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FIRST AMERICAN CORPORATION TO ACQUIRE FIRST FEDERAL

 NASHVILLE, Tenn., Feb. 25 /PRNewswire/ -- First American Corporation (NASDAQ-NMS: FATN) and Area Bancshares of Owensboro, Ky., today announced plans for First American to acquire First Federal Savings and Loan of Bowling Green, Ky., from Area Bancshares.
 First Federal is a $239 million savings and loan institution with three branches in Warren and Simpson counties in south central Kentucky. Warren and Simpson counties are within 60 miles of Nashville and are part of the Nashville trade area.
 First American has entered into an agreement in principle to purchase all of the outstanding shares of First Federal from Area Bancshares for $27.5 million, using equal amounts of cash and subordinated debt. The transaction is expected to be anti-dilutive to First American's earnings in the first year, with no cost savings assumed.
 Dennis C. Bottorff, president and CEO of First American, and Frank St. Charles, president and CEO of First Federal, made the joint announcement. According to Bottorff, "The addition of First Federal is an excellent fit for First American and our strategic plan. First Federal primarily serves consumers in south central Kentucky, which is an important part of the Nashville trade area. With its 20 percent deposit market share in the Bowling Green area, the acquisition of First Federal offers First American an opportunity to expand in this high-growth area."
 St. Charles, who will continue as president and CEO of First Federal, said, "We are excited about the prospects of becoming part of First American. First American is a premier institution that offers value in products and services and will allow us to expand our market share and product offerings. In addition, I've previously worked with Denny Bottorff and have known him for many years. I have every confidence in the management of First American and the positive impact this new partnership will have for our employees, customers and communities."
 Area Bancshares is currently in the process of acquiring another financial institution with a presence in Bowling Green and is being required by regulators to divest itself of First Federal as a condition to that acquisition.
 C.M. Gatton, chairman of the board of Area Bancshares, said, "First Federal is an excellent financial institution -- one that we preferred to keep. However, as part of the regulatory agreement we made in purchasing Bowling Green Bank and Trust, we are forced to divest and are pleased to have found a strong, compatible buyer."
 The acquisition of First Federal is expected to be completed in 1993, subject to approval by regulatory authorities. First American plans to convert First Federal to a national bank and to change the name to First American.
 Warren and Simpson counties are home to approximately 2,300 small to mid-size businesses, 50 of which have annual sales is excess of $10 million, including Fruit of the Loom, divisions of Eaton, Thermodyne and Sumitomo Electric. In addition, Western Kentucky University is located in Bowling Green. Warren County was one of the fastest growing counties in Kentucky during the 1980's, with its population growing at twice the national average. The combined two-county population is estimated at 100,000. In addition, Warren County has led Kentucky in job growth over the last decade and has one of the lowest unemployment rates in the state at 4.3 percent.
 First Federal's net income was $2.5 million in 1992. First Federal's return on average assets was 1.02 percent and its return on average equity was 12.30 percent during 1992. In addition, the equity to assets ratio equaled 9.41 percent at Dec. 31, 1992, nonperforming assets to total loans and OREO equaled .32 percent and 1992 net charge-offs equaled .04 percent of average loans.
 At Dec. 31, 1992, First American's total assets were $6.7 billion; loans net of unearned discount, $3.7 billion; deposits, $5.5 billion; and shareholders' equity, $468.3 million. The total risk-based capital and Tier I leverage ratios for First American were 11.76 percent and 6.87 percent respectively, at Dec. 31, 1992.
 First American Corporation owns First American National Bank, First American Trust Company and First American Community Development Corporation. Approximately 3,100 people work for First American in 134 banking offices across Tennessee.
 First American's stock is traded in the over-the-counter securities market and is quoted on the NASDAQ National Market System under the symbol FATN.
 -0- 2/25/93
 /CONTACT: Carroll Kimball, 615-748-2455, or 615-748-2755 (fax); Vicki Kessler or Janeen Gregory, 615-748-2912, or 615-748-2535 (fax), all of First American Corporation/
 (FATN)


CO: First American Corporation; Area Bancshares; First Federal Savings
 and Loan ST: Tennessee, Kentucky IN: FIN SU: TNM


DF -- CH001 -- 0237 02/25/93 08:42 EST
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Publication:PR Newswire
Date:Feb 25, 1993
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