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AmSouth Bancorporation (NYSE: ASO) today reported earnings for the first quarter ended March 31, 2006, of $.52 per diluted share, compared to $.50 per diluted share reported for the first quarter of 2005. Net income for the first quarter of 2006 was $181.0 million versus $178.6 million for the same period in 2005. AmSouth's first quarter performance resulted in a return on average equity of 20.5 percent, a return on average assets of 1.39 percent, and an efficiency ratio of 52.5 percent. "AmSouth delivered a solid quarter based on strong loan growth funded by continued increases in low-cost deposits," said Dowd Ritter, AmSouth's chairman, president and chief executive officer. "Our broad revenue growth and expanding net interest margin indicate that the momentum we carried into this year is continuing to build." Net interest income in the first quarter grew to $397.7 million, or an annual rate of 5.7 percent compared with the prior quarter, and the net interest margin expanded 5 basis points during the quarter to 3.42 percent. Strong loan growth continued, particularly in Commercial Real Estate, which grew 25.8 percent, and Residential Mortgage lending, which grew 15.4 percent, compared with the first quarter of 2005. Low-cost deposits grew $1.3 billion or 5.6 percent during the same period. Noninterest revenue, which includes earnings from service charges, trust, investment services, interchange, and other sources of fee income, was $219.7 million for the quarter. Noninterest expenses in the first quarter were $330.0 million, reflecting increases in personnel costs and marketing expenses, partially offset by lower professional fees. Underlying credit quality remained strong despite charge-offs of two airline leases, which had been significantly reserved for previously. Net charge-offs were 0.47 percent of average net loans in the first quarter, increasing 24 basis points compared with the first quarter of 2005. Without the effect of the airline leases, net charge-offs would have been 0.17 percent, a 6 basis point decline. The ratio of loan loss allowance to total loans was 0.96 percent at March 31, 2006, a level commensurate with our improving credit risk profile. Excluding the airline leases, the loan loss provision exceeded net charge-offs, representing amounts attributable to loan growth and other factors. Total nonperforming assets at March 31, 2006, were $100.3 million, or 0.27 percent of loans net of unearned income, foreclosed properties and repossessions, compared to $122.9 million, or 0.34 percent, in the previous quarter. For supplemental financial information about the first quarter results, please refer to the Form 8-K filed by AmSouth with the Securities and Exchange Commission on April 18, 2006, or visit the Investor Relations Resource Center on AmSouth's web site at www.amsouth.com. About AmSouth AmSouth is a regional bank holding company with $53 billion in assets, more than 680 branch banking offices and more than 1,200 ATMs. AmSouth operates in Florida, Tennessee, Alabama, Mississippi, Louisiana and Georgia. AmSouth is a leader among regional banks in the Southeast in several key business segments, including consumer and commercial banking, small business banking, mortgage lending, equipment leasing, and trust and investment management services. AmSouth also offers a complete line of banking products and services at its web site, www.amsouth.com. Forward Looking Statements Statements in this document 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. Such factors include, but are not limited to: the execution of AmSouth's strategic initiatives; legislation and regulation; 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; prepayment speeds within the loan and investment security portfolios; deposit flows; the cost of funds; cost of federal deposit insurance premiums; demand for loan products; demand for financial services; competition, including a continued consolidation in the financial services industry; 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 consumer spending and saving habits; technological changes; adverse changes in the financial performance and/or condition of AmSouth's borrowers which could impact the repayment of such borrowers' loans; changes in accounting and tax principles, policies or