Mor Investing — Fall 2009

Letter From the CEO

This September marks the 40th anniversary of the founding of Morgan Keegan in 1969. Four decades of growth. Four decades of striving for excellence. Four decades of putting our clients first. In 1969, when Morgan Keegan & Co. first opened the doors of its one-room office in Memphis, Tennessee, its four young founders set the stunningly ambitious goal of becoming the premier investment firm in the South. Many fine firms have come and gone in the years that followed, but against long odds, Morgan Keegan succeeded and has since positioned itself among the industry’s best in almost every facet of what we do. We remain mindful of that call to excellence these many years later, and strive to exemplify it on a daily basis for our clients.

Reflecting on Allen Morgan's notes from 20 years ago, I am struck by the dedication and perseverance of the people at Morgan Keegan in holding fast to Allen's vision through changing and sometimes challenging times. Our resolve has been tested many times over the past 40 years, although never more so than by the cataclysmic changes in the financial industry over the past 18 months. The near collapse of the world’s credit markets sparked a broad economic decline the likes of which had not been seen in the financial industry since the 1930s. The experience has been painful and humbling for all concerned.

One year ago, in late September of 2008, I wrote my first letter to you as CEO focusing on the soundness of Morgan Keegan in the midst of a pervasive worry about the stability of all financial institutions. In the months that have passed since, many of our peers have been forced to shutter their operations, and yet Morgan Keegan continues to hold to a steady, profitable course. Our record of continuous growth, highlighted on the following pages, is little short of remarkable in the context of what has occurred in our industry. I credit our ability to weather this storm, and others, to remaining true to the basic values on which the firm was founded 40 years ago: an unwavering focus on our clients and a commitment to excellence. These values are as relevant today as they might have appeared to be old fashioned only a few years earlier.

Although Allen Morgan retired from his role as Chairman of the firm in December of 2007, his vision and his hopes for the firm still inspire us. A drive for excellence and a singular focus on serving the financial needs of our clients remain the core of our business today. I am pleased to say that the people of Morgan Keegan look forward to the next decade and beyond with the same vision, the same commitment and the same sense of purpose that has guided us for these past 40 years.

As always, we value the opportunity to serve you, and look forward to doing so for many years to come.

Sincerely,

John C. Carson Jr.
Chief Executive Officer

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Still Going Strong

Since 1969, Morgan Keegan has provided investors like you the tools, information and solutions to help you reach your financial goals. Over the years and through up and down markets, Morgan Keegan’s conservative investment philosophy and dedication to the needs of our clients has built a firm that is today a model of financial strength and stability.

Fixed Income Capital Markets—Leading the Way
Our Fixed Income Capital Markets division, one of the most extensive institutional sales, trading and research operations outside of New York, continues to increase its prominence in the industry. We have been the largest underwriter of municipal bonds in the South Central region of the United States for 16 consecutive years and, in 2008 and the first half of 2009, were among the top ten underwriters in the nation, according to Thomson Reuters. While the recent financial crisis forced many firms to abandon their municipal business, Morgan Keegan continues to support communities, municipalities, school districts and hospitals in their efforts to raise capital—over $256 billion since 2000. In 2009, we became the number one underwriter of competitive issues of Build American Bonds and the first in the country to underwrite an issue for Recovery Zone Economic Development Bonds, allowing local governments and investors to take advantage of these federally-subsidized borrowing programs created by the Stimulus Act of 2009 to aid areas of the United States hurt during the recession.

Equity Capital Markets — Investments for the Future
Morgan Keegan got its start 40 years ago as a regional boutique researching companies based in the South. Today, Morgan Keegan’s Equity Capital Markets research department follows nearly 300 companies in a number of industry sectors, including technology, transportation, energy and financial services, with recent expansions in the healthcare services and REITs sectors. Additionally, we are one of a handful of firms covering the homeland security industry. Our 21 senior equity research analysts are among the most respected in the business, having been honored for their industry-leading performance in the annual StarMine rankings for six consecutive years and included in the Wall Street Journal’s rankings 14 times. The 2008 rankings by Financial Times/StarMine and the Wall Street Journal featured seven Morgan Keegan equity research analysts.

