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First American Corporation Completes Three In-market Mergers.

NASHVILLE, Tenn.--(BUSINESS WIRE)--Oct. 1, 1998--First American Corporation (NYSE: FAM) today announced the completion of its mergers with Peoples Bank, The Middle Tennessee Bank and CSB Financial Corporation.

Peoples Bank, a $135 million bank headquartered in Dickson, Tenn., and The Middle Tennessee Bank, a $232 million bank headquartered in Columbia, Tenn., both give First American the second highest market share in their respective local markets. CSB Financial, a $142 million bank holding company headquartered in Kingston Springs, Tenn., will give First American the highest deposit market share in its local market.

"All three of these in-market transactions are in high growth areas and further solidify First American's leading Middle Tennessee market share," said Dennis C. Bottorff, chairman and CEO. "By having an expanded presence we are able to better serve our clients in these local markets through broader product and service lines and increased access," he said.

Under the terms of the merger agreements, approximately 3 million shares were issued to the shareholders of the three acquired companies in tax-free exchanges. Each transaction will be structured as a pooling-of-interests. The banking operations of all three companies will be consolidated into First American National Bank and they will operate under the First American name. Systems conversions for the three transactions are planned to be complete by mid-1999.

On May 28, 1998, First American also announced the signing of a definitive agreement under which Pioneer Bancshares Inc. will be merged into First American. Pioneer is a $990 million bank holding company headquartered in Chattanooga, Tenn. The transaction will be accomplished as a tax-free exchange and is also expected to close in the fourth quarter of 1998.

Through expected expense and revenue synergies, the four acquisitions are expected to be neutral to slightly accretive to 1999 earnings and accretive to earnings thereafter. The company expects to incur restructuring and merger-related, pre-tax charges of approximately $22 million associated with the closing of all four mergers in the fourth quarter of 1998. Also in the fourth quarter, First American expects a charge of approximately $13 million to conform Pioneer to First American's loan loss reserving and charge-off methodology.

First American's financial statements will be restated as a result of applying the pooling-of-interests method of accounting. This restatement is expected to reduce First American's 1998 full year operating earnings per share by approximately $0.04 to $0.06, including approximately $0.01 per share in the fourth quarter of 1998.

First American Corporation is a $19 billion Nashville-based financial services holding company with approximately 7,000 employees. The corporation is the parent company of First American National Bank, First American Federal Savings Bank and First American Enterprises Inc. The company owns 98.75 percent of IFC Holdings Inc. Through IFC Holdings, the company has approximately 2,400 representatives selling mutual funds, annuities and other investment and insurance products in more than 1,100 investment centers throughout the U.S.

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.
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Publication:Business Wire
Geographic Code:1U6TN
Date:Oct 1, 1998
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