<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark one)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-4491
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FIRST TENNESSEE NATIONAL CORPORATION
------------------------------------
(Exact name of registrant as specified in its charter)
Tennessee 62-0803242
- -------------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
165 Madison Avenue, Memphis, Tennessee 38103
- -------------------------------------- --------
(Address of principal executive offices) (Zip Code)
(901) 523-4027
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(Registrant's telephone number, including area code)
None
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(Former name, former address and former fiscal year,
if changed since last report)
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
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $1.25 par value 67,155,030
- ----------------------------- ----------------------------
Class Outstanding at July 31, 1996
<PAGE> 2
FIRST TENNESSEE NATIONAL CORPORATION
INDEX
Part I. Financial Information
Part II. Other Information
Signatures
Exhibit Index
Exhibit 3(ii)
Exhibit 11
Exhibit 27
<PAGE> 3
PART I.
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FINANCIAL INFORMATION
Item 1. Financial Statements.
- ------------------------------
The Consolidated Statements of Condition
The Consolidated Statements of Income
The Statements of Cash Flows
The Notes to Consolidated Financial Statements
This financial information reflects all adjustments which are, in the
opinion of management, necessary for a fair presentation of the financial
position and results of operations for the interim periods presented.
<PAGE> 4
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CONDITION First Tennessee National Corporation
- -------------------------------------------------------------------------------------------------------------------------------
June 30 December 31
---------------------------------- ------------
(Dollars in thousands)(Unaudited) 1996 1995 1995
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Cash and due from banks $ 674,458 $ 657,666 $ 710,870
Federal funds sold and securities purchased under
agreements to resell 104,257 182,778 64,978
- -------------------------------------------------------------------------------------------------------------------------------
Total cash and cash equivalents 778,715 840,444 775,848
- -------------------------------------------------------------------------------------------------------------------------------
Investment in bank time deposits 1,642 1,744 2,119
Broker/dealer securities inventory 196,821 227,458 182,655
Mortgage loans held for sale 1,103,237 735,268 789,183
Securities available for sale 2,176,485 1,195,327 2,036,668
Securities held to maturity (market value of $71,870
at June 30, 1996; $977,857 at June 30, 1995; and
$75,750 at December 31, 1995) 71,599 985,010 74,731
Loans, net of unearned income 7,487,691 6,882,044 7,333,283
Less: Allowance for loan losses 116,478 110,747 112,567
- -------------------------------------------------------------------------------------------------------------------------------
Total net loans 7,371,213 6,771,297 7,220,716
- -------------------------------------------------------------------------------------------------------------------------------
Premises and equipment, net 181,591 165,621 177,400
Real estate acquired by foreclosure 8,714 13,732 11,794
Mortgage servicing rights 216,082 94,437 149,220
Intangible assets 124,110 101,131 128,985
Bond division receivables and other assets 724,748 482,541 527,563
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $12,954,957 $11,614,010 $12,076,882
===============================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
Demand $ 1,859,864 $ 1,775,417 $ 1,983,994
Checking/Interest 172,356 485,986 103,860
Savings 744,624 603,518 592,320
Money market account 2,546,617 1,867,453 2,499,817
Certificates of deposit under $100,000 and other time 2,900,771 2,866,162 2,882,094
Certificates of deposit $100,000 and more 748,146 514,797 520,112
- -------------------------------------------------------------------------------------------------------------------------------
Total deposits 8,972,378 8,113,333 8,582,197
- -------------------------------------------------------------------------------------------------------------------------------
Federal funds purchased and securities sold under
agreements to repurchase 1,525,945 1,558,908 1,674,225
Commercial paper and other short-term borrowings 591,944 377,137 86,520
Bond division payables and other liabilities 715,029 535,562 600,699
Term borrowings 257,327 202,320 260,017
- -------------------------------------------------------------------------------------------------------------------------------
Total liabilities 12,062,623 10,787,260 11,203,658
- -------------------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY:
Preferred stock - no par value (5,000,000 shares authorized,
but unissued) - - -
Common stock - $1.25 par value (shares authorized -200,000,000;
shares issued - 67,122,092 at June 30, 1996; 67,800,580
at June 30, 1995; and 67,178,236 at December 31, 1995) 83,903 84,751 83,973
Capital surplus 58,780 82,467 63,610
Undivided profits 761,000 660,738 716,861
Unrealized market adjustment on available for sale securities (7,051) 1,140 10,582
Deferred compensation on restricted stock incentive plan (4,298) (2,346) (1,802)
- -------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 892,334 826,750 873,224
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $12,954,957 $11,614,010 $12,076,882
===============================================================================================================================
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME First Tennessee National Corporation
- ----------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30 June 30
--------------------------- ----------------------------
(Dollars in thousands except per share data) (Unaudited) 1996 1995 1996 1995
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $161,636 $151,393 $321,803 $293,065
Interest on investment securities:
Taxable 34,227 33,166 66,323 66,837
Tax-exempt 1,326 1,152 2,669 2,240
Interest on mortgage loans held for sale 22,603 10,792 41,484 18,775
Interest on broker/dealer securities inventory 4,527 3,477 8,785 6,974
Interest on other earning assets 1,655 2,772 2,562 6,245
- ----------------------------------------------------------------------------------------------------------------------
Total interest income 225,974 202,752 443,626 394,136
- ----------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE:
Interest on deposits:
Checking/Interest 670 2,063 1,319 4,209
Savings 2,411 2,739 4,914 5,667
Money market account 22,970 21,823 47,557 43,147
Certificates of deposit under $100,000 and other time 41,311 42,747 82,742 81,254
Certificates of deposit $100,000 and more 12,651 7,701 22,617 14,478
Interest on short-term borrowings 27,793 25,942 55,624 49,163
Interest on term borrowings 5,214 4,384 10,521 8,547
- ----------------------------------------------------------------------------------------------------------------------
Total interest expense 113,020 107,399 225,294 206,465
- ----------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME 112,954 95,353 218,332 187,671
Provision for loan losses 7,559 3,216 15,592 7,364
- ----------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 105,395 92,137 202,740 180,307
- ----------------------------------------------------------------------------------------------------------------------
NONINTEREST INCOME:
Mortgage banking 60,902 42,896 119,021 89,665
Bond division 17,145 22,602 45,266 41,021
Deposit transactions and cash management 19,860 18,286 37,295 36,881
Cardholder and merchant processing 9,478 8,589 19,238 16,206
Trust services 9,078 8,212 17,692 18,535
Equity securities gains/(losses) 15 (106) 490 92
Debt securities gains/(losses) 37 131 (180) 395
All other 13,205 13,176 27,475 24,405
- ----------------------------------------------------------------------------------------------------------------------
Total noninterest income 129,720 113,786 266,297 227,200
- ----------------------------------------------------------------------------------------------------------------------
ADJUSTED GROSS INCOME AFTER PROVISION FOR LOAN LOSSES 235,115 205,923 469,037 407,507
- ----------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE:
Employee compensation, incentives, and benefits 93,062 81,637 192,004 160,961
Operations services 10,421 9,097 21,077 18,108
Occupancy 9,823 8,679 19,148 17,789
Communications and courier 8,545 7,156 16,786 14,490
Equipment rentals, depreciation, and maintenance 8,588 7,425 16,769 15,613
Amortization of mortgage servicing rights 4,816 2,951 13,899 5,769
Advertising and public relations 4,519 2,990 9,458 6,890
Legal and professional fees 3,362 2,394 5,862 7,590
Amortization of intangible assets 2,362 1,940 4,716 3,737
Deposit insurance premium 464 4,393 883 8,751
All other 22,035 15,843 42,981 31,970
- ----------------------------------------------------------------------------------------------------------------------
Total noninterest expense 167,997 144,505 343,583 291,668
- ----------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 67,118 61,418 125,454 115,839
Applicable income taxes 24,771 20,665 45,666 40,479
- ----------------------------------------------------------------------------------------------------------------------
NET INCOME $ 42,347 $ 40,753 $ 79,788 $ 75,360
======================================================================================================================
NET INCOME PER COMMON SHARE $ .63 $ .59 $ 1.19 $ 1.10
- ----------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE SHARES OUTSTANDING 67,224,935 68,482,624 67,263,195 68,350,692
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS First Tennessee National Corporation
- ---------------------------------------------------------------------------------------------------------------
Six Months Ended June 30
--------------------------
(Dollars in thousands)(Unaudited) 1996 1995
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 79,788 $ 75,360
Adjustments to reconcile net income to net cash
provided/(used) by operating activities:
Provision for loan losses 15,592 7,364
Provision for deferred income tax 27,324 14,708
Depreciation and amortization of premises and equipment 13,912 11,877
Amortization of mortgage servicing rights 13,899 5,769
Amortization of intangibles 4,716 3,737
Net amortization of premiums and accretion of discounts 15,790 8,787
Market value adjustment on foreclosed property 1,394 1,409
Equity securities (gains)/losses (490) (92)
Debt securities (gains)/losses 180 (395)
Net (gain)/loss on disposal of fixed assets (8) 1,294
Net increase in:
Broker/dealer securities inventory (14,166) (57,427)
Mortgage loans held for sale (314,054) (219,861)
Bond division receivables (123,154) (53,716)
Interest receivable (4,112) -
Other assets (161,486) (134,582)
Net increase/(decrease)in:
Bond division payables 60,608 87,588
Interest payable (208) 6,015
Other liabilities 38,260 84,579
- ---------------------------------------------------------------------------------------------------------------
Total adjustments (426,003) (232,946)
- ---------------------------------------------------------------------------------------------------------------
Net cash used by operating activities (346,215) (157,586)
- ---------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITES:
Proceeds from maturities of:
Held to maturity securities 4,554 38,300
Available for sale securities 218,299 62,897
Proceeds from sale of:
Available for sale securities 360,773 65,787
Premises and equipment 834 1,449
Payments for purchase of:
Held to maturity securities (1,463) (5,064)
Available for sale securities (746,117) (87,513)
Premises and equipment (18,345) (19,405)
Net increase in loans (162,868) (343,571)
Decrease in investment in bank time deposits 477 790
Acquisitions, net of cash and cash equivalents acquired 400 12,691
- ---------------------------------------------------------------------------------------------------------------
Net cash used by investing activities (343,456) (273,639)
- ---------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Proceeds from:
Exercise of stock options 2,712 2,282
Issuance of term borrowings - 90,000
Payments for:
Capital lease obligations (117) (73)
Term borrowings (2,776) (1,499)
Stock repurchase (12,093) (30,573)
Cash dividends (35,727) (31,102)
Equity distributions related to acquisitions - (20)
Net increase in:
Deposits 383,395 138,696
Short-term borrowings 357,144 126,006
- ---------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 692,538 293,717
- ---------------------------------------------------------------------------------------------------------------
Net increase/(decrease) in cash and cash equivalents 2,867 (137,508)
- ---------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of period 775,848 977,952
- ---------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 778,715 $ 840,444
===============================================================================================================
Total interest paid $ 218,537 $ 199,839
Total income taxes paid 18,341 22,666
</TABLE>
<PAGE> 7
NOTE 1 -- FINANCIAL INFORMATION
The unaudited interim consolidated financial statements have been prepared in
accordance with generally accepted accounting principles. In the opinion of
management, all necessary adjustments have been made for a fair presentation of
financial position and results of operations for the periods presented. The
operating results for the six month period ended June 30, 1996, are not
necessarily indicative of the results that may be expected going forward. For
further information, refer to the audited consolidated financial statements and
footnotes included in the 1995 Annual Report to shareholders.
