<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1994 COMMISSION FILE NUMBER 1-7476
AMSOUTH BANCORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 63-0591257
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
35203
1400 AMSOUTH--SONAT TOWER (ZIP CODE)
BIRMINGHAM, ALABAMA
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
(205) 320-7151
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
As of April 30, 1994 AmSouth Bancorporation had 54,427,241 shares of common
stock outstanding.
- - --------------------------------------------------------------------------------
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<PAGE>
AMSOUTH BANCORPORATION
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Consolidated statement of condition--March 31, 1994 and December 31,
1993................................................................. 1
Consolidated statement of earnings--Three months ended March 31, 1994
and 1993............................................................. 2
Consolidated statement of shareholders' equity--Three months ended
March 31, 1994....................................................... 3
Consolidated statement of cash flows--Three months ended March 31,
1994 and 1993........................................................ 4
Notes to consolidated financial statements--Three months ended March
31, 1994 and 1993.................................................... 5
Review of Independent Accountants..................................... 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.................................................. 8
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders............. 16
Item 5. Other Information............................................... 16
Item 6. Exhibits and Reports on Form 8-K................................ 17
Signatures................................................................ 18
Exhibit Index............................................................. 19
</TABLE>
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
AMSOUTH BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CONDITION
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
1994 1993
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Cash and due from banks.............................. $ 520,193 $ 602,627
Federal funds sold and securities purchased under
agreements to resell................................ 40,800 155,127
Trading securities................................... 120,619 94,844
Available-for-sale securities........................ 950,458 1,289,196
Held-to-maturity securities (market value of
$2,224,717 and $1,830,473, respectively)............ 2,227,499 1,779,549
Mortgage loans held for sale......................... 217,356 335,435
Loans................................................ 8,636,392 8,395,392
Less:Allowance for loan losses....................... 125,783 128,799
Unearned income................................... 73,623 70,946
----------- -----------
Net loans......................................... 8,436,986 8,195,647
Premises and equipment, net.......................... 240,945 229,072
Customers' acceptance liability...................... 8,062 6,264
Accrued interest receivable and other assets......... 424,471 481,998
----------- -----------
$13,187,389 $13,169,759
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits and interest-bearing liabilities:
Deposits:
Noninterest-bearing demand....................... $ 1,719,401 $ 1,718,702
Interest-bearing demand.......................... 3,392,599 3,369,359
Savings.......................................... 854,013 848,386
Time............................................. 3,408,147 3,481,973
Certificates of deposit of $100,000 or more...... 631,800 674,587
----------- -----------
Total deposits................................. 10,005,960 10,093,007
Federal funds purchased and securities sold under
agreements to repurchase.......................... 1,094,365 846,974
Other borrowed funds............................... 534,089 612,068
Long-term debt..................................... 160,758 163,142
----------- -----------
Total deposits and interest-bearing
liabilities................................... 11,795,172 11,715,191
Acceptances outstanding.............................. 8,062 6,264
Accrued expenses and other liabilities............... 238,897 323,309
----------- -----------
Total liabilities.................................. 12,042,131 12,044,764
----------- -----------
Shareholders' equity:
Preferred stock--no par value:
Authorized--2,000,000 shares;
Issued and outstanding--none..................... -0- -0-
Common stock--par value $1 a share:
Authorized--200,000,000 shares
Issued--53,250,218 shares and 53,106,814 shares,
respectively.................................... 53,250 53,107
Capital surplus.................................... 463,934 460,267
Retained earnings.................................. 661,893 638,738
Cost of common stock in treasury--1,500,000 shares. (24,173) (24,173)
Deferred compensation on restricted stock.......... (4,539) (2,944)
Unrealized losses on available-for-sale securities. (5,107) -0-
----------- -----------
Total shareholders' equity..................... 1,145,258 1,124,995
----------- -----------
$13,187,389 $13,169,759
=========== ===========
</TABLE>
See notes to consolidated financial statements.
1
<PAGE>
AMSOUTH BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31
----------------------
1994 1993
---------- ----------
(IN THOUSANDS EXCEPT
PER SHARE DATA)
<S> <C> <C>
REVENUE FROM EARNING ASSETS
Loans................................................... $161,211 $141,499
Securities:
Trading securities.................................... 910 355
Available-for-sale securities......................... 14,449 7,870
Held-to-maturity securities........................... 30,705 44,405
---------- ----------
Total securities.................................... 46,064 52,630
Mortgage loans held for sale............................ 3,614 2,888
Federal funds sold and securities purchased under
agreements to resell................................... 904 1,628
---------- ----------
Total revenue from earning assets................... 211,793 198,645
---------- ----------
INTEREST EXPENSE
Interest-bearing demand deposits........................ 21,609 20,710
Savings deposits........................................ 4,842 4,827
Time deposits........................................... 36,082 34,126
Certificates of deposit of $100,000 or more............. 6,366 6,643
Federal funds purchased and securities sold under
agreements to repurchase............................... 7,530 7,905
Other borrowed funds.................................... 3,075 2,884
Long-term debt.......................................... 3,125 3,046
---------- ----------
Total interest expense.............................. 82,629 80,141
---------- ----------
GROSS INTEREST MARGIN................................... 129,164 118,504
Provision for loan losses............................... 1,042 7,184
---------- ----------
NET INTEREST MARGIN..................................... 128,122 111,320
---------- ----------
NONINTEREST REVENUES
Service charges on deposit accounts..................... 15,813 14,079
Trust income............................................ 11,394 10,367
Investment services income.............................. 4,168 5,708
Mortgage administration fees............................ 4,740 4,509
Investment securities gains............................. 39 980
Other operating revenues................................ 11,801 13,473
---------- ----------
Total noninterest revenues.......................... 47,955 49,116
---------- ----------
NONINTEREST EXPENSES
Salaries and employee benefits.......................... 53,361 49,431
Net occupancy expense................................... 10,199 9,274
Equipment expense....................................... 9,712 8,846
FDIC premiums........................................... 5,360 5,116
Foreclosed properties expense........................... (5) 888
Other operating expenses................................ 35,697 31,977
---------- ----------
Total noninterest expenses.......................... 114,324 105,532
---------- ----------
Income before income taxes.............................. 61,753 54,904
Income taxes............................................ 20,473 17,510
---------- ----------
Net income.......................................... $ 41,280 $ 37,394
========== ==========
Average common shares outstanding....................... 51,656 48,116
Earnings per common share............................... $0.80 $0.78
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
AMSOUTH BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
UNREALIZED
COMMON CAPITAL RETAINED TREASURY DEFERRED LOSSES ON
STOCK SURPLUS EARNINGS STOCK COMPENSATION SECURITIES TOTAL
------- -------- -------- -------- ------------ ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1,
1994................... $53,107 $460,267 $638,738 $(24,173) $(2,944) $ -0- $1,124,995
Net income.............. -0- -0- 41,280 -0- -0- -0- 41,280
Cash dividends declared. -0- -0- (18,125) -0- -0- -0- (18,125)
Common stock
transactions:
Employee stock plans... 143 3,667 -0- -0- (1,595) -0- 2,215
Unrealized losses on
available-for-sale
securities............. -0- -0- -0- -0- -0- (5,107) (5,107)
------- -------- -------- -------- ------- ------- ----------
Balance at March 31,
1994................... $53,250 $463,934 $661,893 $(24,173) $(4,539) $(5,107) $1,145,258
