AmSouth Reports Record Second Quarter 2005 Earnings.BIRMINGHAM Birmingham, cities, United States Birmingham (bûr`mĭnghăm') 1 City (1990 pop. 265,968), seat of Jefferson co., N central Ala., in the Jones Valley near the southern end of the Appalachian system; founded and inc. , Ala ALA aminolevulinic acid. Ala alanine. ala (a´lah) pl. a´lae [L.] a winglike process. . -- AmSouth Bancorporation AmSouth Bancorporation was a bank holding company headquartered in Birmingham, Alabama, operated as a subsidiary of Regions Financial Corporation. AmSouth was previously known as First National Bank of Birmingham first organized in 1872. (NYSE NYSE See: New York Stock Exchange : ASO ASO arteriosclerosis obliterans. ASO 1 Administrative services organization, see there 2 Allele-specific–oligonucleotide hybridization 3 Anti-streptolysin O, see there ) today reported earnings for the second quarter ended June June: see month. 30, 2005, of $.52 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $.47 per diluted share reported for the second quarter of 2004. Net income for the second quarter of 2005 was a record $184.6 million versus $167.0 million for the same period in 2004, an increase of 10.6 percent. This second quarter performance resulted in a return on average equity of 20.9 percent, a return on average assets of 1.47 percent, and an improved efficiency ratio of 51.4 percent. "AmSouth generated solid, high quality results this quarter," said Dowd Dowd is a derivation of an ancient surname which was once common in Ireland but is now quite rare. The name Dowd is an Anglicisation of the original Ui Dubhda, through its more common form O'Dowd. Ritter rit·ter n. pl. ritter A knight. [German, from Middle High German riter, from Middle Dutch ridder, from r , AmSouth's chairman, president and chief executive officer. "We saw strong performance across the board: good loan production and deposit growth, extremely strong credit quality and disciplined expense control." Net interest income was $378.6 million in the second quarter, a 4.8 percent increase compared with the same quarter in 2004. The net interest margin in the second quarter was 3.40 percent, which is a 4 basis point decline compared with the same period in 2004. The increase in net interest income in the second quarter was driven by solid loan growth supported by continued strength in deposits, particularly in the low-cost category. Commercial loans grew 12.8 percent compared with the same quarter in 2004, and low-cost deposits increased 15.1 percent during the same period. Noninterest revenue, which includes earnings from service charges, trust, investment management services, securities gains and other sources of fee income, was $223.2 million for the quarter. Interchange An interchange is a location where two things meet, usually perform some kind of exchange, and possibly go on their ways again. It is most commonly used in four contexts:
Net charge-offs were 0.21 percent of average net loans in the second quarter, declining 2 basis points compared with the first quarter of 2005. The ratio of loan loss reserves to total loans was 1.09 percent at June 30, 2005. The loan loss provision essentially matched net charge-offs in the quarter. Nonperforming loan coverage increased to 519 percent during the quarter. Total nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. at June 30, 2005, were $90.0 million, or 0.27 percent of loans net of unearned income Unearned Income Any income that comes from investments and other sources unrelated to employment services. Notes: Examples of unearned income include interest from a savings account, bond interest, tips, alimony, and dividends from stock. , foreclosed properties and repossessions, compared to $112.7 million, or 0.34 percent, in the previous quarter. For supplemental financial information about the second quarter results, please refer to the Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. filed by AmSouth with the Securities and Exchange Commission on July July: see month. 19, 2005, or visit the Investor Relations Investor relations The process by which the corporation communicates with its investors. Resource Center on AmSouth's web site at www.amsouth.com. About AmSouth AmSouth is a regional bank holding company with over $50 billion in assets, more than 685 branch banking offices and more than 1,200 ATMs. AmSouth operates in Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and , Tennessee Tennessee, state, United States Tennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. , Alabama Alabama, indigenous people of North America Alabama (ăləbăm`ə), indigenous people of North America whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). , Mississippi Mississippi, state, United States Mississippi (mĭs'əsĭp`ē), one of the Deep South states of the United States. It is bordered by Alabama (E), the Gulf of Mexico (S), Arkansas and Louisiana, with most of the border formed by , Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. and Georgia Georgia, country, AsiaGeorgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. . AmSouth is a leader among regional banks in the Southeast Southeast or south east is the ordinal direction halfway between south and east. It the opposite of northwest. Southeast or South East can refer to:
Forward Looking Statements Statements in this document that are not purely historical are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. (as defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995), including any statements regarding descriptions of management's plans, objectives or goals for future operations, products or services, and forecasts of its revenues, earnings or other measures of performance. Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. A number of factors - many of which are beyond AmSouth's control - could cause actual conditions, events or results to differ materially from those described in the forward-looking statements. Factors which could cause results to differ materially from current management expectations include, but are not limited to: the effects of previously disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. agreements on AmSouth's branch expansion plans; the successful completion of the sale of AmSouth's mutual fund advisory business; the execution of AmSouth's strategic initiatives; legislation and regulation; general economic conditions, especially in the Southeast; the performance of the stock and bond markets; changes in interest rates, yield curves and interest rate spread relationships; prepayment speeds Prepayment speed Also called speed, the estimated rate at which mortgagors pay off their loans ahead of schedule, critical in assessing the value of mortgage pass-through securities. within the loan and investment security portfolios; deposit flows; the cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. ; cost of federal deposit insurance premiums; demand for loan products; demand for financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. ; competition, including a continued consolidation in the financial services industry; changes in the quality or composition of AmSouth's loan and investment portfolios including capital market inefficiencies that may affect the marketability Marketability A negotiable security is said to have good marketability if there is an active secondary market in which it can easily be resold. marketability The ease with which an investment may be bought and sold in the secondary market. and valuation of available-for-sale securities; changes in consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. and saving habits; technological changes; adverse changes in the financial performance and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. condition of AmSouth's borrowers which could impact the repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan of such borrowers' loans; changes in accounting and tax principles, policies or guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. and in tax laws; other economic, competitive, governmental and regulatory factors affecting AmSouth's operations, products, services and prices; the effects of weather and natural disasters, such as hurricanes; unexpected judicial actions and developments; results of investigations, examinations, and reviews of regulatory and law enforcement authorities; the outcome of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , which is inherently uncertain and depends on the findings of judges and juries; the impact on AmSouth's businesses, as well as on the risks set forth above, of various domestic or international military or terrorist activities or conflicts; and AmSouth's success at managing the risks involved in the foregoing. Forward-looking statements speak only as of the date they are made. AmSouth does not undertake a duty to update forward-looking statements to reflect circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or or events that occur after the date the forward-looking statements are made.
Unaudited
AmSouth Bancorporation
SUMMARY FINANCIAL INFORMATION
($ in thousands, except per share data)
EARNINGS SUMMARY Three Months Ended
----------------------------------
2005 2004
---------------------- -----------
June 30 March 31 December 31
------------ --------- -----------
Net interest income $378,643 $379,748 $379,212
Provision for loan losses 17,700 20,600 44,250
------------ --------- -----------
Net interest income after provision 360,943 359,148 334,962
Noninterest revenues 223,151 215,436 380,289
Noninterest expenses 314,942 319,517 460,416
------------ --------- -----------
Income before income taxes 269,152 255,067 254,835
Income taxes 84,553 76,422 77,978
------------ --------- -----------
Net income $184,599 $178,645 $176,857
============ ========= ===========
Earnings per common share - basic
(a) $0.52 $0.50 $0.50
Earnings per common share - diluted
(a) 0.52 0.50 0.49
Cash dividends declared per common
share 0.25 0.25 0.25
Average common shares outstanding -
basic 352,054 354,299 355,072
Average common shares outstanding -
diluted 357,026 358,812 360,286
End of period common shares
outstanding 352,349 353,051 356,310
EARNINGS SUMMARY Three Months Ended Percent
2004 Change
---------------------- Versus
Prior
September 30 June 30 Year
------------ --------- -----------
Net interest income $375,906 $361,410 4.8%
Provision for loan losses 28,800 26,600 (33.5%)
------------ ---------
Net interest income after provision 347,106 334,810 7.8%
Noninterest revenues 213,171 218,252 2.2%
Noninterest expenses 362,478 311,770 1.0%
------------ ---------
Income before income taxes 197,799 241,292 11.5%
Income taxes 78,220 74,329 13.8%
------------ ---------
Net income $119,579 $166,963 10.6%
============ =========
Earnings per common share -
basic (a) $0.34 $0.47 10.6%
Earnings per common share -
diluted (a) 0.33 0.47 10.6%
Cash dividends declared per common
share 0.24 0.24 4.2%
Average common shares outstanding -
basic 352,838 351,602
Average common shares outstanding -
diluted 358,272 356,314
End of period common shares
outstanding 354,635 353,414
EARNINGS SUMMARY YTD
---------------------- Percent
Change
2005 2004 Versus
------------ --------- Prior
June 30 June 30 Year
------------ --------- -----------
Net interest income $758,391 $720,907 5.2%
Provision for loan losses 38,300 54,700 (30.0%)
------------ ---------
Net interest income after provision 720,091 666,207 8.1%
Noninterest revenues 438,587 438,682 (0.0%)
Noninterest expenses 634,459 634,044 0.1%
------------ ---------
Income before income taxes 524,219 470,845 11.3%
Income taxes 160,975 143,783 12.0%
------------ ---------
Net income $363,244 $327,062 11.1%
============ =========
Earnings per common share -
basic (a) $1.03 $0.93 10.8%
Earnings per common share -
diluted (a) 1.01 0.92 9.8%
Cash dividends declared per common
share 0.50 0.48 4.2%
Average common shares outstanding -
basic 353,170 351,399
Average common shares outstanding -
diluted 357,914 356,611
End of period common shares
outstanding 352,349 353,414
KEY PERFORMANCE RATIOS Three Months Ended
----------------------
2005
----------------------
June 30 March 31
------------- --------
Average shareholders' equity to
average total assets 7.03% 7.04%
End of period shareholders' equity
to end of period total assets 7.20 6.98
Return on average assets
(annualized) (a) 1.47 1.44
Return on average shareholders'
equity (annualized) (a) 20.92 20.48
Net interest margin - taxable
equivalent 3.40 3.45
Efficiency ratio (a) 51.41 52.72
Loans net of unearned income to
total deposits 94.96 94.82
Book value per common share $10.33 $9.89
Tangible book value per common
share 9.48 9.04
KEY PERFORMANCE RATIOS Three Months Ended
----------------------------------
2004
----------------------------------
December 31 September 30 June 30
----------- ------------- --------
Average shareholders' equity to
average total assets 7.05% 6.87% 6.92%
End of period shareholders' equity
to end of period total assets 7.20 6.94 6.82
Return on average assets
(annualized) (a) 1.42 0.98 1.41
Return on average shareholders'
equity (annualized) (a) 20.15 14.20 20.31
Net interest margin - taxable
equivalent 3.43 3.44 3.44
Efficiency ratio (a) 59.77 60.44 52.83
Loans net of unearned income to
total deposits 95.82 101.83 97.55
Book value per common share $10.02 $9.73 $9.32
Tangible book value per common
share 9.17 8.88 8.46
KEY PERFORMANCE RATIOS YTD
----------------------
2005 2004
------------ --------
June 30 June 30
------------ --------
Average shareholders' equity to
average total assets 7.03% 7.01%
End of period shareholders' equity
to end of period total assets 7.20 6.82
Return on average assets
(annualized) (a) 1.46 1.40
Return on average shareholders'
equity (annualized) (a) 20.70 20.04
Net interest margin - taxable
equivalent 3.42 3.50
Efficiency ratio (a) 52.06 53.70
Loans net of unearned income to
total deposits 94.96 97.55
Book value per common share $10.33 $9.32
Tangible book value per common
share 9.48 8.46
(a) Ratios and earnings per share as adjusted for the third quarter
2004 settlement agreement and related professional fees are
provided in the following table. These expenses represent matters
which management believes are not indicative of AmSouth's legal
and regulatory affairs arising in the normal course of business.