guidelines and in tax laws; other economic, competitive, governmental and regulatory factors affecting AmSouth's operations, products, services and prices; the effects of weather and natural disasters, such as hurricanes; unexpected judicial actions and developments; results of investigations, examinations, and reviews of regulatory and law enforcement authorities; the outcome of litigation, which is inherently uncertain and depends on the findings of judges and juries; the impact on AmSouth's businesses, as well as on the risks set forth above, of various domestic or international military or terrorist activities or conflicts; and AmSouth's success at managing the risks involved in the foregoing. 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. -0- *T Unaudited AmSouth Bancorporation SUMMARY FINANCIAL INFORMATION ($ in thousands, except per share data) ---------------------------------------------------------------------- EARNINGS SUMMARY Three Months Ended ----------------------------------------- 2006 2005 ------------ -------------------------- March 31 December 31 September 30 ---------------------------------------------------------------------- Net interest income $ 397,720 $ 392,150 $ 374,733 Provision for loan and lease losses 27,300 20,850 34,800 ------------ ------------ ------------ Net interest income after provision 370,420 371,300 339,933 Noninterest revenues 219,683 216,944 259,649 Noninterest expenses 330,002 320,559 336,905 ------------ ------------ ------------ Income before income taxes 260,101 267,685 262,677 Income taxes 79,110 85,552 82,349 ------------ ------------ ------------ Net income $ 180,991 $ 182,133 $ 180,328 ============ ============ ============ Earnings per common share - basic $ 0.52 $ 0.52 $ 0.52 Earnings per common share - diluted 0.52 0.52 0.51 Cash dividends declared per common share 0.26 0.26 0.25 Weighted-average common shares outstanding - basic 345,433 347,201 349,346 Weighted-average common shares outstanding - diluted 350,743 351,811 354,654 End of period common shares outstanding 346,590 348,072 348,562 ---------------------------------------------------------------------- ---------------------------------------------------------------------- EARNINGS SUMMARY Three Months Ended -------------------------- Percent 2005 Change -------------------------- Versus June 30 March 31 Prior Year ---------------------------------------------------------------------- Net interest income $ 378,643 $ 379,748 4.7% Provision for loan and lease losses 17,700 20,600 32.5% ------------ ------------ Net interest income after provision 360,943 359,148 3.1% Noninterest revenues 223,151 215,436 2.0% Noninterest expenses 314,942 319,517 3.3% ------------ ------------ Income before income taxes 269,152 255,067 2.0% Income taxes 84,553 76,422 3.5% ------------ ------------ Net income $ 184,599 $ 178,645 1.3% ============ ============ Earnings per common share - basic $ 0.52 $ 0.50 4.0% Earnings per common share - diluted 0.52 0.50 4.0% Cash dividends declared per common share 0.25 0.25 4.0% Weighted-average common shares outstanding - basic 352,054 354,299 Weighted-average common shares outstanding - diluted 357,026 358,812 End of period common shares outstanding 352,349 353,051 ---------------------------------------------------------------------- ---------------------------------------------------------------------- EARNINGS SUMMARY YTD Percent -------------------------- Change 2005 2004 Versus December 31 December 31 Prior Year ---------------------------------------------------------------------- Net interest income $ 1,525,274 $ 1,476,025 3.3% Provision for loan and lease losses 93,950 127,750 (26.5%) ------------ ------------ Net interest income after provision 1,431,324 1,348,275 6.2% Noninterest revenues 915,180 1,032,142 (11.3%) Noninterest expenses 1,291,923 1,456,938 (11.3%) ------------ ------------ Income before income taxes 1,054,581 923,479 14.2% Income taxes 328,876 299,981 9.6% ------------ ------------ Net income $ 725,705 $ 623,498 16.4% ============ ============ Earnings per common share - basic $ 2.07 $ 1.77 16.9% Earnings per common share - diluted 2.04 1.74 17.2% Cash dividends declared per common share 1.01 0.97 4.1% Weighted-average common shares outstanding - basic 350,702 352,684 Weighted-average common shares outstanding - diluted 355,554 357,952 