parkway, Birmingham, Alabama, 35209.

      The formal notice of the annual meeting follows on the next page. Enclosed with this proxy statement are your proxy card and a postage-paid envelope to return your proxy card.

      We hope you will plan to attend the stockholders’ meeting. However, in order that we may be assured of a quorum, we urge you to sign and return the enclosed proxy card in the postage-paid envelope provided, or otherwise vote your shares by telephone or on the Internet as described in the proxy statement, as promptly as possible, whether or not you plan to attend the meeting in person. If you do attend the meeting, you may withdraw your proxy.

      A reception and coffee will be held from 9:00 a.m. until 10:00 a.m., in the Regions Bank Operations Center. We hope you will find it convenient to come early enough to enjoy this social time prior to the stockholders’ meeting.

April 5, 2006

REGIONS FINANCIAL CORPORATION

417 North 20th Street

Birmingham, Alabama 35203

Telephone 205 944-1300

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To be held May 18, 2006

       Regions Financial Corporation will hold its annual meeting of stockholders at Regions Bank Operations Center, 201 Milan Parkway, Birmingham, Alabama 35209 at 10:00 a.m., local time, on May 18, 2006, to consider and vote upon the following matters:

      The Regions board of directors has fixed the close of business on March 23, 2006, as the record date for the annual meeting. This means that Regions stockholders of record at such time are entitled to notice of, and to vote at, the annual meeting or any adjournment or postponement of the annual meeting. A complete list of Regions stockholders of record entitled to vote at the annual meeting will be made available for inspection by any Regions stockholder for ten days prior to the annual meeting at the principal executive offices of Regions and at the time and place of the annual meeting.

      Whether or not you plan to attend the annual meeting, please submit your proxy with voting instructions. To submit your proxy by mail, please complete, sign, date and return the accompanying proxy card in the enclosed self-addressed, stamped envelope. Alternatively, you may use the toll-free telephone number indicated on the proxy card to vote by telephone or visit the website indicated on the proxy card to vote on the Internet. This will not prevent you from voting in person, but it will help to secure a quorum and avoid added solicitation costs. Any holder of Regions common stock who is present at the annual meeting may vote in person instead of by proxy, thereby canceling any previous proxy. In any event, a proxy may be revoked in writing at any time before the annual meeting.

April 5, 2006

TABLE OF CONTENTS

REGIONS FINANCIAL CORPORATION

417 North 20th Street

Birmingham, Alabama 35203

Telephone 205 944-1300

PROXY STATEMENT

FOR 2006 ANNUAL MEETING OF STOCKHOLDERS

       Regions Financial Corporation (“Regions”) is furnishing this proxy statement to the stockholders in connection with the 2006 annual meeting of stockholders to be held on Thursday, May 18, 2006, at 10:00 a.m., local time, at the Regions Bank Operations Center, 201 Milan Parkway, Birmingham, Alabama, 35209, and at any adjournment thereof. The matters to be considered and acted upon are (1) the election of three nominees as directors of Regions, (2) the approval of the Regions Financial Corporation 2006 Long Term Incentive Plan (the “2006 Long Term Incentive Plan”), (3) the ratification of the appointment of Ernst & Young LLP as independent auditors of Regions for the 2006 fiscal year, (4) the consideration of a shareholder proposal, which the board of directors and management oppose, to recommend the annual election of all directors instead of electing directors for staggered three-year terms, and (5) such other business as may properly come before the meeting.

      Your proxy is solicited on behalf of the board of directors of Regions. You may revoke your proxy at any time before it is voted at the annual meeting. You may submit your proxy by signing and dating the enclosed proxy card and returning it in the envelope provided or by voting by telephone or on the Internet by following the instructions provided in the proxy statement. All properly submitted proxies delivered pursuant to this solicitation will be voted at the meeting and in accordance with instructions, if any.

      Participants in Regions 401(k) plan, the Computershare Investment Plan for Regions Financial Corporation, and the Directors Stock Investment Plan, please note that the enclosed proxy card also constitutes the voting instruction form for shares allocated to you under these plans and covers all shares you are entitled to vote under the plan or plans, in addition to shares you may hold directly. Signing and returning the proxy card, or voting by telephone or on the Internet as explained below, will enable voting of all shares, including those held in such plans.

      We are mailing this proxy statement, together with the proxy card and annual report for the year ended December 31, 2005, starting on or about April 10, 2006, to the stockholders entitled to vote at the meeting.

The date of this proxy statement is April 5, 2006.

INFORMATION ABOUT REGIONS

      Regions is a financial holding company headquartered in Birmingham, Alabama which operates throughout the South, Midwest and Texas. Regions’ operations consist of banking, brokerage and investment services, mortgage banking, insurance brokerage, credit life insurance, leasing, commercial accounts receivable factoring and specialty financing. At December 31, 2005, Regions had total consolidated assets of approximately $84.8 billion, total consolidated deposits of approximately $60.4 billion and total consolidated stockholders’ equity of approximately $10.6 billion.

      Regions is a Delaware corporation that on July 1, 2004, became the successor by merger to Union Planters Corporation (“Union Planters”) and the former Regions Financial Corporation. Regions’ principal executive offices are located at 417 North 20th Street, Birmingham, Alabama 35203, and its telephone number at such address is (205) 944-1300.

VOTING, REVOCABILITY AND SOLICITATION OF PROXIES

Voting Procedures and Revocation

      You should complete and return the proxy card accompanying this proxy statement to ensure that your vote is counted at the annual meeting, regardless of whether you plan to attend the annual meeting. If you are a registered stockholder (that is, you hold stock certificates registered in your own name), you may also vote by telephone or through the Internet, by following the instructions described on your proxy card. If your shares are held in nominee or “street name” you will receive separate voting instructions from your broker or nominee with your proxy materials. Although most brokers and nominees offer telephone and Internet voting, availability and specific processes will depend on their voting arrangements. You can revoke the proxy at any time before the vote is taken at the annual meeting by submitting to Regions’ corporate secretary written notice of revocation or a properly executed proxy of a later date, or by attending the annual meeting and voting in person. Written notices of revocation and other communications about revoking Regions proxies should be addressed to:

      If your shares are held in street name, you should follow the instructions of your broker regarding the revocation of proxies.

      All shares represented by valid proxies that we receive through this solicitation, and that are not revoked, will be voted in accordance with the instructions on the proxy card. If you make no specification on your proxy card as to how you want your shares voted before signing and returning it, your proxy will be voted “FOR” approval of the election of the nominated directors, “FOR” approval of the 2006 Long Term Incentive Plan, “FOR” ratification of the appointment of Ernst & Young LLP as independent auditors, and “AGAINST” the shareholder proposal to recommend the annual election of all directors. The Regions board of directors is currently unaware of any other matters that may be presented for action at the annual meeting. If other matters properly come before the annual meeting, or at any adjournment or postponement thereof, we intend that shares represented by properly submitted proxies will be voted, or not voted, by and at the discretion of the persons named as proxies on the proxy card.

Solicitation of Proxies

      We will bear the entire cost of soliciting proxies from you. In addition to solicitation of proxies by mail, we will request that banks, brokers and other record holders send proxies and proxy material to the beneficial owners of Regions common stock and secure their voting instructions, if necessary. We will reimburse the record holders for their reasonable expenses in taking those actions. We have also made

arrangements with D.F. King & Co., Inc. to assist us in soliciting proxies and have agreed to pay that company $12,000 plus reasonable expenses for these services. If necessary, we may also use several of our regular employees, who will not be specially compensated, to solicit proxies from Regions stockholders, either personally or by telephone, telegram, facsimile or letter.

      This is the first mailing of proxy solicitation materials to stockholders.

Quorum Requirement

      The presence, in person or by properly executed proxy, of the holders of a majority of the outstanding shares of Regions common stock is necessary to constitute a quorum at the annual meeting. Abstentions and broker nonvotes will be counted solely for the purpose of determining whether a quorum is present. An unvoted proxy submitted by a broker is sometimes referred to as a broker nonvote.

Information about Votes Necessary for Action to be Taken

      The three nominees for director to be elected at the annual meeting will be elected at the meeting by a plurality of all the votes cast at the meeting, meaning that the three nominees for director with the most votes will be elected. Regions’ certificate of incorporation does not authorize cumulative voting in the election of directors.

      The 2006 Long Term Incentive Plan will be approved if a majority of the shares represented at the annual meeting vote in favor.

      The appointment of Ernst & Young LLP as independent auditors of Regions for the 2006 fiscal year will be ratified if a majority of the shares represented at the annual meeting vote in favor.

      The shareholder proposal to recommend the annual election of all directors will be adopted if a majority of the shares represented at the annual meeting vote in favor. Because the shareholder proposal relates to a nonbinding recommendation of the stockholders to the board of directors, the vote required for approval of the proposal is less than the vote that would be required for the stockholders to approve an amendment to the certificate of incorporation effecting such a change.

      Abstentions and broker nonvotes will have no effect on the vote on the election of directors, but will have the same effect as a vote against approval of the 2006 Long Term Incentive Plan, against the ratification of the appointment of Ernst & Young LLP as independent auditors of Regions for the 2006 fiscal year, and against the shareholder proposal to recommend the annual election of all directors.

Attending The Meeting

      If you wish to vote your shares of Regions common stock held in street name in person at the meeting, you will have to get a written proxy in your name from the broker, bank or other nominee who holds your shares.

Participants in the Regions 401(k) Plan or Other Plan

      If you are a participant in the Regions 401(k) Plan, please note that the proxy card also constitutes the voting instruction form and covers all shares you may vote under the plan. Under the terms of the plan, the trustee or administrator votes all shares held by the plan, but each participant may direct the trustee or administrator how to vote the shares of Regions common stock allocated to his or her plan account. If you own shares through the Regions 401(k) plan and do not vote, the plan trustee or administrator will vote the shares in favor of proposals 1, 2, and 3, against proposal 4, and in accordance with the terms of the plan. The deadline for returning your voting instructions is May 15, 2006.

      If you are a participant in the Computershare Investment Plan for Regions Financial Corporation and/or the Directors Stock Investment Plan, please note that the proxy card also constitutes the voting instruction form and covers all shares allocated to your account under these plans. If you do not return your proxy card, or vote by telephone or over the Internet, your shares in these plans will not be voted. If

you return your proxy card without indicating your voting instructions, the shares will be voted in favor of proposals 1, 2, and 3 and against proposal 4.

Voting by Telephone or the Internet

      Many stockholders of Regions have the option to submit their proxies or voting instructions electronically by telephone or the Internet instead of submitting proxies by mail on the enclosed proxy card. Please note that there are separate arrangements for using the telephone and the Internet depending on whether your shares are registered in Regions’ stock records in your name or in the name of a brokerage firm or bank. Regions stockholders should check their proxy card or the voting instructions forwarded by their broker, bank or other holder of record to see which options are available.

      The telephone and Internet procedures described below for submitting your proxy or voting instructions are designed to authenticate stockholders’ identities, to allow stockholders to have their shares voted and to confirm that their instructions have been properly recorded. Stockholders submitting proxies or voting instructions via the Internet should understand that there may be costs associated with electronic access, such as usage charges from Internet access providers and telephone companies, that will be borne by the stockholder.

      Regions holders of record may submit their proxies:

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

      As of March 23, 2006, Regions had issued 477,624,928 shares of common stock, of which 456,678,128 shares were outstanding and 20,946,800 shares were held as treasury stock. Stockholders are entitled to one vote for each share on all matters to come before the meeting. Only stockholders of record at the close of business on March 23, 2006, will be entitled to vote at the meeting or any adjournment thereof.

Security Ownership of Certain Beneficial Owners

      As of December 31, 2005, Regions Bank beneficially held in a fiduciary capacity for others under numerous trust relationships, 20,160,039 shares or 4.4% of Regions’ outstanding common stock. Regions Bank’s trust department has sole voting power with respect to 18,228,911 of these shares or 4.0%, shared voting power with respect to 541,410 of these shares, sole dispositive power with respect to 4,329,117 of these shares and shared dispositive power with respect to 2,165,913 of these shares. No entity is known to Regions to be the beneficial owner of more than five percent of any class of voting securities.

Security Ownership of Directors and Management

      The following table presents information about beneficial ownership of Regions common stock by the directors and certain executive officers of Regions as of the record date. Unless otherwise indicated, each person has sole voting and investment powers over the indicated shares. A person is deemed to be a beneficial owner of any security of which that person has the right to acquire beneficial ownership within 60 days from the record date. The footnotes to the table indicate how many shares each person has the right to acquire within 60 days of the record date. The shares of Regions common stock which are issuable

to a person listed below upon exercise of the vested portion of the outstanding options are assumed to be outstanding for the purpose of determining the percentage of shares beneficially owned by that person.

      No change in control of Regions has occurred since January 1, 2005, meaning that no person or group has acquired the ability to direct or cause the direction of management and policies of Regions through the ownership of voting securities, by contract, or otherwise, and no arrangements are known to Regions which may at a later date result in such a change in control of Regions.

Section 16(a) Beneficial Ownership Reporting Compliance

      Section 16(a) of the Securities Exchange Act of 1934 requires Regions’ executive officers and directors to file reports of ownership and changes in ownership of Regions’ stock with the Securities and Exchange Commission. Executive officers and directors are required by SEC regulations to furnish Regions with copies of all Section 16(a) forms they file.

      Based solely on a review of the forms filed during or with respect to fiscal year 2005, Regions believes that its executive officers and directors filed all required reports on a timely basis, except as follows.

PROPOSAL 1 — ELECTION OF DIRECTORS

      The board of directors has determined that following the annual meeting of stockholders and for the ensuing year until the next annual meeting, the board will consist of 15 members, with three nominees to be elected as directors at the annual meeting for a term of three years.

      Regions recommends the election of George W. Bryan, Susan W. Matlock, and Michael S. Starnes as directors, to hold office for a term of three years expiring with the annual meeting of stockholders to be held in 2009 or until their successors are elected and qualified. The proxy will be voted FOR the nominees, unless otherwise directed. If any nominee is not available for election, in its discretion the board of directors may designate a substitute nominee. In that event the proxies will be voted for such substitute nominee. Regions does not anticipate that any substitute nominee or nominees will be required. The proxies will not be voted for more than three nominees. The terms of 12 directors in the other two classes will continue following the annual meeting, and the terms of seven present directors will not continue following the annual meeting.

Information about Regions Directors and Nominees

      The following biographies show the age and principal occupations during the past five years of each of the Regions directors whose term of office will continue after the annual meeting, the date the director was

first elected to the board of directors of Regions’ predecessor companies, Union Planters Corporation and former Regions Financial Corporation, and any directorships held by the director with any other public company or any registered investment company.

      George W. Bryan (age 61) (nominee for election at the annual meeting).

      Susan W. Matlock (age 59) (nominee for election at the annual meeting).

      Michael S. Starnes (age 61) (nominee for election at the annual meeting).

      Samuel W. Bartholomew, Jr. (age 61).

      Margaret H. Greene (age 54).

      Richard D. Horsley (age 63).

      Jackson W. Moore (age 57).

      Malcolm Portera (age 60).

      John R. Roberts (age 64).

      Lee J. Styslinger III (age 45).

      Robert R. Waller (age 69).

      Allen B. Morgan, Jr. (age 63).

      Jorge M. Perez (age 56).

      Spence L. Wilson (age 63).

      Harry W. Witt (age 66).

The Board and Committees of the Board

      Regions held six directors’ meetings during 2005. All directors attended at least 75% of the aggregate of the meetings held by the board and by committees of which they were members. It is Regions’ policy that directors attend the annual meeting of stockholders. All directors except one attended Regions’ 2005 annual meeting.

      Regions’ nonmanagement directors met six times in 2005 in executive session without any management directors present. The chair of the nominating and corporate governance committee, Robert R. Waller, presided over these executive sessions; and he presides over periodic meetings of the independent directors in executive session.

      The board has established categorical standards to assist it in making the determination whether a director is independent and in assessing the materiality of the director’s relationship with Regions. These standards will be periodically reviewed and may be amended from time to time. The current categorical standards are set forth as follows. For purposes of the categorical standards and with respect to the look-back aspects of the standards, the “Company” refers to Regions, its predecessor companies former Regions Financial Corporation and Union Planters Corporation, and their respective subsidiaries.

      If any of the following circumstances exist with respect to a director, the director will be deemed not to be independent:

      The relationships described in this group are considered not to be material so as to impair a director’s independence. A director whose independence is not precluded by the Group I standards is presumed to be independent if he or she has no direct or indirect relationship with the Company other than the following:

      The board of directors has reviewed the relationships between directors and Regions in light of the applicable independence standards of the New York Stock Exchange and the foregoing categorical standards. The purpose of the review was to determine whether any director, either directly or indirectly, has a material relationship with Regions that would preclude the director from being independent. As a result of the review, the board has determined that each director is an independent director, other than Carl E. Jones, Jr., Jackson W. Moore, Richard D. Horsley, and Allen B. Morgan, Jr., who are executive officers of Regions and/or its subsidiaries; Spence L. Wilson, who is the brother-in-law of Jackson W. Moore; and Samuel W. Bartholomew, Jr., who is a partner in the law firm of Adams and Reese/ Stokes Bartholomew LLP, which Regions engages for the performance of the legal services and proposes to engage in the future.

