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FIRST TENNESSEE SENIOR DEBT RAISED TO 'A' BY FITCH, TREND IMPROVING -- FITCH FINANCIAL WIRE --

 NEW YORK, May 18 /PRNewswire/ -- First Tennessee National Corp.'s senior debt rating is raised to 'A' from 'A-' by Fitch. The credit trend is revised to stable from improving.
 The action reflects First Tennessee's superior earnings performance, diversified business mix, and continued reductions in nonperforming assets, as well as its leading share of core deposits in Tennessee and prominent position in the state's major markets. At the same time, Fitch believes First Tennessee's 1992 core profitability gains will begin to level off.
 First Tennessee's strong, 1.43 percent return on assets during 1993's first quarter resulted largely from record volume in the company's bond division, low credit-related expenses, and the favorably large spread between prime and Fed funds. Although the earnings contribution from non-interest sources composed a healthy 41 percent of First Tennessee's tax-equivalent revenues during the quarter, the share of operating revenues stemming from fee-based operations is expected to shrink when interest rates rise and volume shifts back toward traditional banking products. Nonetheless, the company's core profitability is expected to remain above that of its Southeast peers.
 As a result of strong earnings during 1992's first nine months and the acquisition of Home Federal Bank FSB in last year's fourth quarter, the company's equity base grew to 6.8 percent of total assets at March 31, up from 5.5 percent at year-end 1991. During this same period, NPAs declined to 1.1 percent of loans and foreclosed properties, down from 1.9 percent, and reserve coverage of nonperformers increased to 196 percent from 114 percent. Liquidity continues to be strong, as core funds comprised 93 percent of total deposits at March 31, and highly liquid assets, including unpledged securities, equaled roughly two times volatile liabilities.
 -0- 5/18/93
 /CONTACT: Christopher M. Siedman, 212-908-0524, or Scott J. O'Donnell, 212-908-0531, both of Fitch/
 (FTEN)


CO: First Tennessee National Corp. ST: Tennessee IN: FIN SU: RTG

SH -- NY040 -- 9658 05/18/93 10:08 EDT
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Date:May 18, 1993
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