<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the Fiscal Year Ended December 31, 1998.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File Number: 0-6198
Full Title of Plan: FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
FIRST AMERICAN CORPORATION
FIRST AMERICAN CENTER
NASHVILLE, TENNESSEE 37237
Required Information:
Items 1 - 3. Financial Statements and Schedules
The following documents are filed as required for this Annual Report:
A. Financial Statements and Schedules
(1) Independent Auditors' Report
(2) Statements of Net Assets Available for Benefits with
Fund Information
(3) Statements of Changes in Net Assets Available for
Benefits with Fund Information
(4) Notes to Financial Statements
(5) Item 27a - Schedule of Assets Held for Investment
Purposes
(6) Item 27d - Schedule of Reportable Transactions
B. Exhibits
EXHIBIT
NUMBER DESCRIPTION
(1) Consent of KPMG LLP
<PAGE> 2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Trustee (or other persons who administer the employee benefit plan) has duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Date: June 24, 1999 By: /s/ SHERRY STEPHENS
---------------------------------------------
SHERRY STEPHENS
Trustee
<PAGE> 3
INDEX
Financial Statements and Exhibits
FINANCIAL STATEMENTS AND SCHEDULES
<TABLE>
<S> <C>
Independent Auditors' Report...................................................................................1
Statements of Net Assets Available for Benefits with Fund Information..........................................2
Statements of Changes in Net Assets Available for Benefits with Fund Information...............................6
Notes to Financial Statements..................................................................................12
Schedule 1 - Item 27a - Schedule of Assets Held for Investment Purposes........................................25
Schedule 2 - Item 27d - Schedule of Reportable Transactions....................................................26
</TABLE>
EXHIBIT
1 - Consent of KPMG LLP
<PAGE> 4
[KPMG LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
First American Corporation
Benefit Plan Administrative Committee:
We have audited the accompanying statements of net assets available for benefits
with fund information of First American Corporation First Incentive Reward
Savings Thrift Plan as of December 31, 1998 and 1997, and the related statements
of changes in net assets available for benefits with fund information for each
of the years in the three-year period ended December 31, 1998. These financial
statements are the responsibility of the Benefit Plan Administrative Committee
(Committee). Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Committee, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of First American
Corporation First Incentive Reward Savings Thrift Plan as of December 31, 1998
and 1997, and the changes in net assets available for benefits for each of the
years in the three-year period ended December 31, 1998, in conformity with
generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included in
Schedules 1 and 2 is presented for the purpose of additional analysis and is not
a required part of the basic financial statements, but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Committee. The
fund information in the statements of net assets available for benefits and the
statements of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets available
for benefits and changes in net assets available for benefits of each fund. The
supplementary information in Schedules 1 and 2 and the fund information have
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
KPMG LLP
June 10, 1999
<PAGE> 5
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Statements of Net Assets Available for Benefits with Fund Information
December 31, 1998 and 1997
<TABLE>
<CAPTION>
1998
-----------------------------------------
ISG
ISG LIMITED FOUNDERS
EB STABLE TERM INCOME BALANCED
VALUE FUND FUND FUND
----------- --------- ---------
<S> <C> <C> <C>
Assets:
Cash $ -- -- --
Short-term investments (809) 118 2
Investments at fair value:
First American Corporation stock (cost of $40,829,994) -- -- --
Mutual funds (cost of $20,548,317) 3,279,348 2,504,348 1,594,923
Participant loans (cost of $1,940,397) -- -- --
----------- --------- ---------
Total investments 3,278,539 2,504,466 1,594,925
Receivables:
Employer's contributions 2,381 3,318 8,217
Participant contributions 12,359 16,802 10,204
Dividends and interest -- 12,081 --
Other -- -- 65,584
----------- --------- ---------
Total receivables 14,740 32,201 84,005
----------- --------- ---------
Total assets 3,293,279 2,536,667 1,678,930
Liabilities:
Due to brokers -- -- --
Other -- -- --
----------- --------- ---------
Total liabilities -- -- --
----------- --------- ---------
Net assets available for benefits $ 3,293,279 2,536,667 1,678,930
=========== ========= =========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE> 6
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Statements of Net Assets Available for Benefits with Fund Information
December 31, 1998 and 1997
<TABLE>
<CAPTION>
1998
------------------------------------------------------------------------------------
ISG
CAPITAL FIRST
GROWTH VANGUARD AIM AMERICAN
PORTFOLIO INTERNATIONAL CONSTELLATION CORPORATION PARTICIPANT
FUND STOCK FUND FUND STOCK FUND LOANS TOTAL
---------- ---------- ---------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Cash -- -- -- 34,718 -- 34,718
Short-term investments (9,066) 7 (23) 371,872 -- 362,101
Investments at fair value:
First American Corporation stock (cost
of $40,829,994) -- -- -- 92,320,227 -- 92,320,227
Mutual funds (cost of $20,548,317) 12,984,219 629,267 1,789,855 -- -- 22,781,960
Participant loans (cost of $1,940,397) -- -- -- -- 1,940,397 1,940,397
----------- ------- ---------- ---------- --------- -----------
Total investments 12,975,153 629,274 1,789,832 92,692,099 1,940,397 117,404,685
Receivables:
Employer's contributions 9,114 2,144 4,351 3,879,842 -- 3,909,367
Participant contributions 66,000 8,505 18,717 162,035 -- 294,622
Dividends and interest -- -- -- 5,601 -- 17,682
Other 6,808 -- 45,906 -- -- 118,298