      The directors named as follows all meet the foregoing categorical independence standards and therefore have been deemed independent by the board of directors: George W. Bryan, James S.M. French,

Margaret H. Greene, James E. Harwood, Parnell S. Lewis, Jr., Susan W. Matlock, Jorge M. Perez, Malcolm Portera , John R. Roberts, Michael S. Starnes, W. Woodrow Stewart, Lee J. Styslinger III, Richard A. Trippeer, Jr., Robert R. Waller, John H. Watson, and Harry W. Witt.

      The board of directors has adopted corporate governance principles that address key governance matters of importance, such as director qualifications and responsibilities, responsibilities of board committees, and director compensation. The corporate governance principles include a mechanism for stockholders or other interested parties to communicate with the directors. In particular, any interested party who desires to communicate with nonmanagement directors of Regions may do so by directing the communication to the chair of the nominating and corporate governance committee at the following address:

If confidential treatment is desired, the envelope should be marked “Confidential Nonmanagement Director Communication.”

      The board of directors has adopted a code of ethics that applies to Regions’ executive officers, including its chief executive officer, president, chief financial officer, comptroller and other persons performing executive-level functions.

      The corporate governance principles, the code of ethics, and the charter of each of the board’s four committees (audit committee, nominating and corporate governance committee, compensation committee, and risk management committee) are posted on the corporate governance section of Regions’ website and can be accessed at http://www.regions.com. Also, each of these items is available in print to any stockholder who requests it.

      Regions’ four board committees meet regularly and as needed. Information about each committee follows.

      Audit Committee. The audit committee, which held 14 meetings in 2005, presently consists of Harry W. Witt, chair, James E. Harwood, Parnell S. Lewis, Jr., John R. Roberts, and Lee J. Styslinger, III. Committee members satisfy the applicable independence requirements of the New York Stock Exchange listing standards, rules of the Securities and Exchange Commission and Regions’ audit committee charter.

      The principal duties of the committee include engaging and monitoring the performance of Regions’ independent auditors, reviewing with Regions’ independent auditors the planning and results of the auditing engagement, reviewing the activities and recommendations of Regions’ internal auditors, reviewing the adequacy of internal accounting and financial reporting controls, reviewing Regions’ audited and unaudited financial reports and related public disclosures, and monitoring Regions’ compliance with legal and regulatory requirements. Members of the audit committee are not professionally engaged in the practice of auditing or accounting.

      Audit Committee Financial Expert. The board of directors has determined that the audit committee includes at least one member, Harry W. Witt, who is an audit committee financial expert within the meaning of the rules of the Securities and Exchange Commission. In addition, all audit committee members are financially literate, as required by New York Stock Exchange listing standards.

      Accounting or Audit-Related Complaints. The audit committee has established procedures for the receipt, retention, and evaluation of complaints and submissions concerning accounting and audit related matters, the features of which include insulation from management, safeguards for protecting anonymity and confidentiality of employee submissions, alternative methods for submissions, dedication of resources for investigations, and the recording and preservation of findings. The procedures are administered by the audit committee and a limited number of individuals in Regions’ corporate security, legal, and internal

audit areas. Regions has effectively notified its employees that the procedures are in place and how to direct a complaint or submission. Any interested party may communicate concerns regarding accounting, internal accounting controls, or auditing matters directly to the attention of the audit committee as follows:

By mail:

By phone: (800) 858-6199.

AUDIT COMMITTEE REPORT

      Regions’ audited financial statements at and for the three year period ended December 31, 2005, are included in Regions’ Annual Report on Form 10-K for the 2005 fiscal year. Regions, acting through its management and board of directors, has the primary responsibility for the financial statements and the reporting process, including the systems of internal accounting controls. Ernst & Young LLP, independent auditors engaged by Regions, are responsible for planning and conducting the annual audit, for expressing an opinion on the conformity of Regions’ audited financial statements with U.S. generally accepted accounting principles, and for annually auditing the effectiveness of Regions’ internal control over financial reporting and management’s assessment of the effectiveness of internal control over financial reporting.

      The audit committee oversees Regions’ financial reporting process on behalf of the board of directors. In fulfilling its oversight responsibilities, the committee has reviewed and discussed the audited financial statements with Regions’ management, including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.

      The audit committee has reviewed with Ernst & Young LLP their judgments as to the quality, not just the acceptability, of Regions’ accounting principles and such other matters as are required to be discussed with the committee under auditing standards generally accepted in the United States, including the matters required to be discussed by Statement on Auditing Standards No. 61, as amended by Statement on Auditing Standards No. 90, Audit Committee Communications.

      The audit committee has discussed with Ernst & Young LLP their independence in relation to Regions and Regions’ management, including the matters addressed in the written disclosures and letter provided to Regions by Ernst & Young, as required by Standard No. 1, Independence Discussions with Audit Committees, of the Independence Standards Board, the standard-setting body governing the independence of auditors in relation to their public company clients.

      The audit committee has discussed with Regions’ internal auditors and Ernst & Young LLP the overall scope and plans for their respective audits. The committee regularly meets with Regions’ internal auditors and Ernst & Young, with and without management present, to discuss the results of their examinations, their evaluations of Regions’ internal accounting and financial reporting controls, and the overall quality of Regions’ financial reporting.

      In reliance on the reviews and discussions referred to above, and subject to the limitations on the role and responsibilities of the audit committee referred to above and in the audit committee charter, the committee approved including the audited financial statements in the Annual Report on Form 10-K for the year ended December 31, 2005 for filing with the Securities and Exchange Commission.

      The foregoing report of the audit committee is furnished by: Harry W. Witt, committee chair, James E. Harwood, Parnell S. Lewis, Jr., John R. Roberts, and Lee J. Styslinger, III.

      Nominating and Corporate Governance Committee. The nominating and corporate governance committee, which held five meetings during 2005, presently consists of Robert R. Waller, chair, Margaret H. Greene, Malcolm Portera, Richard A. Trippeer, and John H. Watson. The role of the nominating and corporate governance committee is to propose nominees for the Regions’ board of directors including the current nominees for election at the annual meeting. The committee also is responsible for reviewing, revising and maintaining the corporate governance policies and procedures of Regions, and for co-ordinating and overseeing the annual self-evaluation process of the board and each committee. The members of the nominating and corporate governance committee are independent in accordance with the applicable director independence requirements of the New York Stock Exchange.

      The nominating and corporate governance committee is charged to identify and review individuals believed to be qualified to become board members for recommendation to the board. The committee will consider and assess candidates consistent with criteria established by the board and set forth in Regions’ declaration of corporate governance principles. The committee will consider all pertinent issues and factors bearing on the qualifications of candidates in light of such criteria.

      Regions’ corporate governance principles affirm that the board seeks members from diverse professional backgrounds who combine a broad spectrum of experience and expertise with a reputation for integrity. Directors should have experience in positions with a high degree of responsibility, be leaders in the companies or institutions with which they are affiliated, and be selected based upon contributions they can make to the board and management regardless of gender or race. A director’s qualifications to contribute as a member of the board can be based on factors such as education, business experience, specific areas of expertise, reputation, or standing in a particular field.

      Regions’ bylaws provide that a stockholder may nominate a candidate for director and establish the procedures and requirements for such a nomination. In general, a stockholder must submit to Regions’ corporate secretary a notice of the nomination not less than 120 days prior to the anniversary date of the previous year’s annual meeting. The notice must be accompanied by all information relating to each nominee that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act and Rule 14a-11 thereunder, including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected.

      It is the current policy and practice of the committee to evaluate any qualified candidate for director under the applicable criteria without regard to the source of the recommendation of the candidate. A stockholder who desires to recommend a candidate for director should follow the procedure set forth in Regions’ bylaws as described above.

      All of the nominees for directors being voted upon at the annual meeting are directors standing for re-election.

      Risk Management Committee. The risk management committee, which held four meetings during 2005, presently consists of Spence L. Wilson, chair, Margaret H. Greene, Jorge Perez, John R. Roberts, and W. Woodrow Stewart. The role of the risk management committee is to assist the board in overseeing, and receiving information regarding, the Company’s policies, procedures and practices relating to asset and liability management, and credit, market, and operational risk.

