First American Provides Outlook for First Quarter and Full Year 1999.

NASHVILLE, Tenn.--(BUSINESS WIRE)--March 22, 1999--First American Corporation (NYSE:FAM) today announced it expects operating earnings for first quarter and full year to be below current analysts' First Call consensus estimates of $0.71 and $2.99 per share, respectively. Current forecasts show operating earnings per share for the first quarter of 1999 to be approximately 4 percent to 7 percent above first quarter 1998 restated operating earnings per share of $0.57, and full year 1999 operating earnings per share to be approximately 5 percent to 7 percent above full year 1998 restated operating earnings per share of $2.57.

"Our earnings forecast is being driven primarily by two factors: (1) unanticipated client attrition with resulting balance declines; and (2) higher expense levels in client service areas," said Dennis C. Bottorff, chairman and CEO of First American.

"In 1998 we focused significant sales, service and management resources on the successful integration of Deposit Guaranty and the achievement of targeted synergies. While we are seeing solid retention rates for our high value clients in the Deposit Guaranty markets, the historically strong retention and sales performance in our First American National Bank franchise has been impacted by service quality issues. Even with these integration issues, 1998 new client additions in our markets were in excess of 10 percent," Bottorff said.

"Temporary expansion of our workforce, including contract support and other costs incurred to address service quality issues, has caused expense levels to be higher than planned. These expenses are expected to continue through the second quarter. Numerous programs are being implemented to focus more intently on client retention and new business acquisition, achieve service quality targets and reduce current expense levels. We expect to see revenue momentum build as the year progresses," said Bottorff.

"First American's Board of Directors and management believe the company's long-term outlook is positive and we are committed to the creation of shareholder value. We also remain committed to our strategic framework as outlined in our annual report and to our goal to be among the highest performing companies in the industry by the end of 2000," Bottorff said.

Operating earnings represent net income exclusive of the effect of merger-related charges and non-recurring gains.

First American Corporation is a $20.7 billion Nashville, Tenn.-based financial services holding company with 391 banking offices and approximately 700 ATMs in Arkansas, Georgia, Kentucky, Louisiana, Mississippi, Tennessee and Virginia. The corporation is the parent company of First American National Bank, First American Federal Savings Bank and First American Enterprises Inc. and owns 98.75 percent of IFC Holdings Inc. and 49% of The SSI Group, Inc. Additional information about First American, including news releases and financial information, can be accessed through the company's web site at www.fanb.com.

To the extent that statements in this report relate to the plans, objectives or future performance of First American Corporation, these statements may be deemed to be forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on Management's current expectations and the current economic environment. Actual strategies and results in future periods may differ materially from those currently expected due to various risks and uncertainties. Additional discussion of factors affecting First American's business and prospects is contained in the Company's periodic filings with the Securities and Exchange Commission.