2004
------------
Three Months
Ended
September 30
------------
Earnings per common share - basic,
GAAP basis 0.34
Adjustment for settlement agreement
and related professional fees 0.15
------------
Earnings per common share - basic,
as adjusted 0.49
Earnings per common share -
diluted, GAAP basis 0.33
Adjustment for settlement agreement
and related professional fees 0.15
------------
Earnings per common share -
diluted, as adjusted 0.48
Return on average assets
(annualized), GAAP basis 0.98%
Adjustment for settlement agreement
and related professional fees 0.42%
------------
Return on average assets
(annualized), as adjusted 1.40%
Return on average shareholders'
equity (annualized), GAAP basis 14.20%
Adjustment for settlement agreement
and related professional fees 6.23%
------------
Return on average shareholders'
equity (annualized), as adjusted 20.43%
Efficiency ratio, GAAP basis 60.44%
Adjustment for settlement agreement
and related professional fees (9.00)%
------------
Efficiency ratio, as adjusted 51.44%
Unaudited
AmSouth Bancorporation
SUMMARY FINANCIAL INFORMATION
($ in thousands)
BALANCE SHEET INFORMATION Three Months Ended
AVERAGE BALANCES --------------------------------------
2005 2004
------------------------- ------------
June 30 March 31 December 31
------------ ------------ ------------
Loans net of unearned income $33,361,522 $33,208,549 $32,525,563
Total investment securities (b) 12,374,769 12,530,581 12,413,850
Interest-earning assets (b) 46,007,898 45,928,699 45,224,572
Total assets 50,341,297 50,296,110 49,535,521
Noninterest-bearing deposits 7,454,032 7,225,621 6,978,442
Interest-bearing deposits (c) 27,403,908 27,486,980 26,344,499
Total deposits (c) 34,857,940 34,712,601 33,322,941
Shareholders' equity 3,540,078 3,538,378 3,491,181
BALANCE SHEET INFORMATION Three Months Ended
AVERAGE BALANCES ------------------------- Percent
Change
2004 Versus
------------------------- Prior
September 30 June 30 Year
------------ ------------ ------------
Loans net of unearned income $32,079,701 $30,633,629 8.9%
Total investment securities (b) 12,374,084 12,488,887 (0.9%)
Interest-earning assets (b) 44,684,992 43,500,751 5.8%
Total assets 48,786,314 47,742,291 5.4%
Noninterest-bearing deposits 6,643,642 6,516,977 14.4%
Interest-bearing deposits (c) 25,735,595 25,337,923 8.2%
Total deposits (c) 32,379,237 31,854,900 9.4%
Shareholders' equity 3,350,323 3,305,636 7.1%
BALANCE SHEET INFORMATION YTD
AVERAGE BALANCES ------------------------- Percent
Change
2005 2004 Versus
------------ ------------ Prior
June 30 June 30 Year
------------ ------------ ------------
Loans net of unearned income $33,285,458 $30,169,686 10.3%
Total investment securities (b) 12,452,245 12,134,183 2.6%
Interest-earning assets (b) 45,968,517 42,635,928 7.8%
Total assets 50,318,828 46,847,692 7.4%
Noninterest-bearing deposits 7,340,457 6,310,096 16.3%
Interest-bearing deposits (c) 27,445,215 24,859,579 10.4%
Total deposits (c) 34,785,672 31,169,675 11.6%
Shareholders' equity 3,539,233 3,281,997 7.8%
(b) Excludes adjustment for market valuation on available-for-sale
securities and certain noninterest-earning marketable equity
securities.
(c) Statement 133 valuation adjustments related to time deposits and
other interest-bearing liabilities are included in other
liabilities.