----------- ------- ---------- ---------- --------- -----------
Total receivables 81,922 10,649 68,974 4,047,478 -- 4,339,969
----------- ------- ---------- ---------- --------- -----------
Total assets 13,057,075 639,923 1,858,806 96,774,295 1,940,397 121,779,372
Liabilities:
Due to brokers 1,428 -- -- 40,764 -- 42,192
Other -- -- -- 43,051 -- 43,051
----------- ------- ---------- ---------- --------- -----------
Total liabilities 1,428 -- -- 83,815 -- 85,243
----------- ------- ---------- ---------- --------- -----------
Net assets available for
benefits 13,055,647 639,923 1,858,806 96,690,480 1,940,397 121,694,129
=========== ======= ========== ========== ========= ===========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 7
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Statements of Net Assets Available for Benefits with Fund Information
December 31, 1998 and 1997
<TABLE>
<CAPTION>
1997
----------------------------------------
ISG
ISG LIMITED FOUNDERS
EB STABLE TERM INCOME BALANCED
VALUE FUND FUND FUND
----------- --------- ---------
<S> <C> <C> <C>
Assets:
Cash $ 68,513 17,661 31,123
Investments at fair value:
First American Corporation stock (cost of $33,024,721) -- -- --
Mutual funds (cost of $15,000,370) 3,972,804 2,251,989 368,834
Participant loans (cost of $659,810) -- -- --
----------- --------- ---------
Total investments 3,972,804 2,251,989 368,834
Receivables:
Employer's contributions -- -- --
Participant contributions -- -- --
Dividends and interest -- 45 --
Due from brokers 16,184 7,059 --
----------- --------- ---------
Total receivables 16,184 7,104 --
----------- --------- ---------
Total assets 4,057,501 2,276,754 399,957
Liabilities:
Due to brokers 876 125 626
Other -- -- --
----------- --------- ---------
Total liabilities 876 125 626
----------- --------- ---------
Net assets available for benefits $ 4,056,625 2,276,629 399,331
=========== ========= =========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 8
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Statements of Net Assets Available for Benefits with Fund Information
December 31, 1998 and 1997
<TABLE>
<CAPTION>
1997
---------------------------------------------------------------------------------
ISG
CAPITAL FIRST
GROWTH VANGUARD AIM AMERICAN
PORTFOLIO INTERNATIONAL CONSTELLATION CORPORATION PARTICIPANT
FUND STOCK FUND FUND STOCK FUND LOANS TOTAL
---------- ------------- ---------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Cash 104,239 17,215 63,666 68,814 -- 371,231
Investments at fair value:
First American Corporation stock (cost
of $33,024,721) -- -- -- 107,503,290 -- 107,503,290
Mutual funds (cost of $15,000,370) 8,871,433 119,049 533,184 -- -- 16,117,293
Participant loans (cost of $659,810) -- -- -- -- 659,810 659,810
----------- ------- ---------- ----------- --------- -----------
Total investments 8,871,433 119,049 533,184 107,503,290 659,810 124,280,393
Receivables:
Employer's contributions -- -- -- 3,276,531 -- 3,276,531
Participant contributions -- -- -- 111,117 -- 111,117
Dividends and interest 19,815 -- 30,181 -- -- 50,041
Due from brokers 21,687 14 15 213,218 -- 258,177
----------- ------- ---------- ----------- --------- -----------
Total receivables 41,502 14 30,196 3,600,866 -- 3,695,866
----------- ------- ---------- ----------- --------- -----------
Total assets 9,017,174 136,278 627,046 111,172,970 659,810 128,347,490
Liabilities:
Due to brokers 130 3,904 638 -- -- 6,299
Other -- -- -- 2,147 -- 2,147
----------- ------- ---------- ----------- --------- -----------
Total liabilities 130 3,904 638 2,147 -- 8,446
----------- ------- ---------- ----------- --------- -----------
Net assets available for
benefits 9,017,044 132,374 626,408 111,170,823 659,810 128,339,044
=========== ======= ========== =========== ========= ===========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 9
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Statements of Changes in Net Assets
Available for Benefits with Fund Information
Years ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
ISG EB STABLE ISG LIMITED TERM
VALUE FUND INCOME FUND
-------------------------- -------------------------
1998 1997 1998 1997
----------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation)
in fair value of investments $ 241,817 1,702 1,667 20,278
Interest -- 69,652 -- --
Dividends - cash -- -- 166,887 13,039
----------- --------- ---------- ---------
Total investment income (loss) 241,817 71,354 168,554 33,317
Loans to participants:
Principal -- -- -- --
Interest -- -- -- --
----------- --------- ---------- ---------
Total loan income -- -- -- --
Contributions:
Participants 295,731 96,644 394,665 105,901
Employer - cash 2,696 28 3,658 55
----------- --------- ---------- ---------
Total contributions 298,427 96,672 398,323 105,956
----------- --------- ---------- ---------
Total additions 540,244 168,026 566,877 139,273
----------- --------- ---------- ---------
Deductions from net assets attributed to:
Benefits paid to participants 1,574,204 133,150 215,157 56,585
Other deductions -- -- -- --
----------- --------- ---------- ---------
Total deductions 1,574,204 133,150 215,157 56,585
----------- --------- ---------- ---------
Net increase (decrease) prior
to interfund transfers (1,033,960) 34,876 351,720 82,688
Interfund transfers 270,614 4,021,749 (91,682) 2,193,941
----------- --------- ---------- ---------
Net increase (decrease) (763,346) 4,056,625 260,038 2,276,629
Net assets available for benefits:
Beginning of year 4,056,625 -- 2,276,629 --
----------- --------- ---------- ---------
End of year $ 3,293,279 4,056,625 2,536,667 2,276,629
=========== ========= ========== =========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 10
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Statements of Changes in Net Assets
Available for Benefits with Fund Information
Years ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
VANGUARD
FOUNDERS ISG CAPITAL INTERNATIONAL
BALANCED FUND GROWTH PORTFOLIO FUND STOCK FUND
---------------------- ------------------------- --------------------
1998 1997 1998 1997 1998 1997
--------- -------- ---------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation)
