-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, sMJz5KraHZhtOqJOHQVFReBdSi2jiBvzJv7Y+8Ys3KE+akezEbT5qSwjTxYHOtd8 grUDTAU5aIUSnTFziH1Ozg== 0000950109-94-000817.txt : 19940519 0000950109-94-000817.hdr.sgml : 19940519 ACCESSION NUMBER: 0000950109-94-000817 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMSOUTH BANCORPORATION CENTRAL INDEX KEY: 0000003133 STANDARD INDUSTRIAL CLASSIFICATION: 6022 IRS NUMBER: 630591257 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07476 FILM NUMBER: 94527690 BUSINESS ADDRESS: STREET 1: 1400 AMSOUTH SONAT TOWER STREET 2: P.O. BOX 11007 CITY: BIRMINGHAM STATE: AL ZIP: 35288 BUSINESS PHONE: 2053207151 MAIL ADDRESS: STREET 1: 1400 AMSOUTH SONAT TOWER CITY: BRIMINGHAM STATE: AL ZIP: 35288 FORMER COMPANY: FORMER CONFORMED NAME: ALABAMA BANCORPORATION DATE OF NAME CHANGE: 19810527 FORMER COMPANY: FORMER CONFORMED NAME: FIRST BIRMINGHAM CORP DATE OF NAME CHANGE: 19741107 10-Q 1 FORM 10-Q PERIOD ENDING 3/31/94 - - -------------------------------------------------------------------------------- - - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1994 COMMISSION FILE NUMBER 1-7476 AMSOUTH BANCORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 63-0591257 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.) INCORPORATION OR ORGANIZATION) 35203 1400 AMSOUTH--SONAT TOWER (ZIP CODE) BIRMINGHAM, ALABAMA (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (205) 320-7151 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- As of April 30, 1994 AmSouth Bancorporation had 54,427,241 shares of common stock outstanding. - - -------------------------------------------------------------------------------- - - -------------------------------------------------------------------------------- AMSOUTH BANCORPORATION FORM 10-Q INDEX
PAGE ---- Part I. Financial Information Item 1. Financial Statements (Unaudited) Consolidated statement of condition--March 31, 1994 and December 31, 1993................................................................. 1 Consolidated statement of earnings--Three months ended March 31, 1994 and 1993............................................................. 2 Consolidated statement of shareholders' equity--Three months ended March 31, 1994....................................................... 3 Consolidated statement of cash flows--Three months ended March 31, 1994 and 1993........................................................ 4 Notes to consolidated financial statements--Three months ended March 31, 1994 and 1993.................................................... 5 Review of Independent Accountants..................................... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................................................. 8 Part II. Other Information Item 4. Submission of Matters to a Vote of Security Holders............. 16 Item 5. Other Information............................................... 16 Item 6. Exhibits and Reports on Form 8-K................................ 17 Signatures................................................................ 18 Exhibit Index............................................................. 19
PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) AMSOUTH BANCORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CONDITION (UNAUDITED)
MARCH 31 DECEMBER 31 1994 1993 ----------- ----------- (IN THOUSANDS) ASSETS Cash and due from banks.............................. $ 520,193 $ 602,627 Federal funds sold and securities purchased under agreements to resell................................ 40,800 155,127 Trading securities................................... 120,619 94,844 Available-for-sale securities........................ 950,458 1,289,196 Held-to-maturity securities (market value of $2,224,717 and $1,830,473, respectively)............ 2,227,499 1,779,549 Mortgage loans held for sale......................... 217,356 335,435 Loans................................................ 8,636,392 8,395,392 Less:Allowance for loan losses....................... 125,783 128,799 Unearned income................................... 73,623 70,946 ----------- ----------- Net loans......................................... 8,436,986 8,195,647 Premises and equipment, net.......................... 240,945 229,072 Customers' acceptance liability...................... 8,062 6,264 Accrued interest receivable and other assets......... 424,471 481,998 ----------- ----------- $13,187,389 $13,169,759 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Deposits and interest-bearing liabilities: Deposits: Noninterest-bearing demand....................... $ 1,719,401 $ 1,718,702 Interest-bearing demand.......................... 3,392,599 3,369,359 Savings.......................................... 854,013 848,386 Time............................................. 3,408,147 3,481,973 Certificates of deposit of $100,000 or more...... 631,800 674,587 ----------- ----------- Total deposits................................. 10,005,960 10,093,007 Federal funds purchased and securities sold under agreements to repurchase.......................... 1,094,365 846,974 Other borrowed funds............................... 534,089 612,068 Long-term debt..................................... 160,758 163,142 ----------- ----------- Total deposits and interest-bearing liabilities................................... 11,795,172 11,715,191 Acceptances outstanding.............................. 8,062 6,264 Accrued expenses and other liabilities............... 238,897 323,309 ----------- ----------- Total liabilities.................................. 12,042,131 12,044,764 ----------- ----------- Shareholders' equity: Preferred stock--no par value: Authorized--2,000,000 shares; Issued and outstanding--none..................... -0- -0- Common stock--par value $1 a share: Authorized--200,000,000 shares Issued--53,250,218 shares and 53,106,814 shares, respectively.................................... 53,250 53,107 Capital surplus.................................... 463,934 460,267 Retained earnings.................................. 661,893 638,738 Cost of common stock in treasury--1,500,000 shares. (24,173) (24,173) Deferred compensation on restricted stock.......... (4,539) (2,944) Unrealized losses on available-for-sale securities. (5,107) -0- ----------- ----------- Total shareholders' equity..................... 1,145,258 1,124,995 ----------- ----------- $13,187,389 $13,169,759 =========== ===========
See notes to consolidated financial statements. 1 AMSOUTH BANCORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
THREE MONTHS ENDED MARCH 31 ---------------------- 1994 1993 ---------- ---------- (IN THOUSANDS EXCEPT PER SHARE DATA) REVENUE FROM EARNING ASSETS Loans................................................... $161,211 $141,499 Securities: Trading securities.................................... 910 355 Available-for-sale securities......................... 14,449 7,870 Held-to-maturity securities........................... 30,705 44,405 ---------- ---------- Total securities.................................... 46,064 52,630 Mortgage loans held for sale............................ 3,614 2,888 Federal funds sold and securities purchased under agreements to resell................................... 904 1,628 ---------- ---------- Total revenue from earning assets................... 211,793 198,645 ---------- ---------- INTEREST EXPENSE Interest-bearing demand deposits........................ 21,609 20,710 Savings deposits........................................ 4,842 4,827 Time deposits........................................... 36,082 34,126 Certificates of deposit of $100,000 or more............. 6,366 6,643 Federal funds purchased and securities sold under agreements to repurchase............................... 7,530 7,905 Other borrowed funds.................................... 3,075 2,884 Long-term debt.......................................... 3,125 3,046 ---------- ---------- Total interest expense.............................. 82,629 80,141 ---------- ---------- GROSS INTEREST MARGIN................................... 129,164 118,504 Provision for loan losses............................... 1,042 7,184 ---------- ---------- NET INTEREST MARGIN..................................... 128,122 111,320 ---------- ---------- NONINTEREST REVENUES Service charges on deposit accounts..................... 15,813 14,079 Trust income............................................ 11,394 10,367 Investment services income.............................. 4,168 5,708 Mortgage administration fees............................ 4,740 4,509 Investment securities gains............................. 39 980 Other operating revenues................................ 11,801 13,473 ---------- ---------- Total noninterest revenues.......................... 47,955 49,116 ---------- ---------- NONINTEREST EXPENSES Salaries and employee benefits.......................... 53,361 49,431 Net occupancy expense................................... 10,199 9,274 Equipment expense....................................... 9,712 8,846 FDIC premiums........................................... 5,360 5,116 Foreclosed properties expense........................... (5) 888 Other operating expenses................................ 35,697 31,977 ---------- ---------- Total noninterest expenses.......................... 114,324 105,532 ---------- ---------- Income before income taxes.............................. 61,753 54,904 Income taxes............................................ 20,473 17,510 ---------- ---------- Net income.......................................... $ 41,280 $ 37,394 ========== ========== Average common shares outstanding....................... 51,656 48,116 Earnings per common share............................... $0.80 $0.78
See notes to consolidated financial statements. 2 AMSOUTH BANCORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)
UNREALIZED COMMON CAPITAL RETAINED TREASURY DEFERRED LOSSES ON STOCK SURPLUS EARNINGS STOCK COMPENSATION SECURITIES TOTAL ------- -------- -------- -------- ------------ ---------- ---------- (IN THOUSANDS) Balance at January 1, 1994................... $53,107 $460,267 $638,738 $(24,173) $(2,944) $ -0- $1,124,995 Net income.............. -0- -0- 41,280 -0- -0- -0- 41,280 Cash dividends declared. -0- -0- (18,125) -0- -0- -0- (18,125) Common stock transactions: Employee stock plans... 143 3,667 -0- -0- (1,595) -0- 2,215 Unrealized losses on available-for-sale securities............. -0- -0- -0- -0- -0- (5,107) (5,107) ------- -------- -------- -------- ------- ------- ---------- Balance at March 31, 1994................... $53,250 $463,934 $661,893 $(24,173) $(4,539) $(5,107) $1,145,258 ======= ======== ======== ======== ======= ======= ==========
See notes to consolidated financial statements. 3 AMSOUTH BANCORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, -------------------- 1994 1993 --------- --------- (IN THOUSANDS) OPERATING ACTIVITIES Net income............................................... $ 41,280 $ 37,394 Adjustments to reconcile net income to net cash provided by operating activities Provision for loan losses.............................. 1,042 7,184 Provision for foreclosed property losses............... (450) 247 Depreciation and amortization of premises and equipment............................................. 5,745 6,074 Amortization of premiums and discounts on held-to- maturity securities and available-for-sale securities. 433 769 Net decrease in mortgage loans held for sale........... 118,255 58,496 Net increase in trading securities..................... (25,535) (9,620) Proceeds from maturities and prepayments of available- for-sale securities................................... 83,404 33,728 Proceeds from sales of available-for-sale securities... 341,587 64,600 Purchases of available-for-sale securities............. (158,658) (123,892) Net gains on sales of available-for-sale securities.... (3,523) (1,693) Net gains on calls and sales of held-to-maturity securities............................................ (39) (980) Net decrease in accrued interest receivable and other assets................................................ 100,835 92,019 Net (decrease) increase in accrued expenses and other liabilities........................................... (134,408) 173,958 Net decrease (increase) in deferred income tax benefits.............................................. 1,715 (4,034) Amortization of intangible assets...................... 3,996 3,947 Other.................................................. (2,756) 162 --------- --------- Net cash provided by operating activities............ 372,923 338,359 INVESTING ACTIVITIES Proceeds from maturities, prepayments and calls of held- to-maturity securities.................................. 118,238 162,898 Proceeds from sales of held-to-maturity securities....... -0- 62,737 Purchase of held-to-maturity securities.................. (494,449) (331,138) Net decrease (increase) in federal funds sold and securities purchased under agreements to resell......... 114,327 (96,824) Net increase in loans.................................... (241,339) (112,664) Net purchases of premises and equipment.................. (17,618) (17,303) Net cash provided by acquisitions........................ -0- 9,661 --------- --------- Net cash used by investing activities................ (520,841) (322,633) FINANCING ACTIVITIES Net increase (decrease) in demand deposits and savings accounts................................................ 30,122 (549,559) Net (decrease) increase in time deposits................. (115,338) 399,492 Net increase in federal funds purchased and securities sold under agreements to repurchase..................... 247,391 56,711 Net decrease in other borrowed funds..................... (77,978) (55,009) Issuance of long-term debt............................... -0- 49,500 Payments for maturing long-term debt..................... (2,231) (29,031) Cash dividends paid...................................... (18,145) (12,970) Proceeds from employee stock plans....................... 1,663 1,267 --------- --------- Net cash provided (used) by financing activities..... 65,484 (139,599) --------- --------- Decrease in cash and cash equivalents.................... (82,434) (123,873) Cash and cash equivalents at beginning of period......... 602,627 576,586 Beginning consolidated cash balance of First Sunbelt Bankshares, Inc. ....................................... -0- 4,221 --------- --------- Cash and cash equivalents at end of period............... $ 520,193 $ 456,934 ========= =========
See notes to consolidated financial statements. 4 AMSOUTH BANCORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) THREE MONTHS ENDED MARCH 31, 1994 AND 1993 General--The consolidated financial statements conform to generally accepted accounting principles and to general industry practices. The accompanying interim financial statements are unaudited; however, in the opinion of management, all adjustments necessary for the fair presentation of the consolidated financial statements have been included. All such adjustments are of a normal recurring nature. The notes included herein should be read in conjunction with the notes to consolidated financial statements included in AmSouth Bancorporation's (AmSouth) 1993 annual report to shareholders on Form 10-K. The consolidated financial statements include the accounts of AmSouth and its subsidiaries. All significant intercompany balances and transactions have been eliminated. Prior year financial statements have been restated to include the accounts of business combinations accounted for as poolings-of-interests unless immaterial. Results of operations of companies purchased are included from the dates of acquisitions. Effective January 1, 1994, AmSouth adopted Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" (Statement 115). The Statement generally requires that debt and equity securities that have readily determinable fair values be carried at fair value unless they are intended to be held to maturity. Securities are classified as held-to-maturity and carried at amortized cost only if AmSouth has positive intent and ability to hold those securities to maturity. If not classified as held-to-maturity, such securities are classified as trading securities or securities available for sale. Net unrealized holding gains or losses for securities available for sale are excluded from earnings and reported as a separate component of shareholders' equity. The adoption of Statement 115 resulted in no material impact on AmSouth's financial condition. The Financial Accounting Standards Board has issued Statement of Financial Accounting Standards No. 114, "Accounting by Creditors for Impairment of a Loan." The statement requires that certain impaired loans be measured based on the present value of the collateral if the loan is collateral dependent. AmSouth anticipates adoption of Statement 114 by January 1, 1995 as required, and the effect on AmSouth's financial condition or results of operations has not been determined. Business Combinations--During the first quarter of 1994, AmSouth completed business combinations with Orange Banking Corporation (Orange), headquartered in Orlando, Florida, and FloridaBank, A Federal Savings Bank (FloridaBank), headquartered in Jacksonville, Florida, both of which were accounted for using the pooling-of-interests method of accounting. AmSouth issued approximately 1,332,000 and 759,000 shares of common stock for all of the outstanding shares of common stock of Orange and FloridaBank, respectively. At December 31, 1993, Orange and FloridaBank had total consolidated assets of approximately $354.4 million and $271.5 million, respectively. Subsequent to March 31, 1994, AmSouth completed the following business combinations which will be accounted for using the pooling-of-interests method of accounting:
CONSOLIDATED ASSETS LOCATION MARCH 31, 1994 -------------- -------------- (IN THOUSANDS) Parkway Bancorp, Inc. ....................... Fort Myers, FL $130,000 First Federal Savings Bank, Calhoun, GA...... Calhoun, GA 72,000 Citizens National Corporation................ Naples, FL 313,000
5 AMSOUTH BANCORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) (UNAUDITED) In the aggregate, when the three month period ended March 31, 1994, is restated for these three poolings-of-interests, AmSouth's gross interest margin will be $134.1 million, net income will be $39.0 million and earnings per common share will be $.72. On September 12, 1993, AmSouth signed an agreement to acquire Fortune Bancorp, Inc. (Fortune) and its subsidiary, Fortune Bank, a Savings Bank. Upon completion of the transaction, AmSouth will issue a total of approximately, 4,507,000 shares and approximately $145.9 million in cash. At March 31, 1994, Fortune had total consolidated assets of approximately $2.7 billion and total consolidated deposits of approximately $1.8 billion. The acquisition will be accounted for using the purchase method of accounting. On March 9, 1994, AmSouth signed an agreement to enter into a business combination with The Tampa Banking Company (Tampa), headquartered in Tampa, Florida, and its subsidiary, The Bank of Tampa. At March 31, 1994, Tampa had total consolidated assets of approximately $213.0 million and total consolidated deposits of approximately $197.0 million. Under the terms of the agreement, AmSouth will issue 1.5592 shares of AmSouth common stock for each of the outstanding shares of Tampa common stock, subject to adjustment. At March 31, 1994, Tampa, had approximately 626,000 shares of common stock outstanding. The transaction will be accounted for using the pooling-of-interests method of accounting. On March 31, 1994, AmSouth signed an agreement to acquire Community Federal Savings Bank (Community), headquartered in Fort Oglethorpe, Georgia. At March 31, 1994, Community had total assets of approximately $103.0 million and total deposits of approximately $89.0 million. Under the terms of the agreement, AmSouth will pay $65.50 for each of the outstanding shares of Community common stock for a total purchase price of approximately $17.2 million. The transaction will be accounted for using the purchase method of accounting. Cash Flows--For the three months ended March 31, 1994 and 1993, AmSouth paid interest of $80,740,000 and $76,687,000, respectively, and income taxes of $9,835,000 and $2,954,000, respectively. Noncash transfers from loans to foreclosed properties for the three months ended March 31, 1994 and 1993, were $2,041,000 and $1,879,000, respectively. For the three months ended March 31, 1994 and 1993, noncash transfers from foreclosed properties to loans were $783,000 and none, respectively. Noncash transfers from available-for-sale securities to held-to-maturity securities for the three months ended March 31, 1994 and 1993, were $215,843,000 and none, respectively. 6 [LETTERHEAD OF ERNST & YOUNG] INDEPENDENT ACCOUNTANTS' REVIEW REPORT The Board of Directors AmSouth Bancorporation We have reviewed the accompanying consolidated statement of condition of AmSouth Bancorporation and subsidiaries as of March 31, 1994, and the related consolidated statement of earnings and statement of cash flows for the three- month period then ended. These financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated statement of condition of AmSouth Bancorporation and subsidiaries as of December 31, 1993, and the related consolidated statements of earnings, shareholders' equity, and cash flows for the year then ended (not presented herein) and in our report dated January 31, 1994, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated statement of condition as of December 31, 1993, is fairly stated, in all material respects, in relation to the consolidated statement of condition from which it has been derived. /s/ Ernst & Young May 9, 1994 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS For the three months ended March 31, 1994, AmSouth reported net income of $41.3 million compared to $37.4 million for the same period of 1993. Both amounts include the effect of business combinations accounted for by the pooling-of-interests method. On a per common share basis, AmSouth earned $.80 compared to $.78 for the first three months of 1993. On an annualized basis, the return on average assets was 1.30% for the first quarter of 1994 compared to 1.32% for the first quarter of 1993. For the same periods, the annualized returns on average equity were 14.64% and 16.03%, respectively. Net Interest Margin The net interest margin for the three months ended March 31, 1994 totaled $128.1 million compared to $111.3 million for the same period of 1993. An increase in revenue from earning assets and a decrease in the provision for loan losses were partially offset by an increase in interest expense. The gross interest margin increased $10.7 million as the gross interest spread declined 16 basis points compared to the prior year. The provision for loan losses for the three months ended March 31, 1994, totaled $1.0 million, the result of continued good asset quality. Average earning assets rose 12.1% with the yield on average earning assets declining 41 basis points. A 19.4% increase in average loans net of unearned income was the primary reason for the increase in average earning assets. Exclusive of the acquisitions of First Chattanooga Financial Corporation (FCFC) in February, 1993 and Mid-State Federal Savings Bank (Mid-State) in December, 1993 which were accounted for as purchases, AmSouth experienced loan growth of approximately 12.0%. Residential first mortgages represented approximately 45.0% of this growth. At March 31, 1994, the majority of AmSouth's residential loan portfolio consisted of adjustable rate mortgages; therefore, declining rates on residential first mortgages over the past twelve months contributed to the decrease in average earning asset yields. The average balance of total securities decreased 2.0% with yields falling from 7.31% to 6.55%. Maturing securities and securities sold were partially replaced with lower yielding instruments. At March 31, 1994, mortgage-backed securities comprised approximately 63.0% of total securities. Average interest-bearing liabilities increased $939.2 million, funding approximately 73% of the increase in average earning assets. Another 14% of the increase in average earning assets was funded by a $176.7 million increase in average noninterest bearing demand deposits. In general the rates paid on interest-bearing liabilities declined slower than the decline of yields on earning assets. This slower decline resulted in a 16 basis point decline in both the incremental and gross interest spread. AmSouth maintains an asset and liability process to control interest rate risk and assist management in maintaining stability in the gross interest margin. In addition, AmSouth utilizes various off-balance sheet instruments such as interest rate swaps, caps and floors to manage interest rate risk. Tables 3 and 4 summarize recent use of interest rate contracts and the maturity of current contracts outstanding. The contracts outstanding at March 31, 1994, are being used to hedge the following balance sheet items for the notional amounts shown:
NOTIONAL AMOUNT ------------- (IN MILLIONS) Securities.................................................... $ 405 Loans......................................................... 600 Federal funds purchased and securities sold under agreements to repurchase................................................ 705 Deposits...................................................... 900 ------ $2,610 ======
In addition, AmSouth had interest rate contracts on behalf of its customers in the amount of $84.4 million at March 31, 1994. For the three months ended March 31, 1994 and 1993, interest rate contracts increased the gross interest margin $1.3 million and $2.4 million, respectively. 8 Credit Quality AmSouth maintains an allowance for loan losses to absorb potential future losses. AmSouth's management continuously evaluates the adequacy of the allowance for loan losses. As changes in the mix of the loan portfolio occur, including the current increase in residential first mortgage loans which inherently have less risk, management will monitor not only the absolute level of the allowance but also the coverage ratio of nonperforming loans. Table 5 shows a comparison of the types of loans outstanding, nonperforming loans by type, and net charge-offs by type for March 31, 1994 and 1993. The coverage ratio of the allowance for loan losses to nonperforming loans increased to 202.33% compared to 182.80% at March 31, 1993. Table 6 presents a five quarter comparison of the components of nonperforming assets. Nonperforming assets as a percentage of loans net of unearned income, foreclosed properties and repossessions decreased from 1.53% at March 31, 1993 to .99% at March 31, 1994. The level of nonperforming assets decreased $26.8 million primarily due to the continued sales of foreclosed properties. Table 7 presents a five quarter analysis of the allowance for loan losses. At March 31, 1994, the allowance for loan losses to loans net of unearned income was 1.47% compared to 1.56% for the prior year. Annualized net charge-offs to average loans net of unearned income for the three months ended March 31, 1994 was 20 basis points compared to 31 basis points for the same period of 1993. Noninterest Revenues and Noninterest Expenses Noninterest revenues decreased $1.2 million or 2.4% for the three months ended March 31, 1994 compared to the same period of 1993. This decrease included a $2.8 million decrease in portfolio income primarily due to declines in the securities market during the first quarter of 1994. Investment services income decreased $1.5 million primarily due to the unstable interest rate environment in the bond market during the first quarter of 1994. Increases occurred in gains on sales of securities available-for-sale of $1.8 million, service charges on deposit accounts of $1.7 million, and trust income of $1.0 million. The increase in service charges on deposit accounts was primarily due to an increased volume of corporate service charges and analysis fees on corporate accounts. Noninterest expenses increased $8.8 million compared to the prior year. Exclusive of FCFC and Mid-State, noninterest expenses increased $3.9 million. Salaries and employee benefits increased $3.9 million with $1.9 million attributable to FCFC and Mid-State. Net occupancy expense and equipment expense each increased $.9 million. Other operating expenses increased $3.7 million primarily due to investment expenses and general overhead costs. Capital Adequacy At March 31, 1994, shareholders' equity totaled $1.1 billion, or 8.68% of total assets. Since December 31, 1993, shareholders' equity increased $20.3 million due primarily to net income less dividends. At March 31, 1994, AmSouth remains well above the regulatory minimum required risk-adjusted Tier 1 capital ratio of 4.00% and the regulatory minimum required risk-adjusted total capital ratio of 8.00%. Table 11 presents the calculation of the risk-adjusted capital ratios for AmSouth at March 31, 1994 and 1993. In addition, the risk-adjusted capital ratios for AmSouth's banking subsidiaries were well above the regulatory minimum at March 31, 1994. The total risk-adjusted capital ratio for each of AmSouth's major subsidiaries was: AmSouth Bank N.A...................... 11.00% AmSouth Bank of Florida............... 14.04% AmSouth Bank of Tennessee............. 18.59%
AmSouth evaluates potential business combinations on a number of factors including, but not limited to, the effect on AmSouth's capital adequacy. On a pro forma combined basis after giving effect to the pending business combinations at March 31, 1994 discussed in the Notes to Consolidated Financial Statements, AmSouth's Tier 1 capital and total capital ratios would have been approximately 9.65% and 13.08%, respectively. AmSouth's leverage ratio would have been 6.91%. 9 TABLE 1--FINANCIAL SUMMARY
MARCH 31 -------------------------- % 1994 1993 CHANGE ----------- ----------- ------ (IN THOUSANDS EXCEPT PER SHARE DATA) BALANCE SHEET SUMMARY END OF PERIOD BALANCES: Loans net of unearned income.............. $ 8,562,769 $ 7,261,462 17.9% Total securities.......................... 3,298,576 3,256,392 1.3 Earning assets............................ 12,119,501 10,975,687 10.4 Total assets.............................. 13,187,389 12,063,004 9.3 Total deposits............................ 10,005,960 9,131,541 9.6 Shareholders' equity...................... 1,145,258 993,588 15.3 YEAR TO DATE AVERAGE BALANCES: Loans net of unearned income.............. $ 8,369,555 $ 7,011,187 19.4% Total securities.......................... 3,045,533 3,107,553 (2.0) Earning assets............................ 11,808,936 10,530,777 12.1 Total assets.............................. 12,880,251 11,484,813 12.2 Total deposits............................ 10,000,069 8,808,172 13.5 Shareholders' equity...................... 1,143,159 946,206 20.8 THREE MONTHS ENDED MARCH 31 -------------------------- % 1994 1993 CHANGE ----------- ----------- ------ EARNINGS SUMMARY Net income.................................. $ 41,280 $ 37,394 10.4% Per common share............................ 0.80 0.78 2.6 SELECTED RATIOS Return on average assets (annualized)....... 1.30% 1.32% Return on average equity (annualized)....... 14.64 16.03 Average equity to average assets............ 8.88 8.24 Allowance for loan losses to loans net of unearned income............................ 1.47 1.56 Efficiency ratio............................ 63.16 61.35 COMMON STOCK DATA Cash dividends declared..................... $ 0.35 $ 0.29 Book value at end of period................. 22.13 20.14 Market value at end of period............... 29 3/4 33 Average common shares outstanding........... 51,656 48,116
10 TABLE 2--YIELDS ON AVERAGE EARNING ASSETS AND RATES ON AVERAGE INTEREST- BEARING LIABILITIES
1994 1993 --------------------------- --------------------------------------------------------------- FIRST QUARTER FOURTH QUARTER THIRD QUARTER --------------------------- --------------------------- --------------------------- ------ AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/ YIELD/ BALANCE EXPENSE RATE BALANCE EXPENSE RATE BALANCE EXPENSE RATE RATE ----------- -------- ------ ----------- -------- ------ ----------- -------- ------ ------ (TAXABLE EQUIVALENT BASIS-DOLLARS IN THOUSANDS) ASSETS Earning assets: Loans net of un- earned income..... $ 8,369,555 $161,961 7.85% $ 7,823,062 $155,826 7.90% $ 7,487,998 $151,517 8.03% 8.24% Trading securi- ties.............. 76,094 928 4.95 74,248 867 4.63 60,832 824 5.37 5.33 Available-for-sale securities........ 1,198,566 14,449 4.89 798,382 10,981 5.46 657,840 7,676 4.63 6.75 Held-to-maturity securities Taxable........... 1,428,464 24,397 6.93 1,902,153 28,684 5.98 2,260,977 36,484 6.40 6.84 Tax-free.......... 342,409 9,437 11.18 357,121 9,829 10.92 372,517 9,953 10.60 10.65 ----------- -------- ----------- -------- ----------- -------- Total held-to- maturity securities....... 1,770,873 33,834 7.75 2,259,274 38,513 6.76 2,633,494 46,437 7.00 7.43 ----------- -------- ----------- -------- ----------- -------- Total securi- ties............ 3,045,533 49,211 6.55 3,131,904 50,361 6.38 3,352,166 54,937 6.50 7.31 Other earning as- sets.............. 393,848 4,518 4.65 538,993 4,946 3.64 513,120 6,155 4.76 4.44 ----------- -------- ----------- -------- ----------- -------- Total earning assets.......... 11,808,936 215,690 7.41 11,493,959 211,133 7.29 11,353,284 212,609 7.43 7.82 Cash and other as- sets............... 1,199,849 1,139,409 1,061,143 Less allowance for loan losses........ 128,534 116,698 112,898 ----------- ----------- ----------- $12,880,251 $12,516,670 $12,301,529 =========== =========== =========== LIABILITIES AND SHAREHOLDERS' EQ- UITY Interest-bearing liabilities: Interest-bearing demand deposits... 3,396,161 21,609 2.58 3,265,405 21,085 2.56 3,164,513 21,092 2.64 2.72 Savings deposits.. 845,545 4,842 2.32 780,914 5,034 2.56 756,230 5,153 2.70 2.75 Time deposits..... 3,439,838 36,082 4.25 3,248,135 35,332 4.32 3,171,271 35,744 4.47 4.76 Certificates of deposit of $100,000 or more.. 660,888 6,366 3.91 651,612 6,663 4.05 671,278 7,097 4.19 4.34 Federal funds purchased and securities sold under agreements to repurchase..... 941,999 7,530 3.24 1,110,841 8,095 2.89 1,033,735 8,361 3.21 3.07 Other interest- bearing liabilities....... 564,099 6,200 4.46 538,807 6,267 4.61 715,587 7,375 4.09 4.49 ----------- -------- ----------- -------- ----------- -------- Total interest- bearing liabilities..... 9,848,530 82,629 3.40 9,595,714 82,476 3.41 9,512,614 84,822 3.54 3.65 -------- ----- -------- ----- -------- ----- ----- Incremental inter- est spread......... 4.01% 3.88% 3.89% 4.17% ===== ===== ===== ===== Noninterest-bearing demand deposits.... 1,657,637 1,677,568 1,616,018 Other liabilities.. 230,925 175,324 139,729 Shareholders' equi- ty................. 1,143,159 1,068,064 1,033,168 ----------- ----------- ----------- $12,880,251 $12,516,670 $12,301,529 =========== =========== =========== Gross interest margin/spread on a taxable equivalent basis.............. 133,061 4.57% 128,657 4.44% 127,787 4.47% 4.73% ===== ===== ===== ===== Taxable equivalent adjustment: Loans............. 750 811 881 Securities........ 3,147 3,278 3,287 -------- -------- -------- Total taxable equivalent adjustment....... 3,897 4,089 4,168 -------- -------- -------- Gross interest margin.......... $129,164 $124,568 $123,619 ======== ======== ========
1993 --------------------------------------------------- SECOND QUARTER FIRST QUARTER --------------------------- --------------------- AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ BALANCE EXPENSE RATE BALANCE EXPENSE ----------- -------- ------ ----------- -------- (TAXABLE EQUIVALENT BASIS-DOLLARS IN THOUSANDS) ASSETS Earning assets: Loans net of un- earned income..... $ 7,357,687 $149,672 8.16% $ 7,011,187 $142,530 Trading securi- ties.............. 34,240 439 5.14 27,837 366 Available-for-sale securities........ 489,443 6,048 4.96 472,515 7,870 Held-to-maturity securities Taxable........... 2,367,302 38,380 6.50 2,206,918 37,248 Tax-free.......... 385,919 10,207 10.61 400,283 10,509 ----------- -------- ----------- -------- Total held-to- maturity securities....... 2,753,221 48,587 7.08 2,607,201 47,757 ----------- -------- ----------- -------- Total securi- ties............ 3,276,904 55,074 6.74 3,107,553 55,993 Other earning as- sets.............. 456,659 4,857 4.27 412,037 4,515 ----------- -------- ----------- -------- Total earning assets.......... 11,091,250 209,603 7.58 10,530,777 203,038 Cash and other as- sets............... 1,066,653 1,062,099 Less allowance for loan losses........ 113,268 108,063 ----------- ----------- $12,044,635 $11,484,813 =========== =========== LIABILITIES AND SHAREHOLDERS' EQ- UITY Interest-bearing liabilities: Interest-bearing demand deposits... 3,123,551 20,629 2.65 3,086,908 20,710 Savings deposits.. 768,298 5,200 2.71 711,199 4,827 Time deposits..... 3,140,477 36,158 4.62 2,907,699 34,126 Certificates of deposit of $100,000 or more.. 685,343 7,328 4.29 621,422 6,643 Federal funds purchased and securities sold under agreements to repurchase..... 1,008,559 7,865 3.13 1,045,975 7,905 Other interest- bearing liabilities....... 605,794 6,452 4.27 536,126 5,930 ----------- -------- ----------- -------- Total interest- bearing liabilities..... 9,332,022 83,632 3.59 8,909,329 80,141 -------- ----- -------- Incremental inter- est spread......... 3.99% ===== Noninterest-bearing demand deposits.... 1,557,396 1,480,944 Other liabilities.. 148,042 148,514 Shareholders' equi- ty................. 1,007,175 946,026 ----------- ----------- $12,044,635 $11,484,813 =========== =========== Gross interest margin/spread on a taxable equivalent basis.............. 125,971 4.56% 122,897 ===== Taxable equivalent adjustment: Loans............. 905 1,031 Securities........ 3,195 3,362 -------- -------- Total taxable equivalent adjustment....... 4,100 4,393 -------- -------- Gross interest margin.......... $121,871 $118,504 ======== ========
- - ---- NOTE: Beginning with the third quarter of 1993, the taxable equivalent adjustment has been computed based on a 35% federal income tax rate. Prior quarters are shown as previously reported, using a 34% federal income tax rate. 11 TABLE 3--INTEREST RATE SWAPS AND CAPS
SWAPS ------------------------------------ RECEIVE FIXED PAY FIXED BASIS OTHER CAPS TOTAL ------------- --------- ----- ------ ------ ------ (IN MILLIONS) Balance at December 31, 1990..................... $ 300 $ -0- $-0- $ -0- $ -0- $ 300 Additions............... -0- -0- -0- -0- 600 600 Maturities.............. -0- -0- -0- -0- -0- -0- Calls................... -0- -0- -0- -0- -0- -0- ----- ----- ---- ------ ------ ------ Balance at December 31, 1991..................... 300 -0- -0- -0- 600 900 Additions............... 65 240 300 300 405 1,310 Maturities.............. -0- -0- -0- -0- -0- -0- Calls................... (60) -0- -0- -0- -0- (60) ----- ----- ---- ------ ------ ------ Balance at December 31, 1992..................... 305 240 300 300 1,005 2,150 Additions............... -0- -0- -0- 300 20 320 Maturities.............. -0- -0- -0- -0- -0- -0- Calls................... (120) (120) -0- -0- -0- (240) ----- ----- ---- ------ ------ ------ Balance at December 31, 1993..................... 185 120 300 600 1,025 2,230 Additions............... -0- -0- -0- 400 -0- 400 Maturities.............. -0- -0- -0- -0- (20) (20) Calls................... -0- -0- -0- -0- -0- -0- ----- ----- ---- ------ ------ ------ Balance at March 31, 1994. $ 185 $ 120 $300 $1,000 $1,005 $2,610 ===== ===== ==== ====== ====== ======
TABLE 4--MATURITIES AND INTEREST RATES EXCHANGED ON SWAPS AND CAPS
MATURE DURING MARCH 31, ----------------------------------- 1994 1994 1995 1996 1997 TOTAL --------- ----- ------ ----- ----- ------ (IN MILLIONS) Receive fixed swaps: Notional....................... $ 185 $ 120 $ 65 $ -0- $ -0- $ 185 Receive rate................... 7.68% 9.04% 5.16% 7.68% Pay rate....................... 3.69% 3.69% 3.69% 3.69% Pay fixed swaps: Notional....................... $ 120 $ 120 $ -0- $ -0- $ -0- $ 120 Receive rate................... 3.69% 3.69% 3.69% Pay rate....................... 4.00% 4.00% 4.00% Basis swaps: Notional....................... $ 300 $ -0- $ -0- $ 300 $ -0- $ 300 Receive rate................... 3.88% 3.94% 3.94% Pay rate....................... 4.61% 4.87% 4.87% Other swaps: Notional....................... $1,000 $ -0- $ 300 $ 300 $ 400 $1,000 Receive rate................... 4.16% 4.89% 4.35% 4.39% 4.53% Pay rate....................... 3.76% 3.97% 3.97% 3.97% 3.97% Total swap portfolio: Notional....................... $1,605 $ 240 $ 365 $ 600 $ 400 $1,605 Receive rate................... 4.48% 6.37% 4.94% 4.15% 4.39% 4.72% Pay rate....................... 3.93% 3.85% 3.92% 4.42% 3.97% 4.11% Total cap portfolio: Notional....................... $1,005 $ -0- $ 915 $ 13 $ 77 $1,005 Pay rate....................... 0.46% 0.45% 0.46% 0.59% 0.46% Total portfolio: Notional....................... $2,610 $ 240 $1,280 $ 613 $ 477 $2,610 Receive rate................... 2.75% 6.37% 1.41% 4.06% 3.68% 2.90% Pay rate....................... 2.59% 3.85% 1.44% 4.33% 3.43% 2.70%
12 TABLE 5--LOANS AND CREDIT QUALITY
NONPERFORMING LOANS LOANS* NET CHARGE-OFFS MARCH 31 MARCH 31 MARCH 31 --------------------- --------------- --------------- 1994 1993 1994 1993 1994 1993 ---------- ---------- ------- ------- ------- ------ (IN THOUSANDS) Commercial............ $2,607,525 $2,312,959 $20,112 $24,307 $ 1,062 $ 321 Commercial real estate: Commercial real estate mortgages: Owner occupied...... 447,719 369,473 4,840 1,226 68 12 Nonowner occupied... 729,052 774,690 26,717 25,062 (1,248) 631 ---------- ---------- ------- ------- ------- ------ Total commercial real estate mortgages........ 1,176,771 1,144,163 31,557 26,288 (1,180) 643 ---------- ---------- ------- ------- ------- ------ Real estate construction Owner occupied...... 132,750 103,197 846 2,180 -0- -0- Nonowner occupied... 258,668 217,901 1,446 1,297 -0- (78) ---------- ---------- ------- ------- ------- ------ Total real estate construction..... 391,418 321,098 2,292 3,477 -0- (78) ---------- ---------- ------- ------- ------- ------ Total commercial real estate.... 1,568,189 1,465,261 33,849 29,765 -0- 565 ---------- ---------- ------- ------- ------- ------ Consumer: Residential first mortgages.......... 2,399,567 1,770,507 6,217 5,431 (36) 89 Other residential mortgages.......... 477,942 464,863 -0- 32 15 31 Dealer indirect..... 659,264 517,917 23 -0- 315 596 Other consumer...... 923,905 799,246 1,965 2,464 3,882 3,692 ---------- ---------- ------- ------- ------- ------ Total consumer.. 4,460,678 3,552,533 8,205 7,927 4,176 4,408 ---------- ---------- ------- ------- ------- ------ $8,636,392 $7,330,753 $62,166 $61,999 $ 4,058 $5,294 ========== ========== ======= ======= ======= ======