<PAGE> 8
NOTE 2 -- LOANS
The composition of the loan portfolio at June 30 is detailed below:
<TABLE>
<CAPTION>
(Dollars in thousands) 1996 1995
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Commercial $3,394,050 $3,147,611
Consumer 2,603,152 2,343,929
Permanent mortgage 658,219 663,355
Credit card receivables 534,784 479,494
Real estate construction 283,150 231,936
Nonaccrual 14,336 15,719
- ---------------------------------------------------------------------------------------
Loans, net of unearned income 7,487,691 6,882,044
Allowance for loan losses 116,478 110,747
- ---------------------------------------------------------------------------------------
Total net loans $7,371,213 $6,771,297
=======================================================================================
The following table presents information concerning nonperforming loans at
June 30:
(Dollars in thousands) 1996 1995
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Impaired loans $ 8,949 $ 9,556
Other nonaccrual loans 5,387 6,163
Restructured loans - 72
- ---------------------------------------------------------------------------------------
Total nonperforming loans $14,336 $15,791
=======================================================================================
</TABLE>
Nonperforming loans consist of impaired loans, other nonaccrual
loans, and certain restructured loans. An impaired loan is a loan that
management believes the contractual amount due probably will not be collected.
Impaired loans are generally carried on a nonaccrual status. Nonaccrual loans
are loans on which interest accruals have been discontinued due to the
borrower's financial difficulties. Management may elect to continue the accrual
of interest when the estimated net realizable value of collateral is sufficient
to recover the principal balance and accrued interest.
Generally, interest payments received on impaired loans are applied to
principal. Once all principal has been received, additional payments are
recognized as interest income on a cash basis. Total restructured impaired
loans at June 30, 1996 and 1995, were $279,000 and $365,000, respectively. The
following table presents information concerning impaired loans:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------- --------------------
(Dollars in thousands) 1996 1995 1996 1995
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total interest on impaired loans $ 243 $ 587 $ 384 $ 930
Average balance on impaired loans 8,479 11,804 8,564 10,798
- ---------------------------------------------------------------------------------------
</TABLE>
An allowance for loan losses is maintained for all impaired loans.
Activity in the allowance for loan losses related to non-impaired loans,
impaired loans, and for the total allowance for the six months ended June 30,
1995 and 1996, is summarized as follows:
<TABLE>
<CAPTION>
(Dollars in thousands) Non-impaired Impaired Total
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at January 1, 1995 $109,859 $ - $109,859
Transfer of allowance (2,542) 2,542 -
Allowance from acquisitions 881 - 881
Provision for loan losses 4,242 3,122 7,364
Charge-offs 13,788 2,239 16,027
Less loan recoveries 8,658 12 8,670
- ---------------------------------------------------------------------------------------
Net charge-offs/(recoveries) 5,130 2,227 7,357
- ---------------------------------------------------------------------------------------
Balance at June 30, 1995 $107,310 $3,437 $110,747
=======================================================================================
Balance at January 1, 1996 $109,051 $3,516 $112,567
Provision for loan losses 16,065 (473) 15,592
Charge-offs 17,710 299 18,009
Less loan recoveries 6,009 319 6,328
- ---------------------------------------------------------------------------------------
Net charge-offs/(recoveries) 11,701 (20) 11,688
- ---------------------------------------------------------------------------------------
BALANCE AT JUNE 30, 1996 $113,415 $3,063 $116,478
=======================================================================================
</TABLE>
<PAGE> 9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
CONSOLIDATED FINANCIAL REVIEW
The following is a discussion and analysis of the financial condition
and results of operations of First Tennessee National Corporation (First
Tennessee) for the three month and six month periods ended June 30, 1996,
compared to the three month and six month periods ended June 30, 1995. To
assist the reader in obtaining a better understanding of First Tennessee and
its performance, this discussion should be read in conjunction with First
Tennessee's unaudited consolidated financial statements and accompanying notes
appearing in this report. Additional information including the 1995 financial
statements, notes and management's discussion is provided in the 1995 annual
report.
OVERVIEW
QUARTERLY COMPARISON:
Earnings per share for the second quarter of 1996 was $.63, up 7
percent from last year's second quarter earnings per share of $.59. Net income
for the second quarter of 1996 was $42.3 million, an increase of 4 percent over
the $40.8 million earned in the second quarter of 1995. Return on average
assets was 1.34 percent and return on average equity was 19.48 percent for the
second quarter of 1996 compared with 1.48 percent and 20.05 percent,
respectively, for the same period in 1995.
YEAR-TO-DATE COMPARISON:
For the first six months, net income in 1996 totaled $79.8 million, or
$1.19 per share, compared with $75.4 million, or $1.10 per share, for the same
period in 1995. Return on average assets for the first half of 1996 was 1.28
percent and return on average equity was 18.37 percent, compared with 1.39
percent and 19.07 percent, respectively, for the same period in 1995.
Total assets were $13.0 billion and shareholders' equity was $892.3
million at June 30, 1996.
INCOME STATEMENT/BALANCE SHEET DISCUSSION
NONINTEREST INCOME
QUARTERLY COMPARISON:
Noninterest income, also called fee income, grew 14 percent, or $15.9
million, from the second quarter of 1995, excluding securities gains.
Noninterest income accounted for 53 percent of total revenue in the second
quarter of 1996. The rise in fee income resulted primarily from increases in
mortgage banking which grew 42 percent, or $18.0 million, as origination volume
increased $1.2 billion to $2.8 billion for the quarter and the servicing
portfolio grew $6.6 billion to $20.5 billion at June 30, 1996. As a result of
higher interest rates, the growth in fee income was lessened by higher
secondary marketing losses and price concessions, as well as less gains on
sales of servicing than what was experienced in 1995. Refinance activity
decreased from 47 percent of total originations in the first quarter of 1996
to 26 percent in the second quarter of 1996. Refinance activity was 13
percent in the second quarter of 1995.
Revenues in the bond division were 24 percent, or $5.5 million, lower
in the second quarter of 1996 compared with the same period in 1995. As a
result of a rising interest rate environment and stronger economic activity,
bank customers experienced increased loan volume thus reducing their investment
requirements and changing their long term investment preferences. This led to
a change in customer's transaction mix towards shorter-term investments which
historically have had lower spreads, thus resulting in lower revenues despite
the increase in securities bought and sold ($48.8 billion in second quarter
1995 compared with $55.1 billion).
In credit card and merchant processing, higher transaction volume from
existing customers and an expanded customer base achieved through targeted
marketing efforts led to a 10 percent, or $.9 million, increase in fees
compared with the second quarter of 1995. As a result of increases in volume,
fee income from deposit transactions and cash management increased 9 percent,
or $1.6 million, for the same period. Trust services grew 11 percent, or $.9
million, as managed trust assets grew 13 percent from the second quarter of
1995.
YEAR-TO-DATE COMPARISON:
For the first six months of 1996, noninterest income increased $39.3
million, or 17 percent, over the same period last year excluding
<PAGE> 10
securities gains. Fee income represented 55 percent of total revenues during
the first six months of both 1995 and 1996. Mortgage banking fee income grew
33 percent, bond division fee income grew 10 percent, and cardholder and
merchant processing grew 19 percent from the prior year. Trust services
declined 5 percent; however, this decline includes the impact of an accounting
change that was made in the first quarter of 1995 from cash basis to accrual
basis. As a result of the decrease in FDIC premiums, fee income from deposit
transactions and cash management was relatively flat from the prior year.
NET INTEREST INCOME
QUARTERLY COMPARISON:
For the second quarter of 1996, net interest income, on a
taxable-equivalent basis, increased 18 percent, or $17.8 million, over the
second quarter of 1995. This increase was due to a larger balance sheet with
increased levels of average earnings assets (13 percent) and an 18 basis point
increase in the net interest margin.
YEAR-TO-DATE COMPARISON:
For the first six months of 1996, net interest income, on a
taxable-equivalent basis, increased 16 percent, or $31.1 million, over the same
period in 1995.
Net interest income is the amount of income generated by earning
assets reduced by the interest cost of funding those assets. Net interest
margin is computed by dividing net interest income (on a taxable-equivalent
basis) by average earning assets. The discussion that follows details changes
in these two components of net interest income.
BALANCE SHEET GROWTH
QUARTERLY COMPARISON:
Total assets at June 30, 1996, were 12 percent, or $1.3 billion,
higher than total assets at June 30, 1995. Period-end net loans increased 9
percent, or $605.6 million from June 30, 1995 to June 30, 1996; the mortgage
warehouse increased 50 percent, or $368.0 million; and investment securities
increased 3 percent, or $67.7 million. The growth in the period-end balance
sheet was partially funded by a 9 percent, or $541.2 million, increase in
interest-bearing core deposits. The balance sheet growth is attributable
primarily to internal growth and the purchase acquisition of Financial
Investment Corporation (parent company of First National Bank of Springdale in
Springdale, Arkansas, acquired on October 1, 1995, with assets of $349 million
at acquisition). Excluding this acquisition, net loans grew 7 percent and
interest-bearing core deposits grew 6 percent from June 30, 1995.
Comparing average balances from second quarter 1995, total assets grew
15 percent, or $1.6 billion; net loans grew 9 percent, or $604.3 million, and
interest-bearing core deposits grew 8 percent, or $485.3 million. Net
commercial loans grew 7 percent, or $212.0 million, and net consumer loans grew
12 percent, or $271.1 million. Commercial loans represented 45 percent and
consumer loans represented 35 percent of total loans. Credit card receivables
grew 13 percent, or $60.9 million, as a result of targeted marketing campaigns.
The permanent mortgage portfolio was relatively flat from the previous year,
and real estate construction grew 24 percent, or $51.8 million. Excluding the
purchase acquisition of Financial Investment Corporation, average net loans
grew 7 percent and average interest-bearing core deposits grew 5 percent from
the second quarter of 1995.
With the increase in mortgage originations, average mortgage warehouse
loans held for sale increased 125 percent, or $672.5 million, from the second
quarter of 1995. This growth was funded by an increase of 34 percent, or
$845.2 million, in purchased funds from the second quarter of 1995.
YEAR-TO-DATE COMPARISON:
Year-to-date average assets increased 15 percent between 1995 and
1996. In comparing the 1995 and 1996 six month periods, net loans grew 10
percent. Commercial loans grew 9 percent and consumer loans grew 12 percent
over the same six month period. This growth was primarily funded with
interest-bearing core deposits, which grew 8 percent. Credit card receivables
grew 13 percent and mortgage warehouse loans grew 146 percent. The growth in
the mortgage warehouse was primarily funded by an increase in purchased funds
of 33 percent from the previous year. Excluding the purchase acquisition of
Financial Investment Corporation, net loans grew 8 percent and interest-bearing
core deposits grew 4 percent for the six month period.
<PAGE> 11
NET INTEREST MARGIN
QUARTERLY COMPARISON:
The net interest margin (margin) percentage improved from 3.91 for the
second quarter of 1995 to 4.09 for the second quarter of 1996. As shown in the
Net Interest Margin Computation Table, the net interest spread (the difference
between the yield on earning assets and the rates paid on interest-bearing
liabilities) increased 34 basis points while the effect of net free funds
decreased 16 basis points. The improvement in the net interest spread reflects
the expiration of the amortization of a basis swap in May 1996, which improved
margin 10 basis points.
NET INTEREST MARGIN COMPUTATION TABLE
<TABLE>
<CAPTION>
Second Quarter
--------------
1996 1995
- ---------------------------------------------------------------------------
<S> <C> <C>
Yield on earning assets 8.04% 8.17%
Rate paid on interest-bearing liabilities 4.69 5.16
- ---------------------------------------------------------------------------
Net interest spread 3.35 3.01
Effect of interest-free sources .66 .82
Loan fees .10 .10
FRB interest and penalties (.02) (.02)
- ---------------------------------------------------------------------------
Net interest margin 4.09% 3.91%
===========================================================================
</TABLE>
The net interest margin is affected by the activity levels of and
related funding for First Tennessee's specialty lines of business, as these
nonbank business lines generally produce lower margins than traditional
retail/commercial banking activities. Consequently, First Tennessee's
consolidated margin cannot readily be compared to that of other bank holding
companies.
The mortgage warehouse balance grew almost 125 percent between the
second quarters of 1995 and 1996, adding $9.1 million to net interest income in
1996 compared to $4.9 million in the second quarter of 1995. Because the
spread between the yields on mortgage loans temporarily in the warehouse and
the related short-term funding rates is significantly less than the comparable
spread earned in the retail/commercial bank, the consolidated margin was
negatively impacted 15 basis points in the second quarter of 1996 compared with
3 basis points in the second quarter of 1995.
The bond division contributed $.7 million more to net interest income
in the second quarter of 1996 than in the same period in 1995. With its
strategy to hedge inventory in the cash markets, the bond division also tends
to negatively impact the consolidated net interest margin, since net interest
income is effectively eliminated on these positions. This negative impact was
10 basis points in the second quarter of 1996, an improvement from the negative
15 basis points impact in the second quarter of 1995.
The decline in the net interest margin in the other specialty lines
of business, as shown in the Net Interest Margin Composition Table, came from
the decreasing value of customer demand deposits that earn credit to pay for
First Express services and from competitive pricing pressures experienced in
credit card.
The retail/commercial bank margin improved from 4.04 percent in the
second quarter of 1995 to 4.29 percent in the second quarter of 1996. With
First Tennessee's existing balance sheet mix and the current interest rate
environment, the retail/commercial bank's margin is expected to remain stable
throughout the balance of 1996, and going forward, the consolidated margin will
improve with the expiration of the basis swap and will continue to be
influenced by the activity levels of the specialty lines of business.
NET INTEREST MARGIN COMPOSITION TABLE
<TABLE>
<CAPTION>
Second Quarter
---------------
1996 1995
- ---------------------------------------------------------------------------
<S> <C> <C>
Retail/commercial bank 4.29% 4.04%
Basis swap (.09) (.19)
Bond division (.10) (.15)
Mortgage banking (.15) (.03)
Other specialty lines of business .14 .24
- ---------------------------------------------------------------------------
Total net interest margin 4.09% 3.91%
===========================================================================
</TABLE>
<PAGE> 12
YEAR-TO-DATE COMPARISON:
Year-to-date net interest margin improved from 3.92 percent to 4.01
percent. This improvement came from the reasons noted above in the quarterly
comparison discussion.
PROVISION FOR LOAN LOSSES/ASSET QUALITY
The provision for loan losses increased from $3.2 million for the
second quarter of 1995 to $7.6 million for the second quarter of 1996. The
higher provision reflects a higher level of allowance for loan losses
commensurate with loan growth. In addition, the level of provision was
increased due to inherent losses reflecting economic trends. The increase
in net charge-offs was primarily related to consumer and credit card lending
as the ratio of net charge-offs to total loans increased to .31 percent for
the second quarter of 1996 compared with .19 percent from the same period in
1995. Although increased from the prior year's low level, credit card net
charge-offs remain favorable to industry averages. The increase in 90 day
past due loans reflects the overall trends in both permanent mortgage and the
consumer loan delinquencies which are in line with current market trends.
The allowance for loan losses to loans has remained stable over the past few
quarters and was 1.56 percent at June 30, 1996, and 1.61 percent at
June 30, 1995. At June 30, 1996, First Tennessee had no concentration of
10 percent or more of total loans in any single industry.
<TABLE>
<CAPTION>
ASSET QUALITY INFORMATION June 30
(Dollars in thousands) -----------------------
1996 1995
- -----------------------------------------------------------------------
<S> <C> <C>
Nonaccrual loans $ 14,336 $ 15,719
Restructured loans - 72
- -----------------------------------------------------------------------
Total nonperforming loans 14,336 15,791
- -----------------------------------------------------------------------
Foreclosed real estate 8,714 13,732
Other assets 925 1,785
- -----------------------------------------------------------------------
Total nonperforming assets $ 23,975 $ 31,308
=======================================================================
Loans 90 days past due $ 32,157 $ 23,078
Potential problem assets 79,063 72,742
Allowance for credit losses:
Beginning balance $114,631 $109,862
Acquisitions - 881
Provision for loan losses 7,559 3,216
Charge-offs (9,159) (8,736)
Loan recoveries 3,447 5,524
- -----------------------------------------------------------------------
Ending balance $116,478 $110,747
=======================================================================
Allowance as a percentage of loans 1.56% 1.61%
Nonperforming loans to total loans .19 .23
Nonperforming assets to total loans,
foreclosed real estate and other assets .32 .45
Allowance to nonperforming assets 485.8 353.7
</TABLE>
<TABLE>
<CAPTION>
NET CHARGE-OFFS AS A PERCENTAGE OF
AVERAGE LOANS June 30
----------------------
1996 1995
- ------------------------------------------------------------------------
<S> <C> <C>
Commercial and commercial real estate (.13)% (.18)%
Consumer .27 .15
Credit card receivables 3.98 3.29
Permanent mortgage (.04) .03
Total .31 .19
- ------------------------------------------------------------------------
</TABLE>
<PAGE> 13
NONINTEREST EXPENSE
QUARTERLY COMPARISON:
Total noninterest expense (operating expense) for the second quarter
of 1996 increased 16 percent, or $23.5 million, over the same period in 1995.
Employee compensation, incentives, and benefits (staff expense), the largest
category, increased 14 percent, or $11.4 million. Staff expense includes
commissions paid in several lines of business, such as the bond division,
mortgage banking, and the venture capital companies. As the revenues increase
or decrease in these business lines, the commissions change accordingly.
Commissions and incentives in mortgage banking increased 52 percent and
decreased 21 percent in the bond division from the second quarter of 1995.
With higher origination volume and a larger servicing portfolio,
amortization and hedging of mortgage servicing rights increased $1.9 million.
The increase in advertising and public relations primarily resulted from
targeted marketing expansion in the credit card business line in response to an
increasingly competitive environment. The decrease in the deposit insurance
premium reflects the cutback in the FDIC premium rate to zero at the beginning
of 1996. The remaining expense in this category is the Savings Association
Insurance Fund (SAIF) assessment on deposits that First Tennessee acquired in
1992 and a small FDIC administrative fee.
Excluding purchase acquisitions since the second quarter of 1995,
operating expense grew 1 percent in the retail/commercial bank and 26 percent
in the specialty lines of business.
YEAR-TO-DATE COMPARISON:
For the first six months of 1996, noninterest expense increased 18
percent over the same period last year with the purchase acquisitions and
one-time acquisition costs not materially impacting this increase. Excluding
purchase acquisitions and one-time acquisition costs, operating expenses grew 1
percent in the retail/commercial bank and 35 percent in the specialty lines of
business for the same reasons noted above. In addition, during the first
quarter of 1996, mortgage banking recognized approximately $2 million related
to back office consolidation.
CAPITAL
Shareholders' equity at June 30, 1996, was $892.3 million, an increase
of $65.6 million, or 8 percent, from June 30, 1995. As a result of stock
repurchased in the latter part of 1995, the period-end equity to assets ratio
declined from 7.12 percent to 6.89 percent (June 1995 to June 1996). From
time to time, First Tennessee will evaluate the level of capital and take
action designed to generate or use the capital (i.e., acquisitions, stock
buybacks, etc.) to maximize the benefit to shareholders. At June 30, 1996, the
corporation's Tier 1 capital ratio was 8.78 percent, the Total capital ratio
was 11.66 percent and the Leverage ratio was 6.37 percent. On June 30, 1996,
First Tennessee's bank subsidiaries had sufficient capital to qualify as
well-capitalized institutions under the regulatory capital standards.
OFF-BALANCE SHEET ACTIVITY
In the normal course of business, First Tennessee is a party to
financial instruments that are not required to be reflected on a balance sheet.
First Tennessee enters into transactions involving these instruments to meet
the financial needs of its customers and manage its own exposure to
fluctuations in interest rates. These instruments are categorized into those
"Held or issued for purposes other than broker/dealer operations" and those
"Held or issued for broker/dealer operations" as noted in the Off-Balance Sheet
Financial Instruments table.
<PAGE> 14
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS AT JUNE 30, 1996
<TABLE>
<CAPTION>
Notional
(Dollars in millions) Value
- ---------------------------------------------------------------------
<S> <C>
HELD OR ISSUED FOR PURPOSES OTHER THAN BROKER/DEALER OPERATIONS
Commitments to extend credit:
Consumer credit card lines $1,606.5
Consumer home equity 282.7
Commercial real estate and
construction and land development 353.7
Mortgage banking 826.6
Other 1,456.6
Commercial and standby letters of credit 238.4
Foreign exchange contracts, net position .4
Interest rate risk management activities:
Interest rate swap receive fixed/
pay floating - amortizing 290.8
Mortgage banking
Commitments to sell loans, net position 1,423.7
Put options purchased 924.5
HELD OR ISSUED FOR BROKER/DEALER OPERATIONS
Forward contracts:
Commitments to buy $1,010.2
Commitments to sell 1,028.0
Futures contracts:
Commitments to buy 54.5
Options contracts:
Written option contracts 2.0
Purchased option contracts 2.0
When-issued securities:
Commitments to buy .2
Commitments to sell .2
Securities underwriting commitments 1.8
- ---------------------------------------------------------------------
</TABLE>
<PAGE> 15
Part II.
--------
OTHER INFORMATION
Items 1,2, 3, and 5.
- --------------------
As of the end of the second quarter, 1996, the answers to Items 1,2, 3, and 5
were either inapplicable or negative, and therefore, these items are omitted.
Item 4. Submission of Matters to a Vote of Security Holders.
- -------------------------------------------------------------
(a) The Company's Annual Meeting of Shareholders was held April 16, 1996.
(b) Proxies for the Annual Meeting were solicited pursuant to Regulation
14 under the Securities Exchange Act of 1934. There were no
solicitations in opposition to management's nominees for election to
Class III (Messrs. Cantu, Cates, Haslam and Horn). The nominees were
elected for a three-year term, or until their respective successors
are duly elected and qualified. Directors continuing in office are
Ms. Roman and Messrs. Blattberg, Martin, Orgill, Rose, Sansom, and
Street.
(c) At the Annual Meeting, the shareholders also ratified the appointment
of Arthur Andersen LLP as independent auditors for the year 1996. The
shareholders vote was as follows:
<TABLE>
<CAPTION>
1. Nominees For Witheld
-------- --- -------
<S> <C> <C>
Carlos H. Cantu 53,265,316 302,571
George E. Cates 53,280,273 287,614
James A. Haslam, III 53,278,934 288,954
Ralph Horn 53,319,802 248,086
</TABLE>
<TABLE>
<CAPTION>
For Witheld Abstain
--- ------- -------
<S> <C> <C> <C> <C>
2. Ratification of Auditors 53,250,121 218,894 98,647
</TABLE>
There were no "broker non-votes" with respect to any of the nominees
or the ratification of the auditors and no abstentions with respect to
any of the nominees.
Item 6. Exhibits and Reports on Form 8-K.
- ------------------------------------------
(a) Exhibits furnished in accordance with the provisions of the Exhibit
Table of Item 601 of Regulation S-K are included as described in the
Exhibit Index which is a part of this report. Exhibits not listed in
the Exhibit Index are omitted because they are inapplicable.
(b) No reports on Form 8-K were filed during the second quarter of 1996.
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRST TENNESSEE NATIONAL CORPORATION
------------------------------------
(Registrant)
DATE: 8/13/96 By: Elbert L. Thomas Jr.
---------------- --------------------------------
Elbert L. Thomas Jr.
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Exhibit Description Page No.
- ----------- ------------------- --------
<S> <C> <C>
3(ii) Bylaws of the Corporation, as amended Filed Herewith
11 Statement re Computation of Per Share Earnings. Filed Herewith
27 Financial Data Schedule (for SEC use only) Filed Herewith
</TABLE>
<PAGE> 1
EXHIBIT 3 (ii)
BY LAWS
OF
FIRST TENNESSEE NATIONAL CORPORATION
(As Amended and Restated March 15, 1977)
ARTICLE I.