      Compensation Committee. The compensation committee, which held 11 meetings during 2005, presently consists of James S.M. French, chair, George W. Bryan, Susan W. Matlock, and Michael S. Starnes.

      The role of the compensation committee involves the development and oversight of executive compensation programs. The functions of the compensation committee include approving the compensation arrangements for executive management and senior company officers, making recommendations to the board concerning incentive compensation plans and equity-based plans, overseeing the administration of employee benefit plans, and reporting to the board of directors concerning the committee’s activities. The

members of the compensation committee are independent in accordance with the applicable director independence requirements of the New York Stock Exchange listing standards.

      In discharging its responsibility, the compensation committee has, from time to time, used the services of compensation consultants for guidance with respect to competitive data and practices of other financial service organizations.

REPORT OF THE COMPENSATION COMMITTEE

REGARDING EXECUTIVE COMPENSATION

      It is the responsibility of the compensation committee to approve the Company’s executive compensation philosophy and oversee and monitor the Company’s executive compensation plans and programs to determine whether they are properly aligned with the Company’s strategic and financial objectives. The committee focuses on ensuring there is a strong link between Regions’ operational and financial success, with the attendant impact on shareholder interests, and the compensation of the executives.

      Compensation Philosophy. Following the merger of Regions and Union Planters at mid-year 2004, the committee endorsed a comprehensive compensation philosophy of the Company that includes the following features:

      Section 162(m) of the Internal Revenue Code, as amended, generally disallows a tax deduction to public companies for compensation over $1,000,000 paid to a company’s chief executive officer and four other most highly compensated executive officers, as reported in its proxy statement. Qualifying performance-based compensation is not subject to the deduction limit if certain requirements are met. It is the committee’s intent to maximize the deductibility of executive compensation while retaining the discretion necessary to compensate executive officers in a manner commensurate with performance and the competitive market of executive talent.

      Base Salary. Executive officers’ base salaries for 2005 were determined by the committee in early 2005. The committee considered peer group comparisons from survey data for other financial services companies, recommendations from an independent compensation consultant, and individual performance assessments. In reaching a consensus on the base salary for each executive, the committee may or may not assign weights to the various factors considered. In evaluating and establishing the base salaries of the executive officers for 2005, the committee, in conjunction with its independent compensation consultant, surveyed the base salaries of the corresponding officers of other bank holding companies in a survey group consisting of 13 peer companies, as well as by reference to a broader set of financial services institutions, including the two other largest bank holding companies headquartered in Alabama. The committee generally compared the base salaries of the named executive officers to be commensurate with or slightly

below the median of the base salaries of the corresponding executive officers of the companies in the survey group, but also factored in an inherently subjective assessment of the comparative contributions of the executive personnel to Regions’ continued financial and operating success.

      The survey comparison group referenced in establishing the base salaries for 2005 was not the same as the group of companies that make up the S&P Banks Index presented in the Comparison of Five-Year Cumulative Total Return graph included in this proxy statement. The committee believes the use of a smaller survey group tailored by asset and deposit size is more valid for salary evaluation purposes, even though not all the compensation survey companies are included in the S&P Banks Index, and even though many companies included in the S&P Banks Index are not included in the compensation survey group.

      Annual Incentive Compensation. In early 2005, the compensation committee approved the 2005 annual performance goals and target awards for executive officers. The performance goals were primarily quantitative in nature and were weighted in accordance with their overall importance in attaining Regions’ earnings objectives and achieving merger integration benchmarks and cost savings objectives. The target award percentages were set to be generally comparable to annual incentive compensation opportunities provided to similarly situated executives of peer institutions. More specifically, 2005 performance goals included goals in the areas of earnings per share, achievement of merger integration benchmarks, realization of merger-related cost savings, achievement of customer retention targets, and levels of loan charge-offs. Regions attained the maximum level for two, the midpoint between target and maximum for one and the target level for two of the goals for 2005. Accordingly, the chief executive officer and the other named officers received commensurate cash incentive awards, calculated as a percentage of their base salaries based on this level of performance goal achievement.

      Long-Term Incentive Compensation. The long-term incentive plans of the combined company permit the grant of long-term incentives in a variety of forms, including stock options, performance shares, restricted stock, and other equity-based awards. Consistent with the compensation philosophy described above, the committee believes that it is desirable to increase management’s equity ownership in Regions in order to focus management’s effort and commitment to build profitability and stockholder value. The primary purpose of LTIP awards is to encourage management to take long-term steps to achieve and sustain objectives with respect to earnings per share and return on equity. Accordingly, with the advice of its independent compensation consultant, the committee awarded LTIP grants to the executive officers during 2005, consisting of stock options, restricted stock, and performance restricted stock. In establishing the LTIP awards for the named officers, senior management and other key employees, the committee reviewed the recommended individual awards, considering the scope of accountability, financial goals, and anticipated performance requirements and contributions expected of the participants.

      Compensation of Chief Executive Officer. In deliberating the compensation of the chief executive officer for 2005, the committee followed similar methodology and approach applied to executive compensation generally. Accordingly, the base salary determination reflects in part the peer group survey comparison described above; the annual incentive compensation is based on an objective formula and tied to Regions’ achievement of pre-determined, quantitative financial and operational goals; and the realization of long-term incentive compensation, by its nature, is aligned with the realization of long-term stockholder value. As in the case of setting executive compensation generally, the committee obtains advice from an independent compensation consultant.

      In setting the base salary for Mr. Moore in 2005, the committee recognized that he would be assuming the chief executive officer position in mid-year. The committee considered a number of factors, including the peer survey comparison, the size of the combined company after the Regions-Union Planters merger, and the pre-merger chief executive compensation levels at both Regions and Union Planters.

      No LTIP awards were granted to Mr. Moore in 2005, based on the committee’s consideration of several circumstances. The committee took into account the accelerated vesting of Mr. Moore’s pre-merger awards, the number of unexercised options he holds, and his existing level of stock ownership. The options granted to Mr. Moore in 2005 consisted of reload grants incident to stock options that had been granted to Mr. Moore prior to the merger.

      Summary. The compensation committee of the board of directors remains dedicated to ensuring that Regions’ overall compensation program for its executive officers, senior management and other key employees is appropriately designed to:

      The foregoing report is furnished by the compensation committee of the board of directors.

           James S.M. French, chairman

George W. Bryan

Susan W. Matlock

Michael S. Starnes

EXECUTIVE COMPENSATION AND OTHER TRANSACTIONS

      The following table is a summary of certain information concerning the compensation earned by Regions’ chief executive officer, the former chief executive officer, and each of the other four most highly compensated executive officers during the last three fiscal years.

Summary Compensation Table

Stock Options

      The following table presents information concerning individual grants of options to purchase Regions’ common stock made during 2005 to the named executive officers.

Option Grants In The Last Fiscal Year

      The following table presents information concerning exercises of stock options to purchase Regions’ common stock during 2005 and the number and value of unexercised options held by the named executive officers.

Aggregated Option/ SAR Exercises in 2005 and Fiscal Year-End Option/ SAR Values

Retirement and Executive Benefit Plans

      The named executive officers, other than Mr. Moore and Mr. Morgan, are covered by the Regions Financial Corporation Retirement Plan, a qualified defined benefit retirement plan, as complemented by retirement compensation agreements pursuant to its supplemental executive retirement program.

      The following table shows estimated maximum annual benefits payable at retirement, including both qualified plan benefits and supplemental benefits, based on combinations of final compensation and age at retirement. Retirement benefits ultimately payable under the pension plan, in combination with the supplemental executive retirement program, depend upon a number of circumstances particular to the participant, including the number of years of credited service, year entering the plan, age at retirement, and final compensation.

Pension Plan Table

      Benefits are based on average compensation (limited to base salary) over the three years prior to retirement. For 2005 and averaged over 2003, 2004, and 2005, compensation covered by the plans for the five highest paid executive officers was as follows: Mr. Horsley, 2005 — $587,643, 3-year average — $539,167; Mr. Upchurch, 2005 — $425,000, 3-year average — $369,513; and Mr. Miller, 2005 — $412,500, 3-year average — $395,833 as reflected in the summary compensation table on page 17. Benefits are payable as a single life annuity for single participants and a joint and 50% survivor annuity for married participants. Other forms of payment are available on an actuarially equivalent basis. Amounts shown are subject to offset for company-sponsored long-term disability payments and executive life insurance program cash values exceeding premiums paid. Benefits are not offset by Social Security benefits. Benefits will be reduced or eliminated if the participant terminates employment voluntarily before age 55.

      Regions has assumed two Union Planters executive benefit plans for selected management employees. Participation in the plans has been frozen, but management employees of Union Planters who were participating in the plans as of the effective date of the merger, including Mr. Moore, are presently eligible to continue their participation.

      The supplemental retirement plan provides a retirement income benefit at age 62 equal to a percentage of final average earnings as defined in the plan, with certain reductions described below. The benefit can be paid in either an equivalent lump-sum amount or in annual or monthly installments. The plan is nonqualified and unfunded, and the amounts payable thereunder are not offset for social security or other amounts, except as described below.

      Currently, Mr. Moore participates in the supplemental retirement plan. Supplemental annual retirement benefits payable under the plan at age 62 are equal to 65% of the sum of the executive’s highest base salary and highest annual bonus during any year of employment, less an amount calculated as the present value of Regions’ cost of funds related to premiums paid on a split-dollar life insurance policy on the life of Mr. Moore and his spouse, which premiums will be reimbursed in full to Regions from the cash value of the policy. The annual supplemental retirement benefit under the plan is reduced 6% per year for early retirement after age 55 but before age 62. In addition, annual supplemental retirement benefits vest following a termination or a change in control as defined in the plan and the agreement with Mr. Moore. The estimated annual benefit payable to Mr. Moore under the plan if he were to retire at age 62, and assuming no increase in his base salary or annual bonus before then, is $1,441,462. However, he has elected to take this benefit in a lump-sum at retirement, which will be discounted to present value and further reduced by the present value of Regions’ cost of funds related to premiums paid on a split-dollar life insurance policy, as described above. Union Planters ceased making premium payments under such life insurance policy after July 30, 2002, to avoid any question that such premiums could be characterized as a personal loan prohibited by Section 402 of the Sarbanes-Oxley Act of 2002. Consequently, the death benefit of such policy to Mr. Moore’s beneficiary, and the premium reimbursement to Regions, will be substantially less than originally intended.

      The deferred compensation plan allows participants to defer a portion of their cash compensation into a nonqualified savings plan. Regions matches up to 25% of the amounts deferred based on various salary levels. Participants’ bookkeeping accounts under the plan track both notional interest computed at the rate of 120% of the mid-term applicable federal rate and hypothetical total investment return on phantom stock units calculated to mirror performance of Regions common stock. Upon termination of employment or earlier if otherwise elected by the participant, the plan returns the compensation deferred plus a return equal to the higher of the interest calculation or the phantom stock calculation.

Employment Contracts and Termination, Severance, and Change of Control Arrangements

      Certain executive officers of Regions, including the executive officers named in the summary compensation table, have agreements with Regions that provide certain protections in the event a “change of control” of Regions occurs. The terms of the agreements with the named executive officers are summarized as follows.

      The terms of Mr. Moore’s employment agreement, which was last amended effective as of June 29, 2005, are summarized as follows.

      Mr. Moore was appointed as chief executive officer of Regions on July 1, 2005; and on the earlier of July 1, 2006 or the date Carl E. Jones, Jr. ceases to serve as chairman of Regions (which is expected to occur on May 18), Mr. Moore will become chairman and chief executive officer of Regions. If Mr. Moore is not appointed to the position of chairman at the designated time, or is removed from the position of chief executive officer prior to becoming chairman and chief executive officer of Regions (in each case, other than as a result of Mr. Moore’s termination for cause (as defined in the employment agreement), his termination due to his death or disability, or his voluntary resignation not in connection with the nonappointments or removal described above), then Mr. Moore would be entitled to the change in control rights described below.

      Mr. Moore’s employment agreement provides for a minimum base salary for Mr. Moore of $650,000. Under the agreement but subject to specific exceptions stated therein, Mr. Moore will be eligible for participation in, and will receive, all pension and welfare benefits, fringe benefits and perquisites with Regions on a basis, at a level and in an amount that, on a benefit-for-benefit basis, is no less favorable than the benefits that were provided or made available to Mr. Moore with Union Planters in January, 2004. The exceptions delineated in the agreement relate to elimination of certain rights Mr. Moore may have had to a gross-up for income and employment taxes on compensation he receives from Regions after June 29, 2005 (whether related to past or future services for Union Planters and/or Regions); elimination of any rights Mr. Moore may have to receive “reload” grants of stock options after June 29, 2005, and to terminate any programs or rights he may have to defer the gains on Company stock options he may

exercise after that date; limitations on Regions’ matching contributions on amounts of compensation Mr. Moore may elect to defer under the Union Planters Corporation Amended and Restated Deferred Compensation Plan for Executives after June 29, 2005; and a requirement that he reimburse Regions for his use of company aircraft or automobiles for personal travel after June 29, 2005.

      The employment period under Mr. Moore’s employment agreement is a rolling three-year term that is currently scheduled to expire on December 31, 2008, subject to automatic one-year extensions on each December 31, unless Regions provides at least 60 days prior notice to Mr. Moore. In any case, the term of the agreement may not be extended after Mr. Moore reaches age 65. If Regions provides prior notice to Mr. Moore that it is electing not to extend the term of the agreement, Mr. Moore may either remain until the end of the then-current term of his agreement, or may choose to terminate the agreement and be paid a lump-sum severance amount equal to three times the sum of his highest base salary and highest annual bonus earned in any year during his employment (“final highest earnings”). In either case, all options, stock appreciation rights, and other awards in the nature of rights that may be exercised, and all awards of restricted stock, if any, issued to Mr. Moore under all stock incentive plans of Regions (collectively, “incentive awards”) will immediately vest and be exercisable and all restrictions thereon will lapse. As a result of the accelerated vesting of Mr. Moore’s equity awards from Union Planters at the time of the merger, there currently are no unvested equity awards outstanding to which this provision would apply. In addition, Mr. Moore will have the right to elect within 90 days after the effective date of his termination of employment, either to receive a lump-sum cash-out of his stock options at the then-current spread value or to have the right to exercise such options from the date of termination through the remaining term of the options.

      If termination of employment is for cause, Mr. Moore will be provided his base salary through the date of termination plus any annual incentive bonus that has been previously approved but not paid. In addition, Regions must, at its election, either effect a lump-sum cash-out of Mr. Moore’s stock options (vested and unvested) at the then-current spread value, or declare all such options to be immediately vested and exercisable by Mr. Moore within one year from notice of his termination.

      If termination of employment is due to death or disability, Mr. Moore will be provided his base salary through the date of termination plus any annual incentive bonus that has been previously approved but not paid, and will receive a severance payment equal to three times his final highest earnings. In either case, all incentive awards will immediately vest and be exercisable and all restrictions thereon will lapse. In addition, Mr. Moore or his estate will have the right to elect, within 90 days after the effective date of Mr. Moore’s termination of employment, either to receive a lump-sum cash-out of his stock options at the then-current spread value or to have the right to exercise such options from the date of termination through the remaining term of the options.

      Mr. Moore’s employment agreement also provides that in the event of a future “change in control” of Regions (as defined in the agreement to include certain business combinations, acquisitions of stock or assets of Regions, or changes in board of directors composition), Mr. Moore will have the option to extend the term of his employment agreement for an additional three-year period, beginning on the later of the date of the renewal notice or the date on which the change in control occurs. Upon the commencement of any such renewal term, any remaining period of the then-current term of the employment agreement will be canceled. During the extended renewal term following a change in control, Mr. Moore may resign without penalty upon 90 days prior notice and receive a lump-sum severance payment equal to three times his final highest earnings. Also, in the event of a change in control, all deferred compensation, supplemental retirement benefits, and incentive awards will immediately vest and be exercisable and all restrictions thereon will lapse, and any stock or stock equivalents held in a deferred account on Mr. Moore’s behalf will become immediately payable. With respect to any benefits paid, accrued or accelerated by virtue of a change in control, the agreement requires Regions to make certain tax gross-up payments to cover Mr. Moore’s excise tax liabilities with respect to any such benefits, including income tax liabilities resulting from the gross-up payments.

      The agreements with Mr. Horsley, Mr. Upchurch, and Mr. Miller provide for similar change of control protections. For this purpose, the agreements generally define “change of control” to include

certain business combinations, acquisitions of stock or assets of Regions, or changes in board of directors composition. The completion of the Union Planters merger constituted a change of control within the meaning of these agreements; however, each of these individuals has agreed that the Union Planters merger will not be deemed as a change of control event, in partial consideration of an award of restricted stock, and, in the case of Mr. Upchurch and Mr. Miller, execution of new change of control agreements.

