Regions Financial Corp. said it will close or consolidate 50 branches and streamline back-office operations as part of a broad effort to contain expenses.

Executives from the $43.6 billion-asset Birmingham, Ala., banking company said in a presentation Thursday that the targeted branches are in low-growth areas and places where branches are "too close together." Expense control is a priority for the company this year, the executives said.

Like many other companies, Regions felt the ill effects of rising interest rates last year. Revenues rose 2% from 1999, but profits were flat as higher rates made lending less profitable. Meanwhile, expenses rose 5%.

During a presentation at Salomon Smith Barney's financial services investors conference, Carl E. Jones Jr., president and chief executive officer of Regions, said the company is trying to remake its image.

"We are moving toward being more than a bank, so we aren't so dependent on interest income," he said.

Acquiring Morgan Keegan Inc., a Nashville brokerage, will take Regions a long way to fulfilling that goal, Mr. Jones said. Regions is scheduled to close the $789 million purchase in the next three months.

The deal would bring Regions capabilities in retail and institutional brokerage, fixed income, asset management, equity capital markets, investment banking, and mergers and acquisitions advisory, and boost its proportion of revenues from fees - instead of interest income - to 40% from the current 30%.

Morgan Keegan would also bring an additional client base to which Regions could cross-sell its banking products. Morgan Keegan has 600 retail brokers and 54 offices in 13 states. The combined company would have 961 brokers in 14 states.

Regions plans to use Morgan Keegan's MOR Account, a combination brokerage and banking product, to win new customers.

The company has been busy as a buyer, making an average of around nine deals a year the last 10 years. Mr. Jones said he intends to focus on closing the Morgan Keegan deal over the next 90 days, but then all bets are off.

"It's a line of business for us to acquire commercial banks and other specialty-type financial services providers," he said. "I would expect us to get back into the market."

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