OFFICES
1. The principal office shall be in Memphis, Tennessee.
2. The Corporation may also have offices in such other
places as the Board of Directors may from time to time appoint, or
the business of the Corporation may require.
ARTICLE II.
SHAREHOLDERS' MEETINGS
1. Meetings of the shareholders of the Corporation may be
held either in the State of Tennessee or elsewhere: but in the
absence of notice to the contrary, shareholders' meetings shall be
held at the office of the Corporation in Memphis, Tennessee.
2. The annual meeting of shareholders for the election of
directors and for the transaction of such other business as may
properly come before the meeting shall be held each year on the
Third Tuesday in April, or if that day is a legal holiday, on the
next succeeding day not a legal holiday, at a time to be fixed by
resolution of the Board of Directors; at which meeting they shall
elect by ballot, by plurality vote, a Board of Directors and may
transact such other business as may properly come before the
meeting.
3. The holders of a majority of the shares issued and out-
standing and entitled to vote thereat, present in person or repre-
sented by proxy, shall be requisite, and shall constitute a quorum
at all meetings of the shareholders, for the transaction of busi-
ness, except as otherwise provided by law, by the Charter of
Incorporation, and these Bylaws. If, however, such majority shall
not be present or represented at the meeting of the shareholders,
the shareholders entitled to vote thereat, present in person or by
Proxy, shall have power to adjourn the meeting from time to time
<PAGE> 2
without notice other than announcement at the meeting until the
requisite amount of voting shares shall be present. At such ad-
journed meeting at which the requisite amount of voting shares shall
be represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
4. Written notice of the annual meeting stating the place,
day and hour of the meeting shall be mailed to each shareholder
entitled to vote thereat at such address as appears on the stock
records of the Corporation, at least ten (10), but not more than
sixty (60), days prior to the meeting.
5. Special meetings of the shareholders for any purpose or
purposes, unless otherwise prescribe by statute, may be called (i)
by the Chairman of the Board of Directors, and shall be called by
the Chairman of the Board of Directors or the Secretary at the
request in writing of a majority of the Board of Directors, or (ii).
by the holders of not less than one-tenth (1/10) of all the shares
entitled to vote at such meeting. Such call shall state the purpose
or purposes of the proposed meeting.
6. Written notice of a special meeting of shareholders,
stating the place, day and hour and the purpose or purposes for
which the meeting is called and the person or persons calling the
meeting, shall be mailed, postage prepaid, at least ten (10) days
before the date of such meeting, to each shareholder entitled to
vote thereat at such address as appears on the stock transfer
records of the Corporation.
7. Special meetings of the shareholders may be held at any
time on written waiver of notice or by consent of all of the share-
holders.
8. Any shareholder may waive notice of any meeting either
before, at or after the meeting.
9. At each meeting of shareholders, each shareholder shall
have one vote for each share of stock having voting power registered
in his name on the records of the Corporation on the record date for
that meeting, and every shareholder having the right to vote shall
be entitled to vote in person or by proxy appointed by instrument in
writing.
-2-
<PAGE> 3
10. Any director may be removed by the shareholders with or
without cause, at any time by the affirmative vote of the holders of
a majority of the stock entitled to vote, by resolution adopted at
any meeting of shareholders, whether an annual or a special meeting.
ARTICLE III
DIRECTORS
1. The business and affairs of the Corporation shall be
directed by a Board of Directors, which shall consist of 19 members.
Directors need not be shareholders.
2. Each director shall serve for the term of one year and
until his successor shall have been duly elected and qualified:
subject, however, to the right of the removal of any director at any
time by the affirmative vote of the majority of the shares entitled
to vote by resolution adopted at any meeting of shareholders,
whether an annual or a special meeting.
3. The directors may hold their meetings at the office of the
Corporation in Memphis, Tennessee, or at such other place or places,
either in the State of Tennessee or elsewhere, as they may from time
to time determine.
4. A majority of the Board of Directors at a meeting duly
assembled shall be necessary to constitute a quorum for the trans-
action of business, and the vote of a majority of the directors
present at a meeting at which a quorum is present shall be the act
of the Board of Directors, unless the vote of a greater number is
required by law, by the Charter, or these Bylaws.
5. As compensation, the directors, for their services, shall
be paid such amounts at such time as may, from tine to time, be
determined by resolution of the entire Board of Directors; provide
that nothing herein contained shall be construed to preclude any
director from serving the Corporation in any other capacity and
being compensated therefor.
6. The directors, by resolution adopted by a majority of the
entire Board, may designate any executive committee, consisting of
three or more directors, and other committees, consisting of three
or more directors, officers or employees, and may delegate to such
-3-
<PAGE> 4
committee or committees all such authority of the Board that it
deems desirable, including, without limitation, authority to elect
corporate officers, fix their salaries and, to the extent such is
not provided by law, the Charter or these Bylaws, to establish their
authority and responsibility, except that no such committee or
committees, unless specifically so authorized by the Board, shall
have and exercise the authority of the Board to:
(a) Adopt, amend or repeal the Bylaws;
(b) Submit to shareholders any action that needs
shareholders' authorization under Chapters 1
through 14, Title 48, Tennessee Code Annotated,
and any and all amendments and supplements
thereto;
(c) Fill vacancies in the Board or in any committee; and
(d) Declare dividends or make other corporate distributions.
Regular and special meetings of committees may be held with or with-
out notice as prescribed by resolution of the directors.
ARTICLE IV.
POWERS OF DIRECTORS
1. The Board of Directors shall have, in addition to such
powers as are hereinafter expressly conferred on it and all such
powers as may be conferred on it by law, all such powers as may be
exercised by the Corporation, subject to the provisions of the law,
the Charter and these Bylaws.
2. The Corporation shall be managed by the Board of Directors,
which shall exercise all powers conferred under the laws of the
State of Tennessee, including without limitation the powers speci-
fied in the Charter of the Corporation, as amended, and the power:
(a) To purchase or otherwise acquire property, rights
or privileges for the Corporation which the Corpora-
tion has power to take, at such prices and on such
terms as the Board of Directors may deem proper;
(b) To pay for such property, rights or privileges in
whole or in part with money, stocks, bonds, deben-
tures or other securities of the Corporation, or
-4-
<PAGE> 5
by the delivery of other property of the
Corporation;
(c) To create, make and issue mortgages, bonds, deeds
of trust, trust agreements and negotiable or trans-
ferable instruments end securities, secured by
mortgage or otherwise, and to do every act and thing
necessary to effectuate the same;
(d) To elect the corporate officers and fix their salaries;
to appoint employees and trustees; and to dismiss them
at its discretion; to fix their duties and emoluments,
and to change them from time to time; and to require
security as it may deem proper;
(e) To confer on any Officer of the Corporation the power
of selecting, discharging or suspending such employees;
and
(f) To determine by whom and in what manner the Corporation's
bills, notes, receipts, acceptances, guaranties, endorse-
ments, checks, releases, contracts or other documents
shall be signed.
ARTICLE V.
MEETINGS OF DIRECTORS
1. Following each annual election of directors, the newly
elected directors shall meet for the purpose of organization, the
election of officers and the transaction of other business, and,
if a majority of the directors be present at such place, day and
hour, no prior notice of such meeting shall be required to be
given to the directors. The place, day and hour of such meeting
may also be fixed by written consent of the directors.
2. Meetings of the directors shall be held at least once each
calendar quarter at such time and place as the Board of Directors
may by resolution determine. Notice of the time and place of the
meetings shall be given as specified for a special meeting.
3. Special meetings of the directors may be called by the
Chairman or the Board of Directors or the President on two days'
-5-
<PAGE> 6
notice in writing or on one day's notice by telegram to each direc-
tor, and shall be called by the Chairman in like manner on the
written request of two directors. The notice shall state thou
place, day and hour where it is to be held.
4. Special meetings of the directors may be held at any time
on written waiver of notice or by consent of all the directors.
5. A majority of the directors shall constitute a quorum, but
a smaller number may adjourn from time to time, without further
notice, if the time and place to which the meeting is adjourned are
fixed at the meeting at which the adjournment is taken and if the
period of adjournment does not exceed thirty (30) days in any one
(1) adjournment.
6. The directors may take action which they are required or
permitted to take, without a meeting, on written consent setting
forth the action so taken, signed by all of the directors entitled
to vote thereon.
ARTICLE VI.
OFFICERS
1. The officers of the Corporation shall be chosen at the
annual organizational meeting following the annual meeting of share-
holders, for a term of one (1) year and until their successors are
elected and qualified. The officers of the Corporation shall con-
sist of a Chairman of the Board of Directors, a President, such
number of Vice Chairmen as the Board may from time to time determine
and appoint, a Financial Vice President, a Secretary, a Treasurer, a
Controller and an Auditor, and such number of Executive Vice Presidents.
Senior Vice Presidents and Vice Presidents, Assistant Secretaries,
Assistant Controllers, Assistant Auditors, and Corporate Officers as
the Board may from time to time determine and appoint. Any person
may hold two or more offices, except that the President shall not
also be the Secretary or an Assistant Secretary. The officers,
other than the Chairman of the Board of Directors, need not be
directors or shareholders.
-6-
<PAGE> 7
2. The Board may appoint such other officers and agents as it
shall deem necessary, who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be
determined from time to time by the Board.
3. If the office of any officer or officers appointed by the
Board of Directors becomes vacant for any reason, the vacancy may
be filled by the Board of Directors.
4. The officers of the Corporation shall hold office until
their successors are elected and qualified. Any officer shall be
subject to removal at any time with or without cause by the affirma-
tive vote of a majority of the Board of Directors.
5. The salaries and compensation of all officers of the
Corporation shall be fixed by the Board.
ARTICLE VII.
CHAIRMAN OF THE BOARD OF DIRECTORS
1. The Chairman of the Board of Directors shall be the Chief
Executive Officer of the Corporation; he shall preside at all
meetings of the shareholders; he shall have general management of
the business of the Corporation and shall exercise general super-
vision over all of its affairs and shall see that all orders and
resolutions of the Board are carried into effect.
2. He shall have the general powers and duties of supervision.
and management usually vested in the office of Chairman of the Board
of Directors and Chief Executive Officer of a Corporation.
ARTICLE VIII.
THE PRESIDENT
1. The President, in the absence of the Chairman of the
Board, shall preside at all meetings of shareholders, and he shall
be charged with the active management and administration of the
business of the Corporation with power to make all contracts in the
conduct of the regular and ordinary business of the Corporation; and
he may appoint and discharge agents and employees of the Corporation
and fix their compensation, subject to the general supervisory powers
-7-
<PAGE> 8
of the Chairman of the Board of Directors and of the Board of
Directors, and do and perform such other duties as from time to time
may be assigned to him by the Board of Directors and as may be
authorized by law.
ARTICLE IX.
VICE CHAIRMAN
1. Vice Chairmen shall perform such of the duties and exer-
cise such of the powers as may be prescribed by the Board of Direc-
tors or the Chairman of the Board of Directors.
ARTICLE X.
CHAIRMAN OF THE CREDIT POLICY COMMITTEE
1. The Chairman of the Credit Policy Committee shall perform
such of the duties and exercise such of the powers as may be pre-
scribed by the Board of Directors or the Chairman of the Board of
Directors.
ARTICLE XI.
FINANCIAL VICE PRESIDENT
1. The Financial Vice President shall perform such of the
duties and exercise such of the powers as may be prescribed by the
Board of Directors or the Chairman of the Board of Directors.
ARTICLE XII.
VICE PRESIDENT
1. Vice Presidents shall perform such of the duties and
exercise such of the powers as may be prescribed by the Board of
Directors, the Chairman of the Board of Directors or the President.
ARTICLE XIII.
