*********ASO NEWS**************
Tuesday July 13, 7:52 am Eastern Time
Company Press Release
SOURCE: AmSouth Bancorporation
AmSouth Reports Record Second Quarter 1999 Earnings; Earnings Per Share Up 16.7 Percent; ROE Increases to 20.87 Percent
BIRMINGHAM, Ala., July 13 /PRNewswire/ -- AmSouth Bancorporation (NYSE: ASO - news) today announced record second quarter earnings, with net income of $74.2 million, or $.42 per diluted share, for the quarter ending June 30, 1999. Adjusting for the company's recent three-for-two stock split, this represents an increase of 13.4 percent in net income and an increase of 16.7 percent in earnings per diluted share compared to the second quarter of 1998.
AmSouth's second quarter performance resulted in a return on average equity of 20.87 percent and a return on average assets of 1.46 percent, the highest levels in company history. AmSouth's second quarter operating efficiency ratio was 55.55 percent.
''Our record financial performance was driven primarily by strong loan growth, improvement in core noninterest revenues and excellent credit quality,'' said C. Dowd Ritter, chairman, president and chief executive officer. ''The results we have achieved demonstrate clearly that our employees are meeting more of our customers' needs today than ever before and building stronger, longer-lasting customer relationships.''
In addition to record financial performance, Ritter cited the company's three-for-two stock split, the announcement that AmSouth would acquire First American Corporation, and full Year 2000 compliance among the second quarter highlights.
''AmSouth's long-term performance and favorable market conditions supported our directors' decision to authorize a three-for-two stock split in the second quarter,'' Ritter said. ''The stock split reflects the confidence we have in the future of our company and is consistent with our goal of enhancing shareholder value.''
''Our merger and integration team has already made significant progress since the June 1 announcement that AmSouth will acquire First American. Merger and integration plans have been developed for each of the functional areas in the combined company. All systems selection decisions have been made and geographic locations have been determined for most business functions. The organizational structure for the combined company also has been determined, and most of the senior managers who will fill key positions have been identified,'' Ritter said.
There are 24 branch offices in overlapping markets that will be consolidated without adversely affecting customer convenience and needs. In addition, approximately 1,400 non revenue-producing positions, or approximately 10 percent of the combined workforce, have been identified for elimination with approximately 160 of these positions being eliminated immediately.
''Our companies also worked closely during the quarter on numerous revenue enhancement and balance sheet management initiatives that should further benefit performance,'' Ritter said.
The primary regulatory filings were made within 30 days of the June 1 announcement, putting AmSouth on track to complete the merger as early as October 1 and the operational conversion in February 2000.
''All this has been accomplished at the same time that AmSouth has further improved on its strong track record of performance,'' Ritter said. ''This is a direct result of the continued focus by employees on meeting customers' needs, the cooperation between our two companies in the merger process, and AmSouth's exceptionally strong management team. Their management skills and extensive merger experience are clearly evident in our rapid progress in such a short time period.''
When the merger is completed, AmSouth will have over $42 billion in assets, 680 banking branches in nine Southeastern states, and a network of 1,350 automated teller machines. AmSouth will have leading market positions in Alabama, Florida, Tennessee and Mississippi and a presence in Georgia, Louisiana, Arkansas, Kentucky and Virginia.
During the second quarter, AmSouth achieved full Year 2000 compliance on all of its mission-critical systems. ''Our emphasis now shifts to maintaining readiness over the next six months,'' Ritter said. He added that AmSouth has a ''dress rehearsal'' schedule for the third quarter during which AmSouth will once again test all mission-critical systems in a Year 2000 environment. This test is above and beyond any regulatory requirement. ''We're confident that we're ready, and the dress rehearsal is simply another step we are taking on our own to ensure a smooth transition for our customers,'' Ritter said.
Compared with the second quarter of 1998, second quarter 1999 net interest income increased 8.2 percent, reflecting growth in average earning assets and expansion of the net interest margin to 4.09 percent. Average managed loans, net of unearned income (excluding residential first mortgages and credit cards sold) increased 26.6 percent in the second quarter compared to the same period one year ago.
The provision for loan losses decreased to $7.5 million in the second quarter reflecting continued improvement in credit quality.
Excluding the second quarter 1998 sale of AmSouth's bond administration and stock transfer businesses and the sale of certain credit card assets during that period, total noninterest income increased 9.6 percent to $88.1 million during the second quarter of 1999. Noninterest expenses for the second quarter were $154.8 million, a decrease of 2.2 percent compared to the second quarter of 1998 which included several one-time items.
AmSouth is a regional bank holding company headquartered in Birmingham. At June 30, the company reported assets of $20.6 billion, ranking it among the top 50 banking institutions in the U.S. AmSouth operates 286 banking offices and 644 ATMs in Alabama, Florida, Tennessee and Georgia. AmSouth and its subsidiaries provide a full line of traditional and nontraditional financial services including consumer and commercial banking, small business banking, mortgage loans, trust services and investment management including 18 proprietary mutual funds.
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