- - -------- * Exclusive of accruing loans 90 days past due. TABLE 6--NONPERFORMING ASSETS
1994 1993 ------- ----------------------------------- MAR 31 DEC 31 SEPT 30 JUN 30 MAR 31 ------- ------- ------- ------- -------- (DOLLARS IN THOUSANDS) Nonaccrual loans................. $60,405 $51,074 $43,766 $54,336 $ 60,129 Restructured loans............... 1,761 2,420 2,674 3,741 1,870 ------- ------- ------- ------- -------- Total nonperforming loans...... 62,166 53,494 46,440 58,077 61,999 Foreclosed properties............ 21,720 27,858 30,813 30,437 48,347 Repossessions.................... 877 1,043 659 657 1,196 ------- ------- ------- ------- -------- Total nonperforming assets*.... $84,763 $82,395 $77,912 $89,171 $111,542 ======= ======= ======= ======= ======== Nonperforming assets* to loans net of unearned income, foreclosed properties and repossessions................... 0.99% 0.99% 1.02% 1.19% 1.53% Accruing loans 90 days past due.. $29,926 $20,598 $20,901 $20,754 $ 18,558
- - -------- * Exclusive of accruing loans 90 days past due. 13 TABLE 7--ALLOWANCE FOR LOAN LOSSES
1994 1993 ----------- ------------------------------------------------ 1ST QUARTER 4TH QUARTER 3RD QUARTER 2ND QUARTER 1ST QUARTER ----------- ----------- ----------- ----------- ----------- (DOLLARS IN THOUSANDS) Balance at beginning of period................. $128,799 $112,933 $112,572 $113,336 $ 98,988 Loans charged off....... 8,167 7,452 8,868 10,765 7,930 Recoveries of loans previously charged off. 4,109 2,230 9,568 2,116 2,636 -------- -------- -------- -------- -------- Net charge-offs (recoveries)........... 4,058 5,222 (700) 8,649 5,294 Addition (reduction) to allowance charged (credited) to expense.. 1,042 11,095 (339) 7,885 7,184 Allowance acquired in bank purchases......... -0- 9,993 -0- -0- 12,458 -------- -------- -------- -------- -------- Balance at end of period................. $125,783 $128,799 $112,933 $112,572 $113,336 ======== ======== ======== ======== ======== Allowance for loan losses to loans net of unearned income........ 1.47% 1.55% 1.49 % 1.51% 1.56% Allowance for loan losses to nonperforming loans.................. 202.33% 240.77% 243.18 % 193.83% 182.80% Allowance for loan losses to nonperforming assets................. 148.39% 156.32% 144.95 % 126.24% 101.61% Net charge-offs to average loans net of unearned income (annualized)........... .20% .26% (.04)% .47% .31%
TABLE 8--ALLOWANCE FOR FORECLOSED PROPERTY LOSSES
1994 1993 ----------- ----------------------------------------------- 1ST QUARTER 4TH QUARTER 3RD QUARTER 2ND QUARTER 1ST QUARTER ----------- ----------- ----------- ----------- ----------- (IN THOUSANDS) Balance at beginning of period................. $ 3,908 $ 2,890 $ 7,251 $ 7,961 $ 7,520 (Reduction) addition to allowance (credited) charged to expense..... (450) (1,684) (1,060) (541) 247 Net recoveries (writedowns)/(losses).. 116 1,848 (3,301) (169) (1,475) Allowance acquired in bank purchases......... -0- 854 -0- -0- 1,669 ------- ------- ------- ------- ------- Balance at end of the period................. $ 3,574 $ 3,908 $ 2,890 $ 7,251 $ 7,961 ======= ======= ======= ======= =======
TABLE 9--SECURITIES
MARCH 31, 1994 MARCH 31, 1993 --------------------- --------------------- CARRYING MARKET CARRYING MARKET AMOUNT VALUE AMOUNT VALUE ---------- ---------- ---------- ---------- (IN THOUSANDS) Held-to-maturity U.S. Treasury and federal agency securities...................... $1,887,532 $1,865,160 $2,087,802 $2,139,759 State, county and municipal securities...................... 331,862 351,540 393,072 418,750 Other securities................. 8,105 8,017 311,720 315,771 ---------- ---------- ---------- ---------- $2,227,499 $2,224,717 $2,792,594 $2,874,280 ========== ========== ========== ========== Available-for-sale U.S. Treasury and federal agency securities...................... $ 914,794 $ 364,520 Other securities................. 35,664 50,377 ---------- ---------- $ 950,458 $ 414,897 ========== ==========
14 TABLE 10--OTHER INTEREST-BEARING LIABILITIES
MARCH 31 ----------------- 1994 1993 -------- -------- (IN THOUSANDS) Short-term: Treasury, tax, and loan note................................ $421,430 $140,778 Term federal funds purchased................................ 60,000 145,000 Other....................................................... 52,659 16,384 -------- -------- Total short-term.......................................... 534,089 302,162 Long-term: 7 1/2% Convertible Subordinated Debentures.................. 3,654 3,433 Floating Rate Notes Due 1999................................ 7,659 8,205 Subordinated Capital Notes.................................. 99,343 99,214 Long-term notes payable..................................... 50,102 51,537 -------- -------- Total long-term........................................... 160,758 162,389 -------- -------- Total other interest-bearing liabilitites............... $694,847 $464,551 ======== ========
TABLE 11--CAPITAL RATIOS
MARCH 31, ------------------------ 1994 1993 ----------- ----------- (DOLLARS IN THOUSANDS) RISK-ADJUSTED CAPITAL RATIO: Total assets....................................... $13,187,389 $12,063,044 Adjusted allowance for loan losses................. 123,182 113,336 Adjustment for risk-weighting of balance sheet items............................................. (4,774,117) (4,250,297) Adjustment for off-balance sheet items............. 1,382,127 1,271,685 Less certain intangible assets..................... (66,619) (93,957) ----------- ----------- Total risk-adjusted assets....................... $ 9,851,962 $ 9,103,811 =========== =========== Shareholders' equity............................... $ 1,145,258 $ 993,588 Add unrealized loss on available-for-sale securities........................................ 5,107 -0- Less certain intangible assets..................... (66,619) (93,957) ----------- ----------- Tier I capital..................................... 1,083,746 899,631 Adjusted allowance for loan losses................. 123,182 113,336 Qualifying long-term debt.......................... 102,997 102,647 ----------- ----------- Tier II capital.................................... 226,179 215,983 ----------- ----------- Total capital.................................... $ 1,309,925 $ 1,115,614 =========== =========== Tier I capital to total risk-adjusted assets....... 11.00% 9.88% Total capital to risk-adjusted assets.............. 13.30% 12.25% OTHER CAPITAL RATIOS: Leverage........................................... 8.46% 7.90% Equity to assets................................... 8.68% 8.24% Tangible equity to assets.......................... 7.53% 7.24%
15 PART II OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The regular Annual Meeting of Shareholders of AmSouth was held on April 21, 1994, at which meeting the shareholders elected eight nominees as directors. The following is a tabulation of the voting for directors:
NAME VOTES FOR VOTES WITHHELD ---- ---------- -------------- George W. Barber, Jr.............................. 42,041,567 737,769 William J. Cabaniss, Jr........................... 42,615,662 163,674 Hugh B. Jacks..................................... 42,557,672 221,664 Ronald L. Kuehn, Jr............................... 42,597,608 181,728 E. Roberts Leatherbury............................ 42,615,130 164,206 Z. Cartter Patten, III............................ 42,617,555 161,781 Herbert A. Sklenar................................ 42,607,794 171,542 John W. Woods..................................... 42,623,158 156,178
ITEM 5. OTHER INFORMATION Since January 1, 1994, AmSouth has completed the following business combinations, the terms of which are summarized in the following table.
APPROXIMATE CONSIDERATION/ HEADQUARTERS TOTAL ACCOUNTING COMPLETION NAME OF ACQUIRED COMPANY LOCATION ASSETS(1) TREATMENT DATE - - ------------------------ ------------ ------------ -------------- ---------- Orange Banking Corpora- Orlando, Florida $354 million common stock/ January 1994 tion................... pooling of interests FloridaBank, a Federal Savings Bank........... Jacksonville, Florida 271 million common stock/ February 1994 pooling of interests Citizens National Corpo- Naples, Florida 313 million common stock/ April 1994 ration................. pooling of interests Parkway Bancorp, Inc. .. Ft. Myers, Florida 130 million common stock/ April 1994 pooling of interests First Federal Savings Bank, Calhoun, Georgia. Calhoun, Georgia 72 million common stock/ April 1994 pooling of interests
- - -------- (1) The dollar amounts indicated represent assets of the specified organization as of the last reported period prior to the business combination. 16 As of the date of this Form 10-Q, AmSouth is a party to a number of pending business combinations, which are summarized in the table below. Except as noted, consummation of each of these transactions remains subject to fulfillment of a number of conditions, including receipt of certain shareholder or regulatory approvals. No assurances can be given that such conditions will be fulfilled or that such transactions will be consummated.
APPROXIMATE HEADQUARTERS TOTAL CONSIDERATION/EXPECTED NAME OF COMPANY TO BE ACQUIRED LOCATION ASSETS(1) ACCOUNTING TREATMENT - - ------------------------------ ------------ ------------- ---------------------- Fortune Bancorp, Inc. Clearwater, Florida $ 2.7 billion cash and common (2).................... stock/purchase The Tampa Banking Tampa, Florida 213 million common stock/pooling of Company................ interests Community Federal Savings Bank........... Fort Oglethorpe, Georgia 103 million cash/purchase
- - -------- (1) The dollar amounts indicated represent assets of the specified organization as of March 31, 1994. (2) Regulatory approvals have been received. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ITEM 6(A)--EXHIBITS The exhibits listed in the Exhibit Index at page 19 of this Form 10-Q are filed herewith or are incorporated by reference herein. ITEM 6(B)--FORMS 8-K The following Forms 8-K have been filed by AmSouth since December 31, 1993: (1) Form 8-K filed on January 26, 1994 to report AmSouth's preliminary results of operations for the fourth quarter of 1993 and for the fiscal year ended December 31, 1993. (2) Form 8-K/A filed on February 16, 1994 (amending a Form 8-K filed on December 21, 1993) to present financial statements and pro forma financial statements regarding the acquisition of Mid-State Federal Savings Bank. (3) Form 8-K filed March 22, 1994 (as amended by Forms 8-K/A filed on April 4, 1994 and April 11, 1994) to present pro forma financial statements regarding certain pending acquisitions. (4) Form 8-K filed April 11, 1994 to present a Form T-1 statement of eligibility and qualification of Bankers Trust Company as trustee under an Indenture to be entered into between AmSouth and Bankers Trust Company. (5) Form 8-K filed on April 15, 1994 to report a press release regarding the receipt of regulatory approvals for the acquisition of Fortune Bancorp, Inc. (6) Form 8-K filed on April 22, 1994 to report AmSouth's preliminary results of operations for the first quarter of 1994. (7) Form 8-K filed on May 11, 1994 to report the modification of AmSouth's Agreement and Plan of Merger with Fortune Bancorp, Inc. 17 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, AMSOUTH HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED. Date: May 11, 1994 /s/ John W. Woods By: _________________________________ Chairman of the Board and Chief Executive Officer Date: May 11, 1994 /s/ Ricky W. Thomas By: _________________________________ Controller and Chief Accounting Officer 18 EXHIBIT INDEX The following is a list of exhibits including items incorporated by reference. 2-a Agreement and Plan of Merger dated as of June 29, 1992 between First Chattanooga Financial Corporation and AmSouth Bancorporation (1) 2-b Agreement and Plan of Reorganization dated as of January 21, 1993 among The First National Bank of Clearwater and Mickler Corporation and AmSouth Bancorporation (2) 2-c Agreement and Plan of Merger dated as of March 29, 1993 between Or- ange Banking Corporation and AmSouth Bancorporation (3) 2-d Amended and Restated Agreement and Plan of Reorganization by and between Mid-State Federal Savings Bank and AmSouth Bancorporation dated as of April 22, 1993 and amended and restated as of June 22, 1993 (4) 2-e Agreement and Plan of Merger dated as of May 11, 1993 between First Sunbelt Bankshares, Inc. and AmSouth Bancorporation (5) 2-f Agreement and Plan of Merger dated as of June 30, 1993 between FloridaBank, a Federal Savings Bank and AmSouth Bancorporation (6) 2-g Agreement and Plan of Merger dated as of July 29, 1993 between Parkway Bancorp, Inc. and AmSouth Bancorporation (7) 2-h Agreement and Plan of Merger dated as of August 3, 1993 between First Federal Savings Bank, Calhoun, Georgia and AmSouth Bancorpo- ration (8) 2-i Agreement and Plan of Merger dated as of August 9, 1993 between Citizens National Corporation and AmSouth Bancorporation (9) 2-j Agreement and Plan of Merger dated as of September 12, 1993, be- tween Fortune Bancorp, Inc. and AmSouth Bancorporation (10) 4-a Instruments defining the rights of security holders (11) 4-b Stockholder Protection Rights Agreement dated as of June 15, 1989 between AmSouth Bancorporation and AmSouth Bank, National Associa- tion as Rights Agent, including as Exhibit A the forms of Rights Certificate and of Election to Exercise and as Exhibit B the form of Certificate of Designation and Terms of Series A Preferred Stock (12) 4-c Certificate of Designation and Terms of Series A Preferred Stock of AmSouth Bancorporation (13) 10-a AmSouth Bancorporation Executive Incentive Plan (14) 10-b AmSouth Bancorporation Transfer/Employee Relocation Policy (15) 10-c AmSouth Bank Supplemental Retirement Plan (16) 10-d AmSouth Bancorporation Long Term Incentive Compensation Plan (17) 10-e Amendment No. 1 to the AmSouth Bancorporation Long Term Incentive Compensation Plan (18) 10-f Amendment No. 2 to the AmSouth Bancorporation Long Term Incentive Compensation Plan (19) 10-g Amendment No. 3 to the AmSouth Bancorporation Long Term Incentive Compensation Plan (20)