SECRETARY
1. The Secretary shall attend all sessions of the Board and
of the shareholders and record all votes and the minutes of all
-8-
<PAGE> 9
proceedings in a book to be kept for that purpose. He shall give or
cause to be given notice of all meetings or the shareholders and of
the Board of Directors and shall perform such other duties as are
incident to his office or as may be prescribed by the Board of
Directors or the Chairman of the Board of Directors.
2. In the absence or disability of the Secretary, the Assistant
Secretary shall perform all the duties and exercise all of the
powers of the Secretary and shall perform such other duties as the
Board of Directors or the Chairman of the Board of Directors shall
prescribe.
ARTICLE XIV.
TREASURER
1. The Treasurer shall have custody of the funds and securi-
ties of the Corporation and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and
shall deposit all monies and other valuable effects in the name and
to the credit of the Corporation such depositories as may be
designated by the Board of Directors.
2. He shall disburse the funds of the Corporation as may be
ordered by the Board, or by the Chairman of the Board of Directors,
or by the President, taking proper vouchers for such disbursements,
and shall render to the Board, the Chairman of the Board, or the
President, whenever they may require it, an account of all his
transactions as Treasurer and of the financial condition of the
Corporation, and at a regular meeting of the Board preceding the
annual shareholders' meeting, a like report for the preceding year.
3. He shall keep or cause to be kept an account of stock
registered and transferred in such manner and subject to such
regulations as the Board of Directors may prescribe
4. He shall give the Corporation a bond, if required by the
Board of Directors, in such sum and in form and with security satis-
factory to the Board of Directors for the faithful performance of
the duties of his office end the restoration to the Corporation, in
case of his death, resignation or removal from office, of all books,
-9-
<PAGE> 10
papers, vouchers, money and other property of whatever kind in his
possession, belonging to the corporation. He shall perform such
other duties as the Board of Directors may from time to time pre-
scribe or require.
5. In the absence or disability of the Treasurer, the Assis-
tant Treasurer shall perform all the duties and exercise all of the
powers of the Treasurer and shall perform such other duties as the
Board of Directors or the Chairman of the Board of Directors shall
prescribe.
ARTICLE XV.
AUDITOR
1. The Auditor shall perform such of the duties and exercise
such of the powers as may be prescribed by the Board of Directors.
2. In the absence or disability of the Auditor, the Assistant
Auditor shall perform all the duties and exercise all the powers of
the Auditor and shall perform such other duties as the Board of
Directors shall prescribe.
ARTICLE XVI.
CONTROLLER
1. The Controller shall assist the management of the Corpora-
tion in setting the financial goals and policies of the Corporation;
shall provide financial and statistical information to the share-
holders and to the management of the Corporation and shall perform
such other duties and exercise such other powers as may be pre-
scribed by the Board of Directors, the Chairman of the Board of
Directors or the President.
2. In the absence or disability of the Controller, the Assis-
tant Controller shall perform all duties and exercise all Powers of
the Controller and shall perform such other duties as the Board of
Directors or the Chairman of the Board of Directors shall prescribe.
-10-
<PAGE> 11
ARTICLE XVII
CORPORATE OFFICER
1. Corporate Officers shall have such authority and perform
such of the duties and exercise such of the powers as may be pre-
scribed by the Board of Directors, the President or any Vice Chair-
man.
ARTICLE XVIII.
DUTIES OF OFFICERS MAY BE DELEGATED
1. In case of the absence of any officer of the Corporation,
or for any other reason that the Board may deem sufficient, the
Board may delegate, for the time being, the powers or duties, or any
of them, of such officer to any other officer, or to any director,
provided a majority of the entire Board concur therein.
ARTICLE XIX.
CERTIFICATES OF STOCK
1. The certificates of stock of the Corporation shall be
numbered, shall be entered in the book or records of the Corpora-
tion as they are issued, and shall be signed by the Chairman of the
Board and any one of the following: the President, the Treasurer or
the Secretary. Each certificate shall include the following upon
the face thereof:
(a) That the Corporation is organized under the laws of this
state;
(b) The name of the Corporation;
(c) The name of the person to whom issued;
(d) The number and class of shares, and the designation of
the series, if any, which such certificate represents;
(e) The par value of each share represented by such certifi-
cate: or a statement that the shares are without par
value; and
(f) Such other provisions as the Board may from time to
time require.
-11-
<PAGE> 12
Either or both of the signatures upon a certificate may be facsimiles
if the certificate is countersigned by a transfer agent, or regis-
tered by a registrar other than an officer or employee of the
Corporation.
ARTICLE XX.
TRANSFERS OF STOCK AND RECORD DATE
1. Transfers of shares of stock shall be made upon the books
of the Corporation by the person named in the certificate or by an
attorney, lawfully constituted in writing, and upon surrender of the
certificate therefor.
The Board of Directors may appoint suitable agents in Memphis,
Tennessee, and elsewhere to facilitate transfers by shareholders
under such regulations as the Board may from time to time prescribe.
The transfer books may be closed by the Board for such period, not
to exceed 40 days, as may be deemed advisable for dividend or other
purposes, or in lieu of closing the books, the Board may fix in
advance a date as the record date for determining shareholders
entitled notice of and to vote at a meeting of shareholders, or
entitled to payment of any dividend. The record date shall not be
less than 10 days prior to the date on which the particular action
requiring such determination is to be taken. All certificates
surrendered the the Corporation for transfer shall be canceled, and
no new certificate shall be issued until the former certificate for
like number of shares shall have been surrendered and canceled,
except that in case of a lost or destroyed certificate a new one may
be issued on the terms prescribe by Article XXII of these Bylaws.
ARTICLE XXI
REGISTERED SHAREHOLDERS
1. The Corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact there-
of; and, accordingly shall not be bound to recognize any equitable
or other claim to or interest in such share on the part of any other
-12-
<PAGE> 13
person, whether or not it shall have express or other notice thereof,
save as expressly provided by the laws of Tennessee.
ARTICLE XXII.
LOST CERTIFICATE
1. The agent for transfer of the Corporation's stock may
issue new share certificates in place of certificates represented to
have been lost, destroyed, stolen or mutilated upon receiving an
indemnity satisfactory to the agent and the Secretary or Treasurer
of the Corporation, without further action of the Board of Directors.
ARTICLE XXIII.
FISCAL YEAR.
1. The Board of Directors of the Corporation shall have
authority from time to time to determine whether the Corporation
shall operate upon a calendar year basis or upon a fiscal year
basis, and if the latter, said Board shall have power to determine
when the said fiscal year shall begin and end.
ARTICLE XXIV.
DIVIDENDS
1. Dividends on the capital stock of the Corporation may be
declared by the Board of Directors at any regular or special meeting
pursuant to law.
2. Before payment of any dividend, there may be set aside out
of any funds of the Corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discre-
tion, think proper as a reserve fund to meet contingencies, or for
equalizing dividends or for repairing or maintaining any property of
the Corporation, or for such other purposes as the directors shall
think conducive to the interest of the Corporation.
-13-
<PAGE> 14
ARTICLE XXV
SEAL
1. This Corporation shall have a Corporate Seal which shall
consist of an imprint of the name of the Corporation, the state of
its incorporation, the year of incorporation and the words "Corporate
Seal."
ARTICLE XXVI.
NOTICES
1. Whenever under the provisions of these Bylaws notice is
required to be given to any director, officer or shareholder, it
shall not be construed to mean personal notice, but such notice may
be given in writing by depositing the same in the United States
Mail, or by telegram addressed to such shareholder, at such address
as appears on the stock transfer books of the Corporation, and
addressed to such director or officer at such address as appears on
the records of the Corporation, and such notice shall be deemed to
be given at the time when the same shall be thus deposited, or the
telegram sent.
2. Any director, officer or shareholder may waive any notice
of any meeting required to be given under these Bylaws either be-
fore, at or after the meeting.
ARTICLE XXVII.
AMENDMENTS
1. The Board of Directors shall have power to make, amend and
repeal the Bylaws of the Corporation by vote of a majority of all
the directors, at any regular or special meeting of the Board.
2. The shareholders may make, alter, amend and repeal the
Bylaws of this Corporation at any annual meeting or at a special
meeting called for that purpose, and all Bylaws made by the direc-
tors may be altered or repealed by vote of the majority of the
shareholders.
-14-
<PAGE> 15
ARTICLE XXVIII
INDEMNIFICATION
1. If any current or former director or officer of First
Tennessee National Corporation ("First Tennessee") shall be wholly
successful, on the merits or otherwise, in any threatened or actual
criminal or civil suit or proceeding other than by or in the right
of First Tennessee to procure a judgement in its favor, including
any suit or proceeding instituted as a result of such director or
officer serving another corporation or other business entity in any
capacity at the request of First Tennessee, which was commenced by
reason of the fact that he is or was a director or officer of First
Tennessee or served such other corporation or other business entity
in any capacity, he shall be indemnified by First Tennessee against
all reasonable expenses, including attorney fees, actually and
necessarily incurred as a result of such threatened or actual suit
or proceeding, or any appeal therein.
2. If any current or former director or officer of First
Tennessee shall be wholly successful, on the merits or otherwise, in
any actual suit by or in the right of First Tennessee to procure a
judgment in its favor, which was commenced by reason of the fact
that he is or was a director or officer of First Tennessee, he shall
be indemnified by First Tennessee against all reasonable expenses;
including attorney fees, actually and necessarily incurred as a
result of such suit or proceeding, or any appeal therein.
3. If any current or former director or officer of First
Tennessee has not been wholly successful, on the merits or other-
wise, in defense of a threatened or actual suit or proceeding of the
character described in Section 1 of this bylaw or a civil action of
the character described in Section 2, unless ordered by the Court
under Section 48-410 of the Tennessee Code Annotated ("T.C.A."), he
shall be indemnified by First Tennessee (1) in a suit or proceeding
of the character described in Section 1, against judgments and
fines; and (2) in a suit or proceeding of the character described in
Sections 1 or 2, against amounts paid in settlement and reasonable
expenses, including attorney fees, actually and necessarily incurred
as a result of such suit or proceeding, or any appeal therein, only
if authorized in the specific case:
-15-
<PAGE> 16
a. By the Board of First Tennessee acting by a quorum consisting
of Directors who are not parties to such action or proceeding
upon a finding that:
(1) In a suit or proceeding other than by or in the right
of First Tennessee, the director or officer has acted
in good faith for a purpose which he has reasonably
believed to be in the best interest of First Tennessee,
and, in criminal actions or proceedings, in addition,
had no reasonable cause to believe that his conduct
was unlawful; or
(2) In a suit or proceeding by or in the right of First
Tennessee, the director or officer has not breached
his duty to First Tennessee under T.C.A. 48-813; and
(3) In the case of any settlement, in addition to the
appropriate standard of conduct under 3.a. (1) or (2),
the settlement is in the best interest of First Tennes-
ee; and if the settlement has been approved by a court,
that the indemnification would not be inconsistent with
any condition with respect to indemnification imposed
by the court in approving the settlement.
b. If a quorum under 3.a. is not available with due diligence:
(1) By the Board of First Tennessee upon the opinion in
writing of independent legal counsel that indemnification
is proper in the circumstances because the applicable
standard of conduct set forth in 3.a.(1), (2) or (3)
has been met by such director or officer; or
(2) By the shareholders of First Tennessee upon finding that
the director or officer has met the applicable standard
of conduct set forth in 3.a.(1), (2) or (3).
4. A director or officer of First Tennessee shall be deemed
to be serving another corporation or other business entity at the
request of First Tennessee only if such request is reflected in the
records of a committee appointed by the Board of first Tennessee for
the purpose of making such requests.
5. Expenses incurred in defending a civil or criminal action,
suit or proceeding may be paid by first Tennessee in advance of the
-16-
<PAGE> 17
final disposition of such action, suit or proceeding if authorized
by the procedure established under 3.a. or b. of this bylaw.
6. If any expenses or other amounts are paid by way of in-
demnification otherwise than by court order under T.C.A. 48-410 or
action by the shareholders, First Tennessee shall give notice to the
shareholders as provided in T.C.A. 48-411(3).
7. Every employee of First Tennessee shall be indemnified by
First Tennessee to the same extent as directors or officers of First
Tennessee.
8. a. The right of indemnification set forth above shall
not be deemed to restrict any right of indemnifica-
tion provided to any director, officer or employee of
First Tennessee or any of its subsidiaries
pursuant to a contract, agreement or resolution
executed upon the approval or ratification of the
Board of First Tennessee acting by a quorum of dis-
interested directors, provided that any such con-
tract shall not enlarge the rights of indemnification
permitted under the Tennessee Central Corporation Act.
b. This bylaw shall not be construed to affect or re-
strict in any manner any right of indemnification
granted by First Tennessee to persons other than
directors, officers and employees of First Tennessee
or any of its subsidiaries.
9. a. No combination of rights shall permit any current or
former director, officer or employee of First Tennes-
see to receive a double recovery.
b. The right of indemnification provided in this bylaw
shall inure to the benefit of the heirs, executors or
administrators of each such current or former direc-
tor, officer of employee of First Tennessee and shall or
in no event be construed to enlarge the rights of
indemnification permitted under the Tennessee General
Corporation Act.
-17-
<PAGE> 18
ARTICLE XXIX
RETIREMENT
1. Directors. Any director who shall attain the age of
seventy (70) shall be automatically retired from the Board at
time of the next succeeding annual meeting of shareholders. How-
ever, a director may be retired before age seventy (70) as herein-
after provided.
Effective December 31, 1978, directors shall be retired from
the Board as follows:
(1) The retirement age for Directors will be sixty-five (65).
Any Director who becomes sixty-five prior to December 31;
1978 or any December 31 thereafter will be retired as of
the December 31 following his sixty-fifth birthday.
(2) For the purpose of maintaining Boards of active business
and professional men, Directors leaving their present
occupation or the position held at their last election (by
retirement or otherwise), will be expected to tender their
resignation from the Board upon such occasion. The resig-
nation will ordinarily be accepted unless (a) the Director
assumes another management position deemed appropriate by
the Board for continuation, or (b) the Director is so en-
gaged in some specific project for the Board as to make
his resignation detrimental to the Corporation. Under
this circumstance, the Board may elect to set a subsequent
date for his retirement timed to coincide with the comple-
tion of the project.
(3) Directors who are also Officers of the Corporation shall
be retired from the Board on the date they retire from or
otherwise discontinue active service with the Corporation
or its affiliates.
Any director of the Corporation who has retired from the Board
is eligible for election to a position on the Honorary Advisory
Board, the duties of which shall be as specified by such resolutions
as the Board of Directors may from time to time adopt. Membership
on the Honorary Advisory Board shall continue at the discretion of
the Board of Directors.
-18-
<PAGE> 19
2. Officers and Employees. As each officer or employee
attains the age of sixty-five years, his employment by the Corpora-
tion shall automatically be terminated and his salary discontinued
on the first day of the month coincident with or immediately following
his sixty-fifth birthday; however, the Board of Directors, in its
discretion, may continue any such officer or employee in service and
designate the capacity in which he shall serve, and shall fix the
remuneration he shall receive. The Board may also re-employ any
former officer who had theretofore been retired.
ARTICLE XXX.
CONVEYANCES
1. All transfers and conveyances of real estate made by the
Corporation shall be executed by any officer of the Corporation, ex-
cept the Auditor and Assistant Auditor, with seal attested by any
other officer of the Corporation.
2. Any officer of the Corporation, except the Auditor and
Assistant Auditor, is authorized and empowered to sell, assign,
transfer, and deliver any and all bonds, stocks, or other indicia of
ownership of personal property which may now or hereafter be assigned
to it, or owned or held by it, and to execute releases of assignments
and conveyances made to the Corporation or instruments in which the
Corporation is named beneficiary.
-19-
<PAGE> 20
RESOLUTION OF
BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
JANUARY 17, 1978
RESOLVED, that Article III, Section 1, of the Bylaws of
the Company be, and hereby is, amended to provide for a board of
directors to consist of 18, rather than 19, members effective
as of April 18, 1978, by deleting the number 19 from said section
of the Bylaws and substituting therefor the number 18.
RESOLVED, that Article XXIX, Section 1, of the Bylaws of the
Company be, and hereby is, amended and restated so as to read as
follows:
"1. Directors. Any director who shall attain the age of
seventy (70) shall be automatically retired from the Board at the
time of the next succeeding annual meeting of shareholders.
However, a director may be retired before age seventy (70) as
hereinafter provided.
Effective December 31, 1978, directors who are not also
officers of the Corporation or its affiliates shall be retired-
from the Board as follows:
(1) Any director who shall attain the age of sixty-
five (65) shall be automatically retired from
the Board at the time of the next succeeding
annual meeting of shareholders.
(2) For the purpose of maintaining Boards of active
business and professional men, directors leaving
their present occupation or the position held at
their last election (by retirement or otherwise),
will be expected to tender their resignation from
the Board upon such occasion. The resignation will
ordinarily be accepted unless (a) the director
assumes another management position deemed appro-
priate by the Board for continuation, or (b) the
director is so engaged in some specific project
for the Board as to make his resignation detri-
mental to the Corporation. Under this circumstance,
the Board may elect to set a subsequent date for his
retirement timed to coincide with the completion
of the project.
Effective January 17, 1978, directors who are also officers
of the Corporation or its affiliates shall be retired from the
Board on the date they retire from or otherwise discontinue active
service with the Corporation or its affiliates.
Any director of the Corporation who has retired from the
Board is eligible for election to a position on the Honorary
Advisory Board, the duties of which shall be as specified by
such resolutions as the Board of Directors may from time to time
adopt. Membership on the Honorary Advisory Board shall continue
at the discretion of the Board of Directors."
A-1, p.1
<PAGE> 21
RESOLUTION OF
BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
MAY 16, 1978
RESOLVED, that Article XXIX, Section 1 of the Bylaws of
the Company be, and in hereby, amended to delete the word
"Advisory" from the phrase "Honorary Advisory Board" where-
ever that phrase appears in said section.
A-1, p.3
<PAGE> 22
RESOLUTION OF
BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
DECEMBER 19, 1978
RESOLVED, that as a result of the Age Discrimination
in Employment Act Amendments of 1978, Article XXIX, Section 2,
of the Bylaws of the Company be, and hereby is, amended and
restated as of January 1, 1979, so as to read as follows:
"2. Officers and Employees. As each officer or
employee attains the age of 70 years, his or
her employment by the Corporation shall auto-
matically be terminated and his or her salary
discontinued on the first day of the month
coincident with or immediately following the
70th birthday. Provided, however, each officer
or employee who meets the exclusion for execu-
tives and top policy makers under the Age
Discrimination in Employment Act; as amended
from time to time, shall automatically be ter-
minated and his or salary discontinued on the
first day of the month coincident with or
immediately following the 65th birthday.
The Board of Directors, in its discretion,
may continue any such officer or employee in
service and designate the capacity in which he or
she shall serve, and shall fix the remuneration
he or she shall receive. The Board of Directors
may also re-employ any former officer who had
theretofore been retired."
A-1, p.5
<PAGE> 23
RESOLUTION OF
BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
APRIL 15, 1980
RESOLVED, that Article III, Section 6 of the Bylaws be, and hereby is,
amended to provide for committees to consist of two, rather than three,
members by deleting the number three, wherever it appears, from said section
of Bylaws and substituting therefor the number two.
<PAGE> 24
RESOLUTION OF
BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
OCTOBER 21, 1980
RESOLVED, that Article VI, Section 5, of the Bylaws of the Company be,
and hereby is, amended and restated to read as follows:
"5. The Board, or a committee thereof, shall fix the
remuneration of executive officers. The renumeration
of non-executive officers shall be fixed by the Board
or by management under such policies and procedures as
shall be established by the Board or a committee there-
of."
<PAGE> 25
RESOLUTION OF BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
JANUARY 19, 1982
RESOLVED, that Article V, Section 2, of the Bylaws of
the Company be, and hereby is, amended by deleting the
words "at least once each calendar quarter" from said
section of Bylaws.
<PAGE> 26
RESOLUTION OF BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
January 20, 1987
A new section 11 of Article II of the Bylaws of the
Company is adopted as follows:
"11. At an annual or special meeting of shareholders,
only such business shall be conducted, and only such
proposals shall be acted upon, as shall have been properly
brought before an annual or special meeting of
shareholders. To be properly brought before an annual or
special meeting of shareholders, business must be (i) in
the case of a special meeting called by or at the direction
of the Board of Directors, specified in the notice of the
special meeting (or any supplement thereto), or (ii) in the
case of an annual meeting properly brought before the
meeting by or at the direction of the Board of Directors or
otherwise properly brought before the annual meeting by a
shareholder. For business to be properly brought before
such a meeting of shareholders by a shareholder, the
shareholder must have given timely notice thereof in
writing to the Secretary of the Corporation. To be timely,
a shareholder's notice must be delivered to or mailed and
received at the principal executive offices of the
Corporation not less than 30 days nor more than 60 days
prior to the date of the meeting; provided, however, that
if less than 40 days' notice or prior public disclosure of
the date of the meeting is given or made to shareholders,
notice by the shareholder to be timely must be so delivered
or received not later than the close of business on the
10th day following the earlier of (i) the day on which such
notice of the date of the meeting was mailed or (ii) the
day on which such public disclosure was made. A
shareholder's notice to the Secretary shall set forth as to
each matter the shareholder proposes to bring before a
meeting of shareholders (i) a brief description of the
business desired to be brought before the meeting and the
reasons for conducting such business at the meeting, (ii)
the name and address, as they appear on the Corporation's
books, of the shareholder proposing such business and any
other shareholders known by such shareholder to be
supporting such proposal, (iii) the class and number of
shares of the Corporation which are beneficially owned by
such shareholder on the date of such shareholder's notice
and by any other shareholders known by such shareholder to
be supporting such proposal on the date of such
shareholder's notice, and (iv) any material interest of the
shareholder in such proposal. Notwithstanding anything in
these Bylaws to the contrary, no business shall be
<PAGE> 27
conducted at a meeting of shareholders except in accordance
with the procedures set forth in this Section 11. The
Chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that the business was
not properly brought before the meeting in accordance with
the procedures prescribed by these Bylaws, and if he should
so determine, he shall so declare to the meeting and any
such business not properly brought before the meeting shall
not be transacted."
<PAGE> 28
RESOLUTION OF BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
January 20, 1987
A new Section 7 of Article III of the Bylaws of the
Company is adopted as follows:
"7. Only persons nominated in accordance with the
procedures set forth in this Section 7 shall be eligible
for election as directors. Nominations of persons for
election to the Board may be made at a meeting of
shareholders (i) by or at the direction of the Board, or
(ii) by any shareholder of the Corporation entitled to vote
for the election of directors at such meeting who complies
with the notice procedures set forth in this Section 7.
Such nominations, other than those made by or at the
direction of the Board, shall be made pursuant to timely
notice in writing to the Secretary of the Corporation. To
be timely, a shareholder's notice must be delivered to or
mailed and received at the principal executive offices of
the Corporation not less than 30 days nor more than 60 days
prior to the date of a meeting; provided, however, that if
fewer than 40 days' notice or prior public disclosure of
the date of the meeting is given or made to shareholders,
notice by the shareholder to be timely must be so delivered
or received not later than the close of business on the
10th day following the earlier of (i) the day on which such
notice of the date of such meeting was mailed or (ii) the
day on which such public disclosure was made. A
shareholder's notice to the Secretary shall set forth (i)
as to each person whom the shareholder proposes to nominate
for election or reelection as a director (a) the name, age,
business address and residence address of such person. (b)
the principal occupation or employment of such person, (c)
the class and number of shares of the Corporation which are
beneficially owned by such person on the date of such
shareholder's notice and (d) any other information relating
to such person that is required to be disclosed in
solicitations of proxies for election of directors or, is
otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended
(including, without limitation, such person's written
consent to being named in the proxy statement as a nominee
and to serving as a director if elected); and (ii) as to
the shareholder giving the notice (a) the name and address,
as they appear on the Corporation's books; of such
shareholder and any other shareholders known by such
shareholder to be supporting such nominees and (b) the
class and number of shares of the Corporation which are
beneficially owned by such shareholder on the date of such
<PAGE> 29
shareholder's notice and by any other shareholders known by
such shareholder to be supporting such nominees on the date
of such shareholder's notice. No person shall be eligible
for election as a director of the Corporation unless
nominated in accordance with the procedures set forth in
this Section 7. The Chairman of the meeting shall, if the
facts warrant, determine and declare to the meeting that a
nomination was not made in accordance with the procedures
prescribed by these Bylaws, and if he should so determine,
he shall so declare to the meeting and the defective
nomination shall be disregarded."
<PAGE> 30
RESOLUTION OF BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
January 20, 1987
Article V, Section 3 of the Bylaws of the Company is
amended to read as follows:
"3. Special meetings of the directors may be called
by the Chairman of the Board of Directors or the President
on two days' notice by mail, or on one day's notice by
telegram or cablegram, or on two hours' notice given
personally or by telephone to each director, and shall be
called by the Chairman in like manner on the written
request of a majority of directors then in office. The
notice shall state the place, day and hour where the
meeting is to be held."
<PAGE> 31
RESOLUTION OF
BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
JANUARY 20, 1987
ADOPTED SUBJECT TO
APPROVAL OF PROPOSAL 3
BY THE SHAREHOLDERS
APRIL 21, 1987
RESOLVED, that Article III, Section 2 of the Bylaws of
First Tennessee National Corporation ("Company") is amended to
read as follows:
"2. Except as otherwise provided by law or by the Charter,
the term of each director hereafter elected shall be
from the time of his election and qualification until
the third annual meeting next following his election
and until his successor shall have been duly elected
and qualified; subject, however, to the right of the
removal of any director as provided by law, by the
Charter or by these Bylaws."
<PAGE> 32
RESOLUTION OF
BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
JANUARY 20, 1987
ADOPTED SUBJECT TO
APPROVAL OF PROPOSAL 3
BY THE SHAREHOLDERS
APRIL 21, 1987
RESOLVED, that a new Section 8 of Article III of the Bylaws
of the Company is adopted as follows:
"8. Except as otherwise provided by law or by the Charter,
newly created directorships resulting from any
increase in the authorized number of directors or any
vacancies on the Board of Directors resulting from
death, resignation, retirement, disqualification or
any other cause (except removal from office) shall be
filled only by the Board of Directors, provided that a
quorum is then in office and present, or only by a
majority of the directors then in office, if less than
a quorum is then in office or by the sole remaining
director. Any vacancies on the Board of Directors
resulting from removal from office may be filled by
the affirmative vote of the holders of at least a
majority of the voting power of all outstanding voting
stock or, if the shareholders do not so fill such a
vacancy, by a majority of the directors then in
office. Directors elected to fill a newly created
directorship or other vacancy shall hold office for
the remainder of the full term of the class of
directors in which the new directorship was created or
the vacancy occurred and until such director's
successor has been duly elected and qualified. The
directors of any class of directors of the Corporation
may be removed by the shareholders only for cause by
the affirmative vote of the holders of at least a
majority of the voting power of all outstanding voting
stock."
<PAGE> 33
RESOLUTION OF
BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
JANUARY 20, 1987
ADOPTED SUBJECT TO
APPROVAL OF PROPOSAL 3
BY THE SHAREHOLDERS
APRIL 21, 1987
RESOLVED, that Article 11, Section 10 of the Bylaws of the
Company is repealed, and Section 11 of Article II of the Bylaws
of the Company is renumbered to become Section 10.
<PAGE> 34
RESOLUTION OF
BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
JANUARY 20, 1987
ADOPTED SUBJECT TO
APPROVAL OF PROPOSAL 3
BY THE SHAREHOLDERS
APRIL 21, 1987
RESOLVED, that Article XXVII, Section 2 of the Bylaws of
the Company is amended to read as follows:
"2. The shareholders may make, alter, amend and repeal the
Bylaws of this Corporation at any annual meeting or at
a special meeting called for that purpose only by the
affirmative vote of the holders of at least eighty
percent (80%) of the voting power of all outstanding
voting stock, and all Bylaws made by the directors may
be altered or repealed only by the vote of the holders
of at least eighty percent (80%) of the voting power
of all outstanding voting stock."
<PAGE> 35
RESOLUTION OF
BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
October 16, 1990
RESOLVED, that Article XXIX, Section 1, of the Bylaws of
the Company be, and it hereby is, amended to read as follows:
Directors who are not also officers of the Corporation
or its affiliates shall be retired from the Board of
Directors as follows:
(1) Any director who shall attain the age of
sixty-five (65) shall not thereafter be nominated for
a directorship and shall be automatically retired from
the Board at the expiration of the term for which he
or she was elected.
(2) For the purpose of maintaining boards of
active business and professional persons, directors
leaving the occupation or the position held at their
last election (by retirement or otherwise) will be
expected to tender their resignation from the Board
upon such occasion. A resignation will ordinarily be
accepted unless (a) the director assumes another
management position deemed appropriate by the Board
for continuation, or (b) the director is so engaged in
some specific project for the Board as to make his or
her resignation detrimental to the Corporation. Under
this circumstance, the Board may elect to set a
subsequent date for his or her retirement to coincide
with the completion of the project.
Directors who are also officers of the Corporation or
any of its affiliates will be retired from the Board on the
date they retire from or otherwise discontinue active
Service with the Corporation and its affiliates.
All directors of the Corporation who have served until
retirement, as specified herein, will be asked to serve on
the Honorary Board of Directors. Those directors who do
not serve until retirement but who have served for a
minimum of 10 years as an active member of the Board and
who retire in good standing will also be asked to serve.
Members of the Honorary Board shall have no authority to
bind the Corporation. They shall not attend Board meetings
of the Corporation and Shall not have any authority to vote
on any matter being considered by the Board.
<PAGE> 36
RESOLUTION OF BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
January 22, 1991
RESOLVED, that Article III, Section 1 of the Bylaws of First
Tennessee National Corporation be, and hereby is, amended to provide
for a Board of Directors to consist of 13, rather than 15 members,
effective as of the Annual Meeting of Shareholders, April 16, 1991,
by deleting the number 15 from said section of the Bylaws and
substituting therefor the number 13.
<PAGE> 37
Amendment to Bylaws of First Tennessee
National Corporation, adopted 4-16-91
ARTICLE XXVIII
INDEMNIFICATION
1. If any current or former officer of the Corporation
[including for purposes of this Article an individual who, while an
officer, is or was serving another corporation or other enterprise
(including an employee benefit plan) in any capacity at the request
of the Corporation and unless the context requires otherwise the
estate or personal representative of such officer] is wholly
successful, on the merits or otherwise, in the defense of any
threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative and
whether formal or informal ("Proceeding"), to which he was a party
because he is or was an officer of the Corporation, he shall be
indemnified by the Corporation against all reasonable expenses,
including attorney fees, incurred in connection with such
Proceeding, or any appeal therein.
2. If any current or former officer of the Corporation has not
been wholly successful on the merits or otherwise, in the defense of
a Proceeding, to which he was or was threatened to be made a party
because he was or is an officer, he shall be indemnified by the
Corporation against any judgment, settlement, penalty, fine
(including any excise tax assessed with respect to an employee
benefit plan), or other liability and any reasonable expenses,
including attorney fees, incurred as a result of such Proceeding, or
any appeal therein, if authorized in the specific case after a
determination has been made that indemnification is permissible
because the following standard of conduct has been met:
(1) He conducted himself in good faith, and
(2) He reasonably believed:
(A) In the case of conduct in his official capacity
as an officer of the Corporation that his conduct
was in the Corporation's best interest; and
(B) In all other cases that his conduct was at least
not opposed to its best interests; and
(3) In the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful;
provided, however, the Corporation may not indemnify an officer in
connection with a Proceeding by or in the right of the Corporation
in which the officer was adjudged liable to the Corporation or in
connection with any other proceeding charging improper benefit to
him, whether or not involving action in his official capacity, in
which he was adjudged liable on the basis that personal benefit was
improperly received by him.
-31-
<PAGE> 38
3. The determination required by Section 2 herein shall be
made as follows:
(1) By the Board of Directors by a majority vote of a
quorum consisting of directors not at the time parties
to the Proceeding;
(2) If a quorum cannot be obtained, by majority vote of a
committee duly designated by the Board of Directors
(in which designation directors who are parties may
participate) consisting solely of two or more
directors not at the time parties to the Proceeding;
(3) By independent special legal counsel;
(A) Selected by the Board of Directors or its
committee in the manner prescribed in subsection
(1) or (2); or
(B) If a quorum of the Board of Directors cannot be
obtained under Subsection (1) and a committee
cannot be designated under subsection (2),
selected by majority vote of the full Board of
Directors (in which selection directors who are
parties may participate); or, if a determination
pursuant to Subsections 1, 2, or 3 of this
Section 3 cannot be obtained, then
(4) By the shareholders, but Shares owned by or voted
under the control of directors who are at the time
parties to the Proceeding may not be voted on the
determination.
4. An officer of the Corporation shall be deemed to be serving
another corporation or other enterprise or employee benefit plan at
the request of the Corporation only if such request is reflected in
the records of the Board of Directors or a committee appointed by
the Board of Directors for the purpose of making such requests.
5. The Corporation shall pay for or reimburse reasonable
expenses, including attorney fees, incurred by an officer who is a
party to a Proceeding in advance of the final disposition of the
Proceeding if:
(1) The officer furnishes to the Corporation a written
affirmation of his good faith belief that he has met
the standard of conduct described in Section 2 herein;
(2) The officer furnishes to the Corporation a written
undertaking, executed personally or on his behalf, to
repay the advance if it is ultimately determined that
he is not entitle to indemnification; and
-32-
<PAGE> 39
(3) A determination is made that the facts then known to
those making the determination would not preclude
indemnification under this bylaw.
6. The undertaking required by Section 5 herein must be an
unlimited general obligation of the officer but need not be secured
and may be accepted without reference to financial ability to make
repayment.
7. Determinations and authorizations of payments under Section
5 herein shall be made in the same manner as is specified in
Section 3 herein.
8. Every employee and every former director of the Corporation
shall be indemnified by the Corporation to the same extent as
officers of the Corporation.
9. The right of indemnification set forth above shall not be
deemed exclusive of any other rights to which an officer, employee,
or former director seeking indemnification may be entitled. No
combination of rights shall permit any officer, employee or former
director of the Corporation to receive a double or greater recovery.
10. The Corporation shall indemnify each of its directors and
such of the non-director officers of the Corporation or any of its
subsidiaries as the Board of Directors may designate, and shall
advance expenses, including attorney's fees, to each director and
such designated officers, to the maximum extent permitted (or not
prohibited) by law, and in accordance with the foregoing, the Board
of Directors is expressly authorized to enter into individual
indemnity agreements on behalf of the Corporation with each director
and such designated officers which provide for such indemnification
and expense advancement and to adopt resolutions, which provide for
such indemnification and expense advancement.
-33-
<PAGE> 40
RESOLUTION OF BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
July 16, 1991
RESOLVED, that Article III, Section 1 of the Bylaws of First
Tennessee National Corporation be, and hereby is, amended to provide
for a Board Of Directors to consist of 14, rather than 13 members,
effective as of August 1, 1991, by deleting the number 13 from said
section of the Bylaws and substituting therefor the number 14.
January 19, 1993
RESOLVED, that Article III, Section 1 of the Bylaws of First Tennessee National
Corporation be, and hereby is, amended to provide for a Board of Directors to
consist of 13, rather than 14 members, effective as of January 31, 1993, by
deleting the number 14 from said section of the Bylaws and substituting
therefor the number 13.
<PAGE> 41
RESOLUTION OF
BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
October 20, 1993
RESOLVED, that Article XXIX, Section 1, of the Bylaws of the Company
be, and it hereby is, amended be deleting it in its entirety and amending it to
read as follows:
Directors who are not also officers of the Corporation or its
affiliates shall be retired from the Board of Directors as follows:
(1) Any director who shall attain the age of
sixty-five (65) on or before the last day of the term for
which he or she was elected shall not be nominated for
re-election and shall be retired from the Board at the
expiration of such term.
(2) For the purpose of maintaining boards of active
business and professional persons, directors leaving the
occupation or the position held at their last election (by
retirement or otherwise) will be expected to tender their
resignation from the Board upon such occasion. A resignation
will ordinarily be accepted unless (a) the director assumes
another management position deemed appropriate by the Board
for continuation, or (b) the director is so engaged in some
specific project for the Board as to make his or her
resignation detrimental to the Corporation. Under this
circumstance, the Board may elect to set a subsequent date for
his or her retirement to coincide with the completion of the
project.
Directors who are also officers of the Corporation or any of
its affiliates will be retired from the Board on the date they retire
from or otherwise discontinue active service with the Corporation and
its affiliates.
All directors of the Corporation who have served until
retirement, as specified herein, will be asked to serve on the
Honorary Board of Directors. Those directors who do not serve until
retirement but who have served for a minimum of 10 years as an active
member of the Board and who retire in good standing will also be asked
to serve. Members of the Honorary Board shall have no authority to
bind the Bank. They shall not attend Board meetings of the
Corporation and shall not have any authority to vote on any matter
being considered by the Board.
<PAGE> 42
RESOLUTION OF BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
December 21, 1993
RESOLVED, that Article III, Section 1 of the Bylaws of First Tennessee National
Corporation be, and hereby is, amended to provide for a Board of Directors to
consist of 14, rather than 13 members, effective as of December 21, 1993, by
deleting the number 13 from said section of the Bylaws and substituting
therefor the number 14.
RESOLUTION OF BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
March 2, 1994
RESOLVED, that Article III, Section 1 of the Bylaws of First Tennessee National
Corporation be, and hereby is, amended to provide for a Board of Directors to
consist of 11, rather than 14 members, effective as of April 19, 1994, by
deleting the number 14 from said section of the Bylaws and substituting
therefor the number 11.
<PAGE> 43
RESOLUTIONS OF
BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
April 19, 1994
RESOLVED, that Article VII of the Bylaws of First Tennessee National
Corporation be, and it hereby is, amended by deleting it in its entirety and
substituting therefor the following:
ARTICLE VII.
The Chairman of the Board of Directors and
The Chief Executive Officer
1. The Chairman of the Board of Directors shall preside
at all meetings of the shareholders and of the Board of Directors and
shall have such powers and perform such duties as may be provided for
herein and as may be incident to the office and as may be assigned by
the Board of Directors. If and at such times as the Board of
Directors so determines, the Chairman of the Board may also serve as
the Chief Executive Officer of the Corporation.
2. The Chief Executive Officer, in the absence of the
Chairman of the Board of Directors, shall preside at all meetings of
the shareholders and of the Board of Directors. The Chief Executive
Officer shall be responsible for carrying out the orders of and the
resolutions and policies adopted by the Board of Directors and shall
have general management of the business of the Corporation and shall
exercise general supervision over all of its affairs. In addition,
the Chief Executive Officer shall have such powers and perform such
duties as may be provided for herein and as may be incident to the
office and as may be assigned by the Board of Directors.
FURTHER RESOLVED, that Article VIII of the Bylaws be, and it hereby
is, amended by deleting it in its entirety and substituting therefore the
following:
ARTICLE VIII
The President.
1. The President, in the absence of the Chairman of the
Board of Directors and the Chief Executive Officer, shall preside at
all meetings of the shareholders and of the Board of Directors and
shall be charged with the active management and administration of the
business of the Corporation with the power to make all contracts in
the conduct of the regular and ordinary business of the Corporation,
and he may appoint and discharge agents and employees of the
Corporation and fix their compensation, subject to the general
supervisory powers of the Chairman of the Board of Directors and of
the Chief Executive Officer and of the Board of Directors. In
addition, he shall have such powers and perform such duties as may be
provided for herein and as may be incident to the office and as may be
assigned by the Board of Directors or the chairman of the Board of
Directors or the Chief Executive Officer.
FURTHER RESOLVED, that Articles IX, X, XI, XII, XIII, XIV, XVI and XIX
be, and they hereby are, amended by substituting the phrase "the Chairman of
the Board of Directors or the Chief Executive Officer" for the phrase "the
Chairman of the Board of Directors" or the phrase "the Chairman of the Board"
wherever either of such phrases appears in such Articles.
<PAGE> 44
RESOLUTION OF
BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
JULY 19, 1994
------------------------------------
RESOLVED, that Article XXIX, Section 2, of the Bylaws of the Company
be, and it hereby is, amended by deleting it in its entirety and amending it to
read as follows:
"2. Officers and Employees. Except as provided in the
following sentence, the Corporation has no compulsory
retirement age for its officers or employees. Each officer or
employee who has attained 65 years of age and who, for the
two-year period immediately before attaining such age, has been
employeed in a "bona fide executive" or a "high policy-making"
position as those terms are used and defined in the Age
Discrimination in Employment Act, Section 12(c), and the
regulations relating to that section prescribed by the Equal
Employment Opportunity Commission, all as amended from time to
time (collectively, the "ADEA"), shall automatically be terminated
by way of compulsory retirement and his or her salary discontinued
on the first day of the month coincident with or immediately
following the 65th birthday, provided such employee is entitled to
an immediate nonforfeitable annual retirement benefit, as
specified in the ADEA, in the aggregate amount of at least
$44,000. Notwithstanding the prior sentence, the Board of
Directors, in its discretion, may continue any such officer or
employee in service and designate the capacity in which he or she
shall serve, and shall fix the remuneration he or she shall
receive. The Board of Directors may also reemploy any former
officer who had theretofor been retired."
<PAGE> 45
RESOLUTION OF BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
October 18, 1994
------------------------------------
RESOLVED, that Article III, Section 1 of the Bylaws of First Tennessee National
Corporation be, and hereby is, amended to provide for a Board of Directors to
consist of 12, rather than 11 members, effective as of October 18, 1994, by
deleting the number 11 from said section of the Bylaws and substituting
therefor the number 12.
<PAGE> 46
RESOLUTION OF BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
December 19, 1995
RESOLVED, that the second paragraph of Section 1 of Article XXIX of
the Bylaws of the Corporation be, and it hereby is, amended by deleting it in
its entirety and substituting therefor the following:
Directors who are also officers of the Corporation or any of
its affiliates will be retired from the Board on the date of
the annual meeting coincident with or next following the date
of the Director's retirement from or other discontinuation of
active service with the Corporation and its affiliates.
<PAGE> 47
RESOLUTION OF BOARD OF DIRECTORS OF
FIRST TENNESSEE NATIONAL CORPORATION
April 16, 1996
RESOLVED, that Article III, Section 1 of the Bylaws of First Tennessee National
Corporation be, and hereby is, amended to provide for a Board of Directors to
consist of 11, rather than 12 members, effective as of April 16, 1996, by
deleting the number 12 from said section of the Bylaws and substituting
therefor the number 11.
<PAGE> 1
EXHIBIT 11
FIRST TENNESSEE NATIONAL CORPORATION
PRIMARY EARNINGS PER SHARE
AND FULLY DILUTED EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
--------------------------- ---------------------------
Computation for Statements of Income: 1996 1995 1996 1995
- ------------------------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Per statements of income (Thousands):
Net income $42,347 $40,753 $79,788 $75,360
========== ========== ========== ==========
Per statements of income:
Weighted average shares outstanding 67,224,935 68,482,624 67,263,195 68,350,692
========== ========== ========== ==========
Primary earnings per share (a):
Net income $ .63 $ .59 $ 1.19 $ 1.10
========== ========== ========== ==========
Additional Primary computation
- -------------------------------------
Adjustment to weighted average shares
outstanding:
Weighted average shares outstanding
per primary computation above 67,224,935 68,482,624 67,263,195 68,350,692
Add dilutive effect of outstanding
options (as determined by the
application of the treasury stock
method) 1,646,335 1,003,994 1,575,857 961,324
---------- ---------- ---------- ----------
Weighted average shares outstanding,
as adjusted 68,871,270 69,486,618 68,839,052 69,312,016
========== ========== ========== ==========
Primary earnings per share, as adjusted (b):
Net income $ .62 $ .59 $ 1.16 $ 1.09
========== ========== ========== ==========
Additional Fully Diluted Computation
- -------------------------------------
Adjustment to weighted average shares
outstanding:
Weighted average shares outstanding
per primary computation above 68,871,270 69,486,618 68,839,052 69,312,016
Additional dilutive effect of outstanding
options (as determined by the application
of the treasury stock method) 114 182,840 59,092 112,216
Weighted average shares outstanding, ----------- ---------- ---------- ----------
as adjusted 68,871,384 69,669,458 68,898,144 69,424,232
========== ========== ========== ==========
Fully diluted earnings per share, as adjusted (b):
Net income $ .62 $ .59 $ 1.16 $ 1.09
========== ========== ========== ==========
</TABLE>
(a) These figures agree with the related amounts in the statements of
income.
(b) This calculation is submitted in accordance with Securities
Exchange Act of 1934 Release No. 9083 although not required by
footnote 2 paragraph 14 of APB Opinion No. 15 because it results in
dilution of less than 3%.
Per share data reflects the 1996 two-for-one stock split.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FIRST
TENNESSEE NATIONAL CORPORATION'S JUNE 30, 1996, FINANCIAL STATEMENTS FILED IN
ITS 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCES TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 674,458
<INT-BEARING-DEPOSITS> 1,642
<FED-FUNDS-SOLD> 104,257
<TRADING-ASSETS> 196,821
<INVESTMENTS-HELD-FOR-SALE> 2,176,485
<INVESTMENTS-CARRYING> 71,599
<INVESTMENTS-MARKET> 71,870
<LOANS> 7,487,691
<ALLOWANCE> 116,478
<TOTAL-ASSETS> 12,954,957
<DEPOSITS> 8,972,378
<SHORT-TERM> 2,117,889
<LIABILITIES-OTHER> 715,029
<LONG-TERM> 257,327
0
0
<COMMON> 83,903
<OTHER-SE> 808,431
<TOTAL-LIABILITIES-AND-EQUITY> 12,954,957
<INTEREST-LOAN> 363,287
<INTEREST-INVEST> 68,992
<INTEREST-OTHER> 11,347
<INTEREST-TOTAL> 443,626
<INTEREST-DEPOSIT> 159,149
<INTEREST-EXPENSE> 225,294
<INTEREST-INCOME-NET> 218,332
<LOAN-LOSSES> 15,592
<SECURITIES-GAINS> 310
<EXPENSE-OTHER> 343,583
<INCOME-PRETAX> 125,454
<INCOME-PRE-EXTRAORDINARY> 79,788
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 79,788
<EPS-PRIMARY> 1.19
<EPS-DILUTED> 1.16
<YIELD-ACTUAL> 4.09
<LOANS-NON> 14,336
<LOANS-PAST> 35,952
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 79,063
<ALLOWANCE-OPEN> 112,567
<CHARGE-OFFS> 18,009
<RECOVERIES> 6,328
<ALLOWANCE-CLOSE> 116,478
<ALLOWANCE-DOMESTIC> 116,478
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
