AmSouth Reports Third Quarter 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 third quarter ended September September: see month. 30, 2004, of $.33 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 $.45 per diluted share reported for the third quarter of 2003. Net income for the third quarter of 2004 was $119.6 million versus $157.4 million for the same period in 2003. Results for the third quarter of 2004 include charges and related professional fees totaling $54.0 million, or $.15 per diluted share, in connection with AmSouth's previously announced settlements with the U.S. Attorney for the Southern District of 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 and the bank's regulators. Excluding these expenses, third quarter 2004 earnings would have been $172.0 million or $.48 per diluted share (see Reconciliation of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Amounts to Adjusted Amounts in the attached financial tables). AmSouth's third quarter performance resulted in a return on average equity of 14.2 percent, a return on average assets of 0.98 percent and an efficiency ratio of 60.4 percent. Excluding the impact of the expenses related to the settlements, the results would have been a return on average equity of 20.4 percent, a return on average assets of 1.40 percent and an efficiency ratio of 51.4 percent. "Our business results are solid and we saw strong growth in the Commercial and Consumer lines of business despite the disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. caused by an unprecedented four hurricanes hitting our markets in just six weeks," 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. "While we did see a slight slowing in the pace of growth because of the storms, we expect business to accelerate in the future as the recovery efforts continue. Overall, that business growth, combined with a stable net interest margin, continued strength in credit quality and diligent dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d expense control, resulted in a strong performance." Net interest income was $375.9 million in the third quarter, representing an annual growth rate of 16.0 percent compared with the previous quarter, and the net interest margin was unchanged at 3.44 percent. Compared to the third quarter in 2003, net interest income increased 9.4 percent. Average loans for the quarter grew by $3.4 billion, an 11.9 percent increase over the same quarter in 2003. Average deposits were higher by $3.2 billion, or 10.9 percent during the same period, including a 12.1 percent increase in average low cost deposits. Noninterest revenue, which includes earnings from service charges, trust, investment management services, securities gains and other sources of fee income, was $213.2 million for the quarter, a decrease of $15.6 million, or 6.8 percent, compared with the same quarter in 2003, largely because of an $11.7 million decline in securities gains. Service charges increased 10.3 percent compared with the third quarter of 2003, trust income grew 10.3 percent over the same period, and 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 .36 percent of average net loans in the third quarter, up one basis point compared with the second quarter. The ratio of loan loss reserves to total loans was 1.17 percent at September 30, 2004, reflecting the portfolio's strong credit quality and a greater proportion of lower risk loans. The loan loss provision essentially matched net charge-offs. 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. continued to decline during the third quarter. Total nonperforming assets at September 30, 2004, were $119.2 million, or .37 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 $135.6 million, or .43 percent, in the previous quarter. For supplemental financial information about the third quarter results, you may 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 October October: see month. 19, 2004, 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 $50 billion in assets, more than 670 branch banking offices and over 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, 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:
annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. and mutual fund sales, and trust and investment management services. AmSouth also offers a complete line of banking products and services at its web site, www.amsouth.com. Forward Looking Statements Statements in this report and the exhibits to the report 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: customers' and other third parties' reaction to the settlements referred to in this press release; 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; the growth and profitability of AmSouth's mortgage banking business, including mortgage-related income and fees, being less than expected; 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 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. 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