19 10-h Amendment No. 4 to the AmSouth Bancorporation Long Term Incentive Compensation Plan (21) 10-i 1989 AmSouth Bancorporation Long Term Incentive Compensation Plan (22) 10-j AmSouth Bancorporation 1987 Substitute Stock Option Plan (23) 10-k Change in Control Compensation Agreements (24) 10-l Deferred Compensation Plan for Directors of AmSouth and AmSouth Bank N.A. (25) 10-m Agreement between AmSouth Bank N.A. and Brasfield and Gorrie Gen- eral Contractor, Inc., dated August 2, 1993 (26) 11 Statement re Computation of Earnings per Share 15 Letter re Unaudited Interim Financial Information
20 NOTES TO EXHIBITS (1) Filed as Exhibit 2 to AmSouth's Registration Statement on Form S-4 (Reg- istration Statement No. 33-53088), incorporated herein by reference (2) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4 (Registration Statement No. 33-60164), incorporated herein by reference (3) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4 (Registration Statement No. 33-49865), incorporated herein by reference (4) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4 (Registration Statement No. 33-64960), incorporated herein by reference (5) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4 (Registration Statement No. 33-50041), incorporated herein by reference (6) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4 (Registration Statement No. 33-50605), incorporated herein by reference (7) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4 (Registration Statement No. 33-50727), incorporated herein by reference (8) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4 (Registration Statement No. 33-51767), incorporated herein by reference (9) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4 (Registration Statement No. 33-50865), incorporated herein by reference (10) Filed as Exhibit 2(a) to AmSouth's Report on Form 8-K filed on September 16, 1993, as amended by a Form 8-K/A filed on September 23, 1993, incor- porated herein by reference (11) Instruments defining the rights of holders of long-term debt of AmSouth are not filed herewith pursuant to Item 601(b)(4)(v) of Regulation S-K, and AmSouth hereby agrees to furnish a copy of said instruments to the SEC upon request (12) Filed as Exhibit 4-a to AmSouth's Form 10-Q Quarterly Report for the quarter ended June 30, 1989, incorporated herein by reference (13) Filed as Exhibit 4-c to AmSouth's Form 10-Q Quarterly Report for the quarter ended June 30, 1989, incorporated herein by reference (14) Filed as Exhibit 10(b) to AmSouth's Form 10-Q Quarterly Report for the quarter ended September 30, 1993, incorporated herein by reference (15) Filed as Exhibit 10-b to AmSouth's Form 10-K Annual Report for the year ended December 31, 1993, incorporated herein by reference (16) Filed as Exhibit 10-b to AmSouth's Form 10-Q Quarterly Report for the quarter ended September 30, 1991, incorporated herein by reference (17) Filed as part of Exhibit 23 to AmSouth's Form 10-Q Quarterly Report for the quarter ended March 31, 1984, incorporated herein by reference (18) Filed as Exhibit 10-e to AmSouth's Form 10-K Annual Report for the year ended December 31, 1985, incorporated herein by reference (19) Filed as Exhibit 10-b to AmSouth's Form 10-Q Quarterly Report for the quarter ended March 31, 1987, incorporated herein by reference (20) Filed as Exhibit 10(b) to AmSouth's Form 10-Q Quarterly Report for the quarter ended September 30, 1988, incorporated herein by reference (21) Filed as Exhibit 10-i to AmSouth's Form 10-K Annual Report for the year ended December 31, 1988, incorporated herein by reference (22) Filed as Exhibit 10 to AmSouth's Form 10-Q Quarterly Report for the quarter ended March 31, 1993, incorporated herein by reference (23) Filed as Exhibit 10-a to AmSouth's Form 10-Q Quarterly Report for the quarter ended March 31, 1988, incorporated herein by reference (24) Filed as Exhibit 10-k to AmSouth's Form 10-K Annual Report for the year ended December 31, 1992, incorporated herein by reference (25) Filed as Exhibit 10-a to AmSouth's Form 10-Q Quarterly Report for the quarter ended June 30, 1986, incorporated herein by reference (26) Filed as Exhibit 10(a) to AmSouth's Form 10-Q Quarterly Report for the quarter ended September 30, 1993, incorporated herein by reference
21 EX-11 2 EARNINGS PER SHARE EXHIBIT 11 AMSOUTH BANCORPORATION COMPUTATION OF EARNINGS PER COMMON SHARE
THREE MONTHS ENDED MARCH 31 ------------------- 1994 1993 --------- --------- (IN THOUSANDS EXCEPT PER SHARE DATA) Net income................................................. $ 41,280 $ 37,394 ========= ========= Average shares of common stock outstanding................. 51,656 48,116 ========= ========= Earnings per common share.................................. $ 0.80 $ 0.78 ========= =========
22 EX-15 3 UNAUDITED FINANCIAL INFORMATION Exhibit 15--Letter Re: Unaudited Interim Financial Information Board of Directors AmSouth Bancorporation We are aware of the incorporation by reference in the following Registration Statements and in their related Prospectuses, of our report dated May 9, 1994, relating to the unaudited consolidated interim financial statements of AmSouth Bancorporation and subsidiaries which are included in its Form 10-Q for the quarter ended March 31, 1994: Form S-8 No. 33-52243 pertaining to the assumption by AmSouth Bancorporation of Florida Bank Stock Option Plan and Stock Option Plan - 1993; Form S-8 No. 33-52113 pertaining to the 1989 Long Term Incentive Compensation Plan; Form S-4 No. 33-51767 pertaining to the acquisition of First Federal Savings Bank; Form S-4 No. 33-50865 pertaining to the acquisition of Citizens National Corporation; Form S-4 No. 33-50727 pertaining to the acquisition of Parkway Bancorp, Inc.; Form S-3 No. 33-50363 pertaining to the Debt Shelf Registration; Form S-8 No. 33-35218 pertaining to the 1989 Long Term Incentive Compensation Plan; Form S-8 No. 33-37905 pertaining to the AmSouth Bancorporation Thrift Plan; Form S-8 No. 33-9368 pertaining to the Long Term Incentive Compensation Plan; Form S-8 No. 33-2927 (as amended) pertaining to the Employee Stock Purchase Plan; Form S-8 No. 33-97464 pertaining to the Long Term Incentive Compensation Plan; Form S-3 No. 33-35280 pertaining to the Dividend Reinvestment and Common Stock Purchase Plan; Form S-8 No. 33-19016 pertaining to the Long Term Incentive Compensation Plan; and Form S-8 No. 33-18653 pertaining to the 1987 Substitute Stock Option Plan. Pursuant to Rule 436(c) of the Securities Act of 1933 our reports are not a part of the registration statements prepared or certified by accountants within the meaning of Sections 7 or 11 of the Securities Act of 1933. /s/ Ernst & Young May 9, 1994 23 -----END PRIVACY-ENHANCED MESSAGE-----