      During a specified period following a change of control (three years in the case of Mr. Horsley and two years in the case of Mr. Upchurch and Mr. Miller), Regions may terminate the employment of the executive officer signatory with or without “cause,” which is defined generally as willfully failing to perform reasonably assigned duties, or engaging in illegal conduct or gross misconduct that materially injures Regions. The executive officer may terminate employment with or without “good reason,” which includes a reduction of the officer’s compensation, benefits, duties or status, a forced relocation or material increase in travel requirements or other material breach of the agreement by Regions.

      If Regions terminates the executive officer’s employment other than for cause, or if the officer resigns for good reason, Regions must pay him accrued compensation and benefits plus an amount equal to a specified multiple (three in the case of Mr. Horsley and two in the case of Mr. Upchurch and Mr. Miller) of his base salary and highest annual bonus during the three years preceding the year in which the change of control occurred or the year preceding the year in which the termination occurs. In the case of Mr. Horsley, Regions must continue to provide the officer or his beneficiaries welfare benefits coverage for three years.

      If the executive officer’s employment is terminated by Regions for cause, or by reason of the officer’s death, disability, or resignation other than for good reason, Regions’ liability is limited to accrued compensation and benefits.

      If any payment under the agreement causes the signatory executive officer to become subject to the excise tax imposed under section 4999 of the Internal Revenue Code, then Regions must make an additional payment sufficient to cover such excise tax plus all income and excise tax imposed on such additional payment.

Directors’ Compensation

      Directors who are not employees of Regions or its subsidiaries are paid an annual directors’ board retainer of $32,000, or $40,000 if deferred under Regions’ directors’ deferred stock investment plan described below, plus an additional meeting attendance fee of $1,500, or $1,875 if deferred, for each board or committee meeting attended, and an additional annual chairman’s retainer of $6,000, or $7,500 if deferred, for each committee chair (or $10,000, or $12,500 if deferred, in the case of the audit committee chair). Also, an annual stock grant of 1,350 shares of Regions common stock will be deferred into the Regions directors’ deferred stock investment plan.

      Directors who are employees of Regions or its subsidiaries receive no fees for their services as directors.

      Nonemployee directors of Regions participate in Regions’ directors’ deferred stock investment plan, under which the common stock component of directors’ compensation described above is automatically deferred, and a director may elect to defer receipt of some or all of the participant’s cash compensation. Regions contributes 25% of the amount of cash deferred by each participating director. Deferred amounts and company contributions are credited to a bookkeeping account for the director, which is designated in notional shares of Regions common stock. Dividend equivalents, if any, are converted to additional notional shares of common stock in the participant’s account. At the end of the deferral period, the participant’s account is settled in actual shares of common stock, plus cash for any fractional share. Receipt and taxability of benefits are deferred until the later of the close of the year in which the participant reaches age 65 or close of the year in which the participant terminates as a director. During the deferral period, the participants’ deferrals and Regions’ contributions are invested in Regions common stock, which is maintained in a rabbi trust. For 2005, the amounts contributed by Regions as matching contributions for

the present directors who participated in the plan, and the amounts of dividend equivalents credited under the plan, were as follows:

Compensation Committee Interlocks and Insider Participation

      The directors who served on Regions’ compensation committee during 2005 were:

      None of these committee members is or ever has been an officer or employee of Regions or any of its subsidiaries.

      During part of 2005, Samuel E. Upchurch, Jr., director of corporate and strategic initiatives of Regions, served as a member of the board of directors of Altec, Inc., and Lee J. Styslinger III, chief executive officer of Altec, Inc., served as a director of Regions. Mr. Upchurch resigned as a director of Altec in May, 2005.

Financial Performance

      Set forth below is a graph comparing the yearly percentage change in the cumulative total return of Regions’ common stock against the cumulative total return of the S&P 500 Index, and the S&P Banks Index for the past five years. This presentation assumes that the value of the investment in Regions’ common stock and in each index was $100 and that all dividends were reinvested.

Other Transactions

      Directors and officers of Regions and their associates were customers of, and had transactions with, Regions in the ordinary course of business during 2005; additional transactions may be expected to take place in the ordinary course of business. Included in such transactions are outstanding loans and commitments from Regions Bank, all of which were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons, and did not involve more than the normal risk of collectibility or present other unfavorable features.

      Regions retained during 2005 and prior years the law firm of Stokes Bartholomew Evans & Petree, P.A., of which director Samuel W. Bartholomew, Jr. was a partner until July 2005, and retained during 2005 and prior years and proposes to retain in the future on behalf of Regions or certain of its subsidiaries the law firm of Adams and Reese/ Stokes Bartholomew LLP, of which Mr. Bartholomew became a partner in July 2005 as a result of the merger of the Nashville, Tennessee office of Stokes Bartholomew Evans & Petree with Adams and Reese LLP. During 2005, Regions or its subsidiaries paid legal fees to the firms of Stokes Bartholomew Evans & Petree, P.A., and Adams and Reese/ Stokes Bartholomew LLP, but in each case the amount did not exceed 5% of the firm’s gross revenue for 2005.

PROPOSAL 2 — APPROVAL OF 2006 LONG TERM INCENTIVE PLAN

      The compensation committee and the board of directors have proposed the Regions Financial Corporation 2006 Long Term Incentive Plan (the “2006 Long Term Incentive Plan”), subject to the approval of the stockholders. In the absence of stockholder approval the 2006 Long Term Incentive Plan

will not take effect. A copy of the 2006 Long Term Incentive Plan is attached to this proxy statement as Appendix A.

      Shares of Regions common stock that may be awarded under the plan may consist, in whole or in part, of authorized and unissued shares or treasury shares.

      The 2006 Long Term Incentive Plan provides generally for the granting to officers and key employees of Regions of non-qualified stock options, stock appreciation rights and shares of stock designated as restricted stock, nonstock share equivalents or share-indexed dollar equivalents in the form of performance shares or performance units, and other equity-based awards. The plan is intended to be used over a period of years to assist Regions in attracting, retaining, motivating and rewarding employees who make a significant contribution to Regions’ long term success, and to encourage employees to acquire and maintain an equity interest in the Company.

      The plan provides that 20,000,000 common share equivalents are subject to and available for distribution to recipients under the plan. For this purpose, shares of restricted stock granted under the plan are assigned a higher share equivalent value because the value of a grant of restricted stock on the date of grant is comparatively higher than the value of a stock option for the same number of underlying shares. Specifically, the plan provides that each share of restricted stock granted under the plan is assigned a share equivalent factor of 4.0 compared to the stock option equivalent of 1.0. In operation, this means that grants of restricted stock will deplete the number of share equivalents available for grant faster than grants of the same number of stock options. Regions has concluded that this mechanism more closely correlates the value of a grant under the plan to the number of share equivalents used for the grant. The closing market price of the common stock of the Company as reported by the New York Stock Exchange was $35.17 per share on March 31, 2006.

      The 2006 Long Term Incentive Plan is administered and interpreted by the compensation committee, which is composed of nonemployee directors who are independent within the meaning of New York Stock Exchange listing standards. The board of directors may, without further approval of the stockholders, suspend, terminate or amend the 2006 Long Term Incentive Plan. However, no such action may be taken without stockholder approval which would materially increase the total number of shares of common stock or common stock equivalents which may be issued under the Plan, relax the performance objectives for performance based awards, or materially increase the benefits of the plan within the meaning of New York Stock Exchange listing standards. Also, no action may be taken without a recipient’s consent which would reduce or impair any vested rights or obligations under any then outstanding award under the Plan.

      The plan provides that awards under the plan may be granted subject to satisfaction of performance objectives, and, if designated by the committee at the time of grant, as awards intended to satisfy the requirements of Internal Revenue Code Section 162(m) applicable to “qualified incentive based compensation.” For performance based awards intended to satisfy such requirements, the performance objectives must be limited to specified levels of or increases in (1) earnings (including, but not limited to, earnings per share or other corporate measures); (2) profit (including, but not limited to, net profit, gross profit, operating profit, economic profit, profit margins or other profit measures); (3) net income; (4) revenue; (5) stock price or performance; (6) stockholder return; (7) return measures (including, but not limited to, return on assets, capital, equity or revenue); (8) growth of loans and deposits; (9) market share; (10) expenses (including, but not limited to, expense management, expense efficiency ratios or other expense measures); (11) business expansions or consolidation (including but not limited to, acquisitions and divestitures); (12) internal rate of return; (13) planning accuracy (as measured by comparing planned results to actual results); (14) number of customers or households; and (15) asset quality and charge-offs, in each case of the Company, a subsidiary, or a region, division, department or function in the Company or a subsidiary.