-----------------------------
2004
September June March
30 30 31
--------- --------- ---------
Net interest income $375,906 $361,410 $359,497
Provision for loan losses 28,800 26,600 28,100
--------- --------- ---------
Net interest income after provision 347,106 334,810 331,397
Noninterest revenues 213,171 218,252 220,430
Noninterest expenses 362,478 311,770 322,274
--------- --------- ---------
Income before income taxes 197,799 241,292 229,553
Income taxes 78,220 74,329 69,454
--------- --------- ---------
Net income $119,579 $166,963 $160,099
========= ========= =========
Earnings per common share(a) $0.34 $0.47 $0.46
Earnings per common share - diluted(a) 0.33 0.47 0.45
Average common shares outstanding 352,838 351,602 351,196
Average common shares outstanding -
diluted 358,272 356,314 356,908
End of period common shares outstanding 354,635 353,414 352,904
EARNINGS SUMMARY
Percent
Change
2003 Versus
December September Prior
31 30 Year
---------- -----------------
Net interest income $358,784 $343,453 9.4%
Provision for loan losses 44,500 41,800 (31.1%)
--------- ---------
Net interest income after provision 314,284 301,653 15.1%
Noninterest revenues 223,390 228,785 (6.8%)
Noninterest expenses 310,793 306,556 18.2%
--------- ---------
Income before income taxes 226,881 223,882 (11.7%)
Income taxes 68,329 66,494 17.6%
--------- ---------
Net income $158,552 $157,388 (24.0%)
========= =========
Earnings per common share(a) $0.45 $0.45 (24.4%)
Earnings per common share - diluted(a) 0.45 0.45 (26.7%)
Average common shares outstanding 350,067 349,421
Average common shares outstanding -
diluted 355,306 353,317
End of period common shares outstanding 351,891 350,622
EARNINGS SUMMARY
YTD Percent
----------------------- Change
2004 2003 Versus
September September Prior
30 30 Year
----------- -------------------
Net interest income $1,096,813 $1,055,851 3.9%
Provision for loan losses 83,500 129,200 (35.4%)
----------- -----------
Net interest income after provision 1,013,313 926,651 9.4%
Noninterest revenues 651,853 632,388 3.1%
Noninterest expenses 996,522 894,784 11.4%
----------- -----------
Income before income taxes 668,644 664,255 0.7%
Income taxes 222,003 196,686 12.9%
----------- -----------
Net income $446,641 $467,569 (4.5%)
=========== ===========
Earnings per common share(a) $1.27 $1.33 (4.5%)
Earnings per common share - diluted(a) 1.25 1.32 (5.3%)
Average common shares outstanding 351,882 350,294
Average common shares outstanding -
diluted 357,169 353,971
End of period common shares outstanding 354,635 350,622
KEY PERFORMANCE RATIOS Three Months Ended
-----------------------
2004
September June March
30 30 31
--------- ------ ------
Average shareholders' equity to average total
assets 6.87% 6.92% 7.09%
End of period shareholders' equity to end of
period total assets 6.94 6.82 7.11
Loans net of unearned income to total deposits 101.83 97.55 94.77
Return on average assets (annualized)(a) 0.98 1.41 1.40
Return on average shareholders' equity
(annualized)(a) 14.20 20.31 19.76
Book value per common share $9.73 $9.32 $9.56
Tangible book value per common share $8.88 $8.46 $8.71
Net interest margin - taxable equivalent 3.44% 3.44% 3.56%
Efficiency ratio(a) 60.44 52.83 54.57
KEY PERFORMANCE RATIOS
2003
December September
31 30
--------- ---------
Average shareholders' equity to average total assets 7.05% 7.14%
End of period shareholders' equity to end of period
total assets 7.08 7.11
Loans net of unearned income to total deposits 96.38 98.85
Return on average assets (annualized)(a) 1.41 1.44
Return on average shareholders' equity
(annualized)(a) 19.96 20.18
Book value per common share $9.18 $8.99
Tangible book value per common share $8.32 $8.13
Net interest margin - taxable equivalent 3.61% 3.60%
Efficiency ratio(a) 52.43 52.58
KEY PERFORMANCE RATIOS YTD
-------------------
2004 2003
September September
30 30
--------- ---------
Average shareholders' equity to average total
assets 6.96% 7.38%
End of period shareholders' equity to end of period
total assets 6.94 7.11
Loans net of unearned income to total deposits 101.83 98.85
Return on average assets (annualized)(a) 1.26 1.49
Return on average shareholders' equity
(annualized)(a) 18.05 20.13
Book value per common share $9.73 $8.99
Tangible book value per common share $8.88 $8.13
Net interest margin - taxable equivalent 3.48% 3.84%
Efficiency ratio(a) 55.97 51.96
(a) Ratios and earnings per share as adjusted for the third
quarter 2004 settlement agreement and related professional
fees are provided in the following table. These expenses
represent matters which management believes are not indicative
of AmSouth's legal and regulatory affairs arising in the
normal course of business.
