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AmSouth Bancorporation (NYSE: ASO) today reported earnings for the second quarter ended June 30, 2006, of $.53 per diluted share, compared to $.52 per diluted share reported for the second quarter of 2005. Net income for the second quarter of 2006 was a record $184.7 million and resulted in a return on average equity of 20.6 percent, a return on average assets of 1.39 percent, and an efficiency ratio of 52.7 percent. "Even as AmSouth prepares to complete its merger with Regions Financial Corporation later this year, we are continuing to deliver solid earnings driven by higher revenue across the board," said Dowd Ritter, AmSouth's chairman, president and chief executive officer. "This quarter was marked by a combination of higher net interest income, higher noninterest revenue, and continued strength in credit quality." Net interest income in the second quarter grew to $402.8 million, or an annual rate of 6.4 percent compared with the second quarter of 2005, and the net interest margin remained stable at 3.39 percent. Contributing to the higher level of net interest income, loan growth continued at a healthy 10.9 percent pace compared to the second quarter of 2005 and was led by growth in Commercial Real Estate, small business lending, and equity lending. Total deposits grew $2.2 billion during the same period. Noninterest revenue, which includes earnings from service charges, trust, investment services, interchange, and other sources of fee income, was $231.4 million for the quarter, increasing at an annual rate of 21.3 percent compared with the prior quarter. Noninterest expenses in the second quarter were $339.6 million, which includes $7.2 million in stock based compensation expense not recorded in prior quarters. Credit quality remained strong, with net charge-offs of $17.2 million or 0.19 percent of average net loans in the second quarter, a decrease of 2 basis points compared with the second quarter of 2005. The provision for loan losses totaled $24.0 million for the current quarter, while the ratio of loan loss allowance to total loans was stable at 0.96 percent at June 30, 2006. Total nonperforming assets at June 30, 2006, were $109.4 million, or 0.29 percent of loans net of unearned income, foreclosed properties and repossessions, compared to $100.3 million, or 0.27 percent, in the previous quarter. "We are continuing to make good progress toward completing our merger with Regions in the fourth quarter and realizing the unprecedented opportunity to combine two premier financial institutions with histories of high profitability and shareholder returns into an even stronger organization," Ritter said. For supplemental financial information about the second quarter results, please refer to the Form 8-K filed by AmSouth with the Securities and Exchange Commission on July 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 $54 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 materially 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 ----------------------- ----------- June 30 March 31 December 31 ----------- ----------- ----------- Net interest income $ 402,785 $ 397,720 $ 392,150 Provision for loan and lease losses 24,000 27,300 20,850 ---------- ---------- ---------- Net interest income after provision 378,785 370,420 371,300 Noninterest revenues 231,381 219,683 216,944 Noninterest expenses 339,555 330,002 320,559 ---------- ---------- ---------- Income before income taxes 270,611 260,101 267,685 Income taxes 85,930 79,110 85,552 ---------- ---------- ---------- Net income $ 184,681 $ 180,991 $ 182,133 ========== ========== ========== Earnings per common share - basic $ 0.54 $ 0.52 $ 0.52 Earnings per common share - diluted 0.53 0.52 0.52 Cash dividends declared per common share 0.26 0.26 0.26 Weighted-average common shares outstanding - basic 344,647 345,433 347,201 Weighted-average common shares outstanding - diluted 349,647 350,743 351,811 End of period common shares outstanding 343,484 346,590 348,072 KEY PERFORMANCE RATIOS Three Months Ended ----------------------------------- 2006 2005 ----------------------- ----------- June 30 March 31 December 31 ----------- ----------- ----------- Average shareholders' equity to average total assