(BUSINESS WIRE) Consistent with the message provided in its third quarter earnings release, Union Planters Corporation (NYSE: UPC) today announced that due to a reduction in mortgage loan volumes and increased competitive pressure on pricing, revenue from the Company's mortgage banking segment would be significantly lower in the fourth quarter compared to the third quarter of 2003. Mortgage volumes in the fourth quarter are projected to decrease more than fifty percent from third quarter levels. The decline in mortgage activity, which occurred at a much faster pace than anticipated, is resulting in a reduction in revenue from originations and loans held for resale balances, while greater industry-wide competitive pricing pressures are reducing the gains from the sale of these loans. As a result, the Company expects earnings per diluted share for 2003 to range between $2.51 and $2.56. The impact on 2004 is expected to be a decline in earnings, excluding any restructuring charge, of five to ten percent below 2003.

"In our third quarter earnings release, we discussed that there would be a challenging transition period over the next few quarters created by a decline in record levels of mortgage refinance activity. At that time, we expected that the decline in mortgage banking revenue would be replaced by a reduction of related expenses, growth in our core banking products, as well as improvement in credit costs," stated Jackson W. Moore, Chairman, President and CEO. "We still expect all of these opportunities to happen; however, the end of the refinancing boom occurred at a much faster rate than we anticipated, and as a result, we are accelerating our initiatives to reduce operating costs and streamline operations.

"We are finalizing plans that will provide greater detail on actions to mitigate the decline in mortgage revenues. This plan will be communicated in concert with our fourth quarter earnings release and will likely include a 2004 restructuring charge covering severance and other costs associated with aligning capacity with a reduction in volumes. In addition to rightsizing the mortgage banking operation, the restructuring will focus on accelerating our stated initiatives such as improving credit quality, reducing the risk profile of our loan portfolio, enhancing our customer base and rationalizing our branch network.

"In addition to the aggressive management of our cost structure, we are also placing a greater emphasis on originating adjustable-rate mortgages. Contributions from non mortgage banking-related activity continue to perform in line with expectations. We expect to see continued demand for our home equity product, solid residential construction activity and growth in commercial loan demand consistent with improvement in the overall economy. Additionally, we continue to be pleased with the improvement in our credit quality, and we currently expect nonperforming assets to decline for the fifth consecutive quarter.

"While the restructuring of our mortgage business will have a short-term impact of reducing 2004 earnings, we are well positioned with a strong balance sheet, a solid core banking franchise, and capital levels that continue to support our strong dividend payment and share repurchase program. During the fourth quarter, the Company repurchased 5.0 million shares of its common stock. Additionally, the Board of Directors authorized the repurchase of up to 20.0 million shares, bringing the total number of shares authorized for repurchase to 24.7 million."