======= ======== ======== ======== ======= ======= ==========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
AMSOUTH BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
--------------------
1994 1993
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Net income............................................... $ 41,280 $ 37,394
Adjustments to reconcile net income to net cash provided
by operating activities
Provision for loan losses.............................. 1,042 7,184
Provision for foreclosed property losses............... (450) 247
Depreciation and amortization of premises and
equipment............................................. 5,745 6,074
Amortization of premiums and discounts on held-to-
maturity securities and available-for-sale securities. 433 769
Net decrease in mortgage loans held for sale........... 118,255 58,496
Net increase in trading securities..................... (25,535) (9,620)
Proceeds from maturities and prepayments of available-
for-sale securities................................... 83,404 33,728
Proceeds from sales of available-for-sale securities... 341,587 64,600
Purchases of available-for-sale securities............. (158,658) (123,892)
Net gains on sales of available-for-sale securities.... (3,523) (1,693)
Net gains on calls and sales of held-to-maturity
securities............................................ (39) (980)
Net decrease in accrued interest receivable and other
assets................................................ 100,835 92,019
Net (decrease) increase in accrued expenses and other
liabilities........................................... (134,408) 173,958
Net decrease (increase) in deferred income tax
benefits.............................................. 1,715 (4,034)
Amortization of intangible assets...................... 3,996 3,947
Other.................................................. (2,756) 162
--------- ---------
Net cash provided by operating activities............ 372,923 338,359
INVESTING ACTIVITIES
Proceeds from maturities, prepayments and calls of held-
to-maturity securities.................................. 118,238 162,898
Proceeds from sales of held-to-maturity securities....... -0- 62,737
Purchase of held-to-maturity securities.................. (494,449) (331,138)
Net decrease (increase) in federal funds sold and
securities purchased under agreements to resell......... 114,327 (96,824)
Net increase in loans.................................... (241,339) (112,664)
Net purchases of premises and equipment.................. (17,618) (17,303)
Net cash provided by acquisitions........................ -0- 9,661
--------- ---------
Net cash used by investing activities................ (520,841) (322,633)
FINANCING ACTIVITIES
Net increase (decrease) in demand deposits and savings
accounts................................................ 30,122 (549,559)
Net (decrease) increase in time deposits................. (115,338) 399,492
Net increase in federal funds purchased and securities
sold under agreements to repurchase..................... 247,391 56,711
Net decrease in other borrowed funds..................... (77,978) (55,009)
Issuance of long-term debt............................... -0- 49,500
Payments for maturing long-term debt..................... (2,231) (29,031)
Cash dividends paid...................................... (18,145) (12,970)
Proceeds from employee stock plans....................... 1,663 1,267
--------- ---------
Net cash provided (used) by financing activities..... 65,484 (139,599)
--------- ---------
Decrease in cash and cash equivalents.................... (82,434) (123,873)
Cash and cash equivalents at beginning of period......... 602,627 576,586
Beginning consolidated cash balance of First Sunbelt
Bankshares, Inc. ....................................... -0- 4,221
--------- ---------
Cash and cash equivalents at end of period............... $ 520,193 $ 456,934
========= =========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
AMSOUTH BANCORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1994 AND 1993
General--The consolidated financial statements conform to generally accepted
accounting principles and to general industry practices. The accompanying
interim financial statements are unaudited; however, in the opinion of
management, all adjustments necessary for the fair presentation of the
consolidated financial statements have been included. All such adjustments are
of a normal recurring nature. The notes included herein should be read in
conjunction with the notes to consolidated financial statements included in
AmSouth Bancorporation's (AmSouth) 1993 annual report to shareholders on Form
10-K.
The consolidated financial statements include the accounts of AmSouth and its
subsidiaries. All significant intercompany balances and transactions have been
eliminated. Prior year financial statements have been restated to include the
accounts of business combinations accounted for as poolings-of-interests unless
immaterial. Results of operations of companies purchased are included from the
dates of acquisitions.
Effective January 1, 1994, AmSouth adopted Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities" (Statement 115). The Statement generally requires that debt and
equity securities that have readily determinable fair values be carried at fair
value unless they are intended to be held to maturity. Securities are
classified as held-to-maturity and carried at amortized cost only if AmSouth
has positive intent and ability to hold those securities to maturity. If not
classified as held-to-maturity, such securities are classified as trading
securities or securities available for sale. Net unrealized holding gains or
losses for securities available for sale are excluded from earnings and
reported as a separate component of shareholders' equity. The adoption of
Statement 115 resulted in no material impact on AmSouth's financial condition.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 114, "Accounting by Creditors for Impairment of a
Loan." The statement requires that certain impaired loans be measured based on
the present value of the collateral if the loan is collateral dependent.
AmSouth anticipates adoption of Statement 114 by January 1, 1995 as required,
and the effect on AmSouth's financial condition or results of operations has
not been determined.
Business Combinations--During the first quarter of 1994, AmSouth completed
business combinations with Orange Banking Corporation (Orange), headquartered
in Orlando, Florida, and FloridaBank, A Federal Savings Bank (FloridaBank),
headquartered in Jacksonville, Florida, both of which were accounted for using
the pooling-of-interests method of accounting. AmSouth issued approximately
1,332,000 and 759,000 shares of common stock for all of the outstanding shares
of common stock of Orange and FloridaBank, respectively. At December 31, 1993,
Orange and FloridaBank had total consolidated assets of approximately $354.4
million and $271.5 million, respectively.
Subsequent to March 31, 1994, AmSouth completed the following business
combinations which will be accounted for using the pooling-of-interests method
of accounting:
<TABLE>
<CAPTION>
CONSOLIDATED
ASSETS
LOCATION MARCH 31, 1994
-------------- --------------
(IN THOUSANDS)
<S> <C> <C>
Parkway Bancorp, Inc. ....................... Fort Myers, FL $130,000
First Federal Savings Bank, Calhoun, GA...... Calhoun, GA 72,000
Citizens National Corporation................ Naples, FL 313,000
</TABLE>
5
<PAGE>
AMSOUTH BANCORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED)
In the aggregate, when the three month period ended March 31, 1994, is
restated for these three poolings-of-interests, AmSouth's gross interest margin
will be $134.1 million, net income will be $39.0 million and earnings per
common share will be $.72.
On September 12, 1993, AmSouth signed an agreement to acquire Fortune
Bancorp, Inc. (Fortune) and its subsidiary, Fortune Bank, a Savings Bank. Upon
completion of the transaction, AmSouth will issue a total of approximately,
4,507,000 shares and approximately $145.9 million in cash. At March 31, 1994,
Fortune had total consolidated assets of approximately $2.7 billion and total
consolidated deposits of approximately $1.8 billion. The acquisition will be
accounted for using the purchase method of accounting.
On March 9, 1994, AmSouth signed an agreement to enter into a business
combination with The Tampa Banking Company (Tampa), headquartered in Tampa,
Florida, and its subsidiary, The Bank of Tampa. At March 31, 1994, Tampa had
total consolidated assets of approximately $213.0 million and total
consolidated deposits of approximately $197.0 million. Under the terms of the
agreement, AmSouth will issue 1.5592 shares of AmSouth common stock for each of
the outstanding shares of Tampa common stock, subject to adjustment. At March
31, 1994, Tampa, had approximately 626,000 shares of common stock outstanding.
The transaction will be accounted for using the pooling-of-interests method of
accounting.
On March 31, 1994, AmSouth signed an agreement to acquire Community Federal
Savings Bank (Community), headquartered in Fort Oglethorpe, Georgia. At March
31, 1994, Community had total assets of approximately $103.0 million and total
deposits of approximately $89.0 million. Under the terms of the agreement,
AmSouth will pay $65.50 for each of the outstanding shares of Community common
stock for a total purchase price of approximately $17.2 million. The
transaction will be accounted for using the purchase method of accounting.
