<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 30, COMMISSION FILE NUMBER 1-7476
1997
AMSOUTH BANCORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 63-0591257
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
35203
AMSOUTH - SONAT TOWER (ZIP CODE)
1900 FIFTH AVENUE NORTH
BIRMINGHAM, ALABAMA
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
(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 PERIOD 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, 1997 AMSOUTH BANCORPORATION HAD 80,616,245 SHARES OF COMMON
STOCK OUTSTANDING.
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<PAGE>
AMSOUTH BANCORPORATION
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Consolidated Statement of Condition--June 30, 1997, December 31,
1996,
and June 30, 1996................................................ 3
Consolidated Statement of Earnings--Six months and three months
ended
June 30, 1997 and 1996........................................... 4
Consolidated Statement of Shareholders' Equity--Six months ended
June 30, 1997.................................................... 5
Consolidated Statement of Cash Flows--Six months ended June 30,
1997
and 1996......................................................... 6
Notes to Consolidated Financial Statements........................ 7
Independent Accountants' Review Report............................ 9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of
Operations....................................................... 10
Part II. Other Information
Item 1. Legal Proceedings............................................. 20
Item 4. Submission of Matters to a Vote of Security Holders........... 20
Item 5. Other Information............................................. 21
Item 6. Exhibits and Reports on Form 8-K.............................. 21
Signatures............................................................... 22
Exhibit Index............................................................ 23
</TABLE>
Forward Looking Information. This Quarterly Report on Form 10-Q contains
certain forward looking statements with respect to the adequacy of the
allowance for loan losses and the effect of legal proceedings on AmSouth's
financial condition and results of operations. These forward looking
statements involve certain risks, uncertainties, estimates and assumptions by
management.
Various factors could cause actual results to differ materially from those
contemplated by such forward looking statements. With respect to the adequacy
of the allowance for loan losses, these factors include the rate of growth of
the economy, especially in the Southeast, the relative strength and weakness
in the consumer and commercial credit sectors and in the real estate markets
and the performance of the stock and bond markets. With regard to the effect
of legal proceedings, various uncertainties are discussed in "Item 1. Legal
Proceedings." Moreover, the outcome of litigation is inherently uncertain and
depends on judicial interpretations of law and the findings of judges and
juries.
2
<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
1997 1996 1996
----------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Cash and due from banks................. $ 639,588 $ 648,494 $ 553,049
Federal funds sold and securities
purchased under agreements to resell... 3,075 15,000 7,575
Trading securities...................... 3,790 3,879 3,603
Available-for-sale securities........... 2,264,214 2,290,478 2,514,195
Held-to-maturity securities (market
value of $2,475,229, $2,649,481 and
$2,737,124, respectively).............. 2,475,095 2,644,706 2,770,228
Mortgage loans held for sale............ 44,857 60,582 115,742
Loans................................... 12,203,520 12,168,572 11,613,277
Less: Allowance for loan losses......... 179,081 179,049 178,724
Unearned income....................... 85,880 88,326 69,946
----------- ----------- -----------
Net loans............................ 11,938,559 11,901,197 11,364,607
Premises and equipment, net............. 314,898 301,592 287,489
Customers' acceptance liability......... 2,059 3,190 3,731
Accrued interest receivable and other
assets................................. 667,196 538,146 520,228
----------- ----------- -----------
$18,353,331 $18,407,264 $18,140,447
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits and interest-bearing liabili-
ties:
Deposits:
Noninterest-bearing demand............ $ 1,912,532 $ 1,951,543 $ 1,822,694
Interest-bearing demand............... 3,809,161 3,599,987 3,601,166
Savings............................... 1,028,198 1,068,555 1,035,475
Time.................................. 5,017,586 5,073,387 5,650,684
Certificates of deposit of $100,000 or
more................................. 846,209 774,127 849,113
----------- ----------- -----------
Total deposits....................... 12,613,686 12,467,599 12,959,132
Federal funds purchased and securities
sold under agreements to repurchase... 1,132,381 1,872,286 1,675,240
Other borrowed funds................... 1,736,941 1,025,383 1,216,612
Long-term Federal Home Loan Bank ad-
vances................................ 798,245 1,023,729 284,079
Other long-term debt................... 436,970 411,946 425,779
----------- ----------- -----------
Total deposits and interest-bearing
liabilities......................... 16,718,223 16,800,943 16,560,842
Acceptances outstanding................. 2,059 3,190 3,731
Accrued expenses and other liabilities.. 250,276 207,302 183,802
----------- ----------- -----------
Total liabilities.................... 16,970,558 17,011,435 16,748,375
----------- ----------- -----------
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--90,033,326, 90,034,023 and
90,042,911 shares, respectively...... 90,033 90,034 90,043
Capital surplus........................ 562,971 562,459 559,170
Retained earnings...................... 918,340 858,329 838,846
Cost of common stock in treasury--
7,968,502, 5,997,737 and 5,176,152
shares, respectively.................. (201,270) (128,889) (101,267)
Deferred compensation on restricted
stock................................. (11,050) (10,400) (4,588)
Unrealized gains on available-for-sale
securities, net of deferred taxes..... 23,749 24,296 9,868
----------- ----------- -----------
Total shareholders' equity........... 1,382,773 1,395,829 1,392,072
----------- ----------- -----------
$18,353,331 $18,407,264 $18,140,447
=========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
AMSOUTH BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS THREE MONTHS
ENDED JUNE 30 ENDED JUNE 30
------------------- -------------------
1997 1996 1997 1996
--------- --------- --------- ---------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
REVENUE FROM EARNING ASSETS
Loans................................. $ 517,350 $ 498,480 $ 263,182 $ 247,651
Available-for-sale securities......... 77,245 79,384 39,789 40,912
Held-to-maturity securities........... 87,173 85,497 42,941 45,276
Trading securities.................... 53 89 29 48
Mortgage loans held for sale.......... 985 3,468 498 2,016
Federal funds sold and securities
purchased under agreements to
resell............................... 483 756 182 392
--------- --------- --------- ---------
Total revenue from earning assets.... 683,289 667,674 346,621 336,295
--------- --------- --------- ---------
INTEREST EXPENSE
Interest-bearing demand deposits...... 56,288 59,407 29,238 29,051
Savings deposits...................... 15,075 13,581 7,471 6,899
Time deposits......................... 140,133 166,656 70,548 83,283
Certificates of deposit of $100,000 or
more................................. 23,652 25,950 12,444 12,602
Federal funds purchased and securities
sold under agreements to repurchase.. 39,327 44,303 20,037 22,483
Other borrowed funds.................. 31,008 19,014 18,054 11,430
Long-term Federal Home Loan Bank
advances............................. 25,127 4,880 10,977 2,468
Other long-term debt.................. 15,886 16,023 8,226 7,924
--------- --------- --------- ---------
Total interest expense............... 346,496 349,814 176,995 176,140
--------- --------- --------- ---------
NET INTEREST INCOME................... 336,793 317,860 169,626 160,155
Provision for loan losses............. 35,517 29,169 17,800 14,049
--------- --------- --------- ---------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES...................... 301,276 288,691 151,826 146,106
--------- --------- --------- ---------
NONINTEREST REVENUES
Service charges on deposit accounts... 48,749 47,007 24,418 23,878
Trust income.......................... 29,979 27,899 15,184 14,418
Consumer investment services income... 11,269 7,811 5,932 4,323
Credit card income.................... 7,269 6,902 3,715 3,723
Interchange income.................... 5,666 4,003 2,998 2,320
Mortgage administration fees.......... 2,943 1,831 1,659 709
Letters of credit income.............. 4,048 3,954 1,825 1,920
Portfolio income...................... 5,308 3,952 2,744 2,076
Other noninterest revenues............ 14,275 11,143 7,349 6,114
--------- --------- --------- ---------
Total noninterest revenues........... 129,506 114,502 65,824 59,481
--------- --------- --------- ---------
NONINTEREST EXPENSES
Salaries and employee benefits........ 122,536 114,354 61,377 57,116
Net occupancy expense................. 27,805 26,299 14,092 13,108
Equipment expense..................... 27,712 26,066 14,148 13,263
Marketing expense..................... 9,176 8,865 4,583 4,488
Postage and office supplies........... 10,999 11,671 5,253 5,795
Communications expense................ 9,990 7,645 5,389 4,295
Professional fees..................... 5,623 5,600 3,019 3,375
FDIC premiums......................... 1,418 5,238 833 2,676
Amortization expense.................. 9,217 8,602 4,672 4,364
Other noninterest expenses............ 35,528 36,755 18,014 19,841
--------- --------- --------- ---------
Total noninterest expenses........... 260,004 251,095 131,380 128,321
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES............ 170,778 152,098 86,270 77,266
Income taxes.......................... 60,305 56,230 30,370 28,561
--------- --------- --------- ---------
NET INCOME........................... $ 110,473 $ 95,868 $ 55,900 $ 48,705
========= ========= ========= =========
Average common shares outstanding*.... 83,235 85,146 82,687 84,762
Earnings per common share*............ $ 1.33 $ 1.13 $ 0.68 $ 0.57
</TABLE>
- --------
* Restated for three-for-two common stock split.
See notes to consolidated financial statements.
4
<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,
1997................... $60,023 $592,470 $858,329 $(128,889) $(10,400) $24,296 $1,395,829
Adjustment for the
effect of 3-for-2
common stock split..... 30,011 (30,011) -0- -0- -0- -0- -0-
------- -------- -------- --------- -------- ------- ----------
BALANCE AT JANUARY 1,
1997 RESTATED.......... 90,034 562,459 858,329 (128,889) (10,400) 24,296 1,395,829
Net income.............. -0- -0- 110,473 -0- -0- -0- 110,473
Cash dividends declared
($0.56 per common
share)*................ -0- -0- (46,645) -0- -0- -0- (46,645)
Common stock
transactions:
Purchase of common
stock................. -0- -0- -0- (91,773) -0- -0- (91,773)
Employee stock plans... (1) 444 (3,707) 16,770 (650) -0- 12,856
Dividend reinvestment.. -0- 68 (110) 2,622 -0- -0- 2,580
Unrealized losses on
available-for-sale
securities, net of
deferred taxes......... -0- -0- -0- -0- -0- (547) (547)
------- -------- -------- --------- -------- ------- ----------
BALANCE AT JUNE 30,
1997................... $90,033 $562,971 $918,340 $(201,270) $(11,050) $23,749 $1,382,773
======= ======== ======== ========= ======== ======= ==========
</TABLE>
- --------
* Restated for three-for-two common stock split.
See notes to consolidated financial statements.
5
<PAGE>
AMSOUTH BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30
--------------------
1997 1996
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Net income............................................... $ 110,473 $ 95,868
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for loan losses............................... 35,517 29,169
Provision for foreclosed property losses................ 268 -0-
Depreciation and amortization of premises and equip-
ment................................................... 16,689 13,682
Amortization of premiums and discounts on held-to-matu-
rity securities and available-for-sale securities...... (930) (1,719)
Net decrease (increase) in mortgage loans held for
sale................................................... 15,725 (53,725)
Net decrease (increase) in trading securities........... 87 (631)
Net gains on sales of available-for-sale securities..... (4,941) (2,697)
Net gains on calls of held-to-maturity securities....... -0- (144)
Net (increase) decrease in accrued interest receivable
and other assets....................................... (104,576) 17,553
Net (decrease) increase in accrued expenses and other
liabilities............................................ (22,610) 21,535
Provision for deferred income taxes..................... 18,441 12,361
Amortization of intangible assets....................... 8,279 8,459
Other................................................... 4,197 1,537
--------- ---------
Net cash provided by operating activities.............. 76,619 141,248
--------- ---------
INVESTING ACTIVITIES
Proceeds from maturities and prepayments of available-
for-sale securities..................................... 138,499 342,779
Proceeds from sales of available-for-sale securities..... 635,838 886,509
Purchases of available-for-sale securities............... (541,612) (761,850)
Proceeds from maturities, prepayments and calls of held-
to-maturity securities.................................. 170,214 213,775
Purchases of held-to-maturity securities................. -0- (816,469)
Net decrease (increase) in federal funds sold and securi-
ties purchased under agreements to resell............... 11,925 (5,800)
Net increase in loans.................................... (286,341) (357,538)
Net purchases of premises and equipment.................. (29,995) (24,745)
--------- ---------
Net cash provided (used) by investing activities....... 98,528 (523,339)
--------- ---------
FINANCING ACTIVITIES
Net increase (decrease) in demand deposits and savings
accounts................................................ 129,806 (290,665)
Net increase (decrease) in time deposits................. 16,605 (169,354)
Net decrease in federal funds purchased and securities
sold under agreements to repurchase..................... (739,905) (185,850)
Net increase in other borrowed funds..................... 686,558 737,534
Issuance of long-term Federal Home Loan Bank advances and
other long-term debt.................................... 775,000 420,000
Payments for maturing long-term debt..................... (950,515) (151,634)
Cash dividends paid...................................... (23,208) (45,192)
Proceeds from employee stock plans and dividend reinvest-
ment plan............................................... 13,379 9,166
Purchase of common stock................................. (91,773) (40,506)
--------- ---------
Net cash (used) provided by financing activities....... (184,053) 283,499
--------- ---------
Decrease in cash and cash equivalents.................... (8,906) (98,592)
Cash and cash equivalents at beginning of period......... 648,494 651,641
--------- ---------
Cash and cash equivalents at end of period............... $ 639,588 $ 553,049
========= =========
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
AMSOUTH BANCORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
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. Certain amounts in the prior year's
financial statements have been reclassified to conform with the 1997
presentation. These reclassifications had no effect on net income. All common
share data presented reflect a three-for-two stock split completed in April
1997. The notes included herein should be read in conjunction with the notes
to consolidated financial statements included in AmSouth Bancorporation's
(AmSouth) 1996 annual report on Form 10-K.
On January 1, 1997, AmSouth adopted Statement of Financial Accounting
Standards No. 125, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities," (Statement 125). Statement 125 provides
accounting and reporting standards for transfers and servicing of financial
assets and extinguishment of liabilities based on a consistent application of
a "financial-components approach" that focuses on control. Under that
approach, after a transfer of financial assets, an entity recognizes the
financial and servicing assets it controls and the liabilities it has
incurred, derecognizes financial assets when control has been surrendered and
derecognizes liabilities when extinguished. Statement 125 provides standards
for consistently distinguishing transfers of financial assets that are sales
from transfers that are secured borrowings. The adoption of Statement 125
resulted in no material impact on AmSouth's financial condition or results of
operations.
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement No. 128, "Earnings per Share," which is required to be adopted on
December 31, 1997. At that time, AmSouth will be required to change the method
currently used to compute earnings per share and to restate all prior periods.
Under the new requirements for calculating basic earnings per share, the
dilutive effect of stock options will be excluded. The impact of Statement 128
on the calculation of basic and diluted earnings per share for the six month
and three month periods ended June 30, 1997 and 1996 is not expected to be
material.
In June 1997, FASB issued Statement 130, "Reporting Comprehensive Income,"
which establishes standards for the reporting and display of comprehensive
income and its components in a full set of general purpose financial
statements. The new rules require that enterprises classify items of other
comprehensive income separately from retained earnings and capital surplus in
the equity section of the statement of condition. This Statement is effective
for fiscal years beginning after December 15, 1997.
FASB Statement No. 131, "Disclosures About Segments of an Enterprise and
Related Information," was issued in June 1997. This Statement changes the way
public companies report segment information in annual financial statements and
requires public companies to report selected segment information in interim
financial reports to shareholders. Under the Statement's "management
approach," public companies are to report financial and descriptive
information about their operating segments. Operating segments are revenue-
producing components of an enterprise for which separate financial information
is produced internally and which are subject to evaluation by the chief
operating decision maker in deciding how to allocate resources to segments.
7
<PAGE>
Cash Flows--For the six months ended June 30, 1997 and 1996, AmSouth paid
interest of $342,053,000 and $354,698,000, respectively, and income taxes of
$38,273,000 and $54,245,000, respectively. Noncash transfers from loans to
foreclosed properties for the six months ended June 30, 1997 and 1996 were
$8,601,000 and $9,764,000, respectively, and noncash transfers from foreclosed
properties to loans were $331,000 and $154,000, respectively. For the six
months ended June 30, 1997 and 1996, noncash transfers from loans to
available-for-sale securities of approximately $204,918,000 and $514,522,000,
respectively, and noncash transfers from loans to other assets of
approximately $1,546,000 and $3,886,000, respectively, were made in connection
with mortgage loan securitizations.
Shareholders' Equity--During the first half of 1997, AmSouth purchased
2,527,000 shares of its common stock at a cost of $91,773,000 for the purpose
of funding employee benefit and dividend reinvestment plans and for general
corporate purposes. At June 30, 1997, approximately 5,200,000 shares remained
authorized for purchase under a plan approved by AmSouth's Board of Directors
(Board) in March 1997.
On March 20, 1997, AmSouth's Board approved a three-for-two common stock
split in the form of a 50 percent common stock dividend. The stock dividend
was paid April 30 to shareholders of record as of April 4.
8
<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
The Board of Directors
AmSouth Bancorporation
We have reviewed the accompanying consolidated statements of condition of
AmSouth Bancorporation and subsidiaries as of June 30, 1997 and 1996, and the
related consolidated statements of earnings for the three-month and six-month
periods ended June 30, 1997 and 1996, and the consolidated statements of cash
flows for the six-month periods ended June 30, 1997 and 1996 and the
consolidated statement of shareholders' equity for the six-month period ended
June 30, 1997. 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, 1996, and the related consolidated
statements of earnings, cash flows, and shareholders' equity for the year then
ended (not presented herein) and in our report dated January 31, 1997, 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, 1996, 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 14, 1997
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
AmSouth reported net income of $110.5 million for the six months ended June
30, 1997, a 15.2% increase over net income of $95.9 million for the same
period of 1996. On a per common share basis, earnings were $1.33 and $1.13,
respectively. Year-to-date earnings resulted in an annualized return on
average assets (ROA) of 1.23% and an annualized return on average equity (ROE)
of 16.13% compared to 1.08% and 14.01%, respectively, for the first half of
1996. AmSouth's 1997 year-to-date operating efficiency ratio improved to
55.29% compared to 57.41% for the prior year.
Net income for the second quarter of 1997 was $55.9 million, or $.68 per
common share, compared to $48.7 million, or $.57 per common share, for the
same period of 1996. ROA and ROE for the second quarter of 1997 were 1.24% and
16.32%, respectively, compared to 1.09% and 14.26%, respectively, for the
second quarter of 1996.
Net Interest Income
Net interest income on a fully taxable equivalent basis for the six months
ended June 30, 1997 was $340.7 million, a 5.5% increase over the same period
of 1996. A combination of the higher rate earned on average earning assets and
the lower rate paid on average interest-bearing liabilities resulted in a 20
basis point improvement in the net interest margin and a 25 basis point
improvement in the incremental interest spread. The improvement was primarily
the result of a $380.9 million increase in average loans net of unearned
income (net loans) combined with a seven basis point increase in the yield
earned on net loans. Also contributing to the improvement was a $583.3 million
decline in average time deposits combined with a 36 basis point decrease in
the average rate paid on time deposits. These changes were partially offset by
a $1.2 billion increase in average other interest-bearing liabilities, most of
which is attributable to an $823.6 million increase in Federal Home Loan Bank
advances.
Asset/Liability Management
AmSouth maintains a formal asset and liability management process to
quantify, monitor and control interest rate risk and to assist management in
maintaining stability in the net interest margin under varying interest rate
environments. The company accomplishes this process through the development
and implementation of lending, funding and pricing strategies designed to
maximize net interest income performance under varying interest rate
environments subject to specific liquidity and interest rate risk guidelines.
The primary tool used by AmSouth to measure interest rate risk is an
earnings simulation model which evaluates the impact of different interest
rate scenarios on the corporation's projected business plan over a 12 to 24
month horizon. Management feels that a more traditional interest sensitivity
gap analysis does not provide a complete picture of AmSouth's exposure to
interest rate changes since static gap models are a point-in-time measurement
and, therefore, do not incorporate the effects of future balance sheet trends,
changes in the relationship between yields earned and rates paid, patterns of
rate movements in general or changes in prepayment speeds due to changes in
rates. AmSouth's earnings simulation model incorporates the effects of these
factors in addition to the impact of certain embedded interest rate caps and
floors on certain assets and liabilities while also reflecting management's
anticipated action under varying interest rate environments.
Interest rate scenarios are simulated on a regular basis to determine the
range of interest rate risk. Net interest income performance is measured under
scenarios ranging from plus or minus 100 basis points to plus or minus 300
basis points over 12 months compared to a stable interest rate environment.
The net interest income differential is expressed as a percent of net interest
income over twelve months if interest rates are unchanged. As of June 30,
1997, the earnings simulation model results indicated that the corporation was
in a relatively neutral interest rate risk position with the net interest
income differential, in a plus or minus 200 basis point scenario, being
approximately two percent when compared to net interest income in a stable
interest rate scenario. This level of interest rate risk is well within the
company's policy guidelines. A very important factor
10
<PAGE>
in determining this interest rate risk position is the extent to which pricing
on administered rate deposit products, including interest checking, savings
and money market accounts, would be affected under varying interest rate
scenarios. At AmSouth, pricing for these products is assumed to be more
variable in rising rate scenarios than in declining rate scenarios. While
these assumptions are somewhat subjective, management reviews the anticipated
pricing for these products on a regular basis and alters these assumptions
whenever trends or market conditions dictate.
AmSouth, from time to time, utilizes various off-balance sheet instruments
such as interest rate swaps, caps and floors to assist in managing interest
rate risk. During 1997, AmSouth entered into additional interest rate swaps in
the notional amount of $485.0 million and terminated interest rate caps in the
notional amount of $1.0 billion. See Table 4. The swaps added in 1997 as
hedges were designated to certain commercial loans, available-for-sale
securities and certificates of deposit. At June 30, 1997, AmSouth also held
other off-balance sheet instruments to provide customers and AmSouth a means
of managing the risks of changing interest and foreign exchange rates. These
other off-balance sheet instruments were immaterial. At June 30, 1997, no off-
balance sheet instruments were held for trading purposes.
Credit Quality
AmSouth maintains an allowance for loan losses which it believes is adequate
to absorb losses inherent in the loan portfolio. A formal review is prepared
quarterly to assess the risk in the portfolio and to determine the adequacy of
the allowance for loan losses. The review includes analyses of historical
performance, the level of nonperforming and adversely rated loans, specific
analyses of certain problem loans, loan activity since the previous quarter,
reports prepared by the Loan Review Department, consideration of current
economic conditions, and other pertinent information. The level of allowance
to net loans outstanding will vary depending on the overall results of this
quarterly review. The review is presented to and subsequently approved by
senior management and the Audit and Community Responsibility Committee of the
Board of Directors.
Table 7 presents a five quarter analysis of the allowance for loan losses.
At June 30, 1997, the allowance for loan losses was $179.1 million, or 1.48%
of loans net of unearned income, compared to $178.7 million, or 1.55%, for the
prior year. The coverage ratio of the allowance for loan losses to
nonperforming loans increased from 213.83% at June 30, 1996 to 245.17% for the
same period in 1997 as the level of nonperforming loans decreased $10.5
million.
For the six months ended June 30, 1997, net charge-offs were $35.5 million,
an increase of $6.6 million compared to the same period of 1996. Increases
occurred primarily in the revolving credit segment of the consumer loan
portfolio. Consumer net charge-offs rose to 1.11% of average consumer loans at
June 30, 1997 compared to .90% for the prior year. Declining trends in credit
quality in the consumer sector of the economy contributed to the increase in
net charge-offs. Annualized net charge-offs to average loans net of unearned
income for the six months ended June 30, 1997 was .60% compared to .50% for
the same period of the prior year. The provision for loan losses for the six
months ended June 30, 1997 was $35.5 million and approximated net charge-offs.
Net charge-offs of impaired loans for the six months ended June 30, 1997 and
1996 totaled $1.9 million and $127 thousand, respectively.
Table 8 presents a five quarter comparison of the components of
nonperforming assets. As a percentage of loans net of unearned income,
foreclosed properties and repossessions, nonperforming assets improved from
.85% at June 30, 1996 to .73% at June 30, 1997. The level of nonperforming
assets decreased $9.2 million during the same period.
Included in nonperforming assets at June 30, 1997 and 1996 was $39.5 million
and $44.5 million, respectively, in loans that were considered to be impaired,
substantially all of which were on a nonaccrual basis. Collateral dependent
loans, which were measured at the fair value of the collateral, constituted
approximately all of these impaired loans. There was $7.8 million in the
allowance for loan losses specifically allocated to these impaired loans. The
average balance of impaired loans for the three months ended June 30, 1997 and
1996 was $43.3 million and $50.6 million, respectively, and $42.5 million and
$52.9 million, respectively, for the six months ended June 30, 1997 and 1996.
AmSouth recorded no material interest income on its impaired loans during the
six months ended June 30, 1997.
11
<PAGE>
Noninterest Revenues and Noninterest Expenses
Year-to-date noninterest revenues totaled $129.5 million at June 30, 1997
compared to $114.5 million for the prior year. Compared to the prior year,
service charges on deposit accounts increased $1.7 million due to increased
account activity and decreased fee waivers. Trust income increased $2.1
million primarily from new employee benefit plan administration and personal
trust accounts. Consumer investment services income increased $3.5 million
primarily as a result of a higher sales volume of annuity products. The
expansion of AmSouth's ATM network and an increase in check card usage were
the primary reasons for a 41.5% increase in interchange income. Other
noninterest revenues increased $3.1 million primarily due to income generated
from bank owned life insurance policies on the lives of certain AmSouth
officers.