2004
-------------------
Three Months
Ended YTD
September September
30 30
--------- ---------
Earnings per common share, GAAP basis 0.34 1.27
Adjustment for settlement agreement and related
professional fees 0.15 0.15
--------- ---------
Earnings per common share, as adjusted 0.49 1.42
Earnings per common share - diluted, GAAP basis 0.33 1.25
Adjustment for settlement agreement and related
professional fees 0.15 0.15
--------- ---------
Earnings per common share - diluted, as adjusted 0.48 1.40
Return on average assets (annualized), GAAP basis 0.98% 1.26%
Adjustment for settlement agreement and related
professional fees 0.42% 0.14%
--------- ---------
Return on average assets (annualized), as adjusted 1.40% 1.40%
Return on average shareholders' equity
(annualized), GAAP basis 14.20% 18.05%
Adjustment for settlement agreement and related
professional fees 6.23% 2.12%
--------- ---------
Return on average shareholders' equity
(annualized), as adjusted 20.43% 20.17%
Efficiency ratio, GAAP basis 60.44% 55.97%
Adjustment for settlement agreement and related
professional fees 9.00% 3.03%
--------- ---------
Efficiency ratio, as adjusted 51.44% 52.94%
Unaudited
AmSouth Bancorporation
SUMMARY FINANCIAL INFORMATION
($ in thousands)
Three Months Ended
BALANCE SHEET INFORMATION --------------------------------------
AVERAGE BALANCES 2004
September 30 June 30 March 31
------------ ------------ ------------
Loans net of unearned income $32,079,701 $30,633,629 $29,705,743
Total investment securities(a) 12,374,084 12,488,887 11,779,479
Interest-earning assets(a) 44,684,992 43,500,751 41,771,105
Total assets 48,786,314 47,742,291 45,953,093
Noninterest-bearing deposits 6,643,642 6,516,977 6,103,216
Interest-bearing deposits(b) 25,735,595 25,337,923 24,381,234
Total deposits(b) 32,379,237 31,854,900 30,484,450
Shareholders' equity 3,350,323 3,305,636 3,258,359
BALANCE SHEET INFORMATION Percent
AVERAGE BALANCES Change
Versus
2003 Prior
December 31 September 30 Year
------------ ------------ -------
Loans net of unearned income $29,263,749 $28,667,773 11.9%
Total investment securities(a) 11,158,897 10,008,025 23.6%
Interest-earning assets(a) 40,609,843 39,075,134 14.4%
Total assets 44,697,830 43,315,707 12.6%
Noninterest-bearing deposits 5,855,497 5,605,708 18.5%
Interest-bearing deposits(b) 23,952,276 23,598,915 9.1%
Total deposits(b) 29,807,773 29,204,623 10.9%
Shareholders' equity 3,151,106 3,094,790 8.3%
YTD Percent
BALANCE SHEET INFORMATION ------------------------- Change
AVERAGE BALANCES Versus
2004 2003 Prior
September 30 September 30 Year
------------ ------------ -------
Loans net of unearned income $30,811,005 $28,257,539 9.0%
Total investment securities(a) 12,214,734 9,358,509 30.5%
Interest-earning assets(a) 43,323,935 37,920,237 14.3%
Total assets 47,498,616 42,067,539 12.9%
Noninterest-bearing deposits 6,422,090 5,361,502 19.8%
Interest-bearing deposits(b) 25,153,716 22,808,241 10.3%
Total deposits(b) 31,575,806 28,169,743 12.1%
Shareholders' equity 3,304,939 3,105,990 6.4%
(a) Excludes adjustment for market valuation on available-for-
sale securities and certain noninterest-earning marketable
equity securities.
(b) Statement 133 valuation adjustments related to time deposits,
certificates of deposit of $100,000 or more and other
interest-bearing liabilities are included in other
liabilities.