Cash Flows--For the three months ended March 31, 1994 and 1993, AmSouth paid
interest of $80,740,000 and $76,687,000, respectively, and income taxes of
$9,835,000 and $2,954,000, respectively. Noncash transfers from loans to
foreclosed properties for the three months ended March 31, 1994 and 1993, were
$2,041,000 and $1,879,000, respectively. For the three months ended March 31,
1994 and 1993, noncash transfers from foreclosed properties to loans were
$783,000 and none, respectively. Noncash transfers from available-for-sale
securities to held-to-maturity securities for the three months ended March 31,
1994 and 1993, were $215,843,000 and none, respectively.
6
<PAGE>
[LETTERHEAD OF ERNST & YOUNG]
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
The Board of Directors
AmSouth Bancorporation
We have reviewed the accompanying consolidated statement of condition of
AmSouth Bancorporation and subsidiaries as of March 31, 1994, and the related
consolidated statement of earnings and statement of cash flows for the three-
month period then ended. These financial statements are the responsibility of
the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, which will be
performed for the full year with the objective of expressing an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying consolidated financial statements referred
to above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated statement of condition of AmSouth Bancorporation
and subsidiaries as of December 31, 1993, and the related consolidated
statements of earnings, shareholders' equity, and cash flows for the year then
ended (not presented herein) and in our report dated January 31, 1994, we
expressed an unqualified opinion on those consolidated financial statements. In
our opinion, the information set forth in the accompanying consolidated
statement of condition as of December 31, 1993, is fairly stated, in all
material respects, in relation to the consolidated statement of condition from
which it has been derived.
/s/ Ernst & Young
May 9, 1994
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
For the three months ended March 31, 1994, AmSouth reported net income of
$41.3 million compared to $37.4 million for the same period of 1993. Both
amounts include the effect of business combinations accounted for by the
pooling-of-interests method. On a per common share basis, AmSouth earned $.80
compared to $.78 for the first three months of 1993.
On an annualized basis, the return on average assets was 1.30% for the first
quarter of 1994 compared to 1.32% for the first quarter of 1993. For the same
periods, the annualized returns on average equity were 14.64% and 16.03%,
respectively.
Net Interest Margin
The net interest margin for the three months ended March 31, 1994 totaled
$128.1 million compared to $111.3 million for the same period of 1993. An
increase in revenue from earning assets and a decrease in the provision for
loan losses were partially offset by an increase in interest expense. The gross
interest margin increased $10.7 million as the gross interest spread declined
16 basis points compared to the prior year. The provision for loan losses for
the three months ended March 31, 1994, totaled $1.0 million, the result of
continued good asset quality.
Average earning assets rose 12.1% with the yield on average earning assets
declining 41 basis points. A 19.4% increase in average loans net of unearned
income was the primary reason for the increase in average earning assets.
Exclusive of the acquisitions of First Chattanooga Financial Corporation (FCFC)
in February, 1993 and Mid-State Federal Savings Bank (Mid-State) in December,
1993 which were accounted for as purchases, AmSouth experienced loan growth of
approximately 12.0%. Residential first mortgages represented approximately
45.0% of this growth. At March 31, 1994, the majority of AmSouth's residential
loan portfolio consisted of adjustable rate mortgages; therefore, declining
rates on residential first mortgages over the past twelve months contributed to
the decrease in average earning asset yields.
The average balance of total securities decreased 2.0% with yields falling
from 7.31% to 6.55%. Maturing securities and securities sold were partially
replaced with lower yielding instruments. At March 31, 1994, mortgage-backed
securities comprised approximately 63.0% of total securities.
Average interest-bearing liabilities increased $939.2 million, funding
approximately 73% of the increase in average earning assets. Another 14% of the
increase in average earning assets was funded by a $176.7 million increase in
average noninterest bearing demand deposits. In general the rates paid on
interest-bearing liabilities declined slower than the decline of yields on
earning assets. This slower decline resulted in a 16 basis point decline in
both the incremental and gross interest spread.
AmSouth maintains an asset and liability process to control interest rate
risk and assist management in maintaining stability in the gross interest
margin. In addition, AmSouth utilizes various off-balance sheet instruments
such as interest rate swaps, caps and floors to manage interest rate risk.
Tables 3 and 4 summarize recent use of interest rate contracts and the maturity
of current contracts outstanding. The contracts outstanding at March 31, 1994,
are being used to hedge the following balance sheet items for the notional
amounts shown:
<TABLE>
<CAPTION>
NOTIONAL
AMOUNT
-------------
(IN MILLIONS)
<S> <C>
Securities.................................................... $ 405
Loans......................................................... 600
Federal funds purchased and securities sold under agreements
to repurchase................................................ 705
Deposits...................................................... 900
------
$2,610
======
</TABLE>
In addition, AmSouth had interest rate contracts on behalf of its customers in
the amount of $84.4 million at March 31, 1994. For the three months ended March
31, 1994 and 1993, interest rate contracts increased the gross interest margin
$1.3 million and $2.4 million, respectively.
8
<PAGE>
Credit Quality
AmSouth maintains an allowance for loan losses to absorb potential future
losses. AmSouth's management continuously evaluates the adequacy of the
allowance for loan losses. As changes in the mix of the loan portfolio occur,
including the current increase in residential first mortgage loans which
inherently have less risk, management will monitor not only the absolute level
of the allowance but also the coverage ratio of nonperforming loans. Table 5
shows a comparison of the types of loans outstanding, nonperforming loans by
type, and net charge-offs by type for March 31, 1994 and 1993. The coverage
ratio of the allowance for loan losses to nonperforming loans increased to
202.33% compared to 182.80% at March 31, 1993. Table 6 presents a five quarter
comparison of the components of nonperforming assets. Nonperforming assets as a
percentage of loans net of unearned income, foreclosed properties and
repossessions decreased from 1.53% at March 31, 1993 to .99% at March 31, 1994.
The level of nonperforming assets decreased $26.8 million primarily due to the
continued sales of foreclosed properties.
Table 7 presents a five quarter analysis of the allowance for loan losses. At
March 31, 1994, the allowance for loan losses to loans net of unearned income
was 1.47% compared to 1.56% for the prior year. Annualized net charge-offs to
average loans net of unearned income for the three months ended March 31, 1994
was 20 basis points compared to 31 basis points for the same period of 1993.
Noninterest Revenues and Noninterest Expenses
Noninterest revenues decreased $1.2 million or 2.4% for the three months
ended March 31, 1994 compared to the same period of 1993. This decrease
included a $2.8 million decrease in portfolio income primarily due to declines
in the securities market during the first quarter of 1994. Investment services
income decreased $1.5 million primarily due to the unstable interest rate
environment in the bond market during the first quarter of 1994. Increases
occurred in gains on sales of securities available-for-sale of $1.8 million,
service charges on deposit accounts of $1.7 million, and trust income of $1.0
million. The increase in service charges on deposit accounts was primarily due
to an increased volume of corporate service charges and analysis fees on
corporate accounts.
Noninterest expenses increased $8.8 million compared to the prior year.
Exclusive of FCFC and Mid-State, noninterest expenses increased $3.9 million.
Salaries and employee benefits increased $3.9 million with $1.9 million
attributable to FCFC and Mid-State. Net occupancy expense and equipment expense
each increased $.9 million. Other operating expenses increased $3.7 million
primarily due to investment expenses and general overhead costs.
Capital Adequacy
At March 31, 1994, shareholders' equity totaled $1.1 billion, or 8.68% of
total assets. Since December 31, 1993, shareholders' equity increased $20.3
million due primarily to net income less dividends. At March 31, 1994, AmSouth
remains well above the regulatory minimum required risk-adjusted Tier 1 capital
ratio of 4.00% and the regulatory minimum required risk-adjusted total capital
ratio of 8.00%. Table 11 presents the calculation of the risk-adjusted capital
ratios for AmSouth at March 31, 1994 and 1993. In addition, the risk-adjusted
capital ratios for AmSouth's banking subsidiaries were well above the
regulatory minimum at March 31, 1994. The total risk-adjusted capital ratio for
each of AmSouth's major subsidiaries was:
<TABLE>
<S> <C>
AmSouth Bank N.A...................... 11.00%
AmSouth Bank of Florida............... 14.04%
AmSouth Bank of Tennessee............. 18.59%
</TABLE>
AmSouth evaluates potential business combinations on a number of factors
including, but not limited to, the effect on AmSouth's capital adequacy. On a
pro forma combined basis after giving effect to the pending business
combinations at March 31, 1994 discussed in the Notes to Consolidated Financial
Statements, AmSouth's Tier 1 capital and total capital ratios would have been
approximately 9.65% and 13.08%, respectively. AmSouth's leverage ratio would
have been 6.91%.
9
<PAGE>
TABLE 1--FINANCIAL SUMMARY
<TABLE>
<CAPTION>
MARCH 31
-------------------------- %
1994 1993 CHANGE
----------- ----------- ------
(IN THOUSANDS
EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
BALANCE SHEET SUMMARY
END OF PERIOD BALANCES:
Loans net of unearned income.............. $ 8,562,769 $ 7,261,462 17.9%
Total securities.......................... 3,298,576 3,256,392 1.3
Earning assets............................ 12,119,501 10,975,687 10.4
Total assets.............................. 13,187,389 12,063,004 9.3
Total deposits............................ 10,005,960 9,131,541 9.6
Shareholders' equity...................... 1,145,258 993,588 15.3
YEAR TO DATE AVERAGE BALANCES:
Loans net of unearned income.............. $ 8,369,555 $ 7,011,187 19.4%
Total securities.......................... 3,045,533 3,107,553 (2.0)
Earning assets............................ 11,808,936 10,530,777 12.1
Total assets.............................. 12,880,251 11,484,813 12.2
Total deposits............................ 10,000,069 8,808,172 13.5
Shareholders' equity...................... 1,143,159 946,206 20.8
<CAPTION>
THREE MONTHS ENDED
MARCH 31
-------------------------- %
1994 1993 CHANGE
----------- ----------- ------
<S> <C> <C> <C>
EARNINGS SUMMARY
Net income.................................. $ 41,280 $ 37,394 10.4%
Per common share............................ 0.80 0.78 2.6
SELECTED RATIOS
Return on average assets (annualized)....... 1.30% 1.32%
Return on average equity (annualized)....... 14.64 16.03
Average equity to average assets............ 8.88 8.24
Allowance for loan losses to loans net of
unearned income............................ 1.47 1.56
Efficiency ratio............................ 63.16 61.35
COMMON STOCK DATA
Cash dividends declared..................... $ 0.35 $ 0.29
Book value at end of period................. 22.13 20.14
Market value at end of period............... 29 3/4 33
Average common shares outstanding........... 51,656 48,116
</TABLE>
10
<PAGE>
TABLE 2--YIELDS ON AVERAGE EARNING ASSETS AND RATES ON AVERAGE INTEREST-
BEARING LIABILITIES
<TABLE>
<CAPTION>
1994 1993
--------------------------- ---------------------------------------------------------------
FIRST QUARTER FOURTH QUARTER THIRD QUARTER
--------------------------- --------------------------- --------------------------- ------
AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE BALANCE EXPENSE RATE RATE
----------- -------- ------ ----------- -------- ------ ----------- -------- ------ ------
(TAXABLE EQUIVALENT BASIS-DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Earning assets:
Loans net of un-
earned income..... $ 8,369,555 $161,961 7.85% $ 7,823,062 $155,826 7.90% $ 7,487,998 $151,517 8.03% 8.24%
Trading securi-
ties.............. 76,094 928 4.95 74,248 867 4.63 60,832 824 5.37 5.33
Available-for-sale
securities........ 1,198,566 14,449 4.89 798,382 10,981 5.46 657,840 7,676 4.63 6.75
Held-to-maturity
securities
Taxable........... 1,428,464 24,397 6.93 1,902,153 28,684 5.98 2,260,977 36,484 6.40 6.84
Tax-free.......... 342,409 9,437 11.18 357,121 9,829 10.92 372,517 9,953 10.60 10.65
----------- -------- ----------- -------- ----------- --------
Total held-to-
maturity
securities....... 1,770,873 33,834 7.75 2,259,274 38,513 6.76 2,633,494 46,437 7.00 7.43
----------- -------- ----------- -------- ----------- --------
Total securi-
ties............ 3,045,533 49,211 6.55 3,131,904 50,361 6.38 3,352,166 54,937 6.50 7.31
Other earning as-
sets.............. 393,848 4,518 4.65 538,993 4,946 3.64 513,120 6,155 4.76 4.44
----------- -------- ----------- -------- ----------- --------
Total earning
assets.......... 11,808,936 215,690 7.41 11,493,959 211,133 7.29 11,353,284 212,609 7.43 7.82
Cash and other as-
sets............... 1,199,849 1,139,409 1,061,143
Less allowance for
loan losses........ 128,534 116,698 112,898
----------- ----------- -----------
$12,880,251 $12,516,670 $12,301,529
=========== =========== ===========
LIABILITIES AND
SHAREHOLDERS' EQ-
UITY
Interest-bearing
liabilities:
Interest-bearing
demand deposits... 3,396,161 21,609 2.58 3,265,405 21,085 2.56 3,164,513 21,092 2.64 2.72
Savings deposits.. 845,545 4,842 2.32 780,914 5,034 2.56 756,230 5,153 2.70 2.75
Time deposits..... 3,439,838 36,082 4.25 3,248,135 35,332 4.32 3,171,271 35,744 4.47 4.76
Certificates of
deposit of
$100,000 or more.. 660,888 6,366 3.91 651,612 6,663 4.05 671,278 7,097 4.19 4.34
Federal funds
purchased and
securities sold
under agreements
to repurchase..... 941,999 7,530 3.24 1,110,841 8,095 2.89 1,033,735 8,361 3.21 3.07
Other interest-
bearing
liabilities....... 564,099 6,200 4.46 538,807 6,267 4.61 715,587 7,375 4.09 4.49
----------- -------- ----------- -------- ----------- --------
Total interest-
bearing
liabilities..... 9,848,530 82,629 3.40 9,595,714 82,476 3.41 9,512,614 84,822 3.54 3.65
-------- ----- -------- ----- -------- ----- -----
Incremental inter-
est spread......... 4.01% 3.88% 3.89% 4.17%
===== ===== ===== =====
Noninterest-bearing
demand deposits.... 1,657,637 1,677,568 1,616,018
Other liabilities.. 230,925 175,324 139,729
Shareholders' equi-
ty................. 1,143,159 1,068,064 1,033,168
----------- ----------- -----------
$12,880,251 $12,516,670 $12,301,529
=========== =========== ===========
Gross interest
margin/spread on a
taxable equivalent
basis.............. 133,061 4.57% 128,657 4.44% 127,787 4.47% 4.73%
===== ===== ===== =====
Taxable equivalent
adjustment:
Loans............. 750 811 881
Securities........ 3,147 3,278 3,287
-------- -------- --------
Total taxable
equivalent
adjustment....... 3,897 4,089 4,168
-------- -------- --------
Gross interest
margin.......... $129,164 $124,568 $123,619
======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
1993
---------------------------------------------------
SECOND QUARTER FIRST QUARTER
--------------------------- ---------------------
AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/
BALANCE EXPENSE RATE BALANCE EXPENSE
----------- -------- ------ ----------- --------
(TAXABLE EQUIVALENT BASIS-DOLLARS IN THOUSANDS)
<C> <C> <C> <C> <C>
ASSETS
Earning assets:
Loans net of un-
earned income..... $ 7,357,687 $149,672 8.16% $ 7,011,187 $142,530
Trading securi-
ties.............. 34,240 439 5.14 27,837 366
Available-for-sale
securities........ 489,443 6,048 4.96 472,515 7,870
Held-to-maturity
securities
Taxable........... 2,367,302 38,380 6.50 2,206,918 37,248
Tax-free.......... 385,919 10,207 10.61 400,283 10,509
----------- -------- ----------- --------
Total held-to-
maturity
securities....... 2,753,221 48,587 7.08 2,607,201 47,757
----------- -------- ----------- --------
Total securi-
ties............ 3,276,904 55,074 6.74 3,107,553 55,993
Other earning as-
sets.............. 456,659 4,857 4.27 412,037 4,515
----------- -------- ----------- --------
Total earning
assets.......... 11,091,250 209,603 7.58 10,530,777 203,038
Cash and other as-
sets............... 1,066,653 1,062,099
Less allowance for
loan losses........ 113,268 108,063
----------- -----------
$12,044,635 $11,484,813
=========== ===========
LIABILITIES AND
SHAREHOLDERS' EQ-
UITY
Interest-bearing
liabilities:
Interest-bearing
demand deposits... 3,123,551 20,629 2.65 3,086,908 20,710
Savings deposits.. 768,298 5,200 2.71 711,199 4,827
Time deposits..... 3,140,477 36,158 4.62 2,907,699 34,126
Certificates of
deposit of
$100,000 or more.. 685,343 7,328 4.29 621,422 6,643
Federal funds
purchased and
securities sold
under agreements
to repurchase..... 1,008,559 7,865 3.13 1,045,975 7,905
Other interest-
bearing
liabilities....... 605,794 6,452 4.27 536,126 5,930
----------- -------- ----------- --------
Total interest-
bearing
liabilities..... 9,332,022 83,632 3.59 8,909,329 80,141
-------- ----- --------
Incremental inter-
est spread......... 3.99%
=====
Noninterest-bearing
demand deposits.... 1,557,396 1,480,944
Other liabilities.. 148,042 148,514
Shareholders' equi-
ty................. 1,007,175 946,026
----------- -----------
$12,044,635 $11,484,813
=========== ===========
Gross interest
margin/spread on a
taxable equivalent
basis.............. 125,971 4.56% 122,897
=====
Taxable equivalent
adjustment:
Loans............. 905 1,031
Securities........ 3,195 3,362
-------- --------
Total taxable
equivalent
adjustment....... 4,100 4,393
-------- --------
Gross interest
margin.......... $121,871 $118,504
======== ========
</TABLE>
- - ----
NOTE: Beginning with the third quarter of 1993, the taxable equivalent
adjustment has been computed based on a 35% federal income tax rate.
Prior quarters are shown as previously reported, using a 34% federal
income tax rate.
11
<PAGE>
TABLE 3--INTEREST RATE SWAPS AND CAPS
<TABLE>
<CAPTION>
SWAPS
------------------------------------
RECEIVE FIXED PAY FIXED BASIS OTHER CAPS TOTAL
------------- --------- ----- ------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1990..................... $ 300 $ -0- $-0- $ -0- $ -0- $ 300
Additions............... -0- -0- -0- -0- 600 600
Maturities.............. -0- -0- -0- -0- -0- -0-
Calls................... -0- -0- -0- -0- -0- -0-
----- ----- ---- ------ ------ ------
Balance at December 31,
1991..................... 300 -0- -0- -0- 600 900
Additions............... 65 240 300 300 405 1,310
Maturities.............. -0- -0- -0- -0- -0- -0-
Calls................... (60) -0- -0- -0- -0- (60)
----- ----- ---- ------ ------ ------
Balance at December 31,
1992..................... 305 240 300 300 1,005 2,150
Additions............... -0- -0- -0- 300 20 320
Maturities.............. -0- -0- -0- -0- -0- -0-
Calls................... (120) (120) -0- -0- -0- (240)
----- ----- ---- ------ ------ ------
Balance at December 31,
1993..................... 185 120 300 600 1,025 2,230
Additions............... -0- -0- -0- 400 -0- 400
Maturities.............. -0- -0- -0- -0- (20) (20)
Calls................... -0- -0- -0- -0- -0- -0-
----- ----- ---- ------ ------ ------
Balance at March 31, 1994. $ 185 $ 120 $300 $1,000 $1,005 $2,610
===== ===== ==== ====== ====== ======
</TABLE>
TABLE 4--MATURITIES AND INTEREST RATES EXCHANGED ON SWAPS AND CAPS
<TABLE>
<CAPTION>
MATURE DURING
MARCH 31, -----------------------------------
1994 1994 1995 1996 1997 TOTAL
--------- ----- ------ ----- ----- ------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Receive fixed swaps:
Notional....................... $ 185 $ 120 $ 65 $ -0- $ -0- $ 185
Receive rate................... 7.68% 9.04% 5.16% 7.68%
Pay rate....................... 3.69% 3.69% 3.69% 3.69%
Pay fixed swaps:
Notional....................... $ 120 $ 120 $ -0- $ -0- $ -0- $ 120
Receive rate................... 3.69% 3.69% 3.69%
Pay rate....................... 4.00% 4.00% 4.00%
Basis swaps:
Notional....................... $ 300 $ -0- $ -0- $ 300 $ -0- $ 300
Receive rate................... 3.88% 3.94% 3.94%
Pay rate....................... 4.61% 4.87% 4.87%
Other swaps:
Notional....................... $1,000 $ -0- $ 300 $ 300 $ 400 $1,000
Receive rate................... 4.16% 4.89% 4.35% 4.39% 4.53%
Pay rate....................... 3.76% 3.97% 3.97% 3.97% 3.97%
Total swap portfolio:
Notional....................... $1,605 $ 240 $ 365 $ 600 $ 400 $1,605
Receive rate................... 4.48% 6.37% 4.94% 4.15% 4.39% 4.72%
Pay rate....................... 3.93% 3.85% 3.92% 4.42% 3.97% 4.11%
Total cap portfolio:
Notional....................... $1,005 $ -0- $ 915 $ 13 $ 77 $1,005
Pay rate....................... 0.46% 0.45% 0.46% 0.59% 0.46%
Total portfolio:
Notional....................... $2,610 $ 240 $1,280 $ 613 $ 477 $2,610
Receive rate................... 2.75% 6.37% 1.41% 4.06% 3.68% 2.90%
Pay rate....................... 2.59% 3.85% 1.44% 4.33% 3.43% 2.70%
</TABLE>
12
<PAGE>
TABLE 5--LOANS AND CREDIT QUALITY
<TABLE>
<CAPTION>
NONPERFORMING
LOANS LOANS* NET CHARGE-OFFS
MARCH 31 MARCH 31 MARCH 31
--------------------- --------------- ---------------
1994 1993 1994 1993 1994 1993
---------- ---------- ------- ------- ------- ------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Commercial............ $2,607,525 $2,312,959 $20,112 $24,307 $ 1,062 $ 321
Commercial real
estate:
Commercial real
estate mortgages:
Owner occupied...... 447,719 369,473 4,840 1,226 68 12
Nonowner occupied... 729,052 774,690 26,717 25,062 (1,248) 631
---------- ---------- ------- ------- ------- ------
Total commercial
real estate
mortgages........ 1,176,771 1,144,163 31,557 26,288 (1,180) 643
---------- ---------- ------- ------- ------- ------
Real estate
construction
Owner occupied...... 132,750 103,197 846 2,180 -0- -0-
Nonowner occupied... 258,668 217,901 1,446 1,297 -0- (78)
---------- ---------- ------- ------- ------- ------
Total real estate
construction..... 391,418 321,098 2,292 3,477 -0- (78)
---------- ---------- ------- ------- ------- ------
Total commercial
real estate.... 1,568,189 1,465,261 33,849 29,765 -0- 565
---------- ---------- ------- ------- ------- ------
Consumer:
Residential first
mortgages.......... 2,399,567 1,770,507 6,217 5,431 (36) 89
Other residential
mortgages.......... 477,942 464,863 -0- 32 15 31
Dealer indirect..... 659,264 517,917 23 -0- 315 596
Other consumer...... 923,905 799,246 1,965 2,464 3,882 3,692
---------- ---------- ------- ------- ------- ------
Total consumer.. 4,460,678 3,552,533 8,205 7,927 4,176 4,408
---------- ---------- ------- ------- ------- ------
$8,636,392 $7,330,753 $62,166 $61,999 $ 4,058 $5,294
========== ========== ======= ======= ======= ======
</TABLE>
- - --------
* Exclusive of accruing loans 90 days past due.
TABLE 6--NONPERFORMING ASSETS
<TABLE>
<CAPTION>
1994 1993
------- -----------------------------------
MAR 31 DEC 31 SEPT 30 JUN 30 MAR 31
------- ------- ------- ------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Nonaccrual loans................. $60,405 $51,074 $43,766 $54,336 $ 60,129
Restructured loans............... 1,761 2,420 2,674 3,741 1,870
------- ------- ------- ------- --------
Total nonperforming loans...... 62,166 53,494 46,440 58,077 61,999
Foreclosed properties............ 21,720 27,858 30,813 30,437 48,347
Repossessions.................... 877 1,043 659 657 1,196
------- ------- ------- ------- --------
Total nonperforming assets*.... $84,763 $82,395 $77,912 $89,171 $111,542
======= ======= ======= ======= ========
Nonperforming assets* to loans
net of unearned income,
foreclosed properties and
repossessions................... 0.99% 0.99% 1.02% 1.19% 1.53%
Accruing loans 90 days past due.. $29,926 $20,598 $20,901 $20,754 $ 18,558
</TABLE>
- - --------
* Exclusive of accruing loans 90 days past due.
13
<PAGE>
TABLE 7--ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
1994 1993
----------- ------------------------------------------------
1ST QUARTER 4TH QUARTER 3RD QUARTER 2ND QUARTER 1ST QUARTER
----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Balance at beginning of
period................. $128,799 $112,933 $112,572 $113,336 $ 98,988
Loans charged off....... 8,167 7,452 8,868 10,765 7,930
Recoveries of loans
previously charged off. 4,109 2,230 9,568 2,116 2,636
-------- -------- -------- -------- --------
Net charge-offs
(recoveries)........... 4,058 5,222 (700) 8,649 5,294
Addition (reduction) to
allowance charged
(credited) to expense.. 1,042 11,095 (339) 7,885 7,184
Allowance acquired in
bank purchases......... -0- 9,993 -0- -0- 12,458
-------- -------- -------- -------- --------
Balance at end of
period................. $125,783 $128,799 $112,933 $112,572 $113,336
======== ======== ======== ======== ========
Allowance for loan
losses to loans net of
unearned income........ 1.47% 1.55% 1.49 % 1.51% 1.56%
Allowance for loan
losses to nonperforming
loans.................. 202.33% 240.77% 243.18 % 193.83% 182.80%
Allowance for loan
losses to nonperforming
assets................. 148.39% 156.32% 144.95 % 126.24% 101.61%
Net charge-offs to
average loans net of
unearned income
(annualized)........... .20% .26% (.04)% .47% .31%
</TABLE>
TABLE 8--ALLOWANCE FOR FORECLOSED PROPERTY LOSSES
<TABLE>
<CAPTION>
1994 1993
----------- -----------------------------------------------
1ST QUARTER 4TH QUARTER 3RD QUARTER 2ND QUARTER 1ST QUARTER
----------- ----------- ----------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Balance at beginning of
period................. $ 3,908 $ 2,890 $ 7,251 $ 7,961 $ 7,520
(Reduction) addition to
allowance (credited)
charged to expense..... (450) (1,684) (1,060) (541) 247
Net recoveries
(writedowns)/(losses).. 116 1,848 (3,301) (169) (1,475)
Allowance acquired in
bank purchases......... -0- 854 -0- -0- 1,669
------- ------- ------- ------- -------
Balance at end of the
period................. $ 3,574 $ 3,908 $ 2,890 $ 7,251 $ 7,961
======= ======= ======= ======= =======
</TABLE>
TABLE 9--SECURITIES
<TABLE>
<CAPTION>
MARCH 31, 1994 MARCH 31, 1993
--------------------- ---------------------
CARRYING MARKET CARRYING MARKET
AMOUNT VALUE AMOUNT VALUE
---------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Held-to-maturity
U.S. Treasury and federal agency
securities...................... $1,887,532 $1,865,160 $2,087,802 $2,139,759
State, county and municipal
securities...................... 331,862 351,540 393,072 418,750
Other securities................. 8,105 8,017 311,720 315,771
---------- ---------- ---------- ----------
$2,227,499 $2,224,717 $2,792,594 $2,874,280
========== ========== ========== ==========
Available-for-sale
U.S. Treasury and federal agency
securities...................... $ 914,794 $ 364,520
Other securities................. 35,664 50,377
---------- ----------
$ 950,458 $ 414,897
========== ==========
</TABLE>
14
<PAGE>
TABLE 10--OTHER INTEREST-BEARING LIABILITIES
<TABLE>
<CAPTION>
MARCH 31
-----------------
1994 1993
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Short-term:
Treasury, tax, and loan note................................ $421,430 $140,778
Term federal funds purchased................................ 60,000 145,000
Other....................................................... 52,659 16,384
-------- --------
Total short-term.......................................... 534,089 302,162
Long-term:
7 1/2% Convertible Subordinated Debentures.................. 3,654 3,433
Floating Rate Notes Due 1999................................ 7,659 8,205
Subordinated Capital Notes.................................. 99,343 99,214
Long-term notes payable..................................... 50,102 51,537
-------- --------
Total long-term........................................... 160,758 162,389
-------- --------
Total other interest-bearing liabilitites............... $694,847 $464,551
======== ========
</TABLE>
TABLE 11--CAPITAL RATIOS
<TABLE>
<CAPTION>
MARCH 31,
------------------------
1994 1993
----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
RISK-ADJUSTED CAPITAL RATIO:
Total assets....................................... $13,187,389 $12,063,044
Adjusted allowance for loan losses................. 123,182 113,336
Adjustment for risk-weighting of balance sheet
items............................................. (4,774,117) (4,250,297)
Adjustment for off-balance sheet items............. 1,382,127 1,271,685
Less certain intangible assets..................... (66,619) (93,957)
----------- -----------
Total risk-adjusted assets....................... $ 9,851,962 $ 9,103,811
=========== ===========
Shareholders' equity............................... $ 1,145,258 $ 993,588
Add unrealized loss on available-for-sale
securities........................................ 5,107 -0-
Less certain intangible assets..................... (66,619) (93,957)
----------- -----------
Tier I capital..................................... 1,083,746 899,631
Adjusted allowance for loan losses................. 123,182 113,336
Qualifying long-term debt.......................... 102,997 102,647
----------- -----------
Tier II capital.................................... 226,179 215,983
----------- -----------
Total capital.................................... $ 1,309,925 $ 1,115,614
=========== ===========
Tier I capital to total risk-adjusted assets....... 11.00% 9.88%
Total capital to risk-adjusted assets.............. 13.30% 12.25%
OTHER CAPITAL RATIOS:
Leverage........................................... 8.46% 7.90%
Equity to assets................................... 8.68% 8.24%
Tangible equity to assets.......................... 7.53% 7.24%
</TABLE>
15
<PAGE>
PART II
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The regular Annual Meeting of Shareholders of AmSouth was held on April 21,
1994, at which meeting the shareholders elected eight nominees as directors.
The following is a tabulation of the voting for directors:
<TABLE>
<CAPTION>
NAME VOTES FOR VOTES WITHHELD
---- ---------- --------------
<S> <C> <C>
George W. Barber, Jr.............................. 42,041,567 737,769
William J. Cabaniss, Jr........................... 42,615,662 163,674
Hugh B. Jacks..................................... 42,557,672 221,664
Ronald L. Kuehn, Jr............................... 42,597,608 181,728
E. Roberts Leatherbury............................ 42,615,130 164,206
Z. Cartter Patten, III............................ 42,617,555 161,781
Herbert A. Sklenar................................ 42,607,794 171,542
John W. Woods..................................... 42,623,158 156,178
</TABLE>
ITEM 5. OTHER INFORMATION
Since January 1, 1994, AmSouth has completed the following business
combinations, the terms of which are summarized in the following table.
<TABLE>
<CAPTION>
APPROXIMATE CONSIDERATION/
HEADQUARTERS TOTAL ACCOUNTING COMPLETION
NAME OF ACQUIRED COMPANY LOCATION ASSETS(1) TREATMENT DATE
- - ------------------------ ------------ ------------ -------------- ----------
<S> <C> <C> <C> <C>
Orange Banking Corpora- Orlando, Florida $354 million common stock/ January 1994
tion................... pooling of interests
FloridaBank, a Federal
Savings Bank........... Jacksonville, Florida 271 million common stock/ February 1994
pooling of interests
Citizens National Corpo- Naples, Florida 313 million common stock/ April 1994
ration................. pooling of interests
Parkway Bancorp, Inc. .. Ft. Myers, Florida 130 million common stock/ April 1994
pooling of interests
First Federal Savings
Bank, Calhoun, Georgia. Calhoun, Georgia 72 million common stock/ April 1994
pooling of interests
</TABLE>
- - --------
(1) The dollar amounts indicated represent assets of the specified organization
as of the last reported period prior to the business combination.
16
<PAGE>
As of the date of this Form 10-Q, AmSouth is a party to a number of pending
business combinations, which are summarized in the table below. Except as
noted, consummation of each of these transactions remains subject to
fulfillment of a number of conditions, including receipt of certain shareholder
or regulatory approvals. No assurances can be given that such conditions will
be fulfilled or that such transactions will be consummated.
<TABLE>
<CAPTION>
APPROXIMATE
HEADQUARTERS TOTAL CONSIDERATION/EXPECTED
NAME OF COMPANY TO BE ACQUIRED LOCATION ASSETS(1) ACCOUNTING TREATMENT
- - ------------------------------ ------------ ------------- ----------------------
<S> <C> <C> <C>
Fortune Bancorp, Inc. Clearwater, Florida $ 2.7 billion cash and common
(2).................... stock/purchase
The Tampa Banking Tampa, Florida 213 million common stock/pooling of
Company................ interests
Community Federal
Savings Bank........... Fort Oglethorpe, Georgia 103 million cash/purchase
</TABLE>
- - --------
(1) The dollar amounts indicated represent assets of the specified organization
as of March 31, 1994.
(2) Regulatory approvals have been received.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
ITEM 6(A)--EXHIBITS
The exhibits listed in the Exhibit Index at page 19 of this Form 10-Q are
filed herewith or are incorporated by reference herein.
ITEM 6(B)--FORMS 8-K
The following Forms 8-K have been filed by AmSouth since December 31, 1993:
(1) Form 8-K filed on January 26, 1994 to report AmSouth's preliminary
results of operations for the fourth quarter of 1993 and for the fiscal
year ended December 31, 1993.
(2) Form 8-K/A filed on February 16, 1994 (amending a Form 8-K filed on
December 21, 1993) to present financial statements and pro forma financial
statements regarding the acquisition of Mid-State Federal Savings Bank.
(3) Form 8-K filed March 22, 1994 (as amended by Forms 8-K/A filed on
April 4, 1994 and April 11, 1994) to present pro forma financial statements
regarding certain pending acquisitions.
(4) Form 8-K filed April 11, 1994 to present a Form T-1 statement of
eligibility and qualification of Bankers Trust Company as trustee under an
Indenture to be entered into between AmSouth and Bankers Trust Company.
(5) Form 8-K filed on April 15, 1994 to report a press release regarding
the receipt of regulatory approvals for the acquisition of Fortune Bancorp,
Inc.
(6) Form 8-K filed on April 22, 1994 to report AmSouth's preliminary
results of operations for the first quarter of 1994.
(7) Form 8-K filed on May 11, 1994 to report the modification of
AmSouth's Agreement and Plan of Merger with Fortune Bancorp, Inc.
17
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, AMSOUTH
HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED
THEREUNTO DULY AUTHORIZED.
Date: May 11, 1994 /s/ John W. Woods
By: _________________________________
Chairman of the Board and Chief
Executive Officer
Date: May 11, 1994 /s/ Ricky W. Thomas
By: _________________________________
Controller and Chief Accounting
Officer
18
<PAGE>
EXHIBIT INDEX
The following is a list of exhibits including items incorporated by
reference.
<TABLE>
<C> <S>
2-a Agreement and Plan of Merger dated as of June 29, 1992 between
First Chattanooga Financial Corporation and AmSouth Bancorporation
(1)
2-b Agreement and Plan of Reorganization dated as of January 21, 1993
among The First National Bank of Clearwater and Mickler Corporation
and AmSouth Bancorporation (2)
2-c Agreement and Plan of Merger dated as of March 29, 1993 between Or-
ange Banking Corporation and AmSouth Bancorporation (3)
2-d Amended and Restated Agreement and Plan of Reorganization by and
between Mid-State Federal Savings Bank and AmSouth Bancorporation
dated as of April 22, 1993 and amended and restated as of June 22,
1993 (4)
2-e Agreement and Plan of Merger dated as of May 11, 1993 between First
Sunbelt Bankshares, Inc. and AmSouth Bancorporation (5)
2-f Agreement and Plan of Merger dated as of June 30, 1993 between
FloridaBank, a Federal Savings Bank and AmSouth Bancorporation (6)
2-g Agreement and Plan of Merger dated as of July 29, 1993 between
Parkway Bancorp, Inc. and AmSouth Bancorporation (7)
2-h Agreement and Plan of Merger dated as of August 3, 1993 between
First Federal Savings Bank, Calhoun, Georgia and AmSouth Bancorpo-
ration (8)
2-i Agreement and Plan of Merger dated as of August 9, 1993 between
Citizens National Corporation and AmSouth Bancorporation (9)
2-j Agreement and Plan of Merger dated as of September 12, 1993, be-
tween Fortune Bancorp, Inc. and AmSouth Bancorporation (10)
4-a Instruments defining the rights of security holders (11)
4-b Stockholder Protection Rights Agreement dated as of June 15, 1989
between AmSouth Bancorporation and AmSouth Bank, National Associa-
tion as Rights Agent, including as Exhibit A the forms of Rights
Certificate and of Election to Exercise and as Exhibit B the form
of Certificate of Designation and Terms of Series A Preferred Stock
(12)
4-c Certificate of Designation and Terms of Series A Preferred Stock of
AmSouth Bancorporation (13)
10-a AmSouth Bancorporation Executive Incentive Plan (14)
10-b AmSouth Bancorporation Transfer/Employee Relocation Policy (15)
10-c AmSouth Bank Supplemental Retirement Plan (16)
10-d AmSouth Bancorporation Long Term Incentive Compensation Plan (17)
10-e Amendment No. 1 to the AmSouth Bancorporation Long Term Incentive
Compensation Plan (18)
10-f Amendment No. 2 to the AmSouth Bancorporation Long Term Incentive
Compensation Plan (19)
10-g Amendment No. 3 to the AmSouth Bancorporation Long Term Incentive
Compensation Plan (20)
</TABLE>
19
<PAGE>
<TABLE>
<C> <S>
10-h Amendment No. 4 to the AmSouth Bancorporation Long Term Incentive
Compensation Plan (21)
10-i 1989 AmSouth Bancorporation Long Term Incentive Compensation Plan
(22)
10-j AmSouth Bancorporation 1987 Substitute Stock Option Plan (23)
10-k Change in Control Compensation Agreements (24)
10-l Deferred Compensation Plan for Directors of AmSouth and AmSouth
Bank N.A. (25)
10-m Agreement between AmSouth Bank N.A. and Brasfield and Gorrie Gen-
eral Contractor, Inc., dated August 2, 1993 (26)
11 Statement re Computation of Earnings per Share
15 Letter re Unaudited Interim Financial Information
</TABLE>
20
<PAGE>
NOTES TO EXHIBITS
<TABLE>
<C> <S>
(1) Filed as Exhibit 2 to AmSouth's Registration Statement on Form S-4 (Reg-
istration Statement No. 33-53088), incorporated herein by reference
(2) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4
(Registration Statement No. 33-60164), incorporated herein by reference
(3) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4
(Registration Statement No. 33-49865), incorporated herein by reference
(4) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4
(Registration Statement No. 33-64960), incorporated herein by reference
(5) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4
(Registration Statement No. 33-50041), incorporated herein by reference
(6) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4
(Registration Statement No. 33-50605), incorporated herein by reference
(7) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4
(Registration Statement No. 33-50727), incorporated herein by reference
(8) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4
(Registration Statement No. 33-51767), incorporated herein by reference
(9) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4
(Registration Statement No. 33-50865), incorporated herein by reference
(10) Filed as Exhibit 2(a) to AmSouth's Report on Form 8-K filed on September
16, 1993, as amended by a Form 8-K/A filed on September 23, 1993, incor-
porated herein by reference
(11) Instruments defining the rights of holders of long-term debt of AmSouth
are not filed herewith pursuant to Item 601(b)(4)(v) of Regulation S-K,
and AmSouth hereby agrees to furnish a copy of said instruments to the
SEC upon request
(12) Filed as Exhibit 4-a to AmSouth's Form 10-Q Quarterly Report for the
quarter ended June 30, 1989, incorporated herein by reference
(13) Filed as Exhibit 4-c to AmSouth's Form 10-Q Quarterly Report for the
quarter ended June 30, 1989, incorporated herein by reference
(14) Filed as Exhibit 10(b) to AmSouth's Form 10-Q Quarterly Report for the
quarter ended September 30, 1993, incorporated herein by reference
(15) Filed as Exhibit 10-b to AmSouth's Form 10-K Annual Report for the year
ended December 31, 1993, incorporated herein by reference
(16) Filed as Exhibit 10-b to AmSouth's Form 10-Q Quarterly Report for the
quarter ended September 30, 1991, incorporated herein by reference
(17) Filed as part of Exhibit 23 to AmSouth's Form 10-Q Quarterly Report for
the quarter ended March 31, 1984, incorporated herein by reference
(18) Filed as Exhibit 10-e to AmSouth's Form 10-K Annual Report for the year
ended December 31, 1985, incorporated herein by reference
(19) Filed as Exhibit 10-b to AmSouth's Form 10-Q Quarterly Report for the
quarter ended March 31, 1987, incorporated herein by reference
(20) Filed as Exhibit 10(b) to AmSouth's Form 10-Q Quarterly Report for the
quarter ended September 30, 1988, incorporated herein by reference
(21) Filed as Exhibit 10-i to AmSouth's Form 10-K Annual Report for the year
ended December 31, 1988, incorporated herein by reference
(22) Filed as Exhibit 10 to AmSouth's Form 10-Q Quarterly Report for the
quarter ended March 31, 1993, incorporated herein by reference
(23) Filed as Exhibit 10-a to AmSouth's Form 10-Q Quarterly Report for the
quarter ended March 31, 1988, incorporated herein by reference
(24) Filed as Exhibit 10-k to AmSouth's Form 10-K Annual Report for the year
ended December 31, 1992, incorporated herein by reference
(25) Filed as Exhibit 10-a to AmSouth's Form 10-Q Quarterly Report for the
quarter ended June 30, 1986, incorporated herein by reference
(26) Filed as Exhibit 10(a) to AmSouth's Form 10-Q Quarterly Report for the
quarter ended September 30, 1993, incorporated herein by reference
</TABLE>
21
<PAGE>
EXHIBIT 11
AMSOUTH BANCORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
-------------------
1994 1993
--------- ---------
(IN THOUSANDS
EXCEPT
PER SHARE DATA)
<S> <C> <C>
Net income................................................. $ 41,280 $ 37,394
========= =========
Average shares of common stock outstanding................. 51,656 48,116
========= =========
Earnings per common share.................................. $ 0.80 $ 0.78
========= =========
</TABLE>
22
<PAGE>
Exhibit 15--Letter Re: Unaudited Interim Financial Information
Board of Directors
AmSouth Bancorporation
We are aware of the incorporation by reference in the following Registration
Statements and in their related Prospectuses, of our report dated May 9, 1994,
relating to the unaudited consolidated interim financial statements of AmSouth
Bancorporation and subsidiaries which are included in its Form 10-Q for the
quarter ended March 31, 1994:
Form S-8 No. 33-52243 pertaining to the assumption by AmSouth
Bancorporation of Florida Bank Stock Option Plan and Stock Option Plan -
1993;
Form S-8 No. 33-52113 pertaining to the 1989 Long Term Incentive
Compensation Plan;
Form S-4 No. 33-51767 pertaining to the acquisition of First Federal
Savings Bank;
Form S-4 No. 33-50865 pertaining to the acquisition of Citizens National
Corporation;
Form S-4 No. 33-50727 pertaining to the acquisition of Parkway Bancorp,
Inc.;
Form S-3 No. 33-50363 pertaining to the Debt Shelf Registration;
Form S-8 No. 33-35218 pertaining to the 1989 Long Term Incentive
Compensation Plan;
Form S-8 No. 33-37905 pertaining to the AmSouth Bancorporation Thrift Plan;
Form S-8 No. 33-9368 pertaining to the Long Term Incentive Compensation
Plan;
Form S-8 No. 33-2927 (as amended) pertaining to the Employee Stock Purchase
Plan;
Form S-8 No. 33-97464 pertaining to the Long Term Incentive Compensation
Plan;
Form S-3 No. 33-35280 pertaining to the Dividend Reinvestment and Common
Stock Purchase Plan;
Form S-8 No. 33-19016 pertaining to the Long Term Incentive Compensation
Plan; and
Form S-8 No. 33-18653 pertaining to the 1987 Substitute Stock Option Plan.
Pursuant to Rule 436(c) of the Securities Act of 1933 our reports are not a
part of the registration statements prepared or certified by accountants within
the meaning of Sections 7 or 11 of the Securities Act of 1933.
/s/ Ernst & Young
May 9, 1994
23