BALANCE SHEET INFORMATION 2005 2004
ENDING BALANCES ------------------------- ------------
June 30 March 31 December 31
------------ ------------ ------------
Loans net of unearned income $33,533,382 $33,025,437 $32,801,337
Total investment securities 12,245,731 12,571,502 12,510,675
Interest-earning assets 46,191,133 45,815,651 45,453,317
Total assets 50,546,831 50,011,458 49,548,371
Noninterest-bearing deposits 7,687,525 7,500,430 7,182,806
Interest-bearing deposits 27,626,183 27,328,090 27,049,973
Total deposits 35,313,708 34,828,520 34,232,779
Shareholders' equity 3,638,225 3,491,722 3,568,841
BALANCE SHEET INFORMATION Percent
ENDING BALANCES Change
2004 Versus
------------------------- Prior
September 30 June 30 Year
------------ ------------ ------------
Loans net of unearned income $32,502,221 $31,351,497 7.0%
Total investment securities 12,584,985 12,590,729 (2.7%)
Interest-earning assets 45,392,357 44,314,099 4.2%
Total assets 49,687,862 48,295,813 4.7%
Noninterest-bearing deposits 6,798,077 6,636,325 15.8%
Interest-bearing deposits 25,121,339 25,502,919 8.3%
Total deposits 31,919,416 32,139,244 9.9%
Shareholders' equity 3,450,558 3,295,478 10.4%
Unaudited
AmSouth Bancorporation
SUMMARY FINANCIAL INFORMATION
($ in thousands)
NONPERFORMING ASSETS 2005 2004
------------------- -----------------------------
June March December September June
30 31 31 30 30
--------- --------- --------- --------- ---------
Nonaccrual loans (d) $70,421 $87,255 $88,488 $92,958 $102,670
Foreclosed
properties 17,791 23,258 19,609 23,043 29,586
Repossessions 1,755 2,208 2,498 3,231 3,295
--------- --------- --------- --------- ---------
Total nonperforming
assets (d) $89,967 $112,721 $110,595 $119,232 $135,551
========= ========= ========= ========= =========
Nonperforming assets
to loans net of
unearned income,
foreclosed
properties and
repossessions 0.27% 0.34% 0.34% 0.37% 0.43%
Accruing loans 90
days past due $49,185 $50,718 $51,117 $63,727 $52,972
========= ========= ========= ========= =========
(d) Exclusive of accruing loans 90 days past due
ALLOWANCE FOR LOAN
LOSSES 2005 2004
------------------- -----------------------------
2nd 1st 4th 3rd 2nd
Quarter Quarter Quarter Quarter Quarter
--------- --------- --------- --------- ---------
Balance at beginning
of period $366,836 $366,774 $381,255 $382,482 $382,450
Loans charged off (27,170) (29,679) (44,277) (39,799) (38,202)
Recoveries of loans
previously charged
off 9,528 10,598 11,146 11,062 11,634
--------- --------- --------- --------- ---------
Net Charge-offs (17,642) (19,081) (33,131) (28,737) (26,568)
Addition to
allowance charged
to expense 17,700 20,600 44,250 28,800 26,600
Reduction of
allowance related
to sold loans (1,268) (1,457) (25,600) (1,290) -
--------- --------- --------- --------- ---------
Balance at end of
period $365,626 $366,836 $366,774 $381,255 $382,482
========= ========= ========= ========= =========
Allowance for loan
losses to loans net
of unearned income 1.09% 1.11% 1.12% 1.17% 1.22%
Net charge-offs to
average loans net
of unearned income
(e) 0.21% 0.23% 0.41% 0.36% 0.35%
Allowance for loan
losses to
nonperforming loans
(d) 519.20% 420.42% 414.49% 410.14% 372.54%
Allowance for loan
losses to
nonperforming
assets (d) 406.40% 325.44% 331.64% 319.76% 282.17%
(e) Annualized
(d) Exclusive of accruing loans 90 days past due
Unaudited
AmSouth Bancorporation
RECONCILIATION OF GAAP AMOUNTS TO ADJUSTED AMOUNTS
($ in thousands, except per share data)
Three Months Ended
September 30, 2004
-------------------------------------
Earnings
Income Earnings per
Before per common
Income Net common share -
Taxes Income share diluted
--------- --------- -------- --------
Results as reported on a GAAP
basis $197,799 $119,579 $0.34 $0.33
Costs incurred under settlement
agreement and related
professional fees (f) 53,972 52,443 0.15 0.15
--------- --------- -------- --------
Results as adjusted $251,771 $172,022 $0.49 $0.48
(f) These expenses represent matters which management believes are not
indicative of AmSouth's legal and regulatory affairs arising in
the normal course of business.
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