BALANCE SHEET INFORMATION
ENDING BALANCES
Loans net of unearned income $32,502,221 $31,351,497 $29,893,723
Total investment securities(a) 12,572,341 12,716,413 12,426,033
Interest-earning assets(a) 45,379,714 44,439,782 43,253,884
Total assets 49,687,862 48,295,813 47,414,968
Noninterest-bearing deposits 6,798,077 6,636,325 6,544,028
Interest-bearing deposits 25,121,339 25,502,919 25,000,664
Total deposits 31,919,416 32,139,244 31,544,692
Shareholders' equity 3,450,558 3,295,478 3,372,349
BALANCE SHEET INFORMATION Percent
ENDING BALANCES Change
Versus
Prior
Year
-------
Loans net of unearned income $29,339,364 $29,128,404 11.6%
Total investment securities(a) 12,036,854 11,011,789 14.2%
Interest-earning assets(a) 41,521,449 40,341,180 12.5%
Total assets 45,615,516 44,342,699 12.1%
Noninterest-bearing deposits 6,273,835 5,839,977 16.4%
Interest-bearing deposits 24,166,518 23,628,246 6.3%
Total deposits 30,440,353 29,468,223 8.3%
Shareholders' equity 3,229,669 3,152,834 9.4%
(a) Excludes adjustment for market valuation on available-for-sale
securities and certain noninterest-earning marketable equity
securities.
Unaudited
AmSouth Bancorporation
SUMMARY FINANCIAL INFORMATION
($ in thousands)
NONPERFORMING ASSETS 2004 2003
September June March December September
30 30 31 31 30
--------- --------- --------- --------- ---------
Nonaccrual loans(a) $92,958 $102,670 $102,904 $110,153 $120,793
Foreclosed properties 23,043 29,586 29,291 32,616 35,163
Repossessions 3,231 3,295 3,733 4,986 5,890
--------- --------- --------- --------- ---------
Total nonperforming
assets(a) $119,232 $135,551 $135,928 $147,755 $161,846
========= ========= ========= ========= =========
Nonperforming assets
to loans net of
unearned income,
foreclosed
properties and
repossessions 0.37% 0.43% 0.45% 0.50% 0.55%
Accruing loans 90
days past due $63,727 $52,972 $58,195 $67,460 $72,588
========= ========= ========= ========= =========
(a) Exclusive of accruing loans 90 days past due
ALLOWANCE FOR LOAN
LOSSES 2004 2003
3rd 2nd 1st 4th 3rd
Quarter Quarter Quarter Quarter Quarter
--------- --------- --------- --------- ---------
Balance at beginning
of period $382,482 $382,450 $384,124 $384,059 $384,011
Loans charged off (39,799) (38,202) (44,412) (56,403) (55,102)
Recoveries of loans
previously charged
off 11,062 11,634 16,406 11,968 13,350
--------- --------- --------- --------- ---------
Net Charge-offs (28,737) (26,568) (28,006) (44,435) (41,752)
Addition to allowance
charged to expense 28,800 26,600 28,100 44,500 41,800
Allowance sold (1,290) - (1,768) - -
--------- --------- --------- --------- ---------
Balance at end of
period $381,255 $382,482 $382,450 $384,124 $384,059
========= ========= ========= ========= =========
Allowance for loan
losses to loans net
of unearned income 1.17% 1.22% 1.28% 1.31% 1.32%
Net charge-offs to
average loans net of
unearned income(a) 0.36% 0.35% 0.38% 0.60% 0.58%
Allowance for loan
losses to
nonperforming
loans(b) 410.14% 372.54% 371.66% 348.72% 317.95%
Allowance for loan
losses to
nonperforming
assets(b) 319.76% 282.17% 281.36% 259.97% 237.30%
(a) Annualized
(b) Exclusive of accruing loans 90 days past due
Unaudited
AmSouth Bancorporation
RECONCILIATION OF GAAP AMOUNTS TO ADJUSTED AMOUNTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004
($ in thousands, except per share data)
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(a) 53,972 52,443 0.15 0.15
--------- --------- -------- --------
Results as adjusted $251,771 $172,022 $0.49 $0.48
Noninterest
Expenses
---------
Results as reported on a GAAP
basis $362,478
Costs incurred under settlement
agreement and related
professional fees(a) 53,972
---------
Results as adjusted $308,506
(a) 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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