      The 2006 Long Term Incentive Plan authorizes the granting of non-qualified stock options to purchase shares of common stock of the Company.

      No stock options may be granted under the 2006 Long Term Incentive Plan after the date of the tenth anniversary of the effective date of the plan’s approval, expected to be May 18, 2016. The option price per share of non-qualified stock options shall not be less than the fair market value of the common stock on the date of the grant. Options may be exercised by payment in cash, or in the discretion of the Committee, by delivery of shares having a market value equal to the option price, or in any combination of cash and shares. An option may be exercised only subject to such terms as the Committee may impose at the time the option is granted. In general, an option must terminate not later than ten years after the date of the grant.

      Stock appreciation rights may be granted under the 2006 Long Term Incentive Plan in connection with all or any part of non-qualified stock options, or independent of stock options. Stock appreciation rights permit the recipient to receive from the Company an amount determinable in relation to any increase in fair market value of the Company’s common stock. The amount awardable upon exercise of a stock appreciation right for each share covered by the exercise is equal to the difference between the exercise price and the fair market value of the share on the date of exercise. The committee has the discretion to establish the terms of a stock appreciation right award at the time of grant, including the method of exercise, method of settlement, form of consideration payable in settlement, and any other terms and conditions of the award. Any stock appreciation right award and the terms and conditions thereof must be evidenced by an award agreement between Regions and the recipient. The aggregate amount due on exercise of a stock appreciation right may be paid wholly or partly in cash or in common stock, in the discretion of the committee.

      Regions understands the federal income tax consequences of stock options under the 2006 Long Term Incentive Plan, under existing federal income tax laws and regulations to be as follows:

      The holder of a non-qualified stock option, upon exercise, must include as ordinary income subject to federal taxation an amount equal to the excess of the fair market value of the stock acquired at date of exercise over the option price.

      The recipient of stock appreciation rights will not be subject to federal income tax at the time of receipt. However, stock or cash delivered pursuant to the exercise of such rights will be treated as taxable income to the employee in the year of receipt.

      A restricted stock award under the 2006 Long Term Incentive Plan consists generally of a grant or sale of the Company’s common stock to the recipient subject to conditions determined by the Committee. The terms determinable by the Committee in each restricted stock award include the number of shares, the price, if any, to be paid by the recipient, the time within which the award may be subject to forfeiture, the nature of the restrictions, including performance criteria if any, and the circumstances upon which restrictions will lapse. The recipient of restricted stock may not sell or transfer such shares during the restriction period, and the certificates representing such shares remain in the custody of the Company until the conditions of restriction are satisfied. Upon lapse or removal of the restrictions, the recipient will have unrestricted ownership of the covered shares.

      The 2006 Long Term Incentive Plan also provides for the grant of awards in the form of performance shares and performance units. The Committee selects recipients of performance share and performance unit awards and establishes performance objectives, the performance period, and the amount and form of the award, which may consist of stock or cash. The performance objectives may relate to the specific performance of the recipient, or the performance of the region, subsidiary, unit, department or function within which the recipient is employed. Performance objectives are intended to enhance the long term financial condition of the Company. If at the end of the performance period the performance objectives have been satisfied, the recipient will have earned the award. If the specific performance objectives are exceeded, the committee in its discretion may award a multiple of the target award, and if the performance objectives are satisfied in part, the committee in its discretion may grant the recipient a portion of the performance award.

      The 2006 Long Term Incentive Plan provides for the grant of full value stock awards in the form of dividend equivalents. Generally, a dividend equivalent entitles the recipient to receive an amount equivalent to the cash dividends declared on Regions common stock over a specified period. The committee has the discretion to set the terms and conditions of a dividend equivalent award at the time of grant, including the number of shares referable to the award, the time period, the form of consideration in which an award is to be settled, and the method of settlement.

      The 2006 Long Term Incentive Plan also grants to the committee discretion to make stock-based awards in other forms and to establish the terms and conditions of the award at the time of grant. In general, any other form of stock-based award under the 2006 Long Term Incentive Plan will be payable in, valued in whole or in part by reference to, or be otherwise based on or related to common stock of the Company. Any such award must be determined by the committee to be consistent with the purposes of the 2006 Long Term Incentive Plan.

      With respect to any or all awards under the 2006 Long Term Incentive Plan, the committee may accelerate the award, meaning that the committee may determine that outstanding options, stock appreciation rights, and other awards in the nature of rights that may be exercised shall become fully exercisable, all restrictions on outstanding awards shall lapse and applicable performance objectives shall be deemed satisfied. In exercising its discretion to accelerate awards under the plan, the committee may distinguish among recipients and among awards. Awards are automatically accelerated in the event of termination of employment within 24 months after a change of control.

      In addition to the 2006 Long Term Incentive Plan, Regions has previously adopted other incentive based compensation plans, including the 1988 Stock Option Plan, the 1991 Long Term Incentive Plan, and the 1999 Long Term Incentive Plan. In addition, Regions assumed and continued in effect certain of Union Planters’ long term incentive plans. The 2006 Long Term Incentive Plan is similar in scope and operation to Regions’ 1999 Long Term Incentive Plan.

      Contingent on stockholder approval of the 2006 Long Term Incentive Plan, the compensation committee has frozen the prior plans, meaning that no further awards can be made under those plans. Outstanding awards under such plans will remain outstanding and subject to the existing terms and conditions of the original grant.

      It is not possible at this time to determine the amounts of the awards that may be granted under the plan in the future, assuming stockholder approval is obtained. The awards granted under the current long term incentive plans of Regions in 2005 to Regions’ named executive officers are as set forth in the tables above. The aggregate number of awards granted in 2005 under such plans to all executive officers as a group was 2,172,405 and to all employees, including all current officers who are not executive officers, as a group was 4,312,743.

Equity Compensation Plan Information

      The following table gives information about the common stock that may be issued upon the exercise of options, warrants and rights under all of Regions existing equity compensation plans as of December 31, 2005.

      The board recommends you vote “FOR” proposal no. 2. Proxies solicited by the board will be voted “FOR” this proposal unless otherwise instructed on the proxy card.

PROPOSAL 3 — RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

General

      The audit committee has selected Ernst & Young LLP as Regions’ independent auditors for the 2006 fiscal year. The board of directors recommends that the stockholders ratify the selection of Ernst & Young. Ernst & Young (or its predecessor) has served as Regions’ independent auditors since 1971. In the event the selection is not ratified by a majority of votes represented at the annual meeting in person or by proxy, it is anticipated that no change in auditors would be made for the current year because of the difficulty and expense of making any change in the middle of the current year, but the vote would be considered in connection with the engagement of independent auditors for 2007.

      Ernst & Young LLP has been engaged to provide auditing services and also to provide tax services and general accounting advice. In making this selection, the audit committee considered whether the engagement by Regions of Ernst & Young for services other than audit services is compatible with Ernst & Young’s independence.

      Ernst & Young LLP served as Regions’ independent auditors for the year ended December 31, 2005, and a representative of the firm will be present at the stockholders’ meeting to make a statement if he or she so desires and to respond to appropriate questions from stockholders.

Fees

      The aggregate fees paid to Ernst & Young LLP by Regions during 2005 and 2004 are set forth in the following table:

      In accordance with the audit committee charter, the audit committee must preapprove any engagement of Ernst & Young LLP for audit or nonaudit services. The audit committee has delegated to its chairperson the authority to preapprove permissible nonaudit services, provided the anticipated fee for such service does not exceed $50,000. Any such approval of nonaudit services pursuant to this delegation of the full audit committee’s authority must be presented to the audit committee at its next regular meeting.

      The board recommends you vote “FOR” proposal no. 3. Proxies solicited by the board will be voted “FOR” this proposal unless otherwise instructed on the proxy card.

PROPOSAL 4 — SHAREHOLDER PROPOSAL

      Gerald R. Armstrong of 820 Sixteenth Street, No. 705, Denver, Colorado 80202-3227, owner of 185.86 shares of Regions common stock, has notified Regions that he intends to present the following proposal and related supporting statement at the annual meeting:

Proposal

      The proposal is as follows:

      The proponent’s supporting statement is as follows:

Board of Directors’ Recommendation

      The board recommends that you vote “AGAINST” this proposal.

