Drip Portfolio Report
Tuesday, April 28, 1998
by Dale Wettlaufer ([email protected])

ALEXANDRIA, VA (April 28, 1998) -- Before we get to today's stuff, I have to call your attention to a total mind lapse I had while editing yesterday's piece. There were some numbers that got mixed up, so I call your attention to the first two paragraphs in the "Amex ROE Conundrum" section of last night's Drip port report. I have corrected the error and clarified the explanation in the archived copy of the report. Thanks to David Felton for pointing out the error.

OK, let's move toward finalizing which companies we'll be looking at here. Based on everyone's mail, there are some favorites that will be making the list. First, we'll introduce demographic data that we'll be looking at for the banks we plan to study. The first part of that will be population trends.

Alabama-based Regions Financial Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RGBK)") else Response.Write("(Nasdaq: RGBK)") end if %>. This is a popular theme we'll be exploring -- banks of the "New South." Though I may be a little young to be using that term, there's little denying that demographic trends still favor warmer-weather climates. I don't know what the causality is there, and to question that is not my purpose, really. But there's no denying the attractiveness of states such as Alabama, Florida, Georgia, Louisiana, and Tennessee, which are where Regions does business.

Over the last six years, these states and regions have been some of the fastest growing in the country. By regions, population growth rates break down as follows:

Regional and State Population (in thousands)

 
 Percentage Change April 1, 1990 - 
 July 1, 1996 (estimate)  
  
 Northeast...............1.5% 
    New England..........1.1 
    Mid-Atlantic.........1.7 
  
 Midwest.................4.0 
    East North Central...3.8 
    West North Central...4.6 
  
 South................8.9 
    South Atlantic....9.3 
    E. South Central..6.7 
    W. South Central..9.7 
  
 West................10.9 
    Mountain.........18.0 
    Pacific...........8.4     
  
 TOTAL................6.4%     
       

Alabama is just below average at 5.76% growth, while Tennessee grew 9.07% in the 1990-1996 period. Georgia grew 13.51%, Florida grew 11.3%, while Louisiana brings up the rear at 3.09%. Fortunately for Regions, Alabama has been a growth story much like Ohio in recent years. Yes, rust-belt Ohio has instituted fiscal policies that have made cities like Columbus, of all places, one of America's hot growth spots, and Cincinnati-based Fifth Third Bancorp <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FITB)") else Response.Write("(Nasdaq: FITB)") end if %> one of the hottest banks in the industry this decade. Alabama is on a similar growth track.

The company's present markets are projected to grow at about the national average over the coming 12 years:

 
          Total Population and Net Change 
             for States: 1995 to 2025  
      
                      1995      2010    Change 
  
 United States     262,755   297,716    11.33% 
 Alabama             4,253     4,798    11.28 
 Tennessee           5,256     6,180    11.76 
 Georgia             7,201     8,824    12.25 
 Florida            14,166    17,363    12.26 
 Louisiana           4,342     4,683    10.79

The place to go to find this information is the U.S. Census Bureau homepage at www.census.gov.

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