Noninterest revenues for the second quarter of 1997 were $65.8 million, a
10.7% increase over the same period of the prior year. Changes for the quarter
were primarily for the same reasons discussed in the year-to-date analysis.
Year-to-date noninterest expenses increased 3.5% to $260.0 million at June
30, 1997 compared to $251.1 million for the prior year. Salaries and employee
benefits increased $8.2 million primarily due to merit increases and increases
in staffing in income producing areas. Net occupancy expense increased $1.5
million primarily due to higher lease payments related to increased occupancy
in a new office complex. Equipment expense increased $1.6 million primarily
reflecting the costs of investments in technology for the consumer and
commercial lines of business. Communications expense increased $2.3 million as
the network was established for these consumer and commercial technology
projects. FDIC premiums decreased $3.8 million as a result of the Federal
Deposit Insurance Corporation reducing the premium assessment rate on insured
deposits beginning January 1997.
Noninterest expenses for the second quarter were $131.4 million compared to
$128.3 million for the same period of the prior year. Changes were primarily
for the same reasons discussed in the year-to-date analysis.
Capital Adequacy
At June 30, 1997, shareholders' equity totaled $1.4 billion or 7.53% of
total assets. Since December 31, 1996, shareholders' equity has decreased
$13.1 million as the increase from net income of $110.5 million was primarily
offset by dividends of $46.6 million and the purchase of 2,527,000 shares of
AmSouth common stock for $91.8 million.
Table 11 presents the capital amounts and risk-adjusted capital ratios for
AmSouth and AmSouth Bank at June 30, 1997 and 1996. At June 30, 1997, AmSouth
exceeded the regulatory minimum required risk-adjusted Tier 1 Capital Ratio of
4.00% and risk-adjusted Total Capital Ratio of 8.00%. In addition, the risk-
adjusted capital ratios for AmSouth Bank were above the regulatory minimums
and the bank was well-capitalized at June 30, 1997.
Interstate Banking
On June 25, 1997, AmSouth merged its five subsidiary banks located in the
states of Alabama, Florida, Georgia and Tennessee. The resulting bank operates
under the name "AmSouth Bank". See "Item 5. Other Information."
12
<PAGE>
TABLE 1--FINANCIAL SUMMARY
<TABLE>
<CAPTION>
JUNE 30
------------------------------ %
1997 1996 CHANGE
-------------- -------------- -------------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET SUMMARY
End-of-period balances:
Loans net of unearned
income............... $ 12,117,640 $ 11,543,331 5.0%
Total investment secu-
rities*.............. 4,701,831 5,269,330 (10.8)
Total assets.......... 18,353,331 18,140,447 1.2
Total deposits........ 12,613,686 12,959,132 (2.7)
Shareholders' equity.. 1,382,773 1,392,072 (0.7)
Year-to-date average
balances:
Loans net of unearned
income............... $ 12,005,268 $ 11,624,393 3.3%
Total investment secu-
rities*.............. 4,674,827 4,905,883 (4.7)
Total assets.......... 18,061,586 17,840,806 1.2
Total deposits........ 12,426,151 13,186,020 (5.8)
Shareholders' equity.. 1,381,181 1,375,691 0.4
<CAPTION>
THREE MONTHS
SIX MONTHS ENDED JUNE 30 ENDED JUNE 30
------------------------------ ---------------- %
1997 1996 % CHANGE 1997 1996 CHANGE
-------------- -------------- ------------------ ------- ------
<S> <C> <C> <C> <C> <C> <C>
EARNINGS SUMMARY
Net income............ $ 110,473 $ 95,868 15.2% $55,900 $48,705 14.8%
Per common share **... 1.33 1.13 17.7 0.68 0.57 19.3
SELECTED RATIOS
Return on average as-
sets (annualized).... 1.23% 1.08% 1.24% 1.09%
Return on average eq-
uity (annualized).... 16.13 14.01 16.32 14.26
Average equity to as-
sets................. 7.65 7.71 7.57 7.63
End of period equity
to assets............ 7.53 7.67 7.53 7.67
End of period tangible
equity to assets..... 6.12 6.24 6.12 6.24
Allowance for loan
losses to loans net
of unearned income... 1.48 1.55 1.48 1.55
Efficiency ratio...... 55.29 57.41 55.35 57.79
COMMON STOCK DATA **
Cash dividends de-
clared............... $ 0.56 $ 0.53 $ 0.28 $ 0.27
Book value at end of
period............... 16.85 16.40 16.85 16.40
Market value at end of
period............... 37.81 24.08 37.81 24.08
Average common shares
outstanding.......... 83,235 85,146 82,687 84,762
</TABLE>
- --------
* Excludes adjustment for market valuation on available-for-sale securities.
** Restated for three-for-two common stock split in April 1997.
13
<PAGE>
TABLE 2--YEAR-TO-DATE YIELDS EARNED ON AVERAGE EARNING ASSETS
AND RATES PAID ON AVERAGE INTEREST-BEARING LIABILITIES
<TABLE>
<CAPTION>
1997 1996
---------------------------- ----------------------------
SIX MONTHS SIX MONTHS
ENDED JUNE 30 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> <C>
ASSETS
Earning assets:
Loans net of unearned
income................ $12,005,268 $518,281 8.71% $11,624,393 $499,656 8.64%
Available-for-sale se-
curities.............. 2,112,154 77,245 7.37 2,386,999 79,384 6.69
Held-to-maturity secu-
rities:
Taxable............... 2,400,627 81,236 6.82 2,310,210 77,790 6.77
Tax-free.............. 162,046 8,920 11.10 208,674 11,506 11.09
----------- -------- ----------- --------
Total held-to-maturity
securities........... 2,562,673 90,156 7.09 2,518,884 89,296 7.13
----------- -------- ----------- --------
Total investment se-
curities............ 4,674,827 167,401 7.22 4,905,883 168,680 6.91
Other earning assets... 64,433 1,521 4.76 133,679 4,313 6.49
----------- -------- ----------- --------
Total earning assets.. 16,744,528 687,203 8.28 16,663,955 672,649 8.12
-------- --------
Cash and other assets... 1,469,926 1,328,653
Allowance for loan
losses................. (179,855) (178,438)
Market valuation on
available-for-sale
securities............. 26,987 26,636
----------- -----------
$18,061,586 $17,840,806
=========== ===========
LIABILITIES AND SHARE-
HOLDERS' EQUITY
Interest-bearing liabil-
ities:
Interest-bearing demand
deposits.............. $ 3,566,617 56,288 3.18 $ 3,772,844 59,407 3.17
Savings deposits....... 1,061,112 15,075 2.86 1,019,952 13,581 2.68
Time deposits.......... 5,163,416 140,133 5.47 5,747,175 166,656 5.83
Certificates of deposit
of $100,000 or more... 846,321 23,652 5.64 904,240 25,950 5.77
Federal funds purchased
and securities sold
under agreements to
repurchase............ 1,504,248 39,327 5.27 1,721,049 44,303 5.18
Other interest-bearing
liabilities........... 2,529,978 72,021 5.74 1,342,991 39,917 5.98
----------- -------- ----------- --------
Total interest-bearing
liabilities.......... 14,671,692 346,496 4.76 14,508,251 349,814 4.85
-------- ----- -------- -----
INCREMENTAL INTEREST
SPREAD................. 3.52% 3.27%
===== =====
Noninterest-bearing
demand deposits........ 1,788,685 1,741,809
Other liabilities....... 220,028 215,055
Shareholders' equity.... 1,381,181 1,375,691
----------- -----------
$18,061,586 $17,840,806
=========== ===========
NET INTEREST
INCOME/MARGIN ON A
TAXABLE EQUIVALENT
BASIS.................. 340,707 4.10% 322,835 3.90%
===== =====
Taxable equivalent ad-
justment:
Loans.................. 931 1,176
Securities............. 2,983 3,799
-------- --------
Total taxable equiva-
lent adjustment...... 3,914 4,975
-------- --------
Net interest income.. $336,793 $317,860
======== ========
</TABLE>
- --------
NOTE: The taxable equivalent adjustment has been computed based on a 35%
federal income tax rate.
14
<PAGE>
TABLE 3--QUARTERLY YIELDS EARNED ON AVERAGE EARNING ASSETS AND RATES PAID ON
AVERAGE INTEREST-BEARING LIABILITIES
<TABLE>
<CAPTION>
1997
----------------------------------------------------------
SECOND QUARTER FIRST QUARTER
---------------------------- ----------------------------
AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE
----------- -------- ------ ----------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
(TAXABLE EQUIVALENT BASIS - DOLLARS IN THOUSANDS)
ASSETS
Earning assets:
Loans net of
unearned
income.......... $12,085,579 $263,645 8.75% $11,924,065 $254,640 8.66%
Available-for-
sale
securities...... 2,163,439 39,789 7.38 2,060,299 37,456 7.37
Held-to-maturity
securities:
Taxable.......... 2,366,941 40,138 6.80 2,434,686 41,098 6.85
Tax-free......... 155,744 4,240 10.92 168,419 4,679 11.27
----------- -------- ----------- --------
Total held-to-
maturity
securities...... 2,522,685 44,378 7.06 2,603,105 45,777 7.13
----------- -------- ----------- --------
Total investment
securities..... 4,686,124 84,167 7.20 4,663,404 83,233 7.24
Other earning
assets.......... 59,722 709 4.76 69,198 809 4.74
----------- -------- ----------- --------
Total earning
assets.......... 16,831,425 348,521 8.31 16,656,667 338,682 8.25
-------- --------
Cash and other
assets........... 1,475,669 1,464,118
Allowance for loan
losses........... (179,075) (180,643)
Market valuation
on available-for-
sale securities.. 21,917 32,112
----------- -----------
$18,149,936 $17,972,254
=========== ===========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Interest-bearing
demand
deposits........ $ 3,606,363 29,238 3.25 $ 3,526,430 27,050 3.11
Savings
deposits........ 1,048,497 7,471 2.86 1,073,866 7,603 2.87
Time deposits.... 5,155,529 70,548 5.49 5,171,390 69,585 5.46
Certificates of
deposit of
$100,000 or
more............ 885,565 12,444 5.64 806,641 11,209 5.64
Federal funds
purchased and
securities sold
under agreements
to repurchase... 1,493,231 20,037 5.38 1,515,388 19,290 5.16
Other interest-
bearing
liabilities..... 2,559,769 37,257 5.84 2,499,857 34,764 5.64
----------- -------- ----------- --------
Total interest-
bearing
liabilities..... 14,748,954 176,995 4.81 14,593,572 169,501 4.71
-------- ----- -------- -----
INCREMENTAL
INTEREST SPREAD.. 3.50% 3.54%
===== =====
Noninterest-
bearing demand
deposits......... 1,805,781 1,771,399
Other
liabilities...... 221,575 218,464
Shareholders'
equity........... 1,373,626 1,388,819
----------- -----------
$18,149,936 $17,972,254
=========== ===========
NET INTEREST
INCOME/MARGIN ON
A TAXABLE
EQUIVALENT
BASIS............ 171,526 4.09% 169,181 4.12%
===== =====
Taxable equivalent
adjustment:
Loans............ 463 468
Securities....... 1,437 1,546
-------- --------
Total taxable
equivalent
adjustment...... 1,900 2,014
-------- --------
Net interest
income......... $169,626 $167,167
======== ========
</TABLE>
<TABLE>
<CAPTION>
1996
----------------------------------------------------------------------------------------
FOURTH QUARTER THIRD QUARTER SECOND QUARTER
---------------------------- ---------------------------- ----------------------------
AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE BALANCE EXPENSE RATE
----------- -------- ------ ----------- -------- ------ ----------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(TAXABLE EQUIVALENT BASIS - DOLLARS IN THOUSANDS)
ASSETS
Earning assets:
Loans net of
unearned
income.......... $11,802,480 $254,051 8.56% $11,726,594 $252,951 8.58% $11,575,473 $248,225 8.62%
Available-for-
sale
securities...... 2,324,417 42,081 7.20 2,468,474 43,008 6.93 2,419,311 40,912 6.80
Held-to-maturity
securities:
Taxable.......... 2,502,510 42,208 6.71 2,566,379 43,162 6.69 2,477,564 41,531 6.74
Tax-free......... 183,722 5,590 12.10 191,680 5,106 10.60 201,702 5,594 11.15
----------- -------- ----------- -------- ----------- --------
Total held-to-
maturity
securities...... 2,686,232 47,798 7.08 2,758,059 48,268 6.96 2,679,266 47,125 7.07
----------- -------- ----------- -------- ----------- --------
Total investment
securities..... 5,010,649 89,879 7.14 5,226,533 91,276 6.95 5,098,577 88,037 6.94
Other earning
assets.......... 60,354 742 4.89 102,270 1,578 6.14 156,952 2,456 6.29
----------- -------- ----------- -------- ----------- --------
Total earning
assets.......... 16,873,483 344,672 8.13 17,055,397 345,805 8.07 16,831,002 338,718 8.09
-------- -------- --------
Cash and other
assets........... 1,321,914 1,332,692 1,324,032
Allowance for loan
losses........... (178,725) (178,764) (178,475)
Market valuation
on available-for-
sale securities.. 33,873 13,767 21,508
----------- ----------- -----------
$18,050,545 $18,223,092 $17,998,067
=========== =========== ===========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Interest-bearing
demand
deposits........ $ 3,552,445 27,480 3.08 $ 3,587,581 28,305 3.14 $ 3,699,290 29,051 3.16
Savings
deposits........ 1,059,981 7,557 2.84 1,044,721 7,294 2.78 1,025,627 6,899 2.71
Time deposits.... 5,292,106 72,724 5.47 5,586,176 79,029 5.63 5,772,404 83,283 5.80
Certificates of
deposit of
$100,000 or
more............ 777,307 11,066 5.66 853,058 12,296 5.73 880,157 12,602 5.76
Federal funds
purchased and
securities sold
under agreements
to repurchase... 1,771,740 23,146 5.20 1,870,288 24,365 5.18 1,767,378 22,483 5.12
Other interest-
bearing
liabilities..... 2,170,005 31,138 5.71 1,894,780 27,251 5.72 1,492,289 21,822 5.88
----------- -------- ----------- -------- ----------- --------
Total interest-
bearing
liabilities..... 14,623,584 173,111 4.71 14,836,604 178,540 4.79 14,637,145 176,140 4.84
-------- ----- -------- ----- -------- -----
INCREMENTAL
INTEREST SPREAD.. 3.42% 3.28% 3.25%
===== ===== =====
Noninterest-
bearing demand
deposits......... 1,804,129 1,781,474 1,767,696
Other
liabilities...... 234,204 216,683 219,469
Shareholders'
equity........... 1,388,628 1,388,331 1,373,757
----------- ----------- -----------
$18,050,545 $18,223,092 $17,998,067
=========== =========== ===========
NET INTEREST
INCOME/MARGIN ON
A TAXABLE
EQUIVALENT
BASIS............ 171,561 4.04% 167,265 3.90% 162,578 3.89%
===== ===== =====
Taxable equivalent
adjustment:
Loans............ 474 528 574
Securities....... 1,621 1,682 1,849
-------- -------- --------
Total taxable
equivalent
adjustment...... 2,095 2,210 2,423
-------- -------- --------
Net interest
income......... $169,466 $165,055 $160,155
======== ======== ========
</TABLE>
- ----
NOTE: The taxable equivalent adjustment has been computed based on a 35%
federal income tax rate.