      The nominating and corporate governance committee regularly evaluates Regions’ corporate governance principles to ensure that such principles, including the staggered election of directors, remain in the best interests of Regions and its stockholders. In its most recent review and in connection with its review of this shareholder proposal, the committee considered the current industry environment, the history of the stagger system and arguments for and against the stagger system, including benefits of the stagger system for a complex regional financial institution such as Regions. After careful consideration, the committee concluded that the staggered election of directors remains in the best interest of Regions and its stockholders and recommended to the board that the staggered system should be maintained. Based on the committee’s conclusion and recommendation, the board has determined that the staggered election of directors remains in the best interest of Regions and its stockholders, and that no action should be taken at the present time. The board opposes the proposal for the following reasons:

      The board recommends you vote “AGAINST” proposal no. 4. Proxies solicited by the board will be voted “AGAINST” this proposal unless otherwise instructed on the proxy card.

PROPOSALS OF STOCKHOLDERS

      Proposals by stockholders intended to be presented at Regions’ 2007 annual meeting of stockholders must be received by Regions not later than December 6, 2006, for consideration for possible inclusion in the proxy statement relating to that meeting.

      The bylaws of Regions include provisions requiring advance notice of a stockholder’s nomination of members of the board of directors. To be timely such notice must be received by Regions not less than 120 days before the date of the previous year’s proxy statement. If no annual meeting was held the previous year and in any year in which the date of the annual meeting is moved by more than 30 days from the date of the previous year’s annual meeting, the notice will be considered timely if received not less than 120 days before the date of the annual meeting or by the 10th day following the day on which public disclosure of the annual meeting date was made. The board of directors of Regions is not required to nominate in the annual proxy statement any person so proposed.

      The procedure for submitting a stockholder proposal is generally the same as for submitting stockholder nominations.

OTHER BUSINESS

      Regions does not know of any business to be presented for action at the meeting other than those items listed in the notice of the meeting and referred to herein. If any other matters properly come before the meeting or any adjournment thereof, it is intended that the proxies will be voted in respect thereof in accordance with the recommendations of the board of directors.

Dated April 5, 2006

Appendix A

REGIONS FINANCIAL CORPORATION

2006 LONG-TERM INCENTIVE PLAN

REGIONS FINANCIAL CORPORATION

2006 LONG-TERM INCENTIVE PLAN

TABLE OF CONTENTS

REGIONS FINANCIAL CORPORATION

2006 LONG-TERM INCENTIVE PLAN

ARTICLE 1

PURPOSE

      1.1.     GENERAL. The purpose of the Regions Financial Corporation 2006 Long-Term Incentive Plan (the “Plan”) is to promote the success, and enhance the value, of Regions Financial Corporation and its Subsidiaries, by linking the personal interests of their employees, officers and directors to those of Company stockholders and by providing such persons with an incentive for outstanding performance. The Plan is further intended to provide flexibility to the Company by increasing its ability to motivate, attract, and retain the services of employees, officers and directors upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent. Accordingly, the Plan permits the grant of incentive awards from time to time to selected employees, officers and directors.

ARTICLE 2

EFFECTIVE DATE

      2.1.     EFFECTIVE DATE. The Plan shall be effective as of the date upon which it shall be approved by the stockholders of the Company (the “Effective Date”). The Plan shall be submitted to the stockholders of the Company for approval within 12 months of the approval thereof by the Compensation Committee of the Board.

ARTICLE 3

DEFINITIONS

      3.1.     DEFINITIONS. When a word or phrase appears in this Plan with the initial letter capitalized, and the word or phrase does not commence a sentence, the word or phrase shall generally be given the meaning ascribed to it in this Section or in Section 1.1 unless a clearly different meaning is required by the context. The following words and phrases shall have the following meanings:

ARTICLE 4

ADMINISTRATION

      4.1.     COMMITTEE. The Plan shall be administered by the Compensation Committee of the Board or, at the discretion of the Board from time to time, by the Board. The Committee shall consist of three or more members of the Board. It is intended that the directors appointed to serve on the Committee shall be “non-employee directors” (within the meaning of Rule 16b-3 promulgated under the 1934 Act) and “outside directors” (within the meaning of Code Section 162(m) and the regulations thereunder) to the extent that Rule 16b-3 and, if necessary for relief from the limitation under Code Section 162(m) and such relief is sought by the Company, Code Section 162(m), respectively, are applicable. However, the mere fact that a Committee member shall fail to qualify under either of the foregoing requirements shall not invalidate any Award made by the Committee which Award is otherwise validly made under the Plan. The members of the Committee shall be appointed by, and may be changed at any time and from time to time in the discretion of, the Board. During any time that the Board is acting as administrator of the Plan, it shall have all the powers of the Committee hereunder, and any reference herein to the Committee (other than in this Section 4.1) shall include the Board.

      4.2.     ACTION BY THE COMMITTEE. For purposes of administering the Plan, the following rules of procedure shall govern the Committee. A majority of the Committee shall constitute a quorum. The acts of a majority of the members present at any meeting at which a quorum is present, and acts approved unanimously in writing by the members of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Parent or Subsidiary, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.

      4.3.     AUTHORITY OF COMMITTEE. The Committee has the exclusive power, authority and discretion to:

      4.4.     DECISIONS BINDING. The Committee’s interpretation of the Plan, any Awards granted under the Plan, any Award Agreement and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties.

      4.5.     AWARD AGREEMENTS. Each Award shall be evidenced by an Award Agreement. Each Award Agreement shall include such provisions, not inconsistent with the Plan, as may be specified by the Committee.

ARTICLE 5

SHARES SUBJECT TO THE PLAN

      5.1.     NUMBER OF SHARES. Subject to adjustment as provided in Sections 5.3 and 15.1, the aggregate number of shares of Stock reserved and available for Awards or which may be used to provide a basis of measurement for or to determine the value of an Award (such as with a Stock Appreciation Right or Performance Unit Award) shall be twenty million (20,000,000) shares.

      5.2.     REDUCTION RATIO. For purposes of Section 5.1, each share of Stock issued or transferred pursuant to an Award other than an Option or Stock Appreciation Right shall reduce the number of shares of Stock available for issuance under the Plan by four (4) shares. Awards that can be settled only in cash shall not reduce the number of shares of Stock available for issuance under the Plan.

      5.3.     SHARE COUNTING.

      (a) From and after the Effective Date, the following shall not reduce the number of authorized shares of Stock available for issuance under this Plan:

      (b) From and after the Effective Date, the following shares of Stock shall not become available for issuance under the Plan:

      (c) To the extent that the full number of shares of Stock subject to an Option or SAR is not issued upon exercise of the Option or SAR for any reason, only the number of shares issued and delivered upon exercise of the Option or SAR shall be considered for purposes of determining the number of shares of Stock remaining available for issuance pursuant to Awards granted under the Plan.

      (d) Substitute Awards granted pursuant to Section 14.11 of the Plan shall not count against the shares of Stock otherwise available for issuance under the Plan under Section 5.1.

      (e) A Stock Appreciation Right issued under an Award shall be counted as the equivalent of an Option for purposes of counting against the shares of Stock available for issuance under the Plan pursuant to Section 5.1

      5.4.     STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open market.

      5.5.     LIMITATION ON AWARDS. Notwithstanding any provision in the Plan to the contrary (but subject to adjustment as provided in Section 15.1), the maximum number of shares of Stock with respect to one or more Options or SARs that may be granted during any one calendar year under the Plan to any one Covered Employee shall be two hundred fifty thousand (250,000); (ii) the maximum aggregate grant with respect to Awards of Restricted Stock, Performance Shares, Performance Units or other Stock-Based Awards (other than Options or SARs) granted in any one calendar year to any one Participant shall be two hundred fifty thousand (250,000), and (iii) the aggregate dollar value of any Performance Units or other cash-based award that may be paid to any one Participant during any one calendar year under the Plan shall be four million dollars ($4,000,000).

      5.6.     MINIMUM VESTING REQUIREMENTS. Full-Value Awards granted under the Plan to an employee shall either (i) be subject to a minimum vesting period of three years (which may include graduated vesting within such three-year period), or one year if the vesting is based on Performance Objectives, or (ii) be granted solely in exchange for foregone cash compensation.

ARTICLE 6

ELIGIBILITY

      6.1.     GENERAL. Awards may be granted only to individuals who are employees, officers or directors of the Company or employees or officers of a Parent or Subsidiary.

ARTICLE 7

STOCK OPTIONS

      7.1.     GENERAL. The Committee is authorized to grant Options to Participants on the following terms and conditions: