AMSOUTH BANCORPORATION - 10-Q Quarterly Report

Forward-Looking Statements. Statements made in this report that are not purely historical are forward-looking statements (as defined in the Private Securities Litigation Reform Act 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 significantly from those described in the forward-looking statements. Some of these factors which could cause results to differ materially from current management expectations include, but are not limited to: execution of AmSouth’s strategic initiatives; legislation; 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; deposit flows; the cost of funds; cost of federal deposit insurance premiums; demand for loan products; demand for financial services; competition; changes in the quality or composition of AmSouth’s loan and investment portfolios including capital market inefficiencies that may affect the marketability and valuation of available-for-sale securities; changes in accounting and tax principles, policies or guidelines; other economic, competitive, governmental, regulatory, and technical factors affecting AmSouth’s operations, products, services and prices; unexpected judicial actions and developments; and the outcome of litigation, which is inherently uncertain and depends on the findings of judges and juries. To the extent that terrorist attacks or other geopolitical conflicts cause a prolonged negative impact on the economy, the effects may include adverse changes in customers’ borrowing, investing or spending patterns; market disruptions; adverse effects on the performance of the United States and foreign equity markets; currency fluctuations; exchange controls; restriction of asset growth; negative effects on credit quality; and other effects that could adversely impact the performance, earnings, and revenue growth of the financial services industry, including AmSouth. 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 or events that occur after the date the forward-looking statements are made.

	September 30 2002			December 31 2001			September 30 2001
	(In thousands)
ASSETS
Cash and due from banks	$	1,364,146		$	1,441,561		$	1,035,436
Federal funds sold and securities purchased under agreements to resell		271,068			400,000			300,000
Trading securities		315,156			12,979			18,906
Available-for-sale securities		4,448,355			4,829,512			4,749,826
Held-to-maturity securities (market value of $4,362,854, $4,071,008 and $4,535,163, respectively)		4,215,161			4,002,474			4,389,327
Loans held for sale		28,984			291,782			161,103
Loans		27,012,900			25,852,221			25,534,112
Less: Allowance for loan losses		379,878			363,607			360,717
Unearned income		726,050			727,728			633,052

Net loans		25,906,972			24,760,886			24,540,343
Other interest-earning assets		67,071			40,458			337,625
Premises and equipment, net		792,853			729,383			677,916
Accrued interest receivable and other assets		2,200,961			2,091,379			2,054,323

	$	39,610,727		$	38,600,414		$	38,264,805

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits and interest-bearing liabilities:
Deposits:
Noninterest-bearing demand	$	5,181,668		$	5,280,621		$	4,715,663
Interest-bearing demand		10,951,276			10,518,922			10,161,426
Savings		1,300,439			1,229,871			1,221,159
Time		6,481,177			6,800,056			7,324,214
Foreign time		531,743			309,641			290,527
Certificates of deposit of $100,000 or more		2,185,499			2,027,906			2,160,959

Total deposits		26,631,802			26,167,017			25,873,948
Federal funds purchased and securities sold under agreements to repurchase		1,954,121			2,080,296			2,071,030
Other borrowed funds		76,428			79,454			81,173
Long-term Federal Home Loan Bank advances		5,352,681			5,093,834			5,106,188
Other long-term debt		1,051,918			1,008,421			1,025,167

Total deposits and interest-bearing liabilities		35,066,950			34,429,022			34,157,506
Accrued expenses and other liabilities		1,421,030			1,216,293			1,136,637

Total liabilities		36,487,980			35,645,315			35,294,143

Shareholders' equity:
Preferred stock—no par value:
Authorized—2,000,000 shares; Issued and outstanding—none		-0-			-0-			-0-
Common stock—par value $1 a share:
Authorized—750,000,000 shares; Issued—416,914,000, 416,931,00) and 416,935,000 shares, respectively		416,914			416,931			416,935
Capital surplus		703,068			699,863			697,996
Retained earnings		2,878,670			2,677,933			2,618,080
Cost of common stock in treasury—59,127,000, 53,896,000 and 52,017,000 shares, respectively		(960,513	)		(848,005	)		(813,814	)
Deferred compensation on restricted stock		(15,747	)		(16,624	)		(17,532	)
Accumulated other comprehensive income		100,355			25,001			68,997

Total shareholders' equity		3,122,747			2,955,099			2,970,662

	$	39,610,727		$	38,600,414		$	38,264,805

	Nine Months ended September 30				Three Months ended September 30
	2002		2001		2002		2001
	(In thousands except per share data)
INTEREST INCOME
Loans	$	1,269,432	$	1,508,937	$	418,820	$	480,993
Available-for-sale securities		256,374		240,699		84,366		84,794
Held-to-maturity securities		186,026		216,539		62,465		68,816
Trading securities		641		266		482		130
Loans held for sale		9,895		13,200		2,068		3,698
Federal funds sold and securities purchased under agreements to resell		2,407		43,108		1,256		7,836
Other interest-earning assets		1,235		4,018		457		2,102

Total interest income		1,726,010		2,026,767		569,914		648,369

INTEREST EXPENSE
Interest-bearing demand deposits		88,623		217,629		30,668		61,961
Savings deposits		5,584		13,367		1,878		3,817
Time deposits		184,024		328,731		59,145		101,607
Foreign time deposits		4,099		8,383		1,668		2,152
Certificates of deposit of $100,000 or more		53,863		102,585		18,140		30,036
Federal funds purchased and securities sold under agreements to repurchase		21,385		64,649		7,452		15,664
Other borrowed funds		3,077		7,997		1,008		1,271
Long-term Federal Home Loan Bank advances		204,348		220,905		68,840		72,855
Other long-term debt		29,330		43,267		9,765		12,969

Total interest expense

Delaware		63-0591257
(State or other jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

AmSouth Center
1900 Fifth Avenue North
Birmingham, Alabama		35203
(Address of principal executive offices)		(Zip Code)

			Page
Part I.	Financial Information
	Item 1.	Financial Statements (Unaudited)
		Consolidated Statement of Condition—September 30, 2002, December 31, 2001, and September 30, 2001	3
		Consolidated Statement of Earnings—Three months and nine months ended September 30, 2002 and 2001	4
		Consolidated Statement of Shareholders’ Equity—Nine months ended September 30, 2002	5
		Consolidated Statement of Cash Flows—Nine months ended September 30, 2002 and 2001	6
		Notes to Consolidated Financial Statements	7
		Independent Accountants’ Review Report	13
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
	Item 3.	Quantitative and Qualitative Disclosures About Market Rate Risk	29
	Item 4.	Controls and Procedures	29

Part II.	Other Information

	Item 1.	Legal Proceedings	29
	Item 6.	Exhibits and Reports on Form 8-K	29
Signatures			30
Certifications			31
Exhibit Index			33

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