<PAGE>
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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 JUNE COMMISSION FILE NUMBER 1-7476
30, 1995
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)
1400 AMSOUTH--SONAT TOWER
BIRMINGHAM, ALABAMA 35203
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
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 August 8, 1995, AmSouth Bancorporation had 58,404,631 shares of common
stock outstanding.
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<PAGE>
AMSOUTH BANCORPORATION
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Consolidated Statement of Condition--June 30, 1995,
December 31, 1994 and
June 30, 1994............................................. 1
Consolidated Statement of Earnings--Six months and three
months ended
June 30, 1995 and 1994.................................... 2
Consolidated Statement of Shareholders' Equity--Six months
ended June 30, 1995....................................... 3
Consolidated Statement of Cash Flows--Six months ended June
30, 1995 and 1994......................................... 4
Notes to Consolidated Financial Statements ................ 5
Independent Accountants' Review Report..................... 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................................................... 18
Item 6. Exhibits and Reports on Form 8-K................... 18
Signatures........................................................... 19
Exhibit Index........................................................ 20
</TABLE>
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
AMSOUTH BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CONDITION
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31 JUNE 30
1995 1994 1994
----------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Cash and due from banks................. $ 684,354 $ 616,639 $ 860,654
Federal funds sold and securities
purchased under agreements to resell... 6,750 152,525 36,504
Trading securities...................... 2,193 6,383 13,202
Available-for-sale securities........... 433,480 383,039 1,030,512
Held-to-maturity securities (market
value of $3,217,044, $3,169,513 and
$3,419,795, respectively).............. 3,205,291 3,336,557 3,478,115
Mortgage loans held for sale............ 81,115 130,223 181,506
Loans................................... 11,989,032 11,496,121 10,659,374
Less: Allowance for loan losses......... 179,002 171,167 164,746
Unearned income..................... 75,507 66,214 79,010
----------- ----------- -----------
Net loans........................... 11,734,523 11,258,740 10,415,618
Premises and equipment, net............. 276,768 282,095 267,060
Customers' acceptance liability......... 3,200 6,979 3,846
Accrued interest receivable and other
assets................................. 577,081 604,771 1,050,388
----------- ----------- -----------
$17,004,755 $16,777,951 $17,337,405
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits and interest-bearing
liabilities:
Deposits:
Noninterest-bearing demand............. $ 1,875,828 $ 1,902,310 $ 1,891,539
Interest-bearing demand................ 3,839,009 4,071,212 4,002,525
Savings................................ 968,136 901,738 968,994
Time................................... 5,906,759 5,384,469 4,585,741
Certificates of deposit of $100,000 or
more.................................. 881,504 807,333 770,156
----------- ----------- -----------
Total deposits........................ 13,471,236 13,067,062 12,218,955
Federal funds purchased and securities
sold under agreements to repurchase... 760,582 1,212,723 2,010,966
Other borrowed funds................... 901,680 656,117 964,950
Long-term debt......................... 328,247 386,147 521,677
----------- ----------- -----------
Total deposits and interest-bearing
liabilities.......................... 15,461,745 15,322,049 15,716,548
Acceptances outstanding................. 3,200 6,979 3,846
Accrued expenses and other liabilities.. 179,227 138,465 289,675
----------- ----------- -----------
Total liabilities..................... 15,644,172 15,467,493 16,010,069
----------- ----------- -----------
Shareholders' equity:
Preferred stock--no par value:
Authorized--2,000,000 shares;
Issued and outstanding--none........... -0- -0- -0-
Common stock--par value $1 a share:
Authorized--200,000,000 shares;
Issued--59,868,582, 59,556,269 and
60,423,571 shares, respectively....... 59,869 59,556 60,424
Capital surplus........................ 586,952 579,579 605,829
Retained earnings...................... 739,811 703,121 699,898
Cost of common stock in treasury--
1,500,000 shares...................... (24,173) (24,173) (24,173)
Deferred compensation on restricted
stock................................. (4,748) (3,031) (4,087)
Unrealized gains/(losses) on available-
for-sale securities, net of deferred
taxes................................. 2,872 (4,594) (10,555)
----------- ----------- -----------
Total shareholders' equity............ 1,360,583 1,310,458 1,327,336
----------- ----------- -----------
$17,004,755 $16,777,951 $17,337,405
=========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
1
<PAGE>
AMSOUTH BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS THREE MONTHS
ENDED JUNE 30 ENDED JUNE 30
-------------------- --------------------
1995 1994 1995 1994
--------- --------- --------- ---------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
REVENUE FROM EARNING ASSETS
Loans.............................. $ 499,042 $ 347,484 $ 254,501 $ 179,330
Securities:
Trading securities................ 253 1,511 100 601
Available-for-sale securities..... 18,507 25,918 8,608 11,333
Held-to-maturity securities....... 107,312 73,903 53,427 42,030
--------- --------- --------- ---------
Total securities.................. 126,072 101,332 62,135 53,964
Mortgage loans held for sale....... 3,073 7,098 1,349 3,484
Federal funds sold and securities
purchased under agreements to re-
sell.............................. 985 1,437 519 533
--------- --------- --------- ---------
Total revenue from earning assets. 629,172 457,351 318,504 237,311
INTEREST EXPENSE
Interest-bearing demand deposits... 74,959 49,185 36,849 26,505
Savings deposits................... 13,885 11,246 7,178 5,647
Time deposits...................... 157,161 74,967 84,198 38,133
Certificates of deposit of $100,000
or more........................... 25,142 14,226 13,537 7,220
Federal funds purchased and securi-
ties sold under agreements to re-
purchase.......................... 32,887 20,578 14,518 13,210
Other borrowed funds............... 18,777 8,670 9,157 5,591
Long-term debt..................... 14,148 7,855 6,945 4,645
--------- --------- --------- ---------
Total interest expense............ 336,959 186,727 172,382 100,951
--------- --------- --------- ---------
NET INTEREST INCOME................ 292,213 270,624 146,122 136,360
Provision for loan losses.......... 20,651 5,181 12,307 2,974
--------- --------- --------- ---------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES................... 271,562 265,443 133,815 133,386
NONINTEREST REVENUES
Service charges on deposit ac-
counts............................ 40,363 32,564 20,758 16,420
Trust income....................... 24,472 23,434 13,067 12,041
Credit card income................. 6,927 6,090 3,416 3,062
Investment services income......... 5,914 7,375 2,737 3,207
Mortgage administration fees....... 8,217 9,960 2,053 5,137
Gain on sale of mortgage servicing. 27,493 184 25,780 184
Securities gains................... 196 228 45 189
Portfolio income................... 3,253 1,149 4 (391)
Other operating revenues........... 14,696 14,788 6,864 7,492
--------- --------- --------- ---------
Total noninterest revenues........ 131,531 95,772 74,724 47,341
NONINTEREST EXPENSES
Salaries and employee benefits..... 120,829 110,393 61,673 54,630
Net occupancy expense.............. 29,728 21,653 17,475 10,985
Equipment expense.................. 27,877 19,719 16,763 9,428
FDIC premiums...................... 14,726 11,230 7,515 5,624
Amortization of goodwill........... 7,997 3,669 4,022 1,835
Foreclosed properties expense...... (413) 211 (477) (15)
Marketing expense.................. 8,575 5,848 4,033 3,189
Postage and office supplies........ 11,892 10,569 5,757 5,321
Other operating expenses........... 55,048 53,669 27,247 25,316
--------- --------- --------- ---------
Total noninterest expenses........ 276,259 236,961 144,008 116,313
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES......... 126,834 124,254 64,531 64,414
Income taxes....................... 45,866 42,380 23,673 21,514
--------- --------- --------- ---------
NET INCOME........................ $ 80,968 $ 81,874 $ 40,858 $ 42,900
========= ========= ========= =========
Average common shares outstanding.. 58,199 54,558 58,293 54,782
Earnings per common share.......... $ 1.39 $ 1.50 $ 0.70 $ 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 GAINS/(LOSSES)
STOCK SURPLUS EARNINGS STOCK COMPENSATION ON SECURITIES TOTAL
------- -------- -------- -------- ------------ -------------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1,
1995................... $59,556 $579,579 $703,121 $(24,173) $(3,031) $(4,594) $1,310,458
Net income.............. -0- -0- 80,968 -0- -0- -0- 80,968
Cash dividends declared. -0- -0- (44,278) -0- -0- -0- (44,278)
Common stock transac-
tions:
Employee stock plans... 313 7,373 -0- -0- (1,717) -0- 5,969
Unrealized gains on
available-for-sale
securities, net of
deferred taxes......... -0- -0- -0- -0- -0- 7,466 7,466
------- -------- -------- -------- ------- ------- ----------
Balance at June 30,
1995................... $59,869 $586,952 $739,811 $(24,173) $(4,748) $ 2,872 $1,360,583
======= ======== ======== ======== ======= ======= ==========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
AMSOUTH BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30
--------------------
1995 1994
-------- ----------
(IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Net income.............................................. $ 80,968 $ 81,874
Adjustments to reconcile net income to net cash provided
by operating activities
Provision for loan losses.............................. 20,651 5,181
Foreclosed property recoveries......................... (322) (1,077)
Depreciation and amortization of premises and
equipment............................................. 13,619 11,883
Amortization of premiums and discounts on held-to-
maturity securities and available-for-sale securities. (2,658) 208
Net decrease in mortgage loans held for sale........... 49,108 170,548
Net decrease in trading securities..................... 6,113 82,490
Net gains on sales of available-for-sale securities.... (3,228) (3,812)
Net gains on calls of held-to-maturity securities...... (196) (228)
Net decrease in accrued interest receivable and other
assets................................................ 28,763 51,521
Net increase (decrease) in accrued expenses and other
liabilities........................................... 57,232 (147,687)
Net (increase) decrease in deferred income tax
benefits.............................................. (874) 2,362
Amortization of intangible assets...................... 13,037 8,253
Other.................................................. (1,523) (10,018)
-------- ----------
Net cash provided by operating activities.............. 260,690 251,498
INVESTING ACTIVITIES
Proceeds from maturities and prepayments of available-
for-sale securities.................................... 13,222 145,441
Proceeds from sales of available-for-sale securities.... 204,710 569,189
Purchases of available-for-sale securities.............. (272,390) (256,251)
Proceeds from maturities, prepayments and calls of held-
to-maturity securities................................. 132,741 199,556
Purchases of held-to-maturity securities................ -0- (1,425,977)
Net decrease in federal funds sold and securities
purchased under agreements to resell................... 145,775 148,266
Net increase in loans................................... (405,097) (465,232)
Net purchases of premises and equipment................. (6,609) (12,050)
Net cash used for acquisitions.......................... (13,221) (109,351)
-------- ----------
Net cash used by investing activities.................. (200,869) (1,206,409)
FINANCING ACTIVITIES
Net (decrease) increase in demand deposits and savings
accounts............................................... (220,398) 79,565
Net increase (decrease) in time deposits................ 543,556 (69,081)
Net (decrease) increase in federal funds purchased and
securities sold under agreements to repurchase......... (452,141) 738,640
Net increase in other borrowed funds.................... 234,563 332,148
Issuance of long-term debt.............................. -0- 149,084
Payments for maturing long-term debt.................... (58,526) (2,659)
Cash dividends paid..................................... (44,278) (38,712)
Proceeds from employee stock plans...................... 5,118 3,657
-------- ----------
Net cash provided by financing activities.............. 7,894 1,192,642
-------- ----------
Increase (decrease) in cash and cash equivalents........ 67,715 237,731
Cash and cash equivalents at beginning of period........ 616,639 614,698
Beginning consolidated cash balances of immaterial
pooling-of-interests entities.......................... -0- 8,225
-------- ----------
Cash and cash equivalents at end of period.............. $684,354 $ 860,654
======== ==========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
AMSOUTH BANCORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
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) 1994 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. Results of operations of companies purchased are included
from the dates of acquisitions.
Effective January 1, 1995, AmSouth adopted Statement of Financial Accounting
Standards No. 114, "Accounting by Creditors for Impairment of a Loan", as
amended by Statement of Financial Accounting Standards No. 118, "Accounting by
Creditors for Impairment of a Loan--Income Recognition and Disclosures"
(Statement 114). The statement requires that certain impaired loans be
measured based on the present value of the collateral if the loan is
collateral dependent. The adoption of Statement 114 resulted in no material
impact on AmSouth's financial condition or results of operations.
In March 1995, Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of," (Statement 121) was issued by the Financial Accounting
Standards Board (FASB). Statement 121 requires that long-lived assets and
certain identifiable intangibles to be held and used by the entity be reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of the asset may not be recoverable. The impact of Statement
121, when adopted on January 1, 1996, on AmSouth's financial condition or
results of operations has not been determined at this time.
In May 1995, FASB issued Statement of Financial Accounting Standards No.
122, "Accounting for Mortgage Servicing Rights, an amendment of FASB Statement
No. 65" (Statement 122). FASB Statement No. 65, "Accounting for Certain
Mortgage Banking Activities," required separate capitalization of purchased
mortgage servicing rights but prohibited capitalization when servicing rights
were acquired through loan origination activities. Statement 122 will require
that purchased and originated mortgage servicing rights be accounted for in
the same manner. The impact of Statement 122, when adopted on January 1, 1996,
on AmSouth's financial condition or results of operations has not been
determined at this time.
On June 23, 1994, AmSouth completed the acquisition of Fortune Bancorp, Inc.
(Fortune) which was accounted for using the purchase method of accounting
through the issuance of approximately 4,474,000 shares of common stock and
payment of approximately $144.6 million in cash. Approximately $172.5 million
of goodwill resulting from the acquisition will be amortized on a straight
line basis over 20 years.
On February 16, 1995, AmSouth completed the acquisition of Community Federal
Savings Bank (Community), headquartered in Fort Oglethorpe, Georgia. Under the
terms of the agreement, AmSouth paid $65.50 for each of the outstanding shares
of Community common stock for a total purchase price of approximately $17.0
million. The transaction was accounted for using the purchase method of
accounting. Approximately $7.5 million of goodwill resulting from the
acquisition will be amortized on a straight line basis over 20 years. Due to
the immateriality of the transaction, pro forma information is not presented.
5
<PAGE>
Cash Flows--For the six months ended June 30, 1995 and 1994, AmSouth paid
----------
interest of $328,770,000 and $179,286,000, respectively, and income taxes of
$36,926,000 and $54,608,000, respectively. Noncash transfers from loans to
foreclosed properties for the six months ended June 30, 1995 and 1994 were
$8,144,000 and $19,233,000, respectively, and noncash transfers from
foreclosed properties to loans were $789,000 and $2,607,000, respectively.
Long-Term Debt--On May 19, 1994, AmSouth issued $150.0 million in 7 3/4%
--------------
Subordinated Notes Due 2004 at a discounted price of 99.389%. The net proceeds
to AmSouth after commissions totaled $148.1 million. The notes will mature on
May 15, 2004 and are not redeemable prior to maturity. The proceeds from the
notes were used for the Fortune acquisition. This debt qualifies as Tier 2
capital in calculating risk-adjusted capital ratios.
Shareholders' Equity--On September 22, 1994, AmSouth purchased 1,000,000
--------------------
shares of AmSouth Common Stock at a cost of $31.3 million for the sole purpose
of replenishing shares issued by AmSouth in connection with its purchase of
Fortune.
6
<PAGE>
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 June 30, 1995 and 1994, and the
related consolidated statement of earnings for the three-month and six-month
periods ended June 30, 1995 and 1994, and the consolidated statement of cash
flows for the six-month periods ended June 30, 1995 and 1994. These financial
statements are the responsibility of the Company's management.
We conducted our reviews in accordance with the 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, 1994, 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, 1995, 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, 1994, is fairly stated, in all
material respects, in relation to the consolidated statement of condition from
which it has been derived.
/s/ Ernst & Young LLP
August 10, 1995
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
For the six months ended June 30, 1995, AmSouth reported net income of $81.0
million compared to $81.9 million for the same period of 1994. On a per common
share basis, AmSouth earned $1.39 and $1.50, respectively. Year-to-date
earnings resulted in an annualized return on average assets (ROA) of .97% and
an annualized return on average equity (ROE) of 12.25% compared to 1.20% and
13.85%, respectively, for the first six months of 1994.
Net income for the second quarter of 1995 was $40.9 million, a 4.8% decrease
compared to net income of $42.9 million for the second quarter of 1994.
Earnings per common share were $.70 for the second quarter of 1995, a 10.3%
decline from the second quarter of 1994. Second quarter net income included a
pre-tax gain of $25.0 million from the sale of AmSouth's third party mortgage
servicing portfolio to GE Capital Mortgage Services, Inc. The second quarter
also included expenses of $22.2 million associated primarily with AmSouth's
recent productivity initiatives including business and branch consolidations
and the development of new financial systems. ROA and ROE for the second
quarter were .97% and 12.22%, respectively, compared to 1.22% and 14.31% for
the second quarter of 1994.
Net Interest Income
-------------------
For the six months ended June 30, 1995, net interest income increased $21.6
million to $292.2 million. The net interest margin for the same period
decreased 58 basis points to 3.87% primarily due to higher costs of deposits.
AmSouth's net interest income for the second quarter of 1995 was $146.1
million compared to $136.4 million for the same period of 1994. For the same
period, the net interest margin decreased from 4.34% to 3.84%.
Year-to-date average earning assets increased 23.6% primarily due to a 31.4%
increase in average loans net of unearned income. Exclusive of the acquisition
of Fortune in June 1994 and Community in February 1995, which were accounted
for as purchases, AmSouth's loan growth was approximately 14.0%. Residential
first mortgages represented approximately 41.0% of this growth and commercial
loans approximately 30.0%. At June 30, 1995, these loans comprised
approximately 37.0% and 25.0% respectively, of AmSouth's total loan portfolio.
Year-to-date average total securities increased $422.8 million or 12.6%.
Average held-to-maturity securities increased $1.0 billion primarily due to
the purchase of mortgage-backed securities during the second and third
quarters of 1994. Partially offsetting this increase were sales of low-
yielding securities during 1994 from the available-for-sale portfolio.
The year-to-date average balance of interest-bearing liabilities increased
$3.0 billion, funding the total growth in earning assets. Average interest-
bearing deposits represent $2.7 billion of the increase, and was primarily due
to the acquisition of Fortune, growth in new markets entered into through
business combinations, rising interest rates and a special marketing campaign
during the last half of 1994. Other significant increases in average balances
include $280.4 million in Federal Home Loan Bank advances, and $118.8 million
in parent company subordinated long-term debt.
From June 30, 1994 to June 30, 1995, as market interest rates increased,
AmSouth's yield on earning assets increased 79 basis points while rates paid
on interest-bearing liabilities increased 143 basis points. Balance increases
in average earning assets and average interest-bearing liabilities were almost
evenly matched with only a minimal increase in noninterest-bearing deposits.
The combination of these results decreased the net interest margin 58 basis
points compared to 1994.
AmSouth maintains an asset/liability management process to monitor interest
rate risk and assist in maintaining stability in the interest margin. Over the
last few years, AmSouth has utilized various off-balance sheet instruments
such as interest rate swaps, caps and floors to manage interest rate risk.
During the fourth quarter of 1994, AmSouth terminated $1.1 billion of interest
rate swaps and $915.0 million of interest rate caps. A $300.0 million interest
rate floor was terminated during the first quarter of 1995. For the three
months and the six months ended June 30, 1995, the amortization of the
deferred loss from the termination of these contracts decreased the net
interest margin $2.8 million and $5.8 million, respectively. Interest rate
contracts had no material impact on the net interest margin for the three
months ended June 30, 1994. The impact on the year-to-date 1994 net interest
margin was an increase of $1.3 milliion. At June 30, 1995, AmSouth had $140.0
million
8
<PAGE>
of interest rate caps remaining with $90.0 million used to hedge Federal funds
purchased and securities sold under agreements to repurchase and $50.0 million
used to hedge deposits. In addition, AmSouth had interest rate contracts on
behalf of its customers in the amount of $63.8 million.
Credit Quality
--------------
Effective January 1, 1995, AmSouth adopted Statement of Financial Accounting
Standards No. 114, "Accounting by Creditors for Impairment of a Loan," as
amended by Statement of Financial Accounting Standards No. 118, "Accounting by
Creditors for Impairment of a Loan--Income Recognition and Disclosures"
(Statement 114). Impairment of a loan within the scope of Statement 114 is to
be recognized based on the present value of expected future cash flows
discounted at the loan's effective interest rate, at the loan's observable
market price, or the fair value of the collateral if the loan is collateral
dependent. At June 30, 1995, the recorded investment in loans that are
considered to be impaired under Statement 114 was $61.1 million (primarily all
of which were on a nonaccrued basis). The allowance for loan losses at June
30, 1995, included $12.2 million related to these impaired loans. The average
recorded investment in impaired loans during the second quarter of 1995 was
approximately $62.0 million. Payments received on impaired loans for which the
ultimate collectibility of principal is uncertain are generally applied first
as principal reductions.
Table 7 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 1.30%
at June 30, 1994 to 0.97% at June 30, 1995. The level of nonperforming assets
decreased $21.6 million during the same period.
AmSouth maintains an allowance for loan losses which management believes is
adequate to absorb losses in the loan portfolio. Table 8 presents a five
quarter analysis of the allowance for loan losses. At June 30, 1995, the ratio
of the allowance for loan losses to loans net of unearned income was 1.50%
compared to 1.56% for the prior year. The coverage ratio of the allowance for
loan losses to nonperforming loans increased from 161.95% to 186.25% for the
same period. Annualized net charge-offs to average loans net of unearned
income for the three months ended June 30, 1995 was 26 basis points compared
to 16 basis points for the same period of 1994. The provision for loan losses
was higher in 1995 due to the increased level of charge-offs combined with
stronger loan growth during the period.
Noninterest Revenues and Noninterest Expenses
---------------------------------------------
Year-to-date noninterest revenues totaled $131.5 million at June 30, 1995
compared to $95.8 million for the same period of the prior year. Included in
other operating revenues is a $25.0 million gain from AmSouth's sale of its
third party mortgage servicing portfolio to GE Capital Mortgage Services, Inc.
Exclusive of the gain, year-to-date noninterest revenues increased 11.2%
compared to the prior year. Within other components of noninterest revenues,
increases occurred in service charges on deposit accounts of $7.8 million and
portfolio income of $2.1 million. The increase in service charges on deposit
accounts was primarily due to an increased volume of overdraft fees and
service charges on consumer accounts. Portfolio income increased due to
improvements in the securities market. Mortgage administration fees decreased
$1.7 million due to the sale of third party mortgage servicing.
Noninterest revenues for the second quarter of 1995 were $74.7 million.
Excluding the effect of the gain from the sale of mortgage servicing during
the quarter, noninterest revenues increased 6.7% over the same period of 1994.
Changes were primarily for the same reasons discussed in the year-to-date
analysis.
Noninterest expenses for the six months ended June 30, 1995 were $276.3
million compared to $237.0 million for the same period of 1994. Exclusive of
the $22.2 million of productivity initiative expenses discussed previously,
noninterest expenses totaled $254.1 million, a 7.2% increase over the prior
period. Salaries and employee benefits increased $10.4 million primarily due
to $6.7 million of expenses related to business and branch consolidations.
Occupancy costs of $5.5 million for branch consolidations are included in the
$8.1 million increase in net occupancy expense. Equipment expense increased
$8.2 million and included $4.7 million for development costs of new financial
systems and the write-off of various leases. The acquisition of Fortune in
June 1994 contributed to the remaining increases in these categories of
noninterest expenses. Increased deposit levels due to the acquisition of
Fortune and a 1994 deposit marketing campaign resulted in a $3.5 million
increase in FDIC premiums.
9
<PAGE>
Noninterest expenses for the second quarter of 1995 totaled $144.0 million
compared to $116.3 million for the second quarter of 1994. Second quarter
noninterest expenses increased 4.7% net of the productivity initiative
expenses of $22.2 million. Quarterly changes in noninterest expenses occurred
primarily for the same reasons discussed in the year-to-date analysis.
Capital Adequacy
---------------
At June 30, 1995, shareholders' equity totaled $1.4 billion, or 8.00% of
total assets. Since December 31, 1994, shareholders' equity increased $50.1
million as net income exceeded dividends by $36.7 million, the market value of
available-for-sale securities increased $7.5 million and employee stock plans
contributed $6.0 million. Table 12 presents the calculation of the risk-
adjusted capital ratios for AmSouth at June 30, 1995, and 1994. At June 30,
1995, AmSouth remains 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%. In addition, the risk-adjusted capital ratios
for AmSouth's banking subsidiaries were above the regulatory minimum and each
subsidiary was well-capitalized at June 30, 1995. The total risk-adjusted
capital ratio for each of AmSouth's major subsidiaries was:
<TABLE>
<S> <C>
AmSouth Bank of Alabama............................................... 10.30%
AmSouth Bank of Florida............................................... 10.56%
AmSouth Bank of Tennessee............................................. 16.39%
</TABLE>
Regulatory Developments
-----------------------
In August of 1995, the Federal Deposit Insurance Corporation (FDIC)
announced a decrease in the lowest deposit insurance rate for deposits insured
through the Bank Insurance Fund (BIF) from $.23 per $100 of deposits to $.04.
This will result in a decrease in AmSouth's FDIC premium for the last six
months of 1995 of approximately $8.0 million.
Various legislative proposals regarding the future of the BIF and the
Savings Insurance Fund (SAIF) have been reported recently. Several of these
proposals include a one-time special assessment for SAIF deposits of $.85 per
$100 of deposits. AmSouth has approximately $4.5 billion of deposits insured
by SAIF. AmSouth does not know when and if any such proposal may be adopted.
10
<PAGE>
TABLE 1--FINANCIAL SUMMARY
<TABLE>
<CAPTION>
JUNE 30
--------------------------------------
%
1995 1994 CHANGE
------------------ ------------------ ------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
BALANCE SHEET SUMMARY
End-of-period balances:
Loans net of unearned income.. $ 11,913,525 $ 10,580,364 12.6%
Total securities.............. 3,640,964* 4,521,829* (19.5)
Total assets.................. 17,004,755 17,337,405 (1.9)
Total deposits................ 13,471,236 12,218,955 10.2
Shareholders' equity.......... 1,360,583 1,327,336 2.5
Year-to-date average balances:
Loans net of unearned income.. $ 11,682,181 $ 8,889,208 31.4%
Total securities.............. 3,789,089* 3,366,296* 12.6
Total assets.................. 16,906,483 13,707,897 23.3
Total deposits................ 13,269,191 10,510,403 26.2
Shareholders' equity.......... 1,332,943 1,192,222 11.8
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS THREE MONTHS
ENDED JUNE 30 ENDED JUNE 30
---------------- ----------------
% %
1995 1994 CHANGE 1995 1994 CHANGE
------- ------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
EARNINGS SUMMARY
Net income............... $80,968 $81,874 (1.1)% $40,858 $42,900 (4.8)%
Per common share......... 1.39 1.50 (7.3) 0.70 0.78 (10.3)
SELECTED RATIOS
Return on average assets
(annualized)............ 0.97% 1.20% 0.97% 1.22%
Return on average equity
(annualized)............ 12.25 13.85 12.22 14.31
Average equity to average
assets.................. 7.88 8.70 7.92 8.55
Allowance for loan losses
to loans net of unearned
income.................. 1.50 1.56 1.50 1.56
Efficiency ratio......... 64.20 63.35 64.26 62.06
COMMON STOCK DATA
Cash dividends declared.. $ 0.76 $ 0.70 $ 0.38 $ 0.35
Book value at end of pe-
riod.................... 23.31 22.53 23.31 22.53
Market value at end of
period.................. 32 5/8 31 3/8 32 5/8 31 3/8
Average common shares
outstanding............. 58,199 54,558 58,293 54,782
</TABLE>
--------
* Includes adjustment for market valuation on available-for-sale securities of
$4,627 and $(16,853) for end of period balances and $(203) and $(2,806) for
year to date average balances for 1995 and 1994, respectively.
11
<PAGE>
TABLE 2--YEAR-TO-DATE YIELDS ON AVERAGE EARNING ASSETS AND RATES ON AVERAGE
INTEREST-BEARING LIABILITIES
<TABLE>
<CAPTION>
1995 1994
---------------------------- ----------------------------
SIX MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
---------------------------- ----------------------------
AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE
----------- -------- ------ ----------- -------- ------
(TAXABLE EQUIVALENT BASIS-DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Earning assets:
Loans net of unearned
income................ $11,682,181 $500,583 8.64% $ 8,889,208 $348,998 7.92%
Trading securities..... 9,792 263 5.42 56,739 1,526 5.42
Available-for-sale
securities............ 506,230 18,507 7.37 1,059,859 25,918 4.93
Held-to-maturity
securities:
Taxable................ 2,994,540 97,148 6.54 1,920,466 61,632 6.47
Tax-free............... 278,730 15,169 10.97 332,038 18,374 11.16
----------- -------- ----------- --------
Total held-to-
maturity securities.. 3,273,270 112,317 6.92 2,252,504 80,006 7.16
----------- -------- ----------- --------
Total securities..... 3,789,292 131,087 6.98 3,369,102 107,450 6.43
Other earning assets... 111,000 4,058 7.37 352,070 8,535 4.89
----------- -------- ----------- --------
Total earning assets. 15,582,473 635,728 8.23 12,610,380 464,983 7.44
Cash and other assets... 1,498,293 1,233,405
Allowance for loan
losses................. (174,080) (133,082)
Market valuation on
available-for-sale
securities............. (203) (2,806)
----------- -----------
$16,906,483 $13,707,897
=========== ===========
LIABILITIES AND SHARE-
HOLDERS' EQUITY
Interest-bearing liabil-
ities:
Interest-bearing demand
deposits.............. $ 3,961,497 74,959 3.82 $ 3,574,434 49,185 2.77
Savings deposits....... 926,918 13,885 3.02 899,529 11,246 2.52
Time deposits.......... 5,714,885 157,161 5.55 3,568,887 74,967 4.24
Certificates of deposit
of $100,000 or more... 888,745 25,142 5.70 712,345 14,226 4.03
Federal funds purchased
and securities sold
under agreements to
repurchase............ 1,099,205 32,887 6.03 1,123,527 20,578 3.69
Other interest-bearing
liabilities........... 1,024,609 32,925 6.48 695,716 16,525 4.79
----------- -------- ----------- --------
Total interest-
bearing liabilities. 13,615,859 336,959 4.99 10,574,438 186,727 3.56
-------- ----- -------- -----
Incremental interest
spread................. 3.24% 3.88%
===== =====
Noninterest-bearing
demand deposits........ 1,777,146 1,755,208
Other liabilities....... 180,535 186,029
Shareholders' equity.... 1,332,943 1,192,222
----------- -----------
$16,906,483 $13,707,897
=========== ===========
Net interest
income/margin on a
taxable equivalent
basis.................. 298,769 3.87% 278,256 4.45%
===== =====
Taxable equivalent
adjustment:
Loans.................. 1,541 1,514
Securities............. 5,015 6,118
-------- --------
Total taxable
equivalent
adjustment.......... 6,556 7,632
-------- --------
Net interest income.. $292,213 $270,624
======== ========
</TABLE>
--------
NOTE: The taxable equivalent adjustment has been computed based on a 35%
federal income tax rate.
12
<PAGE>
TABLE 3--QUARTERLY YIELDS ON AVERAGE EARNING ASSETS AND RATES ON AVERAGE
INTEREST-BEARING LIABILITIES
<TABLE>
<CAPTION>
1995
---------------------------------------------------------- ----------------------------
SECOND QUARTER FIRST QUARTER FOURTH QUARTER
---------------------------- ---------------------------- ----------------------------
AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE BALANCE EXPENSE RATE
----------- -------- ------ ----------- -------- ------ ----------- -------- ------
(TAXABLE EQUIVALENT BASIS-DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Earning assets:
Loans net of
unearned income... $11,801,298 $255,285 8.68% $11,561,740 $245,298 8.60% $11,129,127 $230,021 8.20%
Trading
securities........ 9,194 106 4.62 10,395 157 6.13 11,005 140 5.05
Available-for-sale
securities........ 477,809 8,608 7.23 534,967 9,899 7.50 611,432 8,531 5.54
Held-to-maturity
securities:
Taxable........... 2,970,284 48,378 6.53 3,019,065 48,770 6.55 3,072,008 48,550 6.27
Tax-free.......... 273,382 7,531 11.05 284,138 7,638 10.90 296,523 8,163 10.92
----------- -------- ----------- -------- ----------- --------
Total held-to-
maturity
securities....... 3,243,666 55,909 6.91 3,303,203 56,408 6.93 3,368,531 56,713 6.68
----------- -------- ----------- -------- ----------- --------
Total
securities...... 3,730,669 64,623 6.95 3,848,565 66,464 7.00 3,990,968 65,384 6.50
Other earning
assets............ 90,660 1,868 8.26 125,537 2,190 7.07 190,128 3,115 6.50
----------- -------- ----------- -------- ----------- --------
Total earning
assets........... 15,622,627 321,776 8.26 15,535,842 313,952 8.20 15,310,223 298,520 7.74
Cash and other
assets............. 1,479,463 1,516,028 1,531,345
Allowance for loan
losses............. (175,616) (172,526) (163,282)
Market valuation on
available-for-sale
securities......... 1,985 (2,416) (24,426)
----------- ----------- -----------
$16,928,459 $16,876,928 $16,653,860
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Interest-bearing
demand deposits... $ 3,901,245 36,849 3.79 $ 4,022,419 38,110 3.84 $ 4,041,852 36,447 3.58
Savings deposits.. 949,737 7,178 3.03 903,844 6,707 3.01 913,960 6,556 2.85
Time deposits..... 5,874,024 84,198 5.75 5,553,978 72,964 5.33 5,327,641 65,524 4.88
Certificates of
deposit of
$100,000 or more.. 911,668 13,537 5.96 865,568 11,604 5.44 807,689 10,168 4.99
Federal funds
purchased and
securities sold
under agreements
to repurchase..... 946,492 14,518 6.15 1,247,584 18,369 5.97 1,406,294 18,672 5.27
Other interest-
bearing
liabilities....... 993,363 16,102 6.50 1,056,203 16,823 6.46 891,325 14,183 6.31
----------- -------- ----------- -------- ----------- --------
Total interest-
bearing
liabilities...... 13,576,529 172,382 5.09 13,649,596 164,577 4.89 13,388,761 151,550 4.49
-------- ----- -------- ----- -------- -----
Incremental
interest spread.... 3.17% 3.31% 3.25%
===== ===== =====
Noninterest-bearing
demand deposits.... 1,798,087 1,755,973 1,810,308
Other liabilities.. 212,513 147,208 146,597
Shareholders'
equity............. 1,341,330 1,324,151 1,308,194
----------- ----------- -----------
$16,928,459 $16,876,928 $16,653,860
=========== =========== ===========
Net interest
income/margin on a
taxable equivalent
basis.............. 149,394 3.84% 146,375 3.90% 146,970 3.81%
===== ===== =====
Taxable equivalent
adjustment:
Loans............. 784 757 812
Securities........ 2,488 2,527 2,649
-------- -------- --------
Total taxable
equivalent
adjustment....... 3,272 3,284 3,461
-------- -------- --------
Net interest
income........... $146,122 $146,091 $143,509
======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
1994
------------------------------------------------------------
THIRD QUARTER SECOND QUARTER
---------------------------- ---------------------- ------
AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE
----------- -------- ------ ----------- -------- ------
(TAXABLE EQUIVALENT BASIS-DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Earning assets:
Loans net of
unearned income... $10,731,271 $218,001 8.06% $ 9,058,853 $180,089 7.97%
Trading
securities........ 50,144 923 7.30 37,597 598 6.38
Available-for-sale
securities........ 1,190,536 17,556 5.85 919,733 11,333 4.94
Held-to-maturity
securities:
Taxable........... 3,120,246 50,000 6.36 2,326,573 36,068 6.22
Tax-free.......... 308,343 8,749 11.26 321,311 8,934 11.15
----------- -------- ----------- --------
Total held-to-
maturity
securities....... 3,428,589 58,749 6.80 2,647,884 45,002 6.83
----------- -------- ----------- --------
Total
securities...... 4,669,269 77,228 6.56 3,605,214 56,933 6.33
Other earning
assets............ 276,081 3,595 5.17 289,617 4,017 5.56
----------- -------- ----------- --------
Total earning
assets........... 15,676,621 298,824 7.56 12,953,684 241,039 7.46
Cash and other
assets............. 1,562,705 1,251,509
Allowance for loan
losses............. (165,240) (133,344)
Market valuation on
available-for-sale
securities......... (18,349) (13,826)
----------- -----------
$17,055,737 $14,058,023
=========== ===========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Interest-bearing
demand deposits... $ 4,084,672 33,321 3.24 $ 3,618,893 26,506 2.94
Savings deposits.. 958,903 6,459 2.67 921,136 5,647 2.46
Time deposits..... 4,639,285 51,505 4.40 3,574,761 38,133 4.28
Certificates of
deposit of
$100,000 or more.. 815,600 9,358 4.55 695,062 7,220 4.17
Federal funds
purchased and
securities sold
under agreements
to repurchase..... 2,241,922 25,759 4.56 1,302,683 13,210 4.07
Other interest-
bearing
liabilities....... 1,050,845 15,735 5.94 815,117 10,235 5.04
----------- -------- ----------- --------
Total interest-
bearing
liabilities...... 13,791,227 142,137 4.09 10,927,652 100,951 3.71
-------- ----- -------- -----
Incremental
interest spread.... 3.47% 3.75%
===== =====
Noninterest-bearing
demand deposits.... 1,798,001 1,761,223
Other liabilities.. 128,648 166,657
Shareholders'
equity............. 1,337,861 1,202,491
----------- -----------
$17,055,737 $14,058,023
=========== ===========
Net interest
income/margin on a
taxable equivalent
basis.............. 156,687 3.97% 140,088 4.34%
===== =====
Taxable equivalent
adjustment:
Loans............. 738 759
Securities........ 2,755 2,969
-------- --------
Total taxable
equivalent
adjustment....... 3,493 3,728
-------- --------
Net interest
income........... $153,194 $136,360
======== ========
</TABLE>
-----
NOTE: The taxable equivalent adjustment has been computed based on a 35%
federal income tax rate.
13
<PAGE>
TABLE 4--INTEREST RATE SWAPS, CAPS AND FLOORS
<TABLE>
<CAPTION>
SWAPS
------------------------------------- CAPS
RECEIVE FIXED PAY FIXED BASIS OTHER & FLOORS TOTAL
------------- --------- ----- ------ -------- ------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
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- 400 350 750
Maturities............ -0- -0- (300) -0- (20) (320)
Calls................. (120) (120) -0- -0- -0- (240)
Terminations.......... (65) -0- -0- (1,000) (915) (1,980)
---- ---- ---- ------ ------ ------
Balance at December 31,
1994................... -0- -0- -0- -0- 440 440
Terminations.......... -0- -0- -0- -0- (300) (300)
---- ---- ---- ------ ------ ------
Balance at June 30,
1995................... $-0- $-0- $-0- $ -0- $ 140 $ 140
==== ==== ==== ====== ====== ======
</TABLE>
TABLE 5--MATURITIES AND INTEREST RATES EXCHANGED ON CAPS
<TABLE>
<CAPTION>
MATURE DURING
----------------------------
1995 1996 1997 TOTAL
---- ---------- ---------- -----
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Notional................................... $ 30 $ 33 $ 77 $140
Receive rate............................... 1.81% 1.10% 0.00% 0.65%
Pay rate................................... 1.34% 1.21% 0.59% 0.90%
</TABLE>
--------
NOTE: The maturities and interest rates exchanged are calculated assuming
that interest rates remain unchanged from average June 1995 rates. The
information presented could change as future interest rates increase or
decrease.
14
<PAGE>
TABLE 6--LOANS AND CREDIT QUALITY
<TABLE>
<CAPTION>
LOANS NONPERFORMING LOANS* NET CHARGE-OFFS
JUNE 30 JUNE 30 JUNE 30
----------------------- -------------------- ----------------
1995 1994 1995 1994 1995 1994
----------- ----------- -------------------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Commercial.............. $ 3,015,616 $ 2,652,130 $ 16,017 $ 20,545 $ 2,455 $ 1,383
Commercial real estate:
Commercial real estate
mortgages:
Owner occupied........ 586,703 591,107 5,296 19,886 39 139
Nonowner occupied..... 870,410 784,307 27,482 34,487 273 (1,094)
----------- ----------- --------- ---------- ------- -------
Total commercial real
estate mortgages.... 1,457,113 1,375,414 32,778 54,373 312 (955)
----------- ----------- --------- ---------- ------- -------
Real estate construc-
tion:
Owner occupied........ 157,313 191,684 7,974 2,077 276 (169)
Nonowner occupied..... 266,410 261,042 4,354 215 (3) (7)
----------- ----------- --------- ---------- ------- -------
Total real estate
construction........ 423,723 452,726 12,328 2,292 273 (176)
----------- ----------- --------- ---------- ------- -------
Total commercial
real estate........ 1,880,836 1,828,140 45,106 56,665 585 (1,131)
----------- ----------- --------- ---------- ------- -------
Consumer:
Residential first mort-
gages................. 4,380,941 3,787,197 27,049 22,862 362 (38)
Other residential mort-
gages................. 650,292 541,278 -0- -0- 80 61
Dealer indirect........ 995,327 775,378 807 -0- 2,796 646
Other consumer......... 1,066,020 1,075,251 7,132 1,653 8,291 7,473
----------- ----------- --------- ---------- ------- -------
Total consumer........ 7,092,580 6,179,104 34,988 24,515 11,529 8,142
----------- ----------- --------- ---------- ------- -------
$11,989,032 $10,659,374 $ 96,111 $ 101,725 $14,569 $ 8,394
=========== =========== ========= ========== ======= =======
</TABLE>
--------
* Exclusive of accruing loans 90 days past due.
TABLE 7--NONPERFORMING ASSETS
<TABLE>
<CAPTION>
1995 1994
------------------ ----------------------------
JUN 30 MAR 31 DEC 31 SEPT 30 JUN 30
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Impaired loans............... $ 61,123 $ 62,555 $ -0- $ -0- $ -0-
Other nonaccrual loans....... 34,988 39,409 89,545 97,186 90,550
Restructured loans........... -0- 781 13,203 11,219 11,175
-------- -------- -------- -------- --------
Total nonperforming loans.. 96,111 102,745 102,748 108,405 101,725
Foreclosed properties........ 18,112 24,656 28,263 31,673 35,266
Repossessions................ 2,028 2,097 2,079 1,664 887
-------- -------- -------- -------- --------
Total nonperforming
assets*................... $116,251 $129,498 $133,090 $141,742 $137,878
======== ======== ======== ======== ========
Nonperforming assets* to
loans net of unearned
income, foreclosed
properties and
repossessions............... 0.97% 1.10% 1.16% 1.28% 1.30%
======== ======== ======== ======== ========
Accruing loans 90 days past
due......................... $ 34,663 $ 33,685 $ 34,246 $ 44,293 $ 29,959
======== ======== ======== ======== ========
</TABLE>
--------
* Exclusive of accruing loans 90 days past due.
15
<PAGE>
TABLE 8--ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
1995 1994
----------------------- -----------------------------------
2ND QUARTER 1ST QUARTER 4TH QUARTER 3RD QUARTER 2ND QUARTER
----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Balance at beginning of
period................. $174,398 $171,167 $164,756 $164,746 $130,488
Loans charged off....... 11,833 9,161 16,457 9,066 9,512
Recoveries of loans pre-
viously charged off.... 4,130 2,295 2,719 4,303 5,796
-------- -------- -------- -------- --------
Net charge-offs......... 7,703 6,866 13,738 4,763 3,716
Addition to allowance
charged to expense..... 12,307 8,344 20,149 4,773 2,974
Allowance acquired in
acquisitions........... -0- 1,753 -0- -0- 35,000
-------- -------- -------- -------- --------
Balance at end of peri-
od..................... $179,002 $174,398 $171,167 $164,756 $164,746
======== ======== ======== ======== ========
Allowance for loan
losses to loans net of
unearned income........ 1.50% 1.48% 1.50% 1.50% 1.56%
Allowance for loan
losses to nonperforming
loans.................. 186.25% 169.74% 166.59% 151.98% 161.95%
Allowance for loan
losses to nonperforming
assets................. 153.98% 134.67% 128.61% 116.24% 119.49%
Net charge-offs to aver-
age loans net of un-
earned income
(annualized)........... 0.26% 0.24% 0.49% 0.18% 0.16%
</TABLE>
TABLE 9-- ALLOWANCE FOR FORECLOSED PROPERTY LOSSES
<TABLE>
<CAPTION>
1995 1994
----------------------- -----------------------------------
2ND QUARTER 1ST QUARTER 4TH QUARTER 3RD QUARTER 2ND QUARTER
----------- ----------- ----------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Balance at beginning of
period................. $2,857 $3,638 $2,028 $2,692 $3,574
Addition (reduction) of
allowance charged
(credited) to expense.. (48) (274) 2,600 225 (627)
Net writedowns/losses... (497) (507) (990) (889) (255)
------ ------ ------ ------ ------
Balance at end of the
period................. $2,312 $2,857 $3,638 $2,028 $2,692
====== ====== ====== ====== ======
</TABLE>
TABLE 10--SECURITIES
<TABLE>
<CAPTION>
JUNE 30, 1995 JUNE 30, 1994
--------------------- ---------------------
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...................... $2,927,748 $2,925,946 $3,156,061 $3,081,153
State, county and municipal
securities...................... 270,993 284,370 314,084 330,742
Other securities................. 6,550 6,728 7,970 7,900
---------- ---------- ---------- ----------
$3,205,291 $3,217,044 $3,478,115 $3,419,795
========== ========== ========== ==========
Available-for-sale:
U.S. Treasury and federal agency
securities...................... $ 287,773 $ 969,594
Other securities................. 145,707 60,918
---------- ----------
$ 433,480 $1,030,512
========== ==========
</TABLE>
16
<PAGE>
TABLE 11--OTHER INTEREST-BEARING LIABILITIES
<TABLE>
<CAPTION>
JUNE 30
---------------------
1995 1994
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
Short-term:
Federal Home Loan Bank advances........................ $ 293,950 $ 35,500
Term federal funds purchased........................... 165,030 244,000
Treasury, tax, and loan note........................... 429,958 660,838
Other.................................................. 12,742 24,612
---------- ----------
Total short-term..................................... 901,680 964,950
---------- ----------
Long-term:
7 3/4% Subordinated Notes Due 2004..................... 149,183 149,091
Subordinated Capital Notes Due 1999.................... 99,505 99,376
Federal Home Loan Bank advances........................ 45,727 239,635
Floating Rate Notes Due 1999........................... 7,147 7,659
7 1/2% Convertible Subordinated Debentures............. 3,931 3,709
Long-term notes payable................................ 22,754 22,207
---------- ----------
Total long-term...................................... 328,247 521,677
---------- ----------
Total other interest-bearing liabilities........... $1,229,927 $1,486,627
========== ==========
</TABLE>
TABLE 12--CAPITAL RATIOS
<TABLE>
<CAPTION>
JUNE 30
------------------------
1995 1994
----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Risk-adjusted capital ratio:
Total assets....................................... $17,004,755 $17,337,405
Adjusted allowance for loan losses................. 163,991 145,604
Adjustment for risk-weighting of balance sheet
items............................................. (5,776,819) (7,028,582)
Adjustment for off-balance sheet items............. 2,003,619 1,390,551
Add unrealized (gains)/losses on available-for-sale
securities........................................ (4,612) 16,853
Less certain intangible assets..................... (293,028) (232,683)
----------- -----------
Total risk-adjusted assets....................... $13,097,906 $11,629,148
=========== ===========
Shareholders' equity............................... $ 1,360,583 $ 1,327,336
Add unrealized (gains)/losses on available-for-sale
securities
(net of deferred taxes)........................... (2,872) 10,555
Less certain intangible assets..................... (293,028) (232,683)
----------- -----------
Tier I capital..................................... 1,064,683 1,105,208
Adjusted allowance for loan losses................. 163,991 145,604
Qualifying long-term debt.......................... 209,672 252,176
----------- -----------
Tier II capital.................................... 373,663 397,780
----------- -----------
Total capital.................................... $ 1,438,346 $ 1,502,988
=========== ===========
Tier I capital to total risk-adjusted assets....... 8.13% 9.50%
Total capital to risk-adjusted assets.............. 10.98% 12.92%
Other capital ratios:
Leverage........................................... 6.40% 7.99%
Equity to assets................................... 8.00% 7.66%
Tangible equity to assets.......................... 6.39% 5.68%
</TABLE>
17
<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 20,
1995, at which meeting the shareholders (a) elected five nominees as directors
and (b) voted to approve the Director Restricted Stock Plan. The following is
a tabulation of the voting on these matters.
ELECTION OF DIRECTORS
<TABLE>
<CAPTION>
BROKER
NAME VOTES FOR VOTES WITHHELD ABSTENTIONS NONVOTES
---- ---------- -------------- ----------- --------
<S> <C> <C> <C> <C>
Barney B. Burks, Jr.............. 46,700,082 884,725 N/A N/A
Donald E. Hess................... 46,698,718 886,088 N/A N/A
Claude B. Nielsen................ 46,754,165 857,492 N/A N/A
Benjamin F. Payton............... 46,654,300 957,357 N/A N/A
C. Dowd Ritter................... 46,716,966 894,691 N/A N/A
</TABLE>
APPROVAL OF DIRECTOR
RESTRICTED STOCK PLAN
<TABLE>
<CAPTION>
BROKER
VOTES FOR VOTES AGAINST ABSTENTIONS NONVOTES
--------- ------------- ----------- --------
<S> <C> <C> <C>
42,682,480 3,483,901 1,429,318 0
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
ITEM 6(A)--EXHIBITS
--------
The exhibits listed in the Exhibit Index at page 20 of this Form 10-Q are
filed herewith or are incorporated by reference herein.
ITEM 6(B)--FORMS 8-K
---------
The following Form 8-K was filed by AmSouth during the period March 31, 1995
to June 30, 1995:
Form 8-K filed on April 21, 1995 to report the execution of an agreement to
sell the third party mortgage servicing portfolio held by AmSouth's banking
and mortgage subsidiaries.
18
<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.
By: /s/ John W. Woods
August 14, 1995 ---------------------------------
John W. Woods
Chairman of the Board and
-------------------------
Chief Executive Officer
-----------------------
By: /s/ Dennis J. Dill
August 14, 1995 ---------------------------------
Dennis J. Dill
Executive Vice President and
----------------------------
Chief Accounting Officer
------------------------
(Principal Accounting Officer)
------------------------------
19
<PAGE>
EXHIBIT INDEX
The following is a list of exhibits including items incorporated by
reference.
2 Agreement and Plan of Merger dated as of September 12, 1993, between
Fortune Bancorp, Inc. and AmSouth Bancorporation, as amended by
amendment dated as of May 11, 1994 (1)
3-a Restated Certificate of Incorporation of AmSouth Bancorporation (2)
3-b Bylaws of AmSouth Bancorporation, as amended (3)
10-a Employment Agreement for C. Dowd Ritter
10-b Form of Executive Severance Agreement for certain Executive Officers
10-c Letter Agreement with Kristen M. Hudak
11 Statement Re: Computation of Earnings per Share
15 Letter Re: Unaudited Interim Financial Information
27 Financial Data Schedule
20
<PAGE>
NOTES TO EXHIBITS
(1) 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, and
Annex A to the Supplement to the Proxy Statement/Prospectus dated May 12,
1994, and filed pursuant to rule 424 (b)(3), incorporated herein by
reference
(2) Filed as Exhibit 3-b to AmSouth's Form 10-Q Quarterly Report for the
quarter ended March 31, 1993, incorporated herein by reference
(3) Filed as Exhibit 3-b to AmSouth's Form 10-Q Quarterly Report for the
quarter ended March 31, 1995, incorporated herein by reference
21
<PAGE>
EXHIBIT 10-A
AMSOUTH BANCORPORATION
EMPLOYMENT AGREEMENT FOR C. DOWD RITTER
This EMPLOYMENT AGREEMENT is made, entered into, and is effective as of
this 15th day of June, 1995 (the "Effective Date"), by and between AmSouth
Bancorporation, a Delaware corporation, (the "Company"), and C. Dowd Ritter
(the "Executive").
WHEREAS, the Executive is presently employed by the Company in the
capacity of President and Chief Operating Officer; and
WHEREAS, the Executive possesses considerable experience and an intimate
knowledge of the business and affairs of the Company, its policies, methods,
personnel, and operations; and
WHEREAS, the Company recognizes that the Executive's contributions have
been substantial and meritorious and, as such, the Executive has demonstrated
unique qualifications to act in an executive capacity for the Company; and
WHEREAS, the Company is desirous of assuring the continued employment of
the Executive in the above stated capacities, and Executive is desirous of
having such assurance;
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements of the parties set forth in this Agreement, and of
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree
as follows:
ARTICLE 1. TERM OF EMPLOYMENT
The Company hereby agrees to employ the Executive and the Executive
hereby agrees to continue to serve the Company, in accordance with the terms and
conditions set forth herein, for an initial period of three (3) years,
commencing as of the Effective Date of this Agreement, as indicated above.
Upon each new day of the three (3) year period of employment from the
Effective Date until the Executive's sixty-second (62nd) birthday, the term of
this Agreement automatically shall be extended for one (1) additional day, to
be added to the end of the then-existing three (3) year term. Accordingly, at
all times prior to (i) the Executive's attaining age 62 and (ii) a notice of
employment termination (or an actual termination), the term of this Agreement
shall be three (3) full years. However, either party may terminate this
Agreement by giving the other party written notice of intent not to renew.
Additionally, the automatic extensions of the term of this Agreement shall
immediately be suspended upon an employment termination by reason of death,
Disability, (as defined in Section 6.2), or Retirement (as defined in Section
6.1), or an
<PAGE>
employment termination made voluntarily by the Executive (other than for Good
Reason as defined in Section 6.6), or involuntarily for Cause (as defined in
Section 6.5). The provisions applicable to such suspensions of the term of this
Agreement are set forth in those Sections pertaining to each of such types of
employment terminations.
In the event the Executive gives notice of employment termination, the
term of this Agreement shall expire upon the ninetieth (90th) day following the
delivery to the Company of such notice of employment termination. Except as
otherwise provided in the following paragraph with respect to a voluntary
termination for Good Reason (defined in Section 6.6 herein), a voluntary
employment termination by the Executive shall result in the termination of the
rights and obligations of the parties under this Agreement; provided, however,
that the terms and provisions of Article 9 shall continue to apply.
In the event the Company desires to involuntarily terminate the
employment of the Executive (for purposes of this Agreement, a voluntary
employment termination by the Executive for Good Reason shall be treated as an
involuntary termination of the Executive's employment without Cause), the
Company shall deliver to the Executive a notice of employment termination, and
the following provisions shall apply:
(a) In the event the involuntary termination is for Cause (defined in
Section 6.5 herein), the term of this Agreement shall terminate on
the ninetieth (90th) day following the delivery to the Executive
of such notice of termination. Such a termination for Cause shall
result in the termination of all rights and obligations of the
parties under this Agreement; provided, however, that the terms
and provisions of Article 9 shall continue to apply, and Section
6.5 shall apply until payments required thereunder have been made.
(b) In the event the involuntary termination is without Cause, the
Executive shall be entitled to receive the severance benefits set
forth in Section 6.4 herein; provided, however, that the terms and
provisions of Article 9 shall continue to apply and Section 6.4
shall apply until payments required thereunder have been made.
ARTICLE 2. POSITION AND RESPONSIBILITIES
During the term of this Agreement, the Executive agrees to serve as
President and Chief Operating Officer of the Company, and as a member of the
Company's Board of Directors if so elected, and at a future higher level
position, if so designated by the Board. In his capacity as President and
Chief Operating Officer of the Company, the Executive shall report directly to
the Chairman and Chief Executive Officer, and shall serve as the second in
command and have management responsibility for a significant portion of the
organization's operating line, as well as staff units. The Executive shall have
the same status, privileges, and responsibilities normally inherent in such
capacities in financial institutions of similar size and character to the
Company. During the term of this agreement, the Executive may be promoted to a
higher level
2
<PAGE>
position such as Chairman and/or Chief Executive Officer. In such event the
Executive shall have the same status, privileges, and responsibilities normally
inherent in such capacities in financial institutions of similar size and
character to the Company.
ARTICLE 3. STANDARD OF CARE
During the term of this Agreement, the Executive agrees to devote
substantially his full time, attention, and energies to the Company's business
and shall not be engaged in any other business activity, whether or not such
business activity is pursued for gain, profit, or other pecuniary advantage.
However, the Executive may serve as a director of other companies so long as
such service is not injurious to the Company, and provided that such service is
approved by the Board of the Company as may be required under the By-Laws of
the Company. The Executive covenants, warrants, and represents that he shall:
(a) Devote his full and best efforts to the fulfillment of his
employment obligations; and
(b) Exercise the highest degree of loyalty and the highest standards
of conduct in the performance of his duties.
This Article 3 shall not be construed as preventing the Executive from
investing assets in such form or manner as will not require his services in the
daily operations of the affairs of the companies in which such investments are
made.
ARTICLE 4. COMPENSATION
As remuneration for all services to be rendered by the Executive during
the term of this Agreement, and as consideration for complying with the
covenants herein, the Company shall pay and provide to the Executive the
following:
4.1 BASE SALARY. The Company shall pay the Executive a Base Salary in an
amount which shall be established from time to time by the Board of Directors
of the Company or the Board's designee; provided, however, that such Base
Salary shall not be less than four hundred sixty thousand dollars ($460,000)
per year and if subsequently increased shall not be less than such increased
amount ("Base Salary"). This Base Salary shall be paid to the Executive in
equal semimonthly installments throughout the year, consistent with the normal
payroll practices of the Company.
The annual Base Salary shall be reviewed at least annually following the
Effective Date of this Agreement, while this Agreement is in force, to
ascertain whether, in the judgment of the Board or the Board's designee, such
Base Salary should be increased, based primarily on the performance of the
Executive during the year. If so increased, the Base Salary as stated above
shall, likewise, be increased for all purposes of this Agreement.
3
<PAGE>
4.2 ANNUAL BONUS. In addition to his salary, the Executive shall be
entitled to receive an opportunity to earn a cash bonus (the "Bonus") under the
AmSouth Bancorporation Executive Incentive Plan established as of January 1,
1995, as amended from time to time (the "Executive Incentive Plan").
4.3 LONG-TERM INCENTIVES. During the term of this Agreement, the
Executive shall be entitled to participate in any and all long-term incentive
programs at a level that is commensurate with his position with the Company.
4.4 RETIREMENT BENEFITS. The Company shall provide to the Executive
participation in all Company qualified defined benefit and defined contribution
retirement plans, subject to the eligibility and participation requirements of
such plans. The Executive's retirement benefits shall not be less than those
that would be provided him under the terms of the Supplemental Retirement Plan
and the Supplemental Thrift Plan, or as such benefits shall be increased,
whether or not such benefits under the Supplemental Retirement Plan and the
Supplemental Thrift Plan shall otherwise be decreased or eliminated. The
obligations of the Company pursuant to this Section 4.4 shall survive the
termination of this Agreement.
4.5 EMPLOYEE BENEFITS. The Company shall provide to the Executive all
benefits to which other executives and employees of the Company are entitled to
receive, as commensurate with the Executive's position, subject to the
eligibility requirements and other provisions of such plans or arrangements.
Such benefits shall include, but not be limited to, group term life insurance,
comprehensive health and major medical insurance, dental and life insurance,
and short-term and long-term disability.
4.6 PERQUISITES. The Company shall provide to the Executive, at the
Company's cost, all perquisites to which other similarly situated executives of
the Company are entitled to receive and such other perquisites which are
suitable to the character of Executive's position with the Company and adequate
for the performance of his duties hereunder.
4.7 RIGHT TO CHANGE PLANS. By reason of Sections 4.5 and 4.6 herein, the
Company shall not be obligated to institute, maintain, or refrain from
changing, amending, or discontinuing any benefit plan, program, or perquisite,
so long as such changes are similarly applicable to executive employees
generally.
ARTICLE 5. EXPENSES
The Company shall pay or reimburse the Executive for all ordinary and
necessary expenses, in a reasonable amount, which the Executive incurs in
performing his duties under this Agreement including, but not limited to,
travel, entertainment, professional dues and subscriptions, and all dues, fees,
and expenses associated with membership in various professional, business, and
civic associations and societies in which the Executive's participation is in
the best interest of the Company.
4
<PAGE>
ARTICLE 6. EMPLOYMENT TERMINATIONS
6.1 TERMINATION DUE TO RETIREMENT OR DEATH. In the event the Executive's
employment is terminated while this Agreement is in force by reason of early or
normal retirement (as defined under the then established rules of the Company's
tax-qualified retirement plan) ("Retirement"),or death, the Executive's
benefits shall be determined in accordance with the Company's retirement,
survivors' benefits, insurance, and other applicable programs of the Company
then in effect. Upon the effective date of such termination, the Company's
obligation under this Agreement to pay and provide to the Executive the
elements of pay described in Sections 4.1, 4.2, and 4.3 shall immediately
expire.
However, the Executive shall receive all other rights and benefits that
he is vested in, pursuant to other plans and programs of the Company. In
addition, subject to any conflicting terms of any short-term incentive program
which would provide for greater benefits following such termination, the Company
shall pay to the Executive (or the Executive's beneficiaries or estate, as
applicable), a pro rata share of his Bonus for the fiscal year in which
employment termination occurs, based on base bonus opportunity (as defined in
the Executive Incentive Plan) for such fiscal year. This pro rata Bonus amount
shall be determined at the sole discretion of the Company's Board of Directors,
as a function of the number of days in such fiscal year prior to the date of
employment termination in relation to the total number of days in such fiscal
year. The pro rata Bonus shall be paid within sixty (60) days of the Effective
Date of employment termination. Also, all unvested stock awards (including, but
not limited to, any stock options and restricted stock) will vest in full on the
date of termination.
6.2 TERMINATION DUE TO DISABILITY. In the event that the Executive
becomes Disabled (as defined below) during the term of this Agreement and is,
therefore, unable to perform his duties as set forth herein for more than ninety
(90) total calendar days during any period of twelve (12) consecutive months, or
in the event of the Board's reasonable expectation that the Executive's
Disability will exist for more than a period of ninety (90) calendar days, the
Company shall have the right to terminate the Executive's active employment as
provided in this Agreement. However, the Board shall deliver written notice to
the Executive of the Company's intent to terminate the Executive's employment
for Disability at least thirty (30) calendar days prior to the effective date of
such termination.
A termination of employment for Disability shall become effective upon
the end of the thirty (30) day notice period, specified above. Upon such
effective date, the Company's obligation to pay and provide to the Executive the
elements of pay described in Sections 4.1, 4.2, and 4.3 shall immediately
expire.
However, the Executive shall receive all rights and benefits that he is
vested in, pursuant to other plans and programs of the Company. In addition,
subject to any conflicting terms of any short-term incentive program which
would provide for greater benefits following such termination, the Company
shall pay to the Executive a pro rata
5
<PAGE>
share of his Bonus for the fiscal year in which employment termination occurs,
based on base bonus opportunity for such fiscal year. This pro rata Bonus amount
shall be determined at the sole discretion of the Company's Board of Directors,
as a function of the number of days in such fiscal year prior to the effective
date of termination for Disability, in relation to the total number of days in
such fiscal year. The pro rata Bonus shall be paid within sixty (60) days of the
effective date of termination for Disability.
Also, all unvested stock awards (including, but not limited to, any
stock options and restricted stock) will vest in full on the date of
termination.
The term "Disability" shall mean, for all purposes of this Agreement,
the incapacity of the Executive, due to injury, illness, disease, or bodily or
mental infirmity, to engage in the performance of substantially all of the usual
duties of employment with the Company as contemplated by Article 2 herein, such
Disability to be determined by the Board of Directors of the Company upon
receipt and in reliance on competent medical advice from one (1) or more
individuals, selected by the Board, who are qualified to give such professional
medical advice. The Executive consents to be examined by those individuals
selected by the Board, who are qualified to give such professional medical
advice.
It is expressly understood that the Disability of the Executive for a
period of ninety (90) calendar days or less in the aggregate during any period
of twelve (12) consecutive months, in the absence of any reasonable expectation
that his Disability will exist for more than such a period of time, shall not
constitute a failure by him to perform his duties hereunder and shall not be
deemed a breach or default, and the Executive shall receive full compensation
for any such period or for any other temporary illness or incapacity during the
term of this Agreement.
6.3 VOLUNTARY TERMINATION BY THE EXECUTIVE. The Executive may terminate
this Agreement at any time by giving the Board of Directors of the Company
written notice of intent to terminate, delivered at least ninety (90) calendar
days prior to the effective date of such termination. This section 6.3 shall
not apply if the Executive terminates employment because of Retirement.
The Company shall pay the Executive his full Base Salary, at the rate
then in effect as provided in Section 4.1 herein, through the effective date of
termination, plus all other benefits to which the Executive has a vested right
at that time (for this purpose, the Executive shall not be paid any Bonus with
respect to the fiscal year in which voluntary termination under this Section 6.3
occurs). In the event that the voluntary termination is for Good Reason, the
terms of Section 6.6 herein shall govern the parties' rights and obligations
hereunder.
6.4 INVOLUNTARY TERMINATION BY THE COMPANY WITHOUT CAUSE. At any time
during the term of this Agreement, the Board may terminate the Executive's
employment, as provided under this Agreement, for reasons other than death,
Disability, Retirement, or for Cause, by notifying the Executive in writing of
the
6
<PAGE>
Company's intent to terminate, at least ninety (90) calendar days prior the
effective date of such termination.
Subject to the terms of Article 7 herein, following the expiration of
the ninety (90) day notice period, the Company shall pay to the Executive a lump
sum cash payment equal to the present value of the sum of the following amounts:
(a) The Base Salary which would have been paid to the Executive
throughout the remaining years of the term of this Agreement;
(b) The annual bonus amount in the year of employment termination,
calculated at the higher of the base bonus opportunity or
anticipated actual, multiplied by the remaining years of the term
of this Agreement;
(c) The annualized long-term incentive award for the year in which
termination occurs, at the higher of the targeted level of award
or anticipated actual, multiplied by the remaining years of the
term of this Agreement; and
(d) The amount of the Executive's annual club dues bonus in the year
of termination, multiplied by the remaining years of the term of
this Agreement.
For purposes of making the present value calculations described above,
the Company's Board shall treat such payments as if they were made at the point
in time in the future when each such payment is scheduled to have been made.
Such present value calculations shall be made at the sole discretion of the
Board, using such assumptions and factors as it deems appropriate.
In addition, the Company shall make a prorated payment of the
Executive's base bonus for the bonus year in which termination occurs,
calculated at the sole discretion of the Company's Board. Payment of the base
bonus shall be made in cash, in one lump sum, at the same time the payments
described above are made.
Also, all unvested stock awards (including, but not limited to, any
stock options and restricted stock) will vest on the date of termination.
Further, subject to the terms of Article 7 herein, the Company shall
continue the Executive's health and welfare benefit coverage for the entire
three (3)-year period following employment termination, at the same cost, and
on the same terms as existed immediately prior to employment termination. The
Company and the Executive thereafter shall have no further obligations under
this Agreement. Notwithstanding the foregoing, in the event the Executive
obtains Comparable Employment, as defined in Article 7 hereof, the Company's
obligation to continue the Executive's health and welfare benefit coverage
pursuant to this Section 6.4 shall immediately cease.
The payments described in this Section 6.4 shall be in part to
compensate the Executive for being subject to the provisions of Article 9
hereafter, even though the
7
<PAGE>
Executive's employment has been terminated without Cause or for Good Reason as
provided in Section 6.6.
Also, the Company shall transfer to the Executive title to the
Executive's Company car, without cost to the Executive, and shall pay to the
Executive a lump sum cash payment in an amount necessary to fully gross-up the
income tax effect of said transfer.
6.5 TERMINATION FOR CAUSE. Nothing in this Agreement shall be construed
to prevent the Board from terminating the Executive's employment under this
Agreement for "Cause."
"Cause" shall be determined by the Board in the exercise of good faith
and reasonable judgment; and shall be defined as the conviction of the Executive
for the commission of an act of fraud, embezzlement, theft, or other criminal
act constituting a felony under U.S. laws involving moral turpitude; or the
gross neglect of the Executive in the performance of any or all material
covenants under this Agreement, for reasons other than the Executive's death,
Disability, or Retirement. The Company's Board of Directors, by majority vote,
shall make the determination of whether Cause exists, after providing the
Executive with notice of the reasons the Board believes Cause may exist, and
after giving the Executive the opportunity to respond to the allegation that
Cause exists.
In the event this Agreement is terminated by the Board for Cause, the
Company shall pay the Executive his Base Salary through the effective date of
the employment termination and the Executive shall immediately thereafter
forfeit all rights and benefits (other than vested benefits) he would otherwise
have been entitled to receive under this Agreement. The Company and the
Executive thereafter shall have no further obligations under this Agreement
provided, however, that the provisions of Article 9 shall continue to apply.
6.6 TERMINATION FOR GOOD REASON. At any time during the term of this
Agreement, the Executive may terminate this Agreement for Good Reason (as
defined below) by giving the Board of Directors of the Company ninety (90)
calendar days written notice of intent to terminate, which notice sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
such termination. The Executive's ability to terminate for Good Reason is
contingent upon his agreement to allow the Company to remedy, within such
ninety (90)-day period, the events constituting Good Reason.
Upon the failure of the Company to remedy the events constituting Good
Reason prior to the expiration of the ninety (90)-day notice period, the Good
Reason termination shall become effective, and the Company shall pay and
provide to the Executive the benefits set forth in Section 6.4 herein (as if
the termination were an involuntary termination without Cause.)
8
<PAGE>
Good Reason shall mean, without the Executive's express prior written
consent, the occurrence of any one or more of the following:
(i) The assignment of the Executive to duties materially inconsistent
with the Executive's authorities, duties, responsibilities, and
status (including titles and reporting requirements) as an officer
of the Company, or a material reduction or alteration in the
nature or status of the Executive's authorities, duties, or
responsibilities from those in effect as of the Effective Date (or
as subsequently increased), other than an insubstantial and
inadvertent act that is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
(ii) The Company's requiring the Executive to be based at a location in
excess of thirty-five (35) miles from the location of the
Executive's principal job location or office as of the Effective
Date, except for required travel on the Company's business to an
extent substantially consistent with the Executive's present
business obligations;
(iii) A reduction by the Company of the Executive's Base Salary as in
effect on the Effective Date, or as the same shall be increased
from time to time;
(iv) An intentional material reduction by the Company of the
Executive's aggregate incentive opportunities under the Company's
short- and long-term incentive programs, as such opportunities
exist on the Effective Date, or as such opportunities may be
increased after the Effective Date. For this purpose, a reduction
in the Executive's incentive opportunities shall be deemed to have
occurred in the event his targeted annualized award opportunities
and/or the degree of probability of attainment of such annualized
award opportunities, are materially diminished from the levels and
probability of attainment that existed as of the Effective Date or
as such opportunity and/or degree of probability have been
increased from time to time;
(v) The failure of the Company to maintain the Executive's relative
level of coverage under the Company's employee benefit or
retirement plans, policies, practices, or arrangements in which
the Executive participates as of the Effective Date, both in terms
of the amount of benefits provided and the relative level of the
executive's participation. For this purpose, the Company may
eliminate and/or modify existing programs and coverage levels;
provided, however, that the Executive's level of coverage under
all such programs must be at least as great as is such coverage
provided to executives who have the same or lesser levels of
reporting responsibilities within the Company's organization;
(vi) The failure of the Company to obtain a satisfactory agreement from
any successor to the Company to assume and agree to perform the
Company's obligations under this Agreement, as contemplated in
Article 11 herein; and
9
<PAGE>
(vii) Any purported termination by the Company of the Executive's
employment that is not effected pursuant to a notice of
termination satisfying the requirements of Article 1 herein, and
for purposes of this Agreement, no such purported termination
shall be effective.
The Executive's right to terminate employment for Good Reason shall not
be affected by the Executive's incapacity due to physical or mental illness. The
Executive's continued employment shall not constitute a consent to, or a waiver
of rights with respect to, any circumstance constituting Good Reason herein.
Upon a termination of the Executive's employment for Good Reason at any
time during the term of this Agreement, the Executive shall be entitled to
receive the same payments and benefits as he is entitled to receive following
an involuntary termination of his employment by the Company without Cause, as
specified in Section 6.4 herein.
ARTICLE 7. DUTY TO MITIGATE
As a condition to receiving the severance benefits described in Section
6.4 (with the exception of the transfer of the Company car and payment of any
taxes related thereto, as described in Section 6.4) or in 6.6 herein, the
Executive agrees that he shall actively seek full-time employment throughout the
period following his employment termination. In the event that, prior to the end
of the third year following the Executive's employment termination, the
Executive obtains "Comparable Employment" (defined below), a pro rata amount of
the severance benefits previously paid to the Executive shall be returned by the
Executive to the Company. The pro rata amount to be repaid by the Executive
shall be determined by multiplying the cash lump sum payment described in
Section 6.4 herein by a fraction, the numerator of which is the number of months
between the date the Executive secures such Comparable Employment and the end of
the three (3)-year period following employment termination, and the denominator
of which is thirty-six (36).
For purposes of this Agreement, "Comparable Employment" shall mean a
full-time executive position which provides the Executive with total
compensation opportunities (determined, for purposes of this Agreement, by
adding base pay, targeted bonus opportunity, and targeted annualized long-term
incentive opportunities) substantially equal to the Executive's total
compensation opportunities which exist as of the Effective Date. The
Compensation Committee shall make the determination of whether "Comparable
Employment" has been obtained.
ARTICLE 8. EXCISE TAX GROSS-UP
8.1 EQUALIZATION PAYMENT. In the event that the Executive becomes
entitled to severance benefits under Section 6.4 or 6.6 herein ("Severance
Benefits"), if any of the Severance Benefits will be subject to the tax (the
"Excise Tax") imposed by Section
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4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any
similar tax that may hereafter be imposed, the Company shall pay to the
Executive in cash an additional amount (the "Gross-Up Payment") such that the
net amount retained by the Executive after deduction of (i) any Excise Tax on
the Severance Benefits and (ii) any Federal, state, and local income tax and
Excise Tax on the Gross-Up Payment provided for by this Section 8.1, shall be
equal to the Severance Benefits. Such payment shall be made by the Company to
the Executive as soon as practicable following the effective date of
termination, but in no event beyond thirty (30) days from such date.
8.2 TAX COMPUTATION. For purposes of determining whether any of the
Severance Benefits will be subject to the Excise Tax and the amounts of such
Excise Tax:
(a) Any other payments or benefits received or to be received by the
Executive in connection with a change in control of the Company or
the Executive's termination of employment (whether pursuant to the
terms of this Plan or any other plan, arrangement, or agreement
with the Company, or with any individual, entity, or group of
individuals or entities (individually and collectively referred to
in this Section 8.2 as "Persons") whose actions result in a change
in control of the Company or any Person affiliated with the
Company or such Persons) shall be treated as "parachute payments"
within the meaning of Section 280G(b)(2) of the Internal Revenue
Code, and all "excess parachute payments" within the meaning of
Code Section 280G(b)(1) of the Code shall be treated as subject to
the Excise Tax, unless in the opinion of tax counsel selected by
the Company's independent auditors and acceptable to the
Executive, such other payments or benefits (in whole or in part)
do not constitute parachute payments, or unless such excess
parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of
Code Section 280G(b)(4) of the Code in excess of the base amount
within the meaning of Section 280G(b)(3) of the Code, or are
otherwise not subject to the excise tax;
(b) The amount of the Severance Benefits which shall be treated as
subject to the Excise Tax shall be equal to the lesser of: (i)
the total amount of the Severance Benefits; or (ii) the amount
of excess parachute payments within the meaning of Code
Section 280G(b)(1) of the Code (after applying clause (a)
above); and
(c) The value of any noncash benefits or any deferred payment or
benefit shall be determined by the Company's independent
auditors in accordance with the principles of Sections
280G(d)(3) and (4) of the Code. The base amount shall be
determined by the Company's independent auditors in accordance
with the principles of sections 280G(d)(3) of the Code.
For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay Federal income taxes at the highest marginal
rate of Federal
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income taxation in the calendar year in which the Gross-Up Payment is to be
made, and state and local income taxes at the highest marginal rate of taxation
in the state and locality of the Executive's residence on the effective date of
employment, net of the maximum reduction in Federal income taxes which could be
obtained from deduction of such state and local taxes.
8.3 SUBSEQUENT RECALCULATION. In the event the Internal Revenue Service
adjusts the computation of the Company under Section 8.1 herein, is adjusted by
the Internal Revenue Service which adjustment becomes binding on the Service,
the Company, and the Executive, so that the Executive did not receive the
greatest net benefit, the Company shall reimburse the Executive for the full
amount necessary to make the Executive whole, plus a market rate of interest,
as determined by the Board of Directors.
ARTICLE 9. NONCOMPETITION
9.1 PROHIBITION ON COMPETITION. Without the prior written consent of the
Company, during the term of this Agreement, and for twenty-four (24) months
following the expiration of this Agreement, the Executive shall not, as an
employee or an officer, engage directly or indirectly in any business or
enterprise which is "in competition" with the Company or its successors or
assigns. For purposes of this Agreement, a business or enterprise will be
deemed to be "in competition" if it is a banking institution, the headquarters
of which is within one hundred (100) miles from the location of the Executive's
principal job location or office at the time of termination of employment.
However, the Executive shall be allowed to purchase and hold for
investment less than three percent (3%) of the shares of any corporation whose
shares are regularly traded on a national securities exchange or in the over-
the-counter market.
9.2 DISCLOSURE OF INFORMATION. The Executive recognizes that he has
access to and knowledge of certain confidential and proprietary information of
the Company which is essential to the performance of his duties under this
Agreement. The Executive will not, during or after the term of his employment by
the Company, in whole or in part, disclose such information to any person, firm,
corporation, association, or other entity for any reason or purpose whatsoever,
nor shall he make use of any such information for his own purposes.
9.3 SPECIFIC PERFORMANCE. The parties recognize that the Company will
have no adequate remedy at law for breach by the Executive of the requirements
of this Article 9 and, in the event of such breach, the Company and the
Executive hereby agree that, in addition to the right to seek monetary damages,
the Company will be entitled to a decree of specific performance, mandamus, or
other appropriate remedy to enforce performance of such requirements.
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ARTICLE 10. INDEMNIFICATION
The Company hereby covenants and agrees to indemnify and hold harmless
the Executive in a manner consistent with the provisions of the Company's
Restated Certificate of Incorporation.
ARTICLE 11. ASSIGNMENT
11.1 ASSIGNMENT BY COMPANY. This Agreement may and shall be assigned or
transferred to, and shall be binding upon and shall inure to the benefit of,
any successor of the Company, and any such successor shall be deemed
substituted for all purposes of the "Company" under the terms of this
Agreement. As used in this Agreement, the term "successor" shall mean any
person, firm, corporation, or business entity which at any time, whether by
merger, purchase, or otherwise, acquires all or substantially all of the assets
or the business of the Company. Notwithstanding such assignment, the Company
shall remain, with such successor, jointly and severally liable for all its
obligations hereunder.
Failure of the Company to obtain the agreement of any successor to be
bound by the terms of this Agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement, and shall immediately entitle
the Executive to compensation from the Company in the same amount and on the
same terms as the Executive would be entitled in the event of an termination of
employment, as provided in Section 6.4 herein.
Except as herein provided, this Agreement may not otherwise be assigned
by the Company.
11.2 ASSIGNMENT BY EXECUTIVE. The services to be provided by the
Executive to the Company hereunder are personal to the Executive, and the
Executive's duties may not be assigned by the Executive; provided, however that
this Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, and administrators,
successors, heirs, distributees, devisees, and legatees. If the Executive dies
while any amounts payable to the Executive hereunder remain outstanding, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee, or other
designee or, in the absence of such designee, to the Executive's estate.
ARTICLE 12. DISPUTE RESOLUTION AND NOTICE
12.1 DISPUTE RESOLUTION. The Executive shall have the right and option
to elect to have any good faith dispute or controversy arising under or in
connection with this Agreement settled by litigation or by arbitration.
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If arbitration is selected, such proceeding shall be conducted before a
panel of three (3) arbitrators sitting in a location selected by the Executive
within fifty (50) miles from the location of his principal place of employment,
in accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the award of the arbitrators in any court
having competent jurisdiction.
All expenses of such litigation or arbitration, including the reasonable
fees and expenses of the legal representative for the Executive, and necessary
costs and disbursements incurred as a result of such dispute or legal
proceeding, and any prejudgment interest, shall be borne by the Company.
12.2 NOTICE. Any notices, requests, demands, or other communications
provided for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to the Executive at the last address he has filed
in writing with the Company or, in the case of the Company, to an executive
officer of the Company, at the Company's principal offices.
ARTICLE 13. MISCELLANEOUS
13.1 ENTIRE AGREEMENT. This Agreement supersedes any prior agreements or
understandings, oral or written, between the parties hereto, or between the
Executive and the Company, with respect to the subject matter hereof, and
constitutes the entire agreement of the parties with respect thereto. Without
limiting the generality of the foregoing sentence, this Agreement completely
replaces and supersedes the terms of the Change in Control Compensation
Agreement, entered into by and between the Company and the Executive on
December 16, 1993, concerning the Executive's entitlement to payments and
benefits arising as a result of a change in control of the Company.
13.2 MODIFICATION. This Agreement shall not be varied, altered,
modified, canceled, changed, or in any way amended except by mutual agreement of
the parties in a written instrument executed by the parties hereto or their
legal representatives.
13.3 SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason,
the remaining provisions of this Agreement shall be unaffected thereby and
shall remain in full force and effect.
13.4 COUNTERPARTS. This Agreement may be executed in one (1) or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.
13.5 TAX WITHHOLDING. The Company may withhold from any benefits payable
under this Agreement all Federal, state, city, or other taxes as may be
required pursuant to any law or governmental regulation or ruling.
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13.6 BENEFICIARIES. The Executive may designate one or more persons or
entities as the primary and/or contingent beneficiaries of any amounts to be
received under this Agreement. Such designation must be in the form of a signed
writing acceptable to the Board or the Board's designee. The Executive may make
or change such designation at any time.
ARTICLE 14. GOVERNING LAW
To the extent not preempted by Federal law, the provisions of this
Agreement shall be construed and enforced in accordance with the laws of the
state of Alabama.
IN WITNESS WHEREOF, the Executive has executed, and the Company
(pursuant to a resolution adopted at a duly constituted meeting of the Company's
Board of Directors) has executed this Agreement, as of __________, 1995.
AMSOUTH BANCORPORATION EXECUTIVE:
By:_____________________________ ________________________
John W. Woods C. Dowd Ritter
Chairman and
Chief Executive Officer
Attest:_________________________
Henry D. Rumble
Senior Vice President
Human Resources Administration
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EXHIBIT 10-B
EXECUTIVE SEVERANCE AGREEMENTS
An Executive Severance Agreement in the form attached hereto has been
entered into with the following executive officers of AmSouth:
Sloan D. Gibson, IV
Kristen M. Hudak
W. Charles Mayer, III
E.W. Stephenson, Jr.
Alfred W. Swan, Jr.
Candice W. Rogers
John W. Woods, Chairman of the Board and Chief Executive Officer of
AmSouth, remains a party to the form of change in control compensation agreement
that is exhibit 10-1 to AmSouth's Form 10-K for the year ended December 31,
1994. C. Dowd Ritter, President and Chief Operating Officer of AmSouth, has
entered into the Employment Agreement that is Exhibit 10-a to this Form 10-Q.
<PAGE>
EXECUTIVE SEVERANCE AGREEMENT
FOR
-----------------------
AmSouth Bancorporation
<PAGE>
<TABLE>
<CAPTION>
CONTENTS
--------------------------------------------------------------------------------
PAGE
<S> <C>
Article 1. Definitions 2
Article 2. Severance Benefits 7
Article 3. Form and Timing of Severance Benefits 10
Article 4. Excise Tax Gross-Up 10
Article 5. The Company's Payment Obligations 12
Article 6. Term of Agreement 13
Article 7. Legal Remedies 13
Article 8. Successors 13
Article 9. Miscellaneous 14
</TABLE>
<PAGE>
AMSOUTH BANCORPORATION
EXECUTIVE SEVERANCE AGREEMENT
THIS AGREEMENT is made and entered into as of this ___ day of _____,
____, by and between AmSouth Bancorporation, a Delaware corporation (hereinafter
referred to as the "Company") and _______ (hereinafter referred to as the
"Executive").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has approved the Company
entering into severance agreements with certain key executives of the Company
and its subsidiaries;
WHEREAS, the Executive is a key executive of the Company or of its
subsidiary;
WHEREAS, should the possibility of a Change in Control of the Company
arise, the Board believes it imperative that the Company and the Board should
be able to rely upon the Executive to continue in his position, and that the
Company should be able to receive and rely upon the Executive's advice, if
requested, as to the best interests of the Company and its shareholders without
concern that the Executive might be distracted by the personal uncertainties
and risks created by the possibility of a Change in Control; and
WHEREAS, should the possibility of a Change in Control arise, in
addition to his regular duties, the Executive may be called upon to assist in
the assessment of such possible Change in Control, advise management and the
Board as to whether such Change in Control would be in the best interests of the
Company and its shareholders, and to take such other actions as the Board might
determine to be appropriate.
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NOW THEREFORE, to assure the Company that it will have the continued
dedication of the Executive and the availability of his advice and counsel
notwithstanding the possibility, threat, or occurrence of a Change in Control
of the Company, and to induce the Executive to remain in the employ of the
Company, and for other good and valuable consideration, the Company and the
Executive agree as follows:
ARTICLE 1. DEFINITIONS
Whenever used in this Agreement, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial letter
of the word is capitalized:
(a) "Agreement" means this Executive Severance Agreement.
(b) "Base Salary" means the salary of record paid to the Executive as
annual salary, excluding amounts received under incentive or other
bonus plans, whether or not deferred.
(c) "Beneficial Owner" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange
Act.
(d) "Beneficiary" means the persons or entities designated or deemed
designated by the Executive pursuant to Section 9.2 herein.
(e) "Board" means the Board of Directors of the Company.
(f) "Cause" shall be determined by the Committee, in exercise of good
faith and reasonable judgment, and shall mean the occurrence of any
one or more of the following:
(i) The willful and continued failure by the Executive to
substantially perform his duties (other than any such failure
resulting from the Executive's Disability), after a written
demand for substantial performance is delivered by the
Committee to the Executive that specifically identifies the
manner in which the Committee believes that the Executive has
not substantially performed his duties, and the Executive has
failed to remedy the situation within thirty (30) calendar
days of receiving such notice; or
(ii) The Executive's conviction for committing an act of fraud,
embezzlement, theft, or other act constituting a felony; or
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(iii) The willful engaging by the Executive in gross misconduct
materially and demonstrably injurious to the Company, as
determined by the Committee. However, no act or failure to
act, on the Executive's part shall be considered "willful"
unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that his action or
omission was in the best interest of the Company.
(g) "Change in Control" of the Company shall be deemed to have occurred
as of the first day that any one or more of the following
conditions shall have been satisfied:
(i) Any Person (other than those Persons in control of the
Company as of the Effective Date, or other than a trustee or
other fiduciary holding securities under an employee benefit
plan of the Company, or a corporation owned directly or
indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of
stock of the Company), who becomes the Beneficial Owner,
directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the combined
voting power of the Company's then outstanding securities; or
(ii) During any period of two (2) consecutive years (not including
any period prior to the execution of this Agreement),
individuals who at the beginning of such period constitute
the Board (and any new Director, whose election by the
Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the Directors then still in office who
either were Directors at the beginning of the period or whose
election or nomination for election was so approved), cease
for any reason to constitute a majority thereof; or
(iii) The stockholders of the Company approve: (A) a plan of
complete liquidation of the Company; or (B) an agreement for
the sale or disposition of all or substantially all the
Company's assets; or (C) a merger, consolidation, or
reorganization of the Company with or involving any other
corporation, other than a merger, consolidation, or
reorganization that would result in the voting securities of
the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity), at
least fifty percent (50%) of the combined voting power of the
voting securities of the Company (or such surviving entity)
outstanding immediately after such merger, consolidation, or
reorganization.
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However, in no event shall a Change in Control be deemed to have
occurred, with respect to the Executive, if the Executive is part
of a purchasing group which consummates the Change-in-Control
transaction. The Executive shall be deemed "part of a purchasing
group" for purposes of the preceding sentence if the Executive is
an equity participant in the purchasing company or group (except
for: (i) passive ownership of less than three percent (3%) of the
stock of the purchasing company; or (ii) ownership of equity
participation in the purchasing company or group which is otherwise
not significant, as determined prior to the Change in Control by a
majority of the nonemployee Directors who were Directors prior to
the transaction, and who continue as Directors following the
transaction).
(h) "Code" means the United States Internal Revenue Code of 1986, as
amended.
(i) "Committee" means the Executive Compensation and Benefits Committee
of the Board, or any other committee appointed by the Board to
perform the functions of the Executive Compensation and Benefits
Committee.
(j) "Company" means AmSouth Bancorporation, a Delaware corporation
(including any and all subsidiaries), or any successor thereto as
provided in Article 8 herein.
(k) "Disability" means permanent and total disability, within the
meaning of Code Section 22(e)(3), as determined by the Committee in
the exercise of good faith and reasonable judgment, upon receipt of
and in reliance on sufficient competent medical advice from one or
more individuals, selected by the Committee, who are qualified to
give professional medical advice.
(l) "Effective Date" is _______.
(m) "Effective Date of Termination" means the date on which a
Qualifying Termination occurs which triggers the payment of
Severance Benefits hereunder.
(n) "Exchange Act" means the United States Securities Exchange Act of
1934, as amended.
(o) "Executive" means _______.
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<PAGE>
(p) "Good Reason" means, without the Executive's express written
consent, the occurrence after a Change in Control of the Company of
any one or more of the following:
(i) The assignment of the Executive to duties materially
inconsistent with the Executive's authorities, duties,
responsibilities, and status (including titles and reporting
requirements) as an officer of the Company, or a material
reduction or alteration in the nature or status of the
Executive's authorities, duties, or responsibilities from
those in effect as of ninety (90) days prior to the Change in
Control, other than an insubstantial and inadvertent act that
is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(ii) The Company's requiring the Executive to be based at a
location in excess of thirty-five (35) miles from the
location of the Executive's principal job location or office
immediately prior to the Change in Control; except for
required travel on the Company's business to an extent
substantially consistent with the Executive's present
business obligations;
(iii) A reduction by the Company of the Executive's Base Salary as
in effect on the Effective Date, or as the same shall be
increased from time to time;
(iv) An intentional, material reduction by the Company of the
Executive's aggregate incentive opportunities under the
Company's short- and long-term incentive programs, as such
opportunities exist on the Effective Date, or as such
opportunities may be increased after the Effective Date. For
this purpose, a reduction in the Executive's incentive
opportunities shall be deemed to have occurred in the event
his annualized base bonus and targeted long-term incentive
award opportunities and/or the degree of probability of
attainment of such annualized award opportunities, are
materially diminished from the levels and probability of
attainment that existed as of the Effective Date;
(v) The failure of the Company to maintain the Executive's
relative level of coverage under the Company's employee
benefit or retirement plans, policies, practices, or
arrangements in which the Executive participates as of the
Effective Date, both in terms of the amount of benefits
provided and the relative level of the executive's
participation. For this purpose, the Company may eliminate
and/or modify existing programs
5
<PAGE>
and coverage levels; provided, however, that the Executive's
level of coverage under all such programs must be at least as
great as is such coverage provided to executives who have the
same or lesser levels of reporting responsibilities within
the Company's organization;
(vi) The failure of the Company to obtain a satisfactory agreement
from any successor to the Company to assume and agree to
perform the Company's obligations under this Agreement, as
contemplated in Article 8 herein; and
(vii) Any purported termination by the Company of the Executive's
employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 2.8
herein, and for purposes of this Agreement, no such purported
termination shall be effective.
The Executive's right to terminate employment for Good Reason shall
not be affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any
circumstance constituting Good Reason herein.
(q) "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a "group" as defined in Section 13(d).
(r) "Qualifying Termination" means any of the events described in
Section 2.3 herein, the occurrence of which triggers the payment of
Severance Benefits hereunder.
(s) "Severance Benefits" means the payment of severance compensation as
provided in Section 2.4 herein.
(t) "Severance Multiplier" means the lesser of: (i) _________
(________); or (ii) a fraction, the numerator of which is the
number of full months between the effective date of the Executive's
Qualifying Termination and the Executive's sixty-fifth (65th)
birthday, and the denominator of which is twelve (12). For this
purpose, the Severance Multiplier following the attainment of age
sixty-five (65) shall be zero (0) in all cases.
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<PAGE>
ARTICLE 2. SEVERANCE BENEFITS
2.1. RIGHT TO SEVERANCE BENEFITS. The Executive shall be entitled to
receive from the Company Severance Benefits as described in Section 2.4 herein,
if there has been a Change in Control of the Company and if, within twenty-four
(24) calendar months thereafter, the Executive's employment with the Company
shall end for any reason specified in Section 2.3 herein.
The Executive shall not be entitled to receive Severance Benefits if he
is terminated for Cause, or if his employment with the Company ends due to
death, Disability, retirement on or after early retirement age (as defined under
the then established rules of the Company's tax-qualified retirement plan
applicable to the Executive), or due to a voluntary termination of employment by
the Executive without Good Reason.
2.2. SERVICES DURING CERTAIN EVENTS. In the event a Person begins a
tender or exchange offer, circulates a proxy to shareholders of the Company, or
takes other steps seeking to effect a Change in Control, the Executive agrees
that he will not voluntarily leave the employ of the Company and will render
services until such Person has abandoned or terminated his or its efforts to
effect a Change in Control, or until six (6) months after a Change in Control
has occurred; provided, however, that the Company may terminate the Executive
for Cause at any time, and the Executive may terminate his employment any time
after the Change in Control for Good Reason.
2.3. QUALIFYING TERMINATION. The occurrence of any one or more of the
following events within twenty-four (24) calendar months after a Change in
Control of the Company shall trigger the payment of Severance Benefits to the
Executive under this Agreement:
(a) An involuntary termination of the Executive's employment by
the Company for reasons other than Cause;
(b) A voluntary termination of employment by the Executive for
Good Reason;
(c) A successor company fails or refuses to assume the Company's
obligations under this Agreement, as required by Article 8
herein; or
(d) The Company or any successor company breaches any of the
provisions of this Agreement.
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2.4. DESCRIPTION OF SEVERANCE BENEFITS. In the event that the
Executive becomes entitled to receive Severance Benefits, as provided in
Sections 2.1 and 2.3 herein, the Company shall pay to the Executive and provide
him with the following:
(a) An amount equal to the Severance Multiplier times the highest
rate of the Executive's annual Base Salary in effect at any
time up to and including the Effective Date of Termination.
(b) An amount equal to the Severance Multiplier times the greater
of: (i) the Executive's average annual bonus earned over the
three (3) full fiscal years prior to the Effective Date of
Termination; or (ii) the Executive's base bonus opportunity
established under the AmSouth Bancorporation _______ Incentive
Plan or its successor, for the bonus plan year in which the
Executive's Effective Date of Termination occurs.
(c) An amount equal to the Severance Multiplier times the sum of:
(i) the Executive's annual club dues bonus; plus (ii) the
Executive's annual automobile allowance, for the year in which
the Executive's Effective Date of Termination occurs.
(d) An amount equal to the Executive's unpaid Base Salary, a pro
rata portion of the Executive's base bonus opportunity for the
bonus plan year in which termination occurs (to be determined
at the discretion of the Compensation Committee), and accrued
vacation pay through the Effective Date of Termination.
(e) A continuation of all benefits pursuant to any and all welfare
benefit plans under which the Executive and/or the Executive's
family is eligible to receive benefits and/or coverage as of
the effective date of the Change in Control, including, but
not limited to, group life insurance, hospitalization,
disability, medical and dental plans. Such benefits shall be
provided to the Executive at the same premium cost, and at the
same coverage level, as in effect as of the Executive's
Effective Date of Termination.
The welfare benefits described in this Subsection 2.4(e) shall
continue following the Effective Date of Termination for the
number of years equal to the Severance Multiplier; provided,
however, that such benefits shall be discontinued prior to the
end of such period in the event the Executive receives
substantially similar benefits from a subsequent employer, as
determined by the Committee.
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(f) A lump sum cash payment of the actuarial present value
equivalent of the aggregate benefits accrued by the Executive
as of the Effective Date of Termination under the terms of the
Supplemental Retirement Plan. For this purpose, such benefits
shall be calculated under the assumption that the Executive's
employment continued following the Effective Date of
Termination for the number of years equal to the Severance
Multiplier (i.e., additional years of service credits and age
credits shall be added); provided, however, that for purposes
of determining "final average pay" under the benefit
calculation, the Executive's actual pay history as of the
Effective Date of Termination shall be used. Further, the
payment provided under this Subsection 2.4(f) shall be made in
lieu of, and shall completely supercede and replace the
Executive's benefits payable under the AmSouth Bancorporation
Supplemental Retirement Plan.
(g) A lump sum cash payment of the aggregate benefits accrued by
the Executive as of the Effective Date of Termination under
the terms of the Supplemental Thrift Plan. The payment
provided under this Subsection 2.4(g) shall be made in lieu
of, and shall completely supersede and replace the Executive's
benefits payable under the AmSouth Bancorporation Supplemental
Thrift Plan.
(h) A lump sum cash payment of the entire balance of the
Executive's compensation which has been deferred under the
AmSouth Bancorporation _______ Incentive Plan or its successor
together with all interest that has been credited with respect
to such deferred compensation balance.
(i) A lump sum cash payment of any relocation benefits accrued by
the Executive under the relocation policy of the Company or
its successor as are available to employees in the same class
or category as the Executive immediately prior to the Change
in Control.
2.5. TERMINATION FOR TOTAL AND PERMANENT DISABILITY. Following a
Change in Control of the Company, if the Executive's employment is terminated
due to Disability, the Executive shall receive his Base Salary through the
Effective Date of Termination, at which point in time the Executive's benefits
shall be determined in accordance with the Company's retirement, insurance, and
other applicable plans and programs then in effect.
9
<PAGE>
2.6. TERMINATION FOR RETIREMENT OR DEATH. Following a Change in Control
of the Company, if the Executive's employment is terminated by reason of his
retirement (as defined under the then-established rules of the Company's tax-
qualified retirement plan), or death, the Executive's benefits shall be
determined in accordance with the Company's retirement, survivor's benefits,
insurance, and other applicable programs of the Company then in effect.
2.7. TERMINATION FOR CAUSE OR BY THE EXECUTIVE OTHER THAN FOR GOOD
REASON. Following a Change in Control of the Company, if the Executive's
employment is terminated either: (i) by the Company for Cause; or (ii) by the
Executive other than for Good Reason, the Company shall pay the Executive his
full Base Salary and accrued vacation through the Effective Date of Termination,
at the rate then in effect, plus all other amounts to which the Executive is
entitled under any compensation plans of the Company, at the time such payments
are due, and the Company shall have no further obligations to the Executive
under this Agreement.
2.8. NOTICE OF TERMINATION. Any termination by the Company for Cause
or by the Executive for Good Reason shall be communicated by Notice of
Termination to the other party. For purposes of this Agreement, a "Notice of
Termination" shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon, and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated.
ARTICLE 3. FORM AND TIMING OF SEVERANCE BENEFITS
3.1. FORM AND TIMING OF SEVERANCE BENEFITS. The Severance Benefits
described in Sections 2.4(a), 2.4(b), 2.4(c), 2.4(d), 2.4(f), 2.4(g), 2.4(h),
and 2.4(i) herein shall be paid in cash to the Executive in a single lump sum as
soon as practicable following the Effective Date of Termination, but in no event
beyond thirty (30) days from such date.
3.2. WITHHOLDING OF TAXES. The Company shall be entitled to withhold
from any amounts payable under this Agreement all taxes as legally shall be
required (including, without limitation, any United States Federal taxes, and
any other state, city, or local taxes).
ARTICLE 4. EXCISE TAX GROSS-UP
4.1 EQUALIZATION PAYMENT. In the event that the Executive becomes
entitled to Severance Benefits, if any of the Severance Benefits will be subject
to the tax (the "Excise Tax") imposed by Section 4999 of the Code (or any
similar tax that may hereafter be imposed), the Company shall pay to the
Executive in cash an additional
10
<PAGE>
amount (the "Gross-Up Payment") such that the net amount retained by the
Executive after deduction of any Excise Tax on the Severance Benefits and any
Federal, state, and local income tax and Excise Tax upon the Gross-Up Payment
provided for by this Section 4.1, shall be equal to the Severance Benefits. Such
payment shall be made by the Company to the Executive as soon as practicable
following the Effective Date of Termination, but in no event beyond thirty (30)
days from such date.
4.2 TAX COMPUTATION. For purposes of determining whether any of the
Severance Benefits will be subject to the Excise Tax and the amounts of such
Excise Tax:
(a) Any other payments or benefits received or to be received by
the Executive in connection with a Change in Control of the
Company or the Executive's termination of employment (whether
pursuant to the terms of this Plan or any other plan,
arrangement, or agreement with the Company, or with any Person
whose actions result in a Change in Control of the Company or
any Person affiliated with the Company or such Persons) shall
be treated as "parachute payments" within in the meaning of
Section 280G(b)(2) of the Code, and all "excess parachute
payments" within the meaning of Section 280G(b)(1) shall be
treated as subject to the excise tax, unless in the opinion of
tax counsel selected by the Company's independent auditors and
acceptable to the Executive, such other payments or benefits
(in whole or in part) do not constitute parachute payments, or
unless such excess parachute payments (in whole or in part)
represent reasonable compensation for services actually
rendered within the meaning of Section 280G(b)(4) of the Code
in excess of the base amount within the meaning of Section
280G(b)(3) of the Code, or are otherwise not subject to the
excise tax;
(b) The amount of the Severance Benefits which shall be treated as
subject to the Excise Tax shall be equal to the lesser of: (i)
the total amount of the Severance Benefits; or (ii) the amount
of excess parachute payments within the meaning of Section
280G(b)(1) (after applying clause (a) above); and
(c) The value of any noncash benefits or any deferred payment or
benefit shall be determined by the Company's independent
auditors in accordance with the principles of Sections
280G(d)(3) and (4) of the Code.
11
<PAGE>
For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay Federal income taxes at the highest marginal
rate of Federal income taxation in the calendar year in which the Gross-Up
Payment is to be made, and state and local income taxes at the highest marginal
rate of taxation in the state and locality of the Executive's residence on the
Effective Date of Termination, net of the maximum reduction in Federal income
taxes which could be obtained from deduction of such state and local taxes.
4.3 SUBSEQUENT RECALCULATION. In the event the Internal Revenue
Service adjusts the computation of the Company under Section 4.2 herein, so that
the Executive did not receive the greatest net benefit, the Company shall
reimburse the Executive for the full amount necessary to make the Executive
whole, plus an appropriate market rate of interest, as determined by the
Company's independent auditors.
ARTICLE 5. THE COMPANY'S PAYMENT OBLIGATION
5.1 PAYMENT OBLIGATIONS ABSOLUTE. The Company's obligation to make
the payments and the arrangements provided for herein shall be absolute and
unconditional, and shall not be affected by any circumstances, including,
without limitation, any offset, counterclaim, recoupment, defense, or other
right which the Company may have against the Executive or anyone else. All
amounts payable by the Company hereunder shall be paid without notice or demand.
Each and every payment made hereunder by the Company shall be final, and the
Company shall not seek to recover all or any part of such payment from the
Executive or from whomsoever may be entitled thereto, for any reasons
whatsoever.
The Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any provision of
this Agreement, and the obtaining of any such other employment shall in no event
effect any reduction of the Company's obligations to make the payments and
arrangements required to be made under this Agreement, except to the extent
provided in Section 2.4(e) herein.
5.2 CONTRACTUAL RIGHTS TO BENEFITS. This Agreement establishes and
vests in the Executive a contractual right to the benefits to which he is
entitled hereunder. However, nothing herein contained shall require or be deemed
to require, or prohibit or be deemed to prohibit, the Company to segregate,
earmark, or otherwise set aside any funds or other assets, in trust or
otherwise, to provide for any payments to be made or required hereunder.
12
<PAGE>
ARTICLE 6. TERM OF AGREEMENT
This Agreement will commence on the Effective Date and shall terminate
on ________; provided however that this Agreement shall be extended
automatically for one (1) additional year at the end of this initial term and at
the end of each additional year thereafter, unless the Committee delivers
written notice twelve (12) months prior to the end of such term, or extended
term, to the Executive, that the Agreement will not be extended. In such case,
the Agreement will terminate at the end of the term, or extended term, then in
progress.
However, in the event a Change in Control occurs during the original or
any extended term, this Agreement will remain in effect for the longer of: (i)
twenty-four (24) months beyond the month in which such Change in Control
occurred; or (ii) until all obligations of the Company hereunder have been
fulfilled, and until all benefits required hereunder have been paid to the
Executive.
ARTICLE 7. LEGAL REMEDIES
7.1 PAYMENT OF LEGAL FEES. To the extent permitted by law, the
Company shall pay all legal fees, costs of litigation, prejudgment interest, and
other expenses incurred in good faith by the Executive as a result of the
Company's refusal to provide the Severance Benefits to which the Executive
becomes entitled under this Agreement, or as a result of the Company's
contesting the validity, enforceability, or interpretation of this Agreement, or
as a result of any conflict between the parties pertaining to this Agreement.
7.2 ARBITRATION. The Executive shall have the right and option to
elect (in lieu of litigation) to have any dispute or controversy arising under
or in connection with this Agreement settled by arbitration, conducted before a
panel of three (3) arbitrators sitting in a location selected by the Executive
within fifty (50) miles from the location of his job with the Company, in
accordance with the rules of the American Arbitration Association then in
effect.
Judgment may be entered on the award of the arbitrator in any court
having proper jurisdiction. All expenses of such arbitration, including the fees
and expenses of the counsel for the Executive, shall be borne by the Company.
ARTICLE 8. SUCCESSORS
The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) of all or substantially all of
the business and/or assets of the Company or of any division or subsidiary
thereof to expressly assume and agree to perform the Company's obligations under
this Agreement in the same manner and to the same extent that the Company would
be required to perform them if no such succession had taken place. Failure of
the Company to obtain such assumption and agreement prior to the effective date
of any such succession shall be a breach of this
13
<PAGE>
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as he would be entitled to hereunder if he
had terminated his employment with the Company voluntarily for Good Reason. The
date on which any such succession becomes effective shall be deemed the
Effective Date of Termination.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees, and legatees. If the Executive should
die while any amount would still be payable to him hereunder had he continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement, to the Executive's Beneficiary. If
the Executive has not named a Beneficiary, then such amounts shall be paid to
the Executive's devisee, legatee, or other designee, or if there is no such
designee, to the Executive's estate.
ARTICLE 9. MISCELLANEOUS
9.1 EMPLOYMENT STATUS. The Executive and the Company acknowledge
that, except as may be provided under any other agreement between the Executive
and the Company, the employment of the Executive by the Company is "at will,"
and, prior to the effective date of a Change in Control, may be terminated by
either the Executive or the Company at any time, subject to applicable law. Upon
a termination of the Executive's employment prior to the effective date of a
Change in Control, there shall be no further rights under this Agreement;
provided, however, that if such an employment termination shall arise in
connection with, or in anticipation of, a Change in Control, then the
Executive's rights shall be the same as if the termination had occurred within
two (2) years following a Change in Control.
9.2 BENEFICIARIES. The Executive may designate one or more persons
or entities as the primary and/or contingent Beneficiaries of any Severance
Benefits owing to the Executive under this Agreement. Such designation must be
in the form of a signed writing acceptable to the Committee. The Executive may
make or change such designation at any time.
9.3 ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the Company and the Executive with respect to the subject
matter hereof.
9.4 GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular, and the singular shall include the plural.
14
<PAGE>
9.5 SEVERABILITY. In the event any provision of this Agreement shall
be held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Agreement, and the Agreement shall be
construed and enforced as if the illegal or invalid provision had not been
included. Further, the captions of this Agreement are not part of the provisions
hereof and shall have no force and effect.
9.6 MODIFICATION. No provision of this Agreement may be modified,
waived, or discharged unless such modification, waiver, or discharge is agreed
to in writing and signed by the Executive and by an authorized member of the
Committee, or by the respective parties' legal representatives and successors.
9.7 APPLICABLE LAW. To the extent not preempted by the laws of the
United States, the laws of the state of Alabama shall be the controlling law in
all matters relating to this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on this
________ day of _________, 1995.
AMSOUTH BANCORPORATION EXECUTIVE
By:____________________________ _________________________
JOHN W. WOODS
CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
Attest:________________________
15
<PAGE>
EXHIBIT 10-C
[LETTERHEAD OF AMSOUTH BANCORPORATION APPEARS HERE]
March 24, 1995
Ms. Kristen M. Hudak
940 Andora Avenue
Coral Gables, FL 33146
Dear Kristen:
In consideration for your acceptance of the position of Senior Executive Vice
President and Chief Financial Officer of AmSouth Bancorporation and AmSouth Bank
of Alabama ("AmSouth"), AmSouth hereby agrees as follows:
If AmSouth terminates your employment without Cause (as defined below) within
two years of your first day of employment by AmSouth, AmSouth will pay you a
lump sum payment equal to two times the sum of (i) your base salary for the year
in which your employment with AmSouth is terminated, and (ii) your base bonus
opportunity under the Executive Incentive Plan for the year in which your
employment terminated.
Termination for "Cause" shall mean termination for any of the following reasons:
(a) your willful and continued refusal substantially to perform your duties with
AmSouth (other than a refusal resulting from incapacity due to physical or
mental illness) after a written demand for substantial performance is delivered
to you by the Chief Executive Officer or Chief Operating Officer of AmSouth, (b)
your conviction of a crime involving dishonesty which was committeed during
your employment with AmSouth, or (c) your removal or suspension by any bank
supervisory authority pursuant to federal or state law.
Nothing in this letter is intended to constitute a contract of employment or to
prevent AmSouth from terminating your employment at any time.
Please sign below and return to me.
Sincerely,
/s/ David B. Edmonds /s/ C. Dowd Ritter
----------------------------- ------------------------------------
David B. Edmonds C. Dowd Ritter
Executive Vice President President and Chief Operating Officer
Human Resources Director AmSouth Bancorporation and
AmSouth Bancorporation and AmSouth Bank of Alabama
AmSouth Bank of Alabama
DBE/saa
I hereby agree to the terms outlined in this letter.
/s/ Kristen M. Hudak
-------------------------------------
Kristen M. Hudak
<PAGE>
EXHIBIT 11
AMSOUTH BANCORPORATION
STATEMENT REGARDING COMPUTATION OF EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
SIX MONTHS THREE MONTHS
ENDED JUNE 30 ENDED JUNE 30
------------------- -------------------
1995 1994 1995 1994
--------- --------- --------- ---------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net income............................. $ 80,968 $ 81,874 $ 40,858 $ 42,900
========= ========= ========= =========
Average shares of common stock out-
standing.............................. 58,199 54,558 58,293 54,782
========= ========= ========= =========
Earnings per common share.............. $ 1.39 $ 1.50 $ 0.70 $ 0.78
========= ========= ========= =========
</TABLE>
<PAGE>
Exhibit 15--Letter Re: Unaudited Interim Financial Information
Board of DirectorsAmSouth Bancorporation
We are aware of the incorporation by reference in the following Registration
Statements and in their related Prospectuses, of our report dated August 10,
1995, relating to the unaudited consolidated financial statements of AmSouth
Bancorporation and subsidiaries which are included in its Form 10-Q for the
quarter ended June 30, 1995:
Form S-3 No. 33-55683 pertaining to the Dividend Reinvestment and Common
Stock Purchase Plan;
Form S-8 No. 33-52243 pertaining to the assumption by AmSouth
Bancorporation of FloridaBank Stock Option Plan and FloridaBank Stock
Option Plan-1993;
Form S-8 No. 33-52113 pertaining to the 1989 Long Term Incentive
Compensation Plan;
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. 2-97464 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;
Form S-8 No. 33-18653 pertaining to the 1987 Substitute Stock Option Plan;
and,
Form S-8 No. 33-58777 pertaining to the Director Restricted Stock 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 LLP
August 10, 1995
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
The Consolidated Statement of Condition, the Consolidated Statement of Earnings,
and Tables 2, 7, and 8 of Item 2 of the AmSouth Bancorporation Form 10-Q for the
quarterly period ended June 30, 1995.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 684,354
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 6,750
<TRADING-ASSETS> 2,193
<INVESTMENTS-HELD-FOR-SALE> 433,480
<INVESTMENTS-CARRYING> 3,205,291
<INVESTMENTS-MARKET> 3,217,044
<LOANS> 11,989,032
<ALLOWANCE> 179,002
<TOTAL-ASSETS> 17,004,755
<DEPOSITS> 13,471,236
<SHORT-TERM> 1,662,262
<LIABILITIES-OTHER> 182,427
<LONG-TERM> 328,247
<COMMON> 59,869
0
0
<OTHER-SE> 1,300,714
<TOTAL-LIABILITIES-AND-EQUITY> 17,004,755
<INTEREST-LOAN> 499,042
<INTEREST-INVEST> 126,072
<INTEREST-OTHER> 4,058
<INTEREST-TOTAL> 629,172
<INTEREST-DEPOSIT> 271,147
<INTEREST-EXPENSE> 336,959
<INTEREST-INCOME-NET> 292,213
<LOAN-LOSSES> 20,651
<SECURITIES-GAINS> 196
<EXPENSE-OTHER> 276,259
<INCOME-PRETAX> 126,834
<INCOME-PRE-EXTRAORDINARY> 126,834
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 80,968
<EPS-PRIMARY> 1.39
<EPS-DILUTED> 0
<YIELD-ACTUAL> 3.87
<LOANS-NON> 96,111
<LOANS-PAST> 34,663
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 171,167
<CHARGE-OFFS> 20,994
<RECOVERIES> 6,425
<ALLOWANCE-CLOSE> 179,002
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