Morgan Keegan’s Focus List of recommended stocks, a direct product of our equity research efforts, ranked #1 for its five-year performance (ending 6/30/09) among a list of 13 national and regional brokerage firms who maintain a list of recommended stocks and the S&P 500, according to Zacks Investment Research.

One of the fastest-growing departments at Morgan Keegan is our Investment Banking group. In the last five years, Morgan Keegan has acquired no less than five affiliates with banking expertise in the fields of healthcare, technology, financial institutions, energy and special situations. With ten locations and approximately 150 professionals, Morgan Keegan is one of the largest investment banks focused on the middle market.

Your Morgan Keegan Financial Advisor
All these resources and industry expertise are brought to you every day by your Morgan Keegan financial advisor. Our financial world is as expansive and complex as it has ever been, and Morgan Keegan’s financial advisors are always kept one step ahead through ongoing training, professional development and continuing education. Your financial advisor is further supported by our Wealth Management Services group, a legion of 125 professionals in the fields of asset allocation, insurance, retirement planning, estate planning and more. And you have access to a full array of trust services to help you grow, preserve and transfer your legacy to future generations through our partner Regions Morgan Keegan Trust. All of these professionals at Morgan Keegan, some 4,300 strong, work together to help you make the most of your investments and your financial dreams reality.

From a one-room office to 68 full-service branches and over 250 satellite locations in Regions Banks, Morgan Keegan has come a long way in 40 years. And we are still going strong.

Thank you for a great 40 years!

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An Important Message About Your
MOR Account CheckCard Daily Limit

In an effort to prevent fraudulent activity, the daily limit of the MOR Platinum Visa Debit Card is being changed from $25,000 to $10,000.

Protecting accounts from potential fraud is a priority at Morgan Keegan. This change is one way to limit your account's exposure.For questions regarding this change, plesae contact your Morgan Keegan financial advisor.

Investment Advisory Document

Available to you upon written request, at no cost, is an investment advisory document (Morgan Keegan's Schedule H and Part II of the Investment Advisor's ADV). If you would like a copy, contact your Morgan Keegan financial advisor.

Morgan Keegan’s Business Continuity Plan

As a member of the Financial Industry Regulatory Authority (FINRA), Morgan Keegan is required to create contingency plans in the event a disaster disrupts our ability to do business.

Our Business Continuity Plan includes an Incident Management Team of senior managers from various departments to assess the severity of the interruption; a Disaster Recovery Site equipped with back-up power and the tools needed to continue to do business; and, off-site computer back-up systems to preserve integral data and communications tools to disseminate information.

More information on our Business Continuity Plan is available here at the Morgan Keegan Web site.

File your paperwork down with eNotification

Discover the ease and convenience of eNotification, Morgan Keegan’s electronic statement delivery system. To receive your monthly statement online, contact your Morgan Keegan financial advisor and sign up for eNotification today!

SIPC and Morgan Keegan Working to Protect Your Assets

When you invest with Morgan Keegan, you can rest assured that your assets are protected. Your Morgan Keegan brokerage accounts are protected by the Securities Investor Protection Corporation, or SIPC, a member-supported organization created by Congress in 1970 to provide certain financial protection to clients should a brokerage firm become insolvent. Additionally, Morgan Keegan has for many years purchased supplemental protection, significantly raising the level of coverage for our clients.

The cash and securities – including stocks, bonds, notes, CDs, and money market funds – held in your accounts at Morgan Keegan are protected by SIPC up to stated limitations ($500,000 maximum per eligible client, of which $100,000 may be cash).

Moreover, securities held in Morgan Keegan are further protected by additional coverage provided through Lloyd’s of London. This coverage, up to $124,500,000 for eligible accounts, supplements the protection provided by SIPC.

SIPC coverage does not protect against losses from market fluctuations in portfolio value. Certain investments are ineligible for SIPC protection, such as commodity and futures contracts, as well as investment contracts (such as limited partnerships) and fixed annuity contracts that are not registered with the U.S. Securities and Exchange Commission under the Securities Act of 1933.

You are encouraged to learn more about SIPC and the breadth, and limits, of the coverage it provides you as a Morgan Keegan client. Visit their Web site at www.sipc.org, or ask your Morgan Keegan financial advisor for an informational brochure.