in fair value of investments 116,149 (17,717) 1,180,831 (939,116) 16,422 (3,278)
Interest -- -- -- -- -- --
Dividends - cash 25,079 18,529 1,969,718 1,220,313 12,303 3,278
--------- -------- ---------- ---------- ------- --------
Total investment income (loss) 141,228 812 3,150,549 281,197 28,725 --
Loans to participants:
Principal -- -- -- -- -- --
Interest -- -- -- -- -- --
--------- -------- ---------- ---------- ------- --------
Total loan income -- -- -- -- -- --
Contributions:
Participants 181,663 3,867 1,488,526 363,150 140,167 2,903
Employer - cash 10,104 1,558 11,360 1,558 2,669 110
--------- -------- ---------- ---------- ------- --------
Total contributions 191,767 5,425 1,499,886 364,708 142,836 3,013
--------- -------- ---------- ---------- ------- --------
Total additions 332,995 6,237 4,650,435 645,905 171,561 3,013
--------- -------- ---------- ---------- ------- --------
Deductions from net assets attributed to:
Benefits paid to participants 119,309 -- 1,008,040 251,848 44,253 --
Other deductions -- -- -- -- -- --
--------- -------- ---------- ---------- ------- --------
Total deductions 119,309 -- 1,008,040 251,848 44,253 --
--------- -------- ---------- ---------- ------- --------
Net increase (decrease) prior
to interfund transfers 213,686 6,237 3,642,395 394,057 127,308 3,013
Interfund transfers 1,065,913 393,094 396,208 8,622,987 380,241 129,361
--------- -------- ---------- ---------- ------- --------
Net increase (decrease) 1,279,599 399,331 4,038,603 9,017,044 507,549 132,374
Net assets available for benefits:
Beginning of year 399,331 -- 9,017,044 -- 132,374 --
--------- -------- ---------- ---------- ------- --------
End of year 1,678,930 399,331 13,055,647 9,017,044 639,923 132,374
========= ======== ========== ========== ======= ========
</TABLE>
See accompanying notes to financial statements.
7
<PAGE> 11
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Statements of Changes in Net Assets
Available for Benefits with Fund Information
Years ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
FIRST AMERICAN CORPORATION
AIM CONSTELLATION FUND STOCK FUND
-------------------------- -------------------------
1998 1997 1998 1997
----------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation)
in fair value of investments $ 223,622 (16,167) (10,547,059) 1,845,137
Interest -- -- 55,204 --
Dividends - cash 32,596 -- 2,008,894 445,983
----------- --------- ----------- -----------
Total investment income (loss) 256,218 (16,167) (8,482,961) 2,291,120
Loans to participants:
Principal -- -- -- --
Interest -- -- -- --
----------- --------- - ---------- -----------
Total loan income -- -- -- --
Contributions:
Participants 341,826 10,231 4,137,876 976,666
Employer - cash 5,533 3,117 5,182,831 3,596,185
----------- --------- ----------- -----------
Total contributions 347,359 13,348 9,320,707 4,572,851
----------- --------- ----------- -----------
Total additions 603,577 (2,819) 837,746 6,863,971
----------- --------- ----------- -----------
Deductions from net assets attributed to:
Benefits paid to participants 76,434 -- 11,358,620 2,643,122
Other deductions -- -- -- --
----------- --------- ----------- -----------
Total deductions 76,434 -- 11,358,620 2,643,122
----------- --------- ----------- -----------
Net increase (decrease) prior
to interfund transfers 527,143 (2,819) (10,520,874) 4,220,849
Interfund transfers 705,255 629,227 (3,959,469) 106,949,974
----------- --------- ----------- -----------
Net increase (decrease) 1,232,398 626,408 (14,480,343) 111,170,823
Net assets available for benefits:
Beginning of year 626,408 -- 111,170,823 --
----------- --------- ----------- -----------
End of year $ 1,858,806 626,408 96,690,480 111,170,823
=========== ========= =========== ===========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE> 12
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Statements of Changes in Net Assets
Available for Benefits with Fund Information
Years ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
FUND A
FIRST AMERICAN CORPORATION FUND B
PARTICIPANT LOANS COMMON STOCK BOND
--------------------- --------------------------- -------------------------
1998 1997 1997 1996 1997 1996
--------- -------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation)
in fair value of investments -- -- 44,565,532 11,346,559 9,349 (28,425)
Interest -- -- 10,291 10,090 117,449 117,573
Dividends - cash -- -- 1,258,528 1,333,929 -- --
--------- -------- ------------ ---------- ---------- ---------
Total investment income (loss) -- -- 45,834,351 12,690,578 126,798 89,148
Loans to participants:
Principal 510,444 -- -- -- -- --
Interest 137,323 -- -- -- -- --
--------- --------- ------------ ---------- ---------- ---------
Total loan income 647,767 -- -- -- -- --
Contributions:
Participants -- -- 2,907,082 3,332,347 397,871 597,024
Employer - cash -- -- 978,234 3,904,696 -- --
--------- -------- ------------ ---------- ---------- ---------
Total contributions -- -- 3,885,316 7,237,043 397,871 597,024
--------- -------- ------------ ---------- ---------- ---------
Total additions 647,767 -- 49,719,667 19,927,621 524,669 686,172
--------- -------- ------------ ---------- ---------- ---------
Deductions from net assets attributed to:
Benefits paid to participants 89,656 -- 7,002,892 6,935,764 301,237 351,595
Other deductions 510,444 -- -- 8,581 -- 411
--------- -------- ------------ ---------- ---------- ---------
Total deductions 600,100 -- 7,002,892 6,944,345 301,237 352,006
--------- -------- ------------ ---------- ---------- ---------
Net increase (decrease) prior
to interfund transfers 47,667 -- 42,716,775 12,983,276 223,432 334,166
Interfund transfers 1,232,920 659,810 (109,426,630) (207,026) (2,274,294) (12,183)
--------- -------- ------------ ---------- ---------- ---------
Net increase (decrease) 1,280,587 659,810 (66,709,855) 12,776,250 (2,050,862) 321,983
Net assets available for benefits:
Beginning of year 659,810 -- 66,709,855 53,933,605 2,050,862 1,728,879
--------- -------- ------------ ---------- ---------- ---------
End of year 1,940,397 659,810 -- 66,709,855 -- 2,050,862
========= ======== ============ ========== ========== =========
</TABLE>
See accompanying notes to financial statements.
9
<PAGE> 13
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Statements of Changes in Net Assets
Available for Benefits with Fund Information
Years ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
FUND C FUND D
EQUITY MONEY MARKET
-------------------------- --------------------------
1997 1996 1997 1996
----------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation)
in fair value of investments $ 1,886,579 1,023,274 -- --
Interest 67,657 23,313 158,513 160,645
Dividends - cash -- -- -- --
----------- --------- ---------- ----------
Total investment income (loss) 1,954,236 1,046,587 158,513 160,645
Loans to participants:
Principal -- -- -- --
Interest -- -- -- --
----------- --------- ---------- ----------
Total loan income -- -- -- --
Contributions:
Participants 1,167,187 1,280,210 297,103 863,952
Employer - cash -- -- -- --
----------- --------- ---------- ----------
Total contributions 1,167,187 1,280,210 297,103 863,952
----------- --------- ---------- ----------
Total additions 3,121,423 2,326,797 455,616 1,024,597
----------- --------- ---------- ----------
Deductions from net assets attributed to:
Benefits paid to participants 628,784 700,772 248,229 778,800
Other deductions -- 5,934 -- 156
----------- --------- ---------- ----------
Total deductions 628,784 706,706 248,229 778,956
----------- --------- ---------- ----------
Net increase (decrease) prior
to interfund transfers 2,492,639 1,620,091 207,387 245,641
Interfund transfers (8,530,331) 388,259 (3,368,888) (169,050)
----------- --------- ---------- ----------
Net increase (decrease) (6,037,692) 2,008,350 (3,161,501) 76,591
Net assets available for benefits:
Beginning of year 6,037,692 4,029,342 3,161,501 3,084,910
----------- --------- ---------- ----------
End of year $ -- 6,037,692 -- 3,161,501
=========== ========= ========== ==========
</TABLE>
See accompanying notes to financial statements.
10
<PAGE> 14
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Statements of Changes in Net Assets
Available for Benefits with Fund Information
Years ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
TOTAL
--------------------------------------------
1998 1997 1996
------------ ----------- ----------
<S> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation)
in fair value of investments (8,766,551) 47,352,299 12,341,408
Interest 55,204 423,562 311,621
Dividends - cash 4,215,477 2,959,670 1,333,929
------------ ----------- ----------
Total investment income (loss) (4,495,870) 50,735,531 13,986,958
Loans to participants:
Principal 510,444
Interest 137,323 -- --
------------ ----------- ----------
Total loan income 647,767 -- --
Contributions:
Participants 6,980,454 6,328,605 6,073,533
Employer - cash 5,218,851 4,580,845 3,904,696
------------ ----------- ----------
Total contributions 12,199,305 10,909,450 9,978,229
------------ ----------- ----------
Total additions 8,351,202 61,644,981 23,965,187
------------ ----------- ----------
Deductions from net assets attributed to:
Benefits paid to participants 14,485,673 11,265,847 8,766,931
Other deductions 510,444 -- 15,082
------------ ----------- ----------
Total deductions 14,996,117 11,265,847 8,782,013
------------ ----------- ----------
Net increase (decrease) prior
to interfund transfers (6,644,915) 50,379,134 15,183,174
Interfund transfers -- -- --
------------ ----------- ----------
Net increase (decrease) (6,644,915) 50,379,134 15,183,174
Net assets available for benefits:
Beginning of year 128,339,044 77,959,910 62,776,736
------------ ----------- ----------
End of year 121,694,129 128,339,044 77,959,910
============ =========== ==========
</TABLE>
See accompanying notes to financial statements.
11
<PAGE> 15
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(1) DESCRIPTION OF PLAN
The following description of the First American Corporation First Incentive
Reward Savings Thrift Plan (the Plan) provides only general information.
Participants should refer to the Plan and the summary plan description for
a more complete description of the Plan's provisions.
(A) GENERAL
The Plan is a defined contribution plan sponsored by First American
Corporation and is also adopted by certain subsidiaries (collectively,
the Corporation) and administered by the Corporation's Benefit Plan
Administrative Committee (the Committee). Each participant has an
account with dollars invested and stock shares credited. These amounts
represent the current value of the Plan's net assets including
reinvested dividends and interest. The Plan is subject to the
applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended (ERISA). The Plan is exempt from the minimum
funding rules of ERISA.
Effective December 1, 1997, Committee outsourced the administrative
and record-keeping functions of the Plan to Mid Atlantic Pension Group
(MAPG).
(B) CONTRIBUTIONS
All employees (excluding hourly paid or special exempt salaried
employees who are regularly scheduled to work less than 20 hours per
week) of First American Corporation or any of its participating
subsidiaries are eligible to participate in the Plan. Participants may
contribute between 1% and 6% of their compensation up to $150,000
(indexed for inflation) on a matched pre-tax or matched after-tax
basis, at their election. Pre-tax contributions are made by the
employer pursuant to a salary reduction agreement with the
participant.
(Continued)
12
<PAGE> 16
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Notes to Financial Statements
December 31, 1998 and 1997
The Corporation may make two other types of contributions to the Plan,
employer matching contributions and employer profit contributions,
subject to certain limits set by law. Employer match contributions
match participant contributions and salary reduction contributions in
amounts ranging from 25% to 100% and are based upon the Corporation's
performance, which is currently measured by its productivity ratio for
each year. The Corporation must match participant contributions and
salary reduction contributions at 25%, subject to sufficient net
profits, and the basis for any additional matching, at the
Corporation's discretion, is determined each year. The Corporation's
matching contribution in excess of 25% is contingent on being a
participant on December 31 of that year, except employees terminated
for death, disability, retirement and certain reductions in work
force. Employer profit contributions range from 0% to 2% of a
participant's compensation up to $150,000 (indexed for inflation) each
year and are determined solely at the Corporation's discretion based
on the performance of the Corporation during the year. The
Corporation's contributions to the Plan are invested in its common
stock on behalf of the Plan and are subject to certain
nondiscrimination rules.
Employees may contribute a maximum of an additional 10% of their base
pay in unmatched after-tax deposits each plan year. All employee
contributions are subject to certain nondiscrimination rules and
maximum contribution limits.
(C) PARTICIPANT ACCOUNTS
Each participant's account is credited with the (a) participant's
contributions and the Corporation's contributions on his or her
behalf, (b) Plan earnings, and (c) forfeitures of terminated
participants' nonvested accounts which are used to reduce the
Corporation's contributions. Plan earnings are allocated based upon
individual account balances.
(D) BENEFITS
Under the terms of the Plan, participants are eligible for
distributions upon retirement, disability, termination of service, or
death. The Plan provides various options to certain participants or
their beneficiaries as to the manner of distribution. Special
provisions allow for earlier distributions of certain participants'
deposits and Corporation vested benefits. Employees are immediately
100% vested in their contributions and salary reduction contributions
and the Corporation's employer profit contributions plus earnings or
losses thereon. The Corporation's employer match contributions become
vested at a rate of 25% per year of Plan participation.
(Continued)
13
<PAGE> 17
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(E) TRUST FUNDS MANAGED BY FIRST AMERICAN NATIONAL BANK
Under terms of an agreement between First American National Bank, the
Trustee and a subsidiary of the Corporation, and the Plan, the Trustee
managed four trust funds on behalf of the Plan during 1996 and through
September 30, 1997. These funds included: Fund A - First American
Corporation Common Stock, Fund B - Bond, Fund C - Equity, and Fund D -
Money Market Securities. A participant elected to have the portions of
his or her account that are attributable to participant contributions
and salary reduction contributions made on his or her behalf invested
in one or more of the funds. The following is a description of those
funds.
Fund A - This fund was fully invested, to the extent practicable,
in shares of common stock of the Corporation.
Fund B - This fund was invested by the trustee only in
fixed-income securities, including units of participation in any
fixed-income fund maintained by the Trustee for tax-qualified
plans, commercial bank savings accounts or certificates of
deposit bearing a reasonable rate of interest, short-term money
market instruments and U.S. Treasury obligations, and including,
as may be directed from time to time by the Trustee, insurance
company contracts that provide a guaranteed rate of return, in
which case the Trustee is expressly authorized to the extent
allowed by law to invest in a single class of assets without any
requirement to diversify the class of assets held in Fund B.
Fund C - This fund was invested in a diversified portfolio of
corporate common stocks, including units of participation in any
equity-type fund maintained by the Trustee for tax-qualified
plans, whether or not the same is authorized by law for the
investment of trust funds.
Fund D - This fund was invested only in short-term money market
securities, including units of participation in any short-term
fund maintained by the Trustee for tax-qualified plans,
commercial bank savings accounts, or certificates of deposit
bearing a reasonable rate of interest, short-term money market
instruments, and U.S. Treasury obligations.
Effective October 1, 1997, the Plan began providing the following
seven investment options:
First American Corporation Stock Fund - Contributions are
invested, to the extent practicable, in shares of First American
common stock.
ISG EB Stable Value Fund - The ISG EB Stable Value Fund is a
collective investment fund offering investors current income and
stability of principal. It primarily invests in insurance
contracts with large, high quality, well-known life insurance
companies.
(Continued)
14
<PAGE> 18
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Notes to Financial Statements
December 31, 1998 and 1997
ISG Limited Term Income Fund - The ISG Limited Income Fund is a
mutual fund that seeks to provide investors with high current
income without assuming undue risk. It primarily invests in
obligations of high quality domestic corporations, as well as
U.S. Government securities. Generally, the average life of the
bonds in the portfolio will be under four years.
Founders Balanced Fund - The Founders Balanced Fund is for
investors seeking current income and capital appreciation. It
primarily invests in a portfolio that, under normal conditions,
is comprised of 65 percent equities and 35 percent bonds. The
equities are generally stocks of large, well-known corporations
that have a long record of earnings and dividend growth.
ISG Capital Growth Portfolio Fund - The ISG Capital Growth
Portfolio Fund is a mutual fund that seeks to provide investors
with growth of capital. It invests primarily in stocks of large,
well-known domestic corporations that have a record of
above-average growth in earnings.
Vanguard International Stock Fund - The Vanguard International
Stock Fund is a mutual fund that invests in stocks of companies
located outside the United States and with an emphasis on those
with above-average growth potential. It invests in up to thirty
(30) foreign stock markets.
AIM Constellation Fund - The AIM Constellation Fund is a mutual
fund that seeks to provide capital appreciation through
investments in common stocks with emphasis on medium and smaller
emerging growth companies. It invests primarily in the stock of
companies with strong growth and earnings momentum with market
capitalization of less than $5 billion.
(F) DISTRIBUTIONS
Upon termination, retirement, disability, or death, distributions from
the First American Corporation Stock Fund are made in cash or common
stock of the Corporation, at the discretion of the participant.
Distributions from the Plan of common stock of the Corporation are
made in full shares to the extent possible, and are reflected in the
accompanying statements of changes in net assets available for
benefits with fund information at the fair value of such shares at the
distribution date. The value of any fractional shares are paid in cash
at the fair value of such stock on the first day of the month next
preceding the date of such distribution. Distributions from other
funds are made in cash.
(Continued)
15
<PAGE> 19
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(G) PARTICIPANT LOANS
During 1997, the Plan was amended to allow participant loans.
Participants may borrow from their fund accounts a minimum of $1,000
up to a maximum equal to the lesser of $50,000 or 50 percent of their
vested account balance. Loan transactions, including disbursements and
repayments, are treated as a transfer to (from) the investment fund
from (to) the Participant Loans fund. Loan terms range from 6 months
up to 4 1/2 years. The loans are secured by the balance in the
participant's account and bear interest at a rate equal to the First
American National Bank's prime rate plus one percent. Principal and
interest are paid ratably through semi-monthly payroll deductions. If
a participant leaves the company and a loan is not yet fully repaid,
the participant has the option of making one lump-sum payment to the
Plan prior to the distribution of the account. If a lump-sum payment
representing full repayment of the loan is not made, the remaining
loan balance will be treated as a taxable distribution subject to
applicable taxes and penalties.
(H) ADMINISTRATIVE EXPENSES
The trust agreement provides that all necessary expenses of the Plan
can be paid by the Corporation, or out of the assets of the trust. The
Corporation presently pays all expenses of the Plan, and while it is
not legally obligated to do so, it is the intention of the Corporation
to continue this practice.
(I) FEDERAL INCOME TAXES
The Internal Revenue Service issued its latest determination letter on
May 3, 1995, which stated that the plan and its underlying trust
qualify under the applicable provisions of the Internal Revenue Code
and therefore are exempt from federal income taxes. In the opinion of
the Plan Administrator, the Plan and its underlying trust have
operated within the terms of the plan and remain qualified under the
applicable provisions of the Internal Revenue Code.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF PRESENTATION
The accompanying financial statements have been prepared on the
accrual basis of accounting and present the Plan's net assets
available for benefits and changes in net assets available for
benefits.
(Continued)
16
<PAGE> 20
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(B) BASIS OF FAIR VALUE AND RECORDING OF INVESTMENT TRANSACTIONS
The fair value of common stock investments is based upon quotations
obtained from national securities exchanges; where investments are not
listed on an exchange, quotations are obtained from brokerage firms.
Mutual funds are valued at the unit value of the fund at the valuation
date which is based on the quoted fair values of the underlying
investments within the funds. Purchase and sales of investment
securities are recorded on a trade-date basis. The average cost method
is used in determining the cost of investments sold. Interest income
is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
(C) USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan Administrator to make
estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the
reported amounts of related changes in net assets available for
benefits during the reporting period. Actual results could differ from
those estimates.
(3) INVESTMENTS
Investments in each of the funds at December 31, 1998 and 1997, were as
follows:
<TABLE>
<CAPTION>
1998
---------------------------------------
UNREALIZED
FAIR VALUE COST APPRECIATION
------------ ---------- ------------
<S> <C> <C> <C>
INVESTMENTS IN SECURITIES OF PARTICIPATING
EMPLOYER
First American Corporation Stock Fund (2,080,456
shares) $ 92,320,227 40,829,994 51,490,233
------------ ---------- ----------
</TABLE>
(Continued)
17
<PAGE> 21
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Notes to Financial Statements
December 31, 1998 and 1997
<TABLE>
<CAPTION>
1998
---------------------------------------
UNREALIZED
FAIR VALUE COST APPRECIATION
------------ ---------- ------------
<S> <C> <C> <C>
INVESTMENTS IN COMMON TRUST FUNDS AND MUTUAL
FUNDS ADMINISTERED BY PARTICIPATING EMPLOYER
ISG EB Stable Value Fund (122,861 units) $ 3,279,348 3,113,797 165,551
ISG Limited Term Income Fund (249,189 units) 2,504,348 2,483,277 21,071
ISG Capital Growth Portfolio Fund (921,520 units) 12,984,219 11,138,622 1,845,597
------------ ---------- ----------
Total investments in trust funds and
mutual funds administered by
participating employer 18,767,915 16,735,696 2,032,219
------------ ---------- ----------
INVESTMENTS IN MUTUAL FUNDS ADMINISTERED BY
OTHERS
Founders Balance Fund (130,839 units) 1,594,923 1,562,205 32,718
Vanguard International Stock Fund (33,525 units) 629,267 606,103 23,164
AIM Constellation Fund (58,615 units) 1,789,855 1,644,313 145,542
------------ ---------- ----------
Total investments in mutual funds
administered by others 4,014,045 3,812,621 201,424
------------ ---------- ----------
Total investments in trust funds and
mutual funds 22,781,960 20,548,317 2,233,643
------------ ---------- ----------
SHORT-TERM INVESTMENTS (362,101 UNITS) 362,101 362,101 --
------------ ---------- ----------
Participant loans 1,940,397 1,940,397 --
------------ ---------- ----------
Total all investments $117,404,685 63,680,809 53,723,876
============ ========== ==========
</TABLE>
(Continued)
18
<PAGE> 22
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Notes to Financial Statements
December 31, 1998 and 1997
<TABLE>
<CAPTION>
1997
---------------------------------------
UNREALIZED
FAIR VALUE COST APPRECIATION
------------ ---------- ------------
<S> <C> <C> <C>
INVESTMENTS IN SECURITIES OF PARTICIPATING
EMPLOYER
First American Corporation Stock Fund (2,160,870
shares) $107,503,290 33,024,721 74,478,569
------------ ---------- ----------
INVESTMENTS IN COMMON TRUST FUNDS AND MUTUAL
FUNDS ADMINISTERED BY PARTICIPATING EMPLOYER
ISG Limited Term Income Fund (225,650 units) 2,251,989 2,238,583 13,406
ISG Capital Growth Portfolio Fund (699,089 units) 8,871,433 7,720,202 1,151,231
ISG EB Stable Value Fund (157,988 units) 3,972,804 3,947,933 24,871
------------ ---------- ----------
Total investments in trust funds and
mutual funds administered by
participating employer 15,096,226 13,906,718 1,189,508
------------ ---------- ----------
INVESTMENTS IN MUTUAL FUNDS ADMINISTERED BY
OTHERS
Founders Balance Fund (32,496 units) 368,834 387,609 (18,775)
Vanguard International Stock Fund (7,264 units) 119,049 122,285 (3,236)
AIM Constellation Fund (20,212 units) 533,184 583,758 (50,574)
------------ ---------- ----------
Total investments in trust funds and
mutual funds administered by others 1,021,067 1,093,652 (72,585)
------------ ---------- ----------
Total investments in mutual funds 16,117,293 15,000,370 1,116,923
------------ ---------- ----------
PARTICIPANT LOANS 659,810 659,810 --
------------ ---------- ----------
Total all investments $124,280,393 48,684,901 75,595,492
============ ========== ==========
</TABLE>
(Continued)
19
<PAGE> 23
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Notes to Financial Statements
December 31, 1998 and 1997
The net realized gains on investments for the years ended December 31 were
as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ---------- ---------
<S> <C> <C> <C>
INVESTMENTS IN SECURITIES OF PARTICIPATING
EMPLOYER
Aggregate proceeds from stock sold and market
value of stock distributed $20,017,239 12,057,916 6,262,436
Average cost 7,575,962 5,398,436 3,387,181
----------- ---------- ---------
Net realized gain on investments in
securities of participating employer 12,441,277 6,659,480 2,875,255
----------- ---------- ---------
INVESTMENTS IN COMMON TRUST FUNDS AND MUTUAL
FUNDS ADMINISTERED BY PARTICIPATING EMPLOYER
Aggregate proceeds 7,559,202 6,548,997 5,579,155
Average cost 6,895,414 6,060,996 3,850,271
----------- ---------- ---------
Net realized gain on investments in common trust funds and
mutual funds administered by participating employer 663,788 488,001 1,728,884
----------- ---------- ---------
Total realized gain on investments $13,105,065 7,147,481 4,604,139
=========== ========== =========
</TABLE>
(Continued)
20
<PAGE> 24
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Notes to Financial Statements
December 31, 1998 and 1997
The change in unrealized appreciation (depreciation) on investments for the
years ended December 31 were as follows:
<TABLE>
<CAPTION>
1998 1997 1996
------------ ---------- -----------
<S> <C> <C> <C>
Investments in securities of participating
employer $(22,988,336) 39,751,189 8,471,304
Investment in common trust funds and mutual
funds 1,116,720 453,629 (734,035)
------------ ---------- -----------
Total unrealized gain on investments $(21,871,616) 40,204,818 7,737,269
============ ========== ===========
Total net appreciation (depreciation) in fair
value of investments $ (8,766,551) 47,352,299 12,341,408
============ ========== ===========
</TABLE>
The following investments represent 5% or more of the Plan's net assets
available for benefits at December 31:
<TABLE>
<CAPTION>
1998 1997
------------ -----------
<S> <C> <C>
First American Corporation Stock Fund $ 92,320,227 107,503,290
ISG Capital Growth Portfolio Fund 105,304,445 8,871,433
============ ===========
</TABLE>
(4) CONTRIBUTIONS
The Corporation matched qualifying participant contributions and salary
reduction contributions at 100% for the years ended December 31, 1998, 1997
and 1996 based on the Corporation's performance and achieved productivity
ratio. All contributions were in cash and are used to purchase common stock
of the Corporation.
(5) PARTICIPATION IN THE PLAN
At December 31, 1998, there were 3,019 active and 2,001 inactive
participants in the Plan for a total of 5,020 participants. At December 31,
1997, there were 2,873 active and 1,904 inactive participants in the Plan
for a total of 4,777 participants. At December 31, 1996, there were 2,658
active and 1,425 inactive participants in the Plan for a total of 4,083
participants.
(Continued)
21
<PAGE> 25
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Notes to Financial Statements
December 31, 1998 and 1997
Participants may elect to have the portions of their account balances that
are attributable to their contributions and salary reduction contributions
made on their behalf invested in more than one fund type and may, at
specified times, transfer amounts between funds. At December 31, the number
of participants in each of the funds was as follows:
<TABLE>
<CAPTION>
1998 1997 1996
------ ----- -----
<S> <C> <C> <C>
Fund A $ -- -- 2,317
Fund B -- -- 659
Fund C -- -- 1,177
Fund D -- -- 617
ISG EB Stable Value Fund 1,761 577 --
ISG Limited Term Income Fund 1,354 618 --
Founders Balanced Fund 1,177 57 --
ISG Capital Growth Portfolio Fund 1,286 1,358 --
Vanguard International Stock Fund 1,488 86 --
AIM Constellation Fund 1,305 127 --
First American Corporation Stock Fund 2,221 3,080 --
====== ===== =====
</TABLE>
(6) NONVESTED BENEFITS
Included in net assets available for benefits at December 31, 1998 and
1997, are nonvested employer contributions of $1,641,368 and $1,556,129,
respectively. Forfeitures of nonvested benefits are used to offset future
employer contributions to the Plan. Such forfeitures amounted to $323,686,
$255,457, and $185,106, in 1998, 1997 and 1996, respectively.
(7) RELATED PARTY TRANSACTIONS
Due to the nature of the organization and funding of the Plan, all
investment transactions, except the Founders Balance Fund, Vanguard
International Stock Fund, and the AIM Constellation Fund, are considered
related party transactions with the Corporation.
(Continued)
22
<PAGE> 26
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(8) PLAN TERMINATION
The Corporation has voluntarily agreed to make contributions to the Plan.
Although the Corporation has not expressed any intent to terminate the
Plan, it may cease making contributions or terminate the Plan at any time.
Upon termination, partial termination of the Plan, or the complete
discontinuance of the Corporation's contributions to the Plan, each
affected participant's account (after payment of all expenses and
proportional adjustment of participants' accounts to reflect expenses and
investment gains or losses) becomes nonforfeitable and each participant or
beneficiary would be entitled to receive any amounts then credited to
his/her account in the trust fund, provided that the Corporation may elect
to continue the trust and make payments therefrom, pursuant to the terms of
the Plan.
(9) YEAR 2000 (UNAUDITED)
In 1997, the Trustee initiated a plan (Year 2000 Plan) to identify, assess,
and remediate "Year 2000" issues within each of its significant computer
programs and certain equipment which contain microprocessors. The Year 2000
Plan is addressing the issue of computer programs and embedded computer
chips being unable to distinguish between the year 1900 and the year 2000,
if a program or chip uses only two digits rather than four to define the
applicable year. The Trustee has divided the Year 2000 Plan into five major
phases -- assessment, planning, conversion, implementation and testing.
After completing the assessment and planning phases earlier this year, the
Trustee is currently in the conversion, implementation and testing phases.
Systems which have been determined not to be Year 2000 compliant are being
either replaced or reprogrammed, and thereafter tested for Year 2000
compliance. The Plan anticipates that by mid-1999 the conversion,
implementation and testing phases will be completed. Costs of remediation
are being paid by FAC.
(Continued)
23
<PAGE> 27
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(10) RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following schedule reconciles amounts per the accompanying financial
statements to the Form 5500 for 1998 and 1997:
<TABLE>
<CAPTION>
1998 1997
------------- ------------
<S> <C> <C>
Net assets available for benefits per financial statements $ 121,694,129 128,339,044
Employer contribution receivable (3,909,367) (3,276,531)
Benefit claims payable (122,071) --
Other (20,665) (3)
------------- ------------
Assets available for benefits per the Form 5500 $ 117,642,026 125,062,510
============= ============
Total (deductions from) additions to plan assets per financial
statements $ (6,644,915) 50,379,134
Employer contributions receivable at beginning of year 3,276,531 2,810,471
Employer contributions receivable at end of year (3,909,367) (3,276,531)
Benefit claims payable at end of year (122,071) --
Other (20,662) 5
------------- ------------
Net (deductions from) additions to plan assets
per the Form 5500 $ (7,420,484) 49,913,079
============= ============
</TABLE>
24
<PAGE> 28
SCHEDULE 1
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
(C)
DESCRIPTION OF
INVESTMENT INCLUDING
(A) MATURITY DATE,
PARTY-IN- (B) RATE OF INTEREST, (E)
INTEREST IDENTITY OF ISSUE, BORROWER, LESSOR COLLATERAL, PAR OR (D) FAIR
IDENTIFICATION OR SIMILAR PARTY MATURITY VALUE COST VALUE
- -------------- ---------------- -------------- ---- -----
<S> <C> <C> <C> <C>
* First American Corporation Common stock $ 40,829,994 92,320,227
* ISG Limited Term Income Fund Mutual fund administered
by ISG 2,483,277 2,504,348
* ISG Capital Growth Portfolio Fund Mutual Fund administered
by ISG 11,138,622 12,984,219
* ISG EB Stable Value Fund Common Trust Fund
administered by ISG 3,113,797 3,279,348
Founders Balance Fund Mutual Fund 1,562,205 1,594,923
Vanguard International Stock Fund Mutual Fund 606,103 629,267
AIM Constellation Fund Mutual Fund 1,644,313 1,789,855
* Short-term investments -
ISG Prime Money Market Fund Money Market 362,101 362,101
Participant loans Rates at First American
National Bank's prime
plus 1% and terms of 6
months to 4 1/2 years 1,940,397 1,940,397
------------ -----------
Total investments $ 63,680,809 117,404,685
============ ===========
</TABLE>
*Indicates a party-in-interest to the Plan.
See accompanying independent auditors' report.
25
<PAGE> 29
SCHEDULE 2
FIRST AMERICAN CORPORATION
FIRST INCENTIVE REWARD SAVINGS THRIFT PLAN
Item 27d - Schedule of Reportable Transactions
Year ended December 31, 1998
A. SINGLE TRANSACTIONS REPORTABLE [REG. 2520.103-6(C)(1)(i)]
None.
B. SERIES OF NONSECURITY TRANSACTIONS [REG. 2520.103-6(C)(1)(ii)]
None.
C. TRANSACTIONS ON ONE SECURITY UNDER 5% WHEN AGGREGATED BECOME REPORTABLE [REG.
2520.103-6(C)(1)(iii)]
<TABLE>
<CAPTION>
(H)
(B) (F) CURRENT
(A) DESCRIPTION OF THE ASSET EXPENSE VALUE (I)
IDENTITY (INCLUDING INTEREST (C) (D) (E) INCURRED (G) OF ASSET OF NET
OF PARTY RATE AND MATURITY PURCHASE SELLING LEASE WITH COST OF TRANSACTION GAIN
INVOLVED IN CASE OF A LOAN) PRICE PRICE RENTAL TRANSACTION ASSET DATE (LOSS)
- ---------- ------------------------ ------------- ------------- --------- ------------------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
* First American Corporation
stock (346,319 shares) $15,202,090 -- -- -- 15,202,090 15,202,090 --
* First American Corporation
stock (431,584 shares) -- 19,967,520 -- -- 7,575,962 19,967,520 12,391,558
</TABLE>
D. OTHER TRANSACTIONS [REG. 2520.103-6(C)(1)(iv)]
None.
*Party-in-interest to the Plan.
See accompanying independent auditors' report.
26
<PAGE> 1
EXHIBIT 1
ACCOUNTANTS' CONSENT
The Board of Directors
First American Corporation:
We consent to incorporation by reference in the registration statement No.
2-81685 on Form S-8, as amended, of First American Corporation of our report
dated June 10, 1999, relating to the statements of net assets available for
benefits with fund information of First American Corporation First Incentive
Reward Savings Thrift Plan as of December 31, 1998 and 1997, and the related
statements of changes in net assets available for benefits with fund information
for each of the years in the three-year period ended December 31, 1998, and all
related schedules which report appears in the December 31, 1998 annual report on
Form 11-K of First American Corporation.
/s/ KPMG LLP
Nashville, Tennessee
June 21, 1999