15
<PAGE>
TABLE 4--INTEREST RATE SWAPS, CAPS AND FLOORS
<TABLE>
<CAPTION>
RECEIVE
FIXED RATE CAPS
SWAPS & FLOORS TOTAL
---------- -------- -------
(IN MILLIONS)
<S> <C> <C> <C>
Balance at January 1, 1997........................ $370 $ 1,077 $ 1,447
Additions....................................... 485 -0- 485
Maturities...................................... -0- -0- -0-
Calls........................................... -0- -0- -0-
Terminations.................................... -0- (1,000) (1,000)
---- ------- -------
Balance at June 30, 1997.......................... $855 $ 77 $ 932
==== ======= =======
</TABLE>
TABLE 5--MATURITIES ON CAPS AND INTEREST RATES EXCHANGED ON SWAPS
<TABLE>
<CAPTION>
MATURE DURING
---------------------------------
1997 1998 1999 2000 TOTAL
----- ----- ----- ----- -----
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Receive fixed swaps:
Notional amount............................ $ 215 $ 385 $ 230 $ 25 $ 855
Receive rate............................... 6.46% 6.68% 7.04% 7.15% 6.74%
Pay rate................................... 5.73% 5.76% 5.73% 5.71% 5.74%
Caps:
Notional amount............................ $ 77 $ -0- $ -0- $ -0- $ 77
</TABLE>
- --------
NOTE:
The maturities and interest rates exchanged are calculated assuming that
interest rates remain unchanged from average June 1997 rates. The information
presented could change as future interest rates increase or decrease.
16
<PAGE>
TABLE 6--LOANS AND CREDIT QUALITY
<TABLE>
<CAPTION>
NET CHARGE-OFFS
LOANS* NONPERFORMING LOANS** SIX MONTHS ENDED
JUNE 30 JUNE 30 JUNE 30
----------------------- --------------------- -----------------
1997 1996 1997 1996 1997 1996
----------- ----------- ---------- ---------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Commercial.............. $ 3,745,430 $ 3,225,638 $ 16,245 $ 14,420 $ 1,628 $ 250
Commercial real estate:
Commercial real estate
mortgages............. 1,692,761 1,582,021 19,620 26,282 281 144
Real estate
construction.......... 664,529 645,877 2,098 2,556 25 (267)
----------- ----------- ---------- ---------- -------- --------
Total commercial real
estate............... 2,357,290 2,227,898 21,718 28,838 306 (123)
----------- ----------- ---------- ---------- -------- --------
Consumer:
Residential first
mortgages............. 2,769,810 3,110,597 23,880 33,402 836 1,513
Other residential
mortgages............. 1,009,268 754,223 3,805 1,147 712 73
Dealer indirect........ 1,212,045 1,088,652 5,078 4,435 6,790 7,789
Revolving credit....... 495,020 492,038 -0- -0- 16,888 12,773
Other consumer......... 528,777 644,285 2,318 1,341 8,325 6,621
----------- ----------- ---------- ---------- -------- --------
Total consumer........ 6,014,920 6,089,795 35,081 40,325 33,551 28,769
----------- ----------- ---------- ---------- -------- --------
$12,117,640 $11,543,331 $ 73,044 $ 83,583 $ 35,485 $ 28,896
=========== =========== ========== ========== ======== ========
</TABLE>
- --------
* Net of unearned income.
** Exclusive of accruing loans 90 days past due.
TABLE 7--ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
1997 1996
----------------------- -----------------------------------
2ND QUARTER 1ST QUARTER 4TH QUARTER 3RD QUARTER 2ND QUARTER
----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Balance at beginning of
period................. $179,049 $179,049 $179,350 $178,724 $177,930
Loans charged off....... (24,209) (22,632) (23,009) (21,202) (18,442)
Recoveries of loans
previously charged
off.................... 6,441 4,915 4,211 4,323 5,187
-------- -------- -------- -------- --------
Net charge-offs......... (17,768) (17,717) (18,798) (16,879) (13,255)
Addition to allowance
charged to expense..... 17,800 17,717 18,497 17,505 14,049
-------- -------- -------- -------- --------
Balance at end of
period................. $179,081 $179,049 $179,049 $179,350 $178,724
======== ======== ======== ======== ========
Allowance for loan
losses to loans net of
unearned income........ 1.48% 1.49% 1.48% 1.52% 1.55%
Allowance for loan
losses to nonperforming
loans.................. 245.17% 225.31% 229.41% 221.40% 213.83%
Allowance for loan
losses to nonperforming
assets................. 201.53% 189.69% 189.84% 183.67% 182.29%
Net charge-offs to
average loans net of
unearned income
(annualized)........... 0.59% 0.60% 0.63% 0.57% 0.46%
</TABLE>
17
<PAGE>
TABLE 8--NONPERFORMING ASSETS
<TABLE>
<CAPTION>
1997 1996
----------------- --------------------------------
JUNE 30 MARCH 31 DECEMBER 31 SEPTEMBER 30 JUNE 30
------- -------- ----------- ------------ -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Nonaccrual loans........... $73,044 $79,469 $78,048 $81,007 $83,583
Foreclosed properties...... 13,546 12,890 14,445 13,874 12,845
Repossessions.............. 2,272 2,030 1,822 2,769 1,614
------- ------- ------- ------- -------
Total nonperforming
assets*.................. $88,862 $94,389 $94,315 $97,650 $98,042
======= ======= ======= ======= =======
Nonperforming assets* to
loans net of unearned
income, foreclosed
properties and
repossessions............. 0.73% 0.78% 0.78% 0.82% 0.85%
Accruing loans 90 days past
due....................... $42,918 $32,535 $36,382 $39,535 $39,944
</TABLE>
- --------
* Exclusive of accruing loans 90 days past due.
TABLE 9--INVESTMENT SECURITIES
<TABLE>
<CAPTION>
JUNE 30, 1997 JUNE 30, 1996
---------------------------- ----------------------------
CARRYING AMOUNT MARKET VALUE CARRYING AMOUNT MARKET VALUE
--------------- ------------ --------------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
HELD-TO-MATURITY:
U.S. Treasury and
federal agency
securities............ $2,092,291 $2,088,347 $2,293,413 $2,255,713
State, county and
municipal securities.. 150,394 155,506 202,873 211,318
Other securities....... 232,410 231,376 273,942 270,093
---------- ---------- ---------- ----------
$2,475,095 $2,475,229 $2,770,228 $2,737,124
========== ========== ========== ==========
AVAILABLE-FOR-SALE:
U.S. Treasury and
federal agency
securities............ $2,124,857 $2,284,508
Other securities....... 139,357 229,687
---------- ----------
$2,264,214 $2,514,195
========== ==========
</TABLE>
- --------
NOTES:
1. The weighted average remaining life, which reflects the amortization on
mortgage related and other asset-backed securities, and the weighted
average yield on the combined held-to-maturity and available-for-sale
portfolios at June 30, 1997 were approximately 3.94 years and 7.09%,
respectively. Included in the balance was $3.7 billion of mortgage-backed
securities, $758 million of which were variable rate. The weighted average
remaining life and the weighted average yield of mortgage-backed securities
at June 30, 1997 were approximately 4.2 years and 7.07%, respectively. The
duration of the combined portfolios which considers the repricing frequency
of variable rate securities is approximately 2.16 years.
2. The available-for-sale portfolio included net unrealized gains of $37.5
million and $15.1 million at June 30, 1997 and 1996, respectively.
18
<PAGE>
TABLE 10 - OTHER INTEREST-BEARING LIABILITIES
<TABLE>
<CAPTION>
JUNE 30
---------------------
1997 1996
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
OTHER BORROWED FUNDS:
Treasury, tax and loan notes............................ $1,030,060 $ 997,210
Short-term Federal Home Loan Bank advances.............. 385,000 205,000
Short-term bank notes................................... 275,000 -0-
Other short-term debt................................... 46,881 14,402
---------- ----------
Total other borrowed funds............................. $1,736,941 $1,216,612
========== ==========
OTHER LONG-TERM DEBT:
6 3/4% Subordinated Debentures Due 2025................. $ 149,854 $ 149,836
7 3/4% Subordinated Notes Due 2004...................... 149,366 149,274
Subordinated Capital Notes Due 1999..................... 99,763 99,634
Long-term notes payable................................. 37,987 27,035
---------- ----------
Total other long-term debt............................. $ 436,970 $ 425,779
========== ==========
</TABLE>
TABLE 11 - CAPITAL AMOUNTS AND RATIOS
<TABLE>
<CAPTION>
JUNE 30
----------------------------------
1997 1996
---------------- ----------------
AMOUNT RATIO AMOUNT RATIO
---------- ----- ---------- -----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
TIER 1 CAPITAL:
AmSouth.................................... $1,099,127 7.58% $1,105,795 8.30%
AmSouth Bank............................... 1,465,632 10.12 1,367,621 10.27
TOTAL CAPITAL:
AmSouth.................................... $1,597,381 11.02% $1,611,485 12.09%
AmSouth Bank............................... 1,644,713 11.35 1,534,251 11.52
LEVERAGE:
AmSouth.................................... $1,099,127 6.14% $1,105,795 6.24%
AmSouth Bank............................... 1,465,632 8.20 1,367,621 7.74
</TABLE>
19
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Several of AmSouth's subsidiaries are defendants in legal proceedings
arising in the ordinary course of business. Some of these proceedings seek
relief or damages that are substantial. The actions relate to AmSouth's
lending, collections, servicing, investment, trust and other activities.
Among the actions which are pending against AmSouth subsidiaries are actions
filed as class actions in the State of Alabama. The actions are similar to
others that have been brought in recent years in Alabama against financial
institutions in that they seek punitive damage awards in transactions
involving relatively small amounts of actual damages. In recent years, juries
in Alabama state courts have made large punitive damage awards in such cases.
Legislation which would limit these lawsuits has been proposed from time to
time in the Alabama legislature but has not been enacted into law. AmSouth
cannot predict whether any such legislation will be enacted.
It may take a number of years to finally resolve some of these legal
proceedings pending against AmSouth subsidiaries, due to their complexity and
for other reasons. It is not possible to determine with any certainty at this
time the corporation's potential exposure from the proceedings. At times,
class actions are settled by defendants without admission or even an actual
finding of any wrongdoing but with payment of some compensation to purported
class members and large attorneys' fees to plaintiff class counsel.
Nonetheless, based upon the advice of legal counsel, AmSouth's management is
of the opinion that the ultimate resolution of these legal proceedings will
not have a material adverse effect on AmSouth's financial condition or results
of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The regular Annual Meeting of Shareholders of AmSouth was held on April 17,
1997, at which meeting the shareholders (a) elected three nominees as
directors, (b) approved the 1997 Performance Incentive Plan and the Executive
Incentive Plan and (c) did not approve a shareholder proposal recommending
that the Board of Directors explore the possible sale of the company. The
following is a tabulation of the voting on these matters.
ELECTION OF DIRECTORS
<TABLE>
<CAPTION>
VOTES BROKER
NAMES VOTES FOR WITHHELD ABSTENTIONS NONVOTES
- ----- ---------- -------- ----------- --------
<S> <C> <C> <C> <C>
Ronald L. Kuehn, Jr.................... 45,566,540 632,635 N/A 247,198
C. Dowd Ritter......................... 45,519,518 679,657 N/A 247,198
Herbert A. Sklenar..................... 45,568,065 631,110 N/A 247,198
</TABLE>
APPROVAL OF 1997 PERFORMANCE
INCENTIVE PLAN
<TABLE>
<CAPTION>
VOTES FOR VOTES AGAINST ABSTENTIONS BROKER NONVOTES
---------- ------------- ----------- ---------------
<S> <C> <C> <C>
43,460,548 2,248,569 737,256 -0-
</TABLE>
APPROVAL OF EXECUTIVE
INCENTIVE PLAN
<TABLE>
<CAPTION>
VOTES FOR VOTES AGAINST ABSTENTIONS BROKER NONVOTES
---------- ------------- ----------- ---------------
<S> <C> <C> <C>
43,338,966 2,286,125 821,282 -0-
</TABLE>
20
<PAGE>
SHAREHOLDER PROPOSAL
<TABLE>
<CAPTION>
VOTES
VOTES FOR AGAINST ABSTENTIONS BROKER NONVOTES
---------- ---------- ----------- ---------------
<S> <C> <C> <C>
3,694,698 34,754,703 1,027,004 6,969,968
</TABLE>
ITEM 5. OTHER INFORMATION
At the close of business on June 25, 1997, AmSouth Bank of Alabama, AmSouth
Bank of Florida, AmSouth Bank of Tennessee, AmSouth Bank of Georgia and
AmSouth Bank of Walker County merged to form one bank named AmSouth Bank.
AmSouth Bank is a state bank chartered under the laws of Alabama that is a
member of the Federal Reserve System and is headquartered in Birmingham,
Alabama. All of the foregoing banks were wholly-owned subsidiaries of AmSouth,
and the resulting bank continues to be a wholly-owned subsidiary of AmSouth.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
ITEM 6(A) -- EXHIBITS
The exhibits listed in the Exhibit Index at page 23 of this Form 10-Q are
filed herewith or are incorporated by reference herein.
ITEM 6(B) -- REPORTS ON Form 8-K
No report on Form 8-K was filed by Amsouth during the period April 1, 1997
to June 30, 1997.
21
<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.
/s/ C. Dowd Ritter
August 14, 1997 By: _________________________________
C. Dowd Ritter
Chairman of the Board, President
and
Chief Executive Officer
/s/ Robert R. Windelspecht
August 14, 1997 By: _________________________________
Robert R. Windelspecht
Executive Vice President
Controller
22
<PAGE>
EXHIBIT INDEX
The following is a list of exhibits including items incorporated by
reference.
<TABLE>
<CAPTION>
<C> <S>
3-a Restated Certificate of Incorporation of AmSouth Bancorporation (1)
3-b By-Laws of AmSouth Bancorporation
11 Statement Re: Computation of Earnings per Share
15 Letter Re: Unaudited Interim Financial Information
21 List of Subsidiaries of AmSouth Bancorporation
27 Financial Data Schedule
</TABLE>
NOTES TO EXHIBITS
(1) Filed as Exhibit 3-b to AmSouth's Form 10-Q Quarterly Report for the
quarter ended March 31, 1993, incorporated herein by reference.
23
<PAGE>
Exhibit 3-b
AMSOUTH BANCORPORATION BYLAWS
ARTICLE 1 - OFFICES
-------------------
SECTION 1.1: PRINCIPAL EXECUTIVE OFFICE AND OTHER OFFICES
The principal executive office of the corporation shall be at such
place, either within or without the State of Alabama, as may be designated from
time to time by the Board of Directors. The corporation may have such other
offices, either within or without the State of Alabama, as the Board of
Directors may designate or as the business of the corporation may require from
time to time.
ARTICLE 2 - SHAREHOLDER MEETINGS
--------------------------------
SECTION 2.1: ANNUAL MEETING
The annual meeting of the shareholders of the corporation shall be held
on such date and at such time as may be fixed by resolution of the Board of
Directors, for the purpose of electing directors and for the transaction of such
other business as may come before the meeting. If the day fixed for the annual
meeting is a legal holiday in the state in which the meeting is to be held, the
meeting shall be held on the next succeeding business day. If the election of
directors shall not be held on the day fixed by the Board of Directors for any
annual meeting of the shareholders, or at any adjournment thereof, the Board of
Directors shall cause the election to be held at a special meeting of the
shareholders as soon thereafter as convenient.
SECTION 2.2: SPECIAL MEETINGS
Special meetings of the shareholders, for any purpose or purposes, may
be called only as provided in the Restated Certificate of Incorporation.
<PAGE>
SECTION 2.3: PLACE OF MEETING
The place of meeting shall be the principal executive office of the
corporation unless some other place, either within or without the State of
Alabama, is designated by the Board of Directors.
SECTION 2.4: NOTICE OF MEETING: FORM; CONTENTS; DELIVERY METHOD; DELIVERY
TIME
Written notice stating (a) the place, day, and hour of the meeting and
(b) in the case of a special meeting, a meeting that is required by statute to
be held for any special purpose, or an annual meeting at which special action is
to be taken, the purpose or purposes for which the meeting is called, or the
special action proposed to be taken, shall be delivered either personally or by
mail, by or at the direction of the Board of Directors, the Chief Executive
Officer, the Secretary, or the persons calling the meeting, to each shareholder
of record entitled to vote at such meeting. If mailed, such notice shall be
deemed to be given when deposited in the United States mail addressed to the
shareholder at the shareholder's address as it appears on the records of the
corporation, with postage thereon prepaid. Any such notice that relates to an
annual meeting of shareholders shall be delivered not less than ten (10) nor
more than sixty (60) days before the date of the meeting; and any such notice
that relates to any special meeting of shareholders shall be delivered as
provided in the Restated Certificate of Incorporation. An affidavit of the
Secretary or an Assistant Secretary or the transfer agent of the corporation
that notice has been given shall, in the absence of fraud, be prima facie
evidence of the facts stated therein.
When a meeting is adjourned to another time or place, notice need not be
given of the adjourned meeting if the time and place thereof are announced at
the meeting at which the adjournment is taken. At the adjourned meeting the
shareholders may transact any business that might have been transacted at the
original meeting. If the adjournment is for more than 30 days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each shareholder of record entitled to
vote at the meeting.
Any shareholder may waive notice of any meeting in the manner provided
in Section 9.1 of these bylaws. Attendance of a shareholder at a meeting of
shareholders shall constitute a waiver of notice of such a meeting, except when
the shareholder attends a meeting for the express purpose of objecting at the
beginning of the meeting to the transaction of any business because the meeting
is not lawfully called or convened.
-2-
<PAGE>
Any previously scheduled meeting of the shareholders (other than a
meeting called by shareholders under Section VII(b) of the Restated Certificate
of Incorporation) may be postponed, and any special meeting of the shareholders
(other than a meeting called by shareholders of the corporation under Section
VII(b) of the Restated Certificate of Incorporation) may be cancelled, by
resolution of the Board of Directors upon public announcement (as defined in
Section 2.12(C)(2) of these bylaws) given prior to the time previously scheduled
for such meeting of shareholders.
SECTION 2.5: FIXING OF RECORD DATE
In order that the corporation may determine the shareholders entitled to
notice of or to vote at any meeting of shareholders or any adjournment thereof,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted by
the Board of Directors, and which record date shall be not more than sixty (60)
nor less than ten (10) days before the date of such meeting. If no record date
is fixed by the Board of Directors, the record date for determining
shareholders entitled to notice of or to vote at a meeting of shareholders
shall be at the close of business on the date next preceding the day on which
notice is given, or, if notice is waived, at the close of business on the day
next preceding the day on which the meeting is held. A determination of
shareholders of record entitled to notice of or to vote at a meeting of
shareholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
SECTION 2.6: VOTING LISTS
The officer having charge of the stock ledger for shares of the
corporation shall make, at least ten (10) days before each meeting of
shareholders, a complete list of the shareholders entitled to vote at such
meeting, or any adjournment thereof, arranged in alphabetical order, with the
address and the number of shares registered in the name of each shareholder,
which list, for a period of ten (10) days prior to such meeting, shall be kept
on file at the principal office of the corporation and shall be subject to
inspection by any shareholder, for any purpose germane to the meeting, at any
time during usual business hours. Such list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any shareholder during the whole time of the meeting. The original stock ledger
shall be the only evidence as to who are the shareholders entitled to examine
such list or stock ledger or books of the corporation or to vote in person or by
proxy at any meeting of shareholders.
-3-
<PAGE>
SECTION 2.7: QUORUM
A majority of the outstanding shares of the corporation entitled to
vote, present in person or represented by proxy, shall constitute a quorum at a
meeting of shareholders. If less than a majority of the outstanding shares
entitled to vote are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted that might have been transacted at the meeting under
the original notice. The shareholders present at a duly organized meeting may
continue to transact business until the meeting is adjourned, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum.
SECTION 2.8: PROXIES
At all meetings of shareholders, a shareholder may vote by proxy in
writing executed by the shareholder or by the shareholder's duly authorized
attorney in fact. Such proxy shall be filed with the Secretary of the
corporation before or at the time of the meeting. No proxy shall be valid after
eleven (11) months from the date of its execution, unless otherwise provided in
the proxy.
SECTION 2.9: VOTING OF SHARES
Each outstanding share entitled to vote shall be entitled to one (1)
vote upon each matter submitted to a vote at a meeting of the shareholders.
Directors shall be elected by a plurality of the votes of the shares present in
person or represented by a proxy at the meeting and entitled to vote on the
election of directors. In all matters other than the election of directors, the
affirmative vote of a majority of shares present in person or represented by a
proxy at the meeting and entitled to vote on the subject matter shall be the act
of the shareholders, except as otherwise provided in the Restated Certificate of
Incorporation or as otherwise required by Delaware law.
-4-
<PAGE>
Where a separate vote by class or classes is required, a majority of the
outstanding shares of such class or classes, present in person or represented
by proxy, shall constitute a quorum entitled to take action with respect to
that vote on that matter, and the affirmative vote of a majority of the shares
of such class or classes present in person or represented by proxy at the
meeting shall be the act of such class, except as otherwise provided in the
Restated Certificate of Incorporation or as otherwise required by Delaware law.
The vote on all questions shall be taken in such manner as the Chairman
prescribes, provided, however, that all votes taken at any meeting of
shareholders, including, without limitation, votes taken with respect to the
election of directors, shall be by written ballot.
SECTION 2.10: VOTING OF SHARES BY CERTAIN HOLDERS
Except as provided in this paragraph, shares of the corporation standing
in the name of another corporation may be voted by such officer, agent, or proxy
as the bylaws of such corporation may prescribe, or, in the absence of such
provision, as the board of directors of such corporation may determine. Shares
of its own capital stock belonging to the corporation or to another corporation,
if a majority of the shares entitled to vote in the election of directors of
such other corporation is held, directly or indirectly, by the corporation,
shall neither be entitled to vote nor to be counted for quorum purposes;
provided, however, that nothing in this section shall be construed as limiting
the right of any corporation to vote stock, including but not limited to its own
stock, held by it in a fiduciary capacity.
Shares that have been called for redemption shall not be deemed to be
outstanding shares for the purpose of voting or determining the total number of
shares entitled to vote on any matter on and after the date on which written
notice of redemption has been sent to holders thereof and a sum sufficient to
redeem such shares has been irrevocably deposited or set aside to pay the
redemption price to the holders of the shares upon surrender of certificates
therefor.
Shares held by an administrator, executor, guardian, or conservator may
be voted by such person, either in person or by proxy, without a transfer of
such shares into such person's name. Shares standing in the name of a trustee
may be voted by such trustee, either in person or by proxy; but no trustee shall
be entitled to vote shares held by such trustee without a transfer of such
shares into such trustee's name.
-5-
<PAGE>
Shares standing in the name of a receiver may be voted by such receiver,
and shares held or under the control of a receiver may be voted by such
receiver without the transfer thereof into such receiver's name if authority so
to do is contained in an appropriate order of the court by which such receiver
was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares unless in the transfer by the pledgor on the books of the corporation
the pledgor has expressly empowered the pledgee to vote thereon, in which case
only the pledgee, or the pledgee's proxy, may represent such shares and vote
thereon.
If shares or other securities of the corporation having voting powers
stand of record in the names of two (2) or more persons, whether fiduciaries,
members of a partnership, joint tenants, tenants in common, tenants by the
entirety or otherwise, or if two (2) or more persons have the same fiduciary
relationship respecting the same shares, unless the Secretary of the corporation
is given written notice to the contrary and is furnished with a copy of the
instrument or order appointing them or creating the relationship wherein it is
so provided, their acts with respect to voting shall have the following effect:
(a) If only one (1) votes, the act of such person binds all;
(b) If more than one (1) vote, the act of the majority so voting
binds all;
(c) If more than one (1) vote, but the vote is evenly split on any
particular matter, each fraction may vote the securities in
question proportionately. If the instrument so filed shows that
any such tenancy is held in unequal interests, a majority or
even split for the purpose of this section shall be a majority
or even split in interest.
SECTION 2.11: INSPECTORS
Prior to any meeting of shareholders, the Board of Directors or the
Chief Executive Officer shall appoint one or more inspectors to act at the
meeting and make a written report thereof and may designate one or more persons
as alternate inspectors to replace any inspector who fails to act. If no
inspector or alternate is able to act at the meeting of shareholders, the person
presiding at the meeting shall appoint one or more inspectors to act at the
meeting. Inspectors may, but are not required to be, employees of the
corporation or of its subsidiaries. Each inspector, before entering upon the
discharge of his or her duties, shall take and sign an oath faithfully to
execute the duties of inspector with strict impartiality and according to the
best of his or her ability.
-6-
<PAGE>
The inspectors shall ascertain the number of shares outstanding and the
voting power of each, determine the shares represented at the meeting and the
validity of proxies and ballots, count all votes and ballots, determine and
retain for a reasonable period a record of the disposition of any challenges
made to any determination by the inspectors and certify their determination of
the number of shares represented at the meeting and their count of all votes
and ballots. The inspectors may appoint or retain other persons or entities to
assist them in the performance of their duties.
The date and time of the opening and closing of the polls for each
matter upon which the shareholders will vote at a meeting shall be announced at
the meeting. No ballot, proxies, or votes, nor any revocations thereof or
changes thereto, shall be accepted by the inspectors after the closing of the
polls.
In determining the validity and counting of proxies and ballots, the
inspectors shall be limited to an examination of the proxies, any envelopes
submitted therewith, any information provided by a shareholder who submits a
proxy by telegram, cablegram, or other electronic transmission from which it
can be determined that the proxy was authorized by the shareholder, ballots,
and the regular books and records of the corporation, except that the
inspectors may also consider other reliable information for the limited purpose
of reconciling proxies and ballots submitted by or on behalf of banks, brokers,
their nominees or similar persons which represent more votes than the holder of
a proxy is authorized by the record owner to cast or more votes than the
shareholder holds of record. If the inspectors consider other reliable
information for such purpose, they shall, at the time they make their
certification, specify the precise information considered by them, including
the person or persons from whom they obtained the information, when the
information was obtained, the means by which the information was obtained and
the basis for the inspectors' belief that such information is accurate and
reliable.
-7-
<PAGE>
SECTION 2.12: NOTICE OF SHAREHOLDER BUSINESS AND NOMINATIONS
(A) Annual Meetings of Shareholders.
--------------------------------
(1) Nominations of persons for election to the Board of
Directors and the proposal of business to be considered by the shareholders may
be made at an annual meeting of shareholders (a) pursuant to the corporation's
notice of meeting, (b) by or at the direction of the Board of Directors or (c)
by any shareholder of the corporation who was a shareholder of record at the
time of giving of notice provided for in this bylaw, who is entitled to vote at
the meeting and who complies with the notice procedures set forth in this
Section 2.12.
(2) For nominations or other business to be properly brought
before an annual meeting by a shareholder pursuant to clause (c) of paragraph
(A)(1) of this Section 2.12, the shareholder must have given timely notice
thereof in writing to the Secretary of the corporation, and such other business
must otherwise be a proper matter for shareholder action. To be timely, a
shareholder's notice shall be delivered to the Secretary at the principal
executive office of the corporation not later than the close of business on the
sixtieth (60th) day nor earlier than the close of business on the ninetieth
(90th) day prior to the first anniversary of the preceding year's annual
meeting; provided, however, that in the event that the date of the annual
meeting is more than thirty (30) days before or more than sixty (60) days after
such anniversary date, notice by the shareholder to be timely must be so
delivered not earlier than the close of business on the ninetieth (90th) day
prior to such annual meeting and not later than the close of business on the
later of the sixtieth (60th) day prior to such annual meeting or the tenth
(10th) day following the day on which public announcement of the date of such
meeting is first made by the corporation. In no event shall the public
announcement of an adjournment of an annual meeting commence a new time period
for the giving of a shareholder's notice as described above. Such shareholder's
notice shall set forth (a) as to each person whom the shareholder proposes to
nominate for election or re-election as a director, all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of directors in an election contest, or is otherwise required, in each
case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
-8-
<PAGE>
amended (the "Exchange Act") and Rule 14a-11 thereunder (including such person's
written consent to being named in the proxy statement as a nominee and to
serving as a director if elected); (b) as to any other business that the
shareholder proposes to bring before the meeting, a brief description of the
business desired to be brought before the meeting, the reasons for conducting
such business at the meeting and any material interest in such business of such
shareholder and the beneficial owner, if any, on whose behalf the proposal is
made; and (c) as to the shareholder giving the notice and the beneficial owner,
if any, on whose behalf the nomination or proposal is made (i) the name and
address of such shareholder, as they appear on the corporation's books, and of
such beneficial owner and (ii) the class and number of shares of the corporation
that are owned beneficially and of record by such shareholder and such
beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph
(A)(2) of this Section 2.12 to the contrary, if the number of directors to be
elected to the Board of Directors of the corporation is increased and there is
no public announcement by the corporation naming all of the nominees for
director or specifying the size of the increased Board of Directors at least
seventy (70) days prior to the first anniversary of the preceding year's annual
meeting, a shareholder's notice required by this bylaw shall also be considered
timely, but only with respect to nominees for any new positions created by such
increase, if it shall be delivered to the Secretary at the principal executive
office of the corporation not later than the close of business on the tenth
(10th) day following the day on which such public announcement is first made by
the corporation.
(B) Special Meetings of Shareholders. Only such business shall be
--------------------------------
conducted at a special meeting of shareholders as shall have been brought
before the meeting pursuant to the corporation's notice of meeting.
Nominations of persons for election to the Board of Directors may be made at a
special meeting of shareholders at which directors are to be elected pursuant
to the corporation's notice of meeting (a) by or at the direction of the Board
of Directors or (b) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by any shareholder of the
corporation who is a shareholder of record at the time of giving of notice
provided for in this bylaw, who shall be entitled to vote at the meeting and
who complies with the notice procedures set forth in this Section 2.12. If the
corporation calls a special meeting of shareholders for the purpose of electing
one or more directors to the Board of Directors, any such shareholder may
nominate a person or persons (as the case may be), for election to such
-9-
<PAGE>
position(s) as specified in the corporation's notice of meeting, if the
shareholder's notice required by paragraph (A)(2) of this Section 2.12 shall be
delivered to the Secretary at the principal executive offices of the
corporation not earlier than the close of business on the ninetieth (90th) day
prior to such special meeting and not later than the close of business on the
later of the sixtieth (60th) day prior to such special meeting or the tenth
(10th) day following the day on which public announcement is first made of the
date of the special meeting and of the nominees proposed by the Board of
Directors to be elected at such meeting. In no event shall the public
announcement of an adjournment of a special meeting commence a new time period
for the giving of a shareholder's notice as described above.
(C) General.
-------
(1) Only such persons who are nominated in accordance with
the procedures set forth in this Section 2.12 shall be eligible to serve as
directors, and only such business shall be conducted at a meeting of
shareholders as shall have been brought before the meeting in accordance with
the procedures set forth in this Section 2.12. Except as otherwise provided by
law, the chairman of the meeting shall have the power and duty to determine
whether a nomination or any business proposed to be brought before the meeting
was made or proposed, as the case may be, in accordance with the procedures set
forth in this Section 2.12 and, if any proposed nomination or business is not in
compliance with this Section 2.12, to declare that such defective proposal or
nomination shall be disregarded.
(2) For purposes of this Section 2.12, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the corporation with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Section
2.12, a shareholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this Section 2.12. Nothing in this section shall be deemed
(a) to affect any rights (i) of shareholders to request inclusion of proposals
in the corporation's proxy statement pursuant to Rule 14a-8 under the Exchange
Act or (ii) of the holders of any series of preferred stock of the corporation
to elect directors under specified circumstances or (b) to grant to any
shareholder any right to nominate persons for election to the Board of
Directors, or to propose business to be considered by the shareholders, that
such shareholder would not have had in the absence of this Section 2.12, it
being the intent of this section only to provide for the procedure for making
such nominations or proposals of business to be considered.
-10-
<PAGE>
ARTICLE 3 - BOARD OF DIRECTORS
------------------------------
SECTION 3.1: GENERAL POWERS
The business and affairs of the corporation shall be managed under the
direction of its Board of Directors.
SECTION 3.2: NUMBER, TENURE, AND QUALIFICATIONS
(a) Subject to the provisions of Paragraph (5) of Section XI of the
Restated Certificate of Incorporation relating to the rights of the holders of
any class or series of Preferred Stock, as defined in Section IV of the
Restated Certificate of Incorporation, to elect under specified circumstances
by separate class vote additional directors, the number of directors of the
corporation shall be fixed from time to time by the affirmative vote of
two-thirds of the total number of directors then in office who have been
elected by the holders of the capital stock of the corporation entitled to vote
generally for the election of directors. No decrease in the number of
directors shall shorten the term of any incumbent director.
(b) Directors need not be residents of Alabama or Delaware nor
shareholders of the corporation.
(c) The qualifications and retirement policies of the members of the
Board of Directors shall be established from time to time by resolution of the
Board of Directors.
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<PAGE>
(d) Any director may resign at any time upon written notice to the
corporation. Any director or the entire Board of Directors may be removed at any
time, but only for cause and only as provided in the Restated Certificate of
Incorporation.
SECTION 3.3: REGULAR MEETINGS
A regular meeting of the Board of Directors shall be held without other
notice than this bylaw at 1:00 p.m., local time, on the third Thursday of
January, March, April, June, July, October, and December (unless such date
shall fall on a holiday observed by AmSouth Bank of Alabama, in which event the
meeting shall be held on the next succeeding business day and at the same hour
or at such other hour as may be designated by the Board of Directors). Regular
meetings of the Board of Directors shall be held at the principal executive
office of the corporation or such other location as may be determined by the
Board of Directors or as permitted by law. The Board of Directors may provide,
by resolution, the time and place, either within or without the State of
Alabama, for the holding of additional or substitute regular meetings without
other notice than such resolution.
-12-
<PAGE>
SECTION 3.4: SPECIAL MEETINGS
Special meetings of the Board of Directors may be called by or at the
request of the Chief Executive Officer or any three (3) directors. A special
meeting of the Board of Directors shall be held at the principal office of the
corporation unless all directors agree in advance and in writing that it be
held at another place, either within or without the State of Alabama.
SECTION 3.5: PARTICIPATION BY CONFERENCE TELEPHONE
Members of the Board of Directors, or of any committee thereof, may
participate in any meeting of the Board of Directors or of any such committee
by means of a conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each other; and
participation in a meeting in such manner shall constitute presence in person
at the meeting.
SECTION 3.6: ACTION BY CONSENT WITHOUT A MEETING
Any action required or permitted to be taken at any meeting of the Board
of Directors or of any committee thereof may be taken without a meeting, if a
written consent thereto is signed by all members of the Board of Directors or of
such committee, as the case may be, and such written consent is filed with the
minutes of proceedings of the Board of Directors or committee.
SECTION 3.7: NOTICE
At least one (1) day's notice of any special meeting of the Board of
Directors or of any meeting of a committee of the Board of Directors shall be
given to all directors or committee members, as the case may be, unless, in the
opinion of the officer or directors calling the meeting, an emergency exists
that requires less than one (1) day's notice; in that event, only such notice
need be given as such officer or directors shall direct. Any director may
waive notice of any meeting, as provided in Section 9 of these bylaws. The
attendance of a director at a meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting for the express purpose
of objecting at the beginning of the meeting to the transaction of any business
because the meeting is not lawfully called or convened.
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<PAGE>
SECTION 3.8: FEES
By resolution of the Board of Directors, the directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors or
any committee thereof and may be paid a fixed sum for attendance at each such
meeting or a stated salary as director, or both.
SECTION 3.9: QUORUM
Except as otherwise provided in Section XI of the Restated Certificate
of Incorporation, a majority of the sum of (i) the number of directors
determined pursuant to Paragraph (2) of Section XI of the Restated Certificate
of Incorporation and Section 3.2(a) of these bylaws, and (ii) the number of
directors, if any, elected under specified circumstances by a separate class
vote of the holders of any class or series of Preferred Stock, as defined in
Section IV of the Restated Certificate of Incorporation, shall constitute a
quorum for the transaction of business at any meeting of the Board of Directors;
but, if less than such quorum is present at a meeting, a majority of the
directors present may adjourn the meeting from time to time without further
notice.
SECTION 3.10: MANNER OF ACTING
Except as provided in Sections VIII and XI of the Restated Certificate
of Incorporation and Section 3.2(a) and Section 3.12 of these bylaws, the act of
the majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
SECTION 3.11: VACANCIES
Any vacancy occurring in the Board of Directors and any directorship to
be filled by reason of an increase in the number of directorships or any other
reason shall be filled according to the provisions of Section XI of the Restated
Certificate of Incorporation.
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<PAGE>
SECTION 3.12: COMMITTEES OF THE BOARD
The Board of Directors may, by resolution or resolutions passed by a
majority of the whole Board, designate one or more committees, which, to the
extent provided in such resolution or resolutions, shall have, and may during
intervals between the meetings of the Board of Directors exercise, all the
powers and authority of the Board of Directors in the management of the
business and affairs of the corporation and may authorize the seal of the
corporation to be affixed to all papers that may require it. Each such
committee or committees shall consist of one or more of the directors of the
corporation and shall have such name or names as may be determined from time to
time by resolution or resolutions adopted by the Board of Directors. The
designation of any such committee or committees and the delegation thereto of
authority shall not operate to relieve the Board of Directors, nor any member
thereof, of any responsibility imposed upon it, him, or her by law.
SECTION 3.13: EMERITUS BOARD OF DIRECTORS
The Board of Directors may designate an "Emeritus Board of Directors",
which shall consist of directors of the corporation who have retired, either by
reason of age or because of being retired or otherwise permanently separated
from the business or professional position that he or she held at the time of
his or her election to the Board of Directors. If the Board of Directors
designates an Emeritus Board of Directors, it will also specify the frequency
of the meetings thereof, eligibility for continued service thereon, and
compensation for service thereon.
ARTICLE 4 - OFFICERS
--------------------
SECTION 4.1: GENERAL
(a) NUMBER. The officers of the corporation shall consist of a Chairman
of the Board of Directors, a President, one or more Vice Presidents (one or more
of whom may be designated by the Board of Directors as Senior Executive Vice
President, Executive Vice President, Senior Vice President, or such other title
as the Board of Directors may determine), a Chief Accounting Officer or
Controller, and a Corporate Secretary and may also include such other officers
as the Board of Directors may from time to time determine, including, but not
limited to, one or more Vice Chairmen and one or more Assistant Secretaries.
Either the Chairman of the Board or the President shall be
designated by the Board of Directors as the Chief Executive Officer of the
corporation; the President, a Vice Chairman, or one of the Vice Presidents may
be designated by the Board as the Chief Operating Officer of the corporation;
and, other officers may be designated by other titles such as "Chief Compliance
Officer", "Chief Financial Officer", "Chief Credit Officer", "State Banking
Group Head," and the like.
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<PAGE>
(b) EXECUTIVE OFFICERS; ORDER OF AUTHORITY. As used in these
bylaws, the term "Executive Officers" shall include the Chairman of the Board
(if, but only if, he or she also is the Chief Executive Officer), the President
(regardless of whether he or she is the Chief Executive Officer), any Vice
Chairman of the Board, the Senior Executive Vice Presidents, and the Executive
Vice Presidents. Their "order of authority" shall be the order designated by
resolution of the Board of Directors or, if not so designated by the Board of
Directors, as designated by the Chief Executive Officer. Notwithstanding
anything to the contrary contained in this Section 4.1 or elsewhere in these
bylaws, no one other than the members of the Management Committee of this
corporation shall participate in or have the authority to participate in
(otherwise than in the capacity of a director), major policy-making functions of
this corporation. All officers of this corporation other than members of the
Management Committee shall be excluded from major policy-making functions of
this corporation, otherwise than in the capacity of a director of this
corporation. Executive officers of all affiliates or subsidiaries of this
corporation (other than members of the Management Committee) are excluded from
participation in major policy-making functions of this corporation. Nothing
contained in these bylaws is intended to have any bearing on whether or not an
officer of this corporation is an "executive officer" of this corporation for
any purpose other than convenient reference in these bylaws, including, but not
limited to the purpose of determining whether or not any officer of this
corporation is an "officer" within the meaning of Section 16 of the Securities
Exchange Act of 1934 or an "executive officer" under Regulation O of the Federal
Reserve Board. Only members of the Management Committee shall be (i) "officers"
for purposes of Section 16 of the Securities Exchange Act of 1934 (unless
Section 16 or applicable regulations require other officers with specific titles
to be subject to Section 16) or (ii) "executive officers" for purposes of
Regulation O of the Federal Reserve Board.
(c) DUAL OFFICES. Any two or more offices in the corporation
may, except where prohibited by law, be held by the same individual. In cases
where an individual holds more than one office, that person shall have the
authority of all offices so held and shall occupy the "order of authority" for
the most senior of the offices held.
(d) MANNER OF ELECTION; TERM OF OFFICE. Except as provided
below, all officers shall be elected annually by the Board of Directors at their
first meeting next following the Annual Meeting of Shareholders of the
corporation, or as soon thereafter as is practicable; and their terms of office
shall be for one (1) year, commencing upon election, or until their successors
are elected and qualified, whichever occurs later.
The Board of Directors may, at any time and for any reason
sufficient to them, elect such other officers as they may deem desirable.
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<PAGE>
Each of the two (2) Executive Officers having the highest order
of authority shall have the power to elect or appoint, or delegate to any other
officer of the corporation the power to elect or appoint, all employees and all
officers holding a title at or below that of Senior Vice President. Appointment
of employees and election of persons to an office at or below the level of
Senior Vice President shall be made, unless one of the said two (2) Executive
Officers acts directly in a particular instance, as provided in the personnel
policies of the corporation, as they may from time to time be adopted, amended,
and modified. Compensation of all officers and employees shall be fixed as
provided in the personnel policies of the corporation.
(e) RESIGNATION; REMOVAL FROM OFFICE. Each officer shall hold
his or her office until his or her successor is elected and qualified or until
his or her earlier resignation or removal. Any officer may resign at any time
upon written notice to the corporation. All officers and employees serve at the
will of this corporation and may be removed from office and employment at any
time, with or without cause.
Only the Board of Directors or its Executive Committee may
remove from office the Chief Executive Officer, the Chairman of the Board, or
the President.
All other officers and employees may be removed from office by either of
the two (2) Executive Officers having the highest order of authority or by any
person authorized so to do by the personnel policies of the corporation; and,
unless one of the said two (2) Executive Officers acts directly in a particular
instance, removal from office or employment shall be as provided in the
personnel policies of the corporation, as they may from time to time be adopted,
amended, and modified.
(f) VACANCIES. Vacancies among the Executive Officers may be
filled by the Board of Directors or the Executive Committee. In the event of a
vacancy in any of the offices of the Executive Officers, any of the other
Executive Officers remaining may be elected to fill the vacancy in such office
for such period as the Board of Directors may determine or until further action
by the Board.
SECTION 4.2: CHIEF EXECUTIVE OFFICER
Subject to the direction of the Board of Directors, of the Executive
Committee, and of other committees of the Board having authority, the Chief
Executive Officer shall be vested with authority to act for the corporation in
all matters to the extent that such delegation of authority may not be contrary
to law; shall have general charge of the corporation and of its business and
affairs, including authority over the operations of the corporation and over
its employees; and, subject to the limitations stated, shall have full power
and authority to do and perform in the name of the corporation all acts
necessary or proper in his or her opinion to be done and performed and to
execute for and in the name of the corporation all instruments, agreements, and
deeds which may be authorized to be executed on behalf of the corporation or
which may be required by law.
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SECTION 4.3: CHAIRMAN OF THE BOARD
The Chairman of the Board, or in his or her absence, the President or
other Executive Officers, in their order of authority, shall preside at all
regular, called, or special meetings of the Board of Directors, the Executive
Committee, and the shareholders, and at adjournments thereof.
SECTION 4.4: PRESIDENT
The President shall, subject to the direction of the Board of Directors,
the Executive Committee, other committees of the Board of Directors having
authority (and, if he or she is not the Chief Executive Officer, then also
subject to the direction of the Chief Executive Officer), be vested with
authority to act for the corporation in all matters to the extent that such
delegation of authority may not be contrary to law. The President, regardless
of whether he or she is also the Chief Executive Officer, shall have the same
power to sign for the corporation as is prescribed in these bylaws for the
Chief Executive Officer. The President shall perform all duties incidental to
the office and shall perform such other duties as may be assigned from time to
time by the Board of Directors or the Chief Executive Officer.
SECTION 4.5: OTHER EXECUTIVE OFFICERS
Each of the Executive Officers shall (subject to the direction of the
Board of Directors and of the committees of the Board having authority and to
the direction of the Chief Executive Officer) have and may exercise authority to
act for the corporation in all matters to the extent that such delegation of
authority may not be contrary to law and, in general, to discharge the functions
and to exercise the authority vested in the Chief Executive Officer in matters
not otherwise acted upon by the Chief Executive Officer or by other Executive
Officers senior in the order of authority. Subject to the limitations stated
above, the authority of each Executive Officer shall include authority over the
operations of the corporation within his or her assigned areas of responsibility
and over assigned employees, and authority to do and perform in the name of the
corporation all acts necessary or proper in his or her opinion to be done and
performed and to execute for and in the name of the corporation all instruments,
agreements, and deeds which may be authorized to be executed on behalf of the
corporation or required by law.
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SECTION 4.6: VICE PRESIDENTS
Any Vice President shall have the authority to execute in the name of
the corporation transfers, conveyances, certificates, releases, satisfactions,
authentications, options, proxies, leases, including oil, gas, and other mineral
leases, agreements, including but not limited to agreements relating to
depository accounts of the corporation, or other instruments pertaining to
investment, assets or operations of the corporation or powers held or controlled
by the corporation. The Vice Presidents shall have such other powers as are from
time to time conferred upon them by the Board of Directors, committees of the
Board, and the Executive Officers.
SECTION 4.7: CHIEF ACCOUNTING OFFICER OR CONTROLLER
An officer of the corporation shall be appointed "Chief Accounting
Officer" or "Controller" and shall have custody of the corporation's general
accounting records, shall prepare financial statements, tax returns, profit
plans and reports to regulatory authorities, and shall have such other duties as
the Chief Executive Officer or other Executive Officer may assign him from time
to time.
SECTION 4.8: THE SECRETARY
The Secretary shall: (a) keep the minutes of the shareholders' and of
the Board of Directors' meetings in one (1) or more books provided for that
purpose; (b) see that all notices are duly given in accordance with the
provisions of these bylaws or as required by law; (c) be custodian of the
corporate records and of the seal of the corporation and affix, or cause to be
affixed, the seal of the corporation to all documents the execution of which on
behalf of the corporation under its seal is appropriate; (d) keep a record of
the post office address of each shareholder, which shall be furnished to the
Secretary by such shareholder; (e) have general charge of the stock transfer
books of the corporation; and (f) in general perform all duties incident to the
office of Secretary and such other duties as from time to time may be assigned
to him or her by these bylaws, by the Chief Executive Officer, or by the Board
of Directors. The Secretary may, from time to time, delegate to other officers
of the corporation, including but not limited to Assistant Secretaries, any or
all of the duties and powers of the Secretary hereunder.
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SECTION 4.9: EXERCISE OF AUTHORITY OF CHIEF EXECUTIVE OFFICER BY OTHER
EXECUTIVE OFFICERS
In case of the disqualification, disability, death, resignation, or
removal of the Chief Executive Officer, and until the Board of Directors has
filled the vacancy, the Executive Officers, in their order of authority, shall
act as such Chief Executive Officer and with his full authority.
SECTION 4.10: MANAGEMENT COMMITTEE
There shall be an officers' committee of the corporation (the
"Management Committee"), which shall consist of such officers of the corporation
and its subsidiaries as may be appointed to sit thereon by the Chief Executive
Officer. The chairman of the committee shall be the Chief Executive Officer, and
the committee shall meet at the chairman's call.
The Management Committee shall develop, publish, and implement policies
and procedures for the operation of the corporation and its subsidiaries and
affiliates. The Board of Directors shall have the right to amend or revoke
actions of the Management Committee. The Management Committee may amend, make
additions to, or deletions from, or revoke such policies and procedures, to the
extent the committee deems such actions to be necessary and desirable. In
addition to the duties prescribed above, the Management Committee shall have
such other and further duties and responsibilities as may from time to time be
assigned to it by the Board of Directors or the Chief Executive Officer.
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ARTICLE 5 - SHARES; PROXIES
---------------------------
SECTION 5.1: CERTIFICATES FOR SHARES
Certificates shall be issued only for whole shares and no certificate
will be issued for a fractional share. Certificates representing whole shares of
the corporation shall be in such form as shall be determined by the Board of
Directors and shall be signed in the manner provided by the General Corporation
Law of Delaware by the Chairman or Vice-Chairman of the Board of Directors, or
by the President or any Vice-President, and by the Treasurer or an Assistant
Treasurer, or by the Secretary or an Assistant Secretary. Such signatures may be
in facsimile form. All certificates for shares shall be consecutively numbered
or otherwise identified. The name and address of the person to whom the shares
represented thereby are issued, with the number of shares and date of issue,
shall be entered on the stock transfer books of the corporation. All
certificates surrendered to the corporation for transfer shall be canceled, and
no new certificate shall be issued until the former certificate for a like
number of shares shall have been surrendered and canceled, except that the
corporation may issue a new certificate of stock in place of any certificate
theretofore issued by it, alleged to have been lost, stolen, or destroyed, and
the corporation may require the owner of the lost, stolen, or destroyed
certificate, or such owner's legal representative, to give the corporation a
bond sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft, or destruction of any such certificate or
the issuance of such new certificate, as the Board of Directors may prescribe.
SECTION 5.2: TRANSFER OF SHARES
Transfer of shares of the corporation shall be made only on the stock
transfer books of the corporation by the holder of record thereof or by such
holder's legal representative, who shall furnish proper evidence of authority
to transfer, or by such holder's attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary of the corporation, and on
surrender for cancellation of the certificate for such shares. The person in
whose name shares stand on the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.
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SECTION 5.3: PROXIES
Unless otherwise provided by resolution of the Board of Directors, the
Chief Executive Officer may cast, or from time to time appoint an attorney or
agent of the corporation to cast, the votes that the corporation may be
entitled to cast as the holder of stock or other securities in any other
corporation any of the stock or other securities of which may be held by the
corporation, at meetings of the holders of the stock or other securities of
such other corporation, or to consent in writing, in the name and on behalf of
the corporation as such holder, to any action by such other corporation, and
may instruct the person or persons so appointed as to the manner of casting
such votes or giving such consent, and may execute or cause to be executed, in
the name and on behalf of the corporation and under its corporate seal or
otherwise, all such written proxies or other instruments as the Chief Executive
Officer may deem necessary or proper in the premises.
ARTICLE 6 - FISCAL YEAR
-----------------------
SECTION 6.1: The fiscal year of the corporation shall begin on January 1 and
end on December 31 in each year.
ARTICLE 7 - DIVIDENDS; RECORD DATE
----------------------------------
SECTION 7.1: The Board of Directors or the Executive Committee may from time
to time declare, and the corporation may pay, dividends on its outstanding
shares in the manner and upon the terms and conditions provided by law.
SECTION 7.2: In order that the corporation may determine the shareholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the shareholders entitled to exercise any rights with respect
to any change, conversion or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the record date is
adopted, and which record date shall be not more than sixty (60) days prior to
such action. If no record date is fixed, the record date for determining
shareholders for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts a resolution relating thereto.
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ARTICLE 8 - SEAL
----------------
SECTION 8.1: The corporate seal of the corporation shall be a circular die
around which shall be the words "AmSouth Bancorporation."
ARTICLE 9 - WAIVERS OF NOTICE
-----------------------------
SECTION 9.1: Whenever any notice is required to be given to any shareholder
or director of the corporation under the provisions of these bylaws, the
Restated Certificate of Incorporation, or the provisions of law, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the shareholders, directors, or
members of a committee of directors need be specified in any written waiver of
notice except as required by the Restated Certificate of Incorporation or these
bylaws.
ARTICLE 10 - AMENDMENTS TO BYLAWS
---------------------------------
SECTION 10.1: POWER OF DIRECTORS TO AMEND
The Board of Directors shall have the power to alter, amend, and repeal
the bylaws of the corporation or adopt new bylaws for the corporation at any
regular or special meeting of the Board.
SECTION 10.2: POWER OF SHAREHOLDERS TO AMEND
(a) The shareholders may alter, amend, or repeal the bylaws of the
corporation or adopt new bylaws for the corporation at any annual meeting or at
a special meeting called for the purpose, and all bylaws made by the directors
may be altered, amended, or repealed by the shareholders; provided, however,
that:
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(1) the affirmative vote of the holders of sixty-seven
percent (67%) of the combined voting power of the then outstanding shares of
capital stock of the corporation entitled to vote generally for the election of
directors, voting together as a single class, shall be required for the
shareholders to alter, amend, or repeal Section VII of the Restated Certificate
of Incorporation of the corporation, or to adopt any provision of these bylaws
that would cause these bylaws to be inconsistent with the provisions of Section
VII of the Restated Certificate of Incorporation of the corporation;
(2) the affirmative vote of the holders of eighty percent
(80%) of the combined voting power of the then outstanding shares of capital
stock of the corporation entitled to vote generally for the election of
directors, voting together as a single class, shall be required for the
shareholders to alter, amend, or repeal Section XI of the Restated Certificate
of Incorporation of the corporation or to adopt any provision of these bylaws
that would cause these bylaws to be inconsistent with the provisions of Section
XI of the Restated Certificate of Incorporation of the corporation;
(3) the affirmative vote of the holders of eighty percent
(80%) of the combined voting power of the then outstanding shares of capital
stock of the corporation entitled to vote generally for the election of
directors, voting together as a single class, shall be required for the
shareholders to alter, amend, or repeal any provision of Paragraph (a) of
Section 3.2 of these bylaws or to adopt any provision of these bylaws that would
cause these bylaws to be inconsistent with the provisions of Paragraph (a) of
Section 3.2 of these bylaws; and
(4) the affirmative vote of the holders of not less than
eighty percent (80%) of the outstanding shares of the voting stock and the
affirmative vote of the holders of not less than sixty-seven percent (67%) of
the voting stock held by shareholders other than an Interested Stockholder (as
defined in Section VIII of the Restated Certificate of Incorporation) shall be
required for the shareholders to alter, amend, or repeal Section VIII of the
Restated Certificate of Incorporation of the corporation, or to adopt any
provision of these bylaws that would cause these bylaws to be inconsistent with
the provisions of Section VIII of the Restated Certificate of Incorporation of
the corporation.
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(b) The affirmative vote of the holders of sixty-seven percent
(67%) of the combined voting power of the then outstanding shares of capital
stock of the corporation entitled to vote generally for the election of
directors, voting together as a single class, shall be required for the
shareholders to alter, amend, or repeal Paragraph (a) (1) of this Section 10.2
of these bylaws or to adopt any provision of these bylaws that would cause these
bylaws to be inconsistent with Paragraph (a) (1) of this Section 10.2 of these
bylaws.
(c) The affirmative vote of the holders of eighty percent (80%) of
the combined voting power of the then outstanding shares of capital stock of the
corporation entitled to vote generally for the election of directors, voting
together as a single class, shall be required for the shareholders to alter,
amend, or repeal Paragraph (a) (2) or (a) (3) of this Section 10.2 of these
bylaws or to adopt any provision of these bylaws inconsistent with Paragraph (a)
(2) or (a) (3) of this Section 10.2 of these bylaws.
(d) The affirmative vote of the holders of not less than eighty
percent (80%) of the outstanding shares of the voting stock and the affirmative
vote of the holders of not less than sixty-seven percent (67%) of the voting
stock held by shareholders other than an Interested Stockholder (as defined in
Section VIII of the Restated Certificate of Incorporation) shall be required for
the shareholders to alter, amend, or repeal Paragraph (a) (4) of this Section
10.2 or to adopt any provision of these bylaws that would cause these bylaws to
be inconsistent with Paragraph (a) (4) of this Section 10.2 of these bylaws.
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EXHIBIT 11
AMSOUTH BANCORPORATION
STATEMENT REGARDING COMPUTATION OF EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
THREE MONTHS
SIX MONTHS ENDED ENDED
JUNE 30 JUNE 30
-------------------------------------
1997 1996 1997 1996
--------- ---------------------------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net income ............................. $ 110,473 $ 95,868 $ 55,900 $ 48,705
========= ======== ======== ========
Average shares of common stock outstand-
ing*................................... 83,235 85,146 82,687 84,762
========= ======== ======== ========
Earnings per common share* ............. $ 1.33 $ 1.13 $ 0.68 $ 0.57
========= ======== ======== ========
</TABLE>
* Restated for three-for-two common stock split.
<PAGE>
EXHIBIT 15
EXHIBIT 15 -- LETTER RE: UNAUDITED INTERIM FINANCIAL INFORMATION
Board of Directors
AmSouth Bancorporation
We are aware of the incorporation by reference in the following Registration
Statements and in their related Prospectuses, of our report dated August 14,
1997 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, 1997:
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-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. 33-58777 pertaining to the Director Restricted Stock Plan;
Form S-8 No. 333-02099 pertaining to the AmSouth Bancorporation Thrift
Plan;
Form S-3 No. 333-06641 pertaining to the AmSouth Bancorporation 7 1/2%
Convertible Subordinated Debentures; and
Form S-8 No. 333-05631 pertaining to the 1996 Long Term Incentive
Compensation 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 14, 1997
<PAGE>
EXHIBIT 21
AMSOUTH BANCORPORATION
LIST OF SUBSIDIARIES
The following is a list of all subsidiaries of AmSouth Bancorporation and the
jurisdiction in which they were organized. Each subsidiary does business under
its own name.
<TABLE>
<CAPTION>
NAME JURISDICTION WHERE ORGANIZED
---- ------------------------------
<S> <C>
Alabanc Properties, Inc................... Delaware
AmSouth Bank.............................. Alabama
AmSouth Leasing Corporation.............. Alabama
AmSouth Leasing, Ltd..................... Alabama
AmSouth Investment Services, Inc......... Alabama
AmSouth Riverchase, Inc.................. Alabama
Fifth Avenue Realty Company.............. (unincorporated joint venture)
First Gulf Insurance Agency, Inc......... Alabama
Five Points Capital Advisors, Inc........ Alabama
National Properties and Mining Company,
Inc..................................... Delaware
Rockhaven Asset Management, LLC.......... Delaware
AmSouth Insurance Agency, Inc............ Florida
AmSouth Real Estate Holdings, Inc........ Alabama
AmSouth Real Estate Management, Inc..... Alabama
AmSouth Retirement Services, Inc......... Florida
Fortune Mortgage Corporation............. Florida
Service Mortgage and Insurance Agency,
Inc..................................... Florida
FMLS, Inc................................ Tennessee
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 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, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 639,588
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 3,075
<TRADING-ASSETS> 3,790
<INVESTMENTS-HELD-FOR-SALE> 2,264,214
<INVESTMENTS-CARRYING> 2,475,095
<INVESTMENTS-MARKET> 2,475,229
<LOANS> 12,203,520
<ALLOWANCE> 179,081
<TOTAL-ASSETS> 18,353,331
<DEPOSITS> 12,613,686
<SHORT-TERM> 2,869,322
<LIABILITIES-OTHER> 252,335
<LONG-TERM> 1,235,215
0
0
<COMMON> 90,033
<OTHER-SE> 1,292,740
<TOTAL-LIABILITIES-AND-EQUITY> 18,353,331
<INTEREST-LOAN> 517,350
<INTEREST-INVEST> 164,418
<INTEREST-OTHER> 1,521
<INTEREST-TOTAL> 683,289
<INTEREST-DEPOSIT> 238,148
<INTEREST-EXPENSE> 346,496
<INTEREST-INCOME-NET> 336,793
<LOAN-LOSSES> 35,517
<SECURITIES-GAINS> 4,941
<EXPENSE-OTHER> 260,004
<INCOME-PRETAX> 170,778
<INCOME-PRE-EXTRAORDINARY> 170,778
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 110,473
<EPS-PRIMARY> 1.33
<EPS-DILUTED> 1.33
<YIELD-ACTUAL> 4.10
<LOANS-NON> 73,044
<LOANS-PAST> 42,918
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 179,049
<CHARGE-OFFS> 46,841
<RECOVERIES> 11,356
<ALLOWANCE-CLOSE> 179,081
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