End of period common shares outstanding 348,072 356,310 ---------------------------------------------------------------------- KEY PERFORMANCE RATIOS Three Months Ended ---------------------------------------- 2006 2005 ------------- -------------------------- March 31 December 31 September 30 ---------------------------------------------------------------------- Average shareholders' equity to average total assets 6.79% 6.87% 7.06% End of period shareholders' equity to end of period total assets 6.84 6.91 7.00 Return on average assets (annualized) 1.39 1.40 1.41 Return on average shareholders' equity (annualized) 20.52 20.36 20.02 Net interest margin - taxable equivalent 3.42 3.37 3.31 Efficiency ratio 52.53 51.71 52.22 Loans net of unearned income to total deposits 98.97 98.76 96.23 Book value per common share $10.44 $10.44 $10.26 Tangible book value per common share 9.58 9.59 9.41 ---------------------------------------------------------------------- KEY PERFORMANCE RATIOS Three Months Ended -------------------------- 2005 -------------------------- June 30 March 31 ---------------------------------------------------------------------- Average shareholders' equity to average total assets 7.03% 7.04% End of period shareholders' equity to end of period total assets 7.20 6.98 Return on average assets (annualized) 1.47 1.44 Return on average shareholders' equity (annualized) 20.92 20.48 Net interest margin - taxable equivalent 3.40 3.45 Efficiency ratio 51.41 52.72 Loans net of unearned income to total deposits 94.96 94.82 Book value per common share $10.33 $9.89 Tangible book value per common share 9.48 9.04 ---------------------------------------------------------------------- KEY PERFORMANCE RATIOS YTD -------------------------- 2005 2004 December 31 December 31 ---------------------------------------------------------------------- Average shareholders' equity to average total assets 7.00% 6.98% End of period shareholders' equity to end of period total assets 6.91 7.20 Return on average assets (annualized) 1.43 1.30 Return on average shareholders' equity (annualized) 20.44 18.60 Net interest margin - taxable equivalent 3.38 3.47 Efficiency ratio 52.01 57.12 Loans net of unearned income to total deposits 98.76 95.82 Book value per common share $10.44 $10.02 Tangible book value per common share 9.59 9.17 ---------------------------------------------------------------------- Unaudited AmSouth Bancorporation SUMMARY FINANCIAL INFORMATION ($ in thousands) ---------------------------------------------------------------------- BALANCE SHEET INFORMATION Three Months Ended AVERAGE BALANCES --------------------------------------- ---------------------------- 2006 2005 ----------- -------------------------- March 31 December 31 September 30 ------------ -------------------------- Loans net of unearned income $ 36,344,524 $ 34,993,552 $ 33,765,529 Total investment securities (a) 11,530,789 11,792,136 11,969,618 Interest-earning assets (a) 48,394,488 47,373,341 46,276,262 Total assets 52,708,707 51,673,254 50,635,581 Noninterest-bearing deposits 7,956,264 7,949,605 7,565,672 Interest-bearing deposits (b) 28,790,160 28,166,662 27,848,894 Total deposits (b) 36,746,424 36,116,267 35,414,566 Shareholders' equity 3,576,492 3,548,566 3,572,805 ---------------------------------------------------------------------- BALANCE SHEET INFORMATION Three Months Ended AVERAGE BALANCES -------------------------- Percent ------------------------- 2005 Change -------------------------- Versus June 30 March 31 Prior Year -------------------------- ------------ Loans net of unearned income $ 33,361,522 $ 33,208,549 9.4% Total investment securities (a) 12,374,769 12,530,581 (8.0%) Interest-earning assets (a) 46,007,898 45,928,699 5.4% Total assets 50,341,297 50,296,110 4.8% Noninterest-bearing deposits 7,454,032 7,225,621 10.1% Interest-bearing deposits (b) 27,403,908 27,486,980 4.7% Total deposits (b) 34,857,940 34,712,601 5.9% Shareholders' equity 3,540,078 3,538,378 1.1% ---------------------------------------------------------------------- BALANCE SHEET INFORMATION YTD Percent AVERAGE BALANCES -------------------------- Change ------------------------- 2005 2004 Versus December 31 December 31 Prior Year ------------ ------------ ------------ Loans net of unearned income $ 33,836,996 $ 31,241,987 8.3% Total investment securities (a) 12,164,213 12,264,785 (0.8%) Interest-earning assets (a) 46,400,178 43,801,691 5.9% Total assets 50,740,057 48,010,625 5.7% Noninterest-bearing deposits 7,550,762 6,561,938 15.1% Interest-bearing deposits (b) 27,728,809 25,453,038 8.9% Total deposits (b) 35,279,571 32,014,976 10.2% Shareholders' equity 3,550,047 3,351,754 5.9% (a) Excludes adjustment for market valuation on available-for- sale securities and certain noninterest-earning marketable equity securities. (b) Statement 133 valuation adjustments related to time deposits and other interest-bearing liabilities are included in other liabilities. BALANCE SHEET INFORMATION ENDING BALANCES 2006 2005 ------------------------- ------------ -------------------------- March 31 December 31 September 30 ------------ ------------ ------------ Loans net of unearned income $ 36,737,948 $ 35,897,939 $ 34,335,169 Total investment securities 11,394,687 11,669,483 11,855,712 Interest-earning assets 48,491,173 48,072,394 46,779,359 Total assets 52,858,162 52,607,110 51,105,385 Noninterest-bearing deposits 8,291,134 8,233,137 8,022,022 Interest-bearing deposits 28,828,184 28,115,245 27,658,103 Total deposits 37,119,318 36,348,382 35,680,125 Shareholders' equity 3,617,742 3,634,577 3,577,455 BALANCE SHEET INFORMATION Percent ENDING BALANCES 2005 Change ------------------------- -------------------------- Versus June 30 March 31 Prior Year -------------------------- ------------ Loans net of unearned income $ 33,533,382 $ 33,025,437 11.2% Total investment securities 12,245,731 12,571,502 (9.4%) Interest-earning assets 46,191,133 45,815,651 5.8% Total assets 50,546,831 50,011,458 5.7% Noninterest-bearing deposits 7,687,525 7,500,430 10.5% Interest-bearing deposits 27,626,183 27,328,090 5.5% Total deposits 35,313,708 34,828,520 6.6% Shareholders' equity 3,638,225 3,491,722 3.6% ---------------------------------------------------------------------- Unaudited AmSouth Bancorporation SUMMARY FINANCIAL INFORMATION ($ in thousands) ---------------------------------------------------------------------- NONPERFORMING ASSETS 2006 2005 -------- -------------------------------------- March December September June March 31 31 30 30 31 ---------------------------------------------------------------------- Nonaccrual loans (c) $ 84,150 $102,981 $ 80,421 $ 70,421 $ 87,255 Foreclosed properties 14,566 17,667 15,853 17,791 23,258 Repossessions 1,599 2,274 1,869 1,755 2,208 -------- -------------------------------------- Total nonperforming assets (c) $100,315 $122,922 $ 98,143 $ 89,967 $112,721 ======== ====================================== Nonperforming assets to loans net of unearned income, foreclosed properties and repossessions 0.27% 0.34% 0.29% 0.27% 0.34% Accruing loans 90 days past due $ 49,208 $ 54,005 $ 52,404 $ 49,185 $ 50,718 ======== ====================================== (c) Exclusive of accruing loans 90 days past due ---------------------------------------------------------------------- ALLOWANCE FOR LOAN AND LEASE LOSSES 2006 2005 -------- --------------------------------------- 1st 4th 3rd 2nd 1st Quarter Quarter Quarter Quarter Quarter ---------------------------------------------------------------------- Balance at beginning of period $366,695 $384,647 $365,626 $366,836 $366,774 Loans charged off (50,571) (47,314) (23,926) (27,170) (29,679) Recoveries of loans previously charged off 8,818 8,512 8,147 9,528 10,598 ------------------------------------------------ Net Charge-offs (41,753) (38,802) (15,779) (17,642) (19,081) Addition to allowance charged to expense 27,300 20,850 34,800 17,700 20,600 Reduction of allowance related to sold loans 0 0 0 (1,268) (1,457) ------------------------------------------------ Balance at end of period $352,242 $366,695 $384,647 $365,626 $366,836 ================================================ Allowance for loan and lease losses to loans net of unearned income 0.96% 1.02% 1.12% 1.09% 1.11% Net charge-offs to average loans net of unearned income (d) 0.47% 0.44% 0.19% 0.21% 0.23% Allowance for loan and lease losses to nonperforming loans (e) 418.59% 356.08% 478.29% 519.20% 420.42% Allowance for loan and lease losses to nonperforming assets (e) 351.14% 298.32% 391.93% 406.40% 325.44% (d) Annualized (e) Exclusive of accruing loans 90 days past due ---------------------------------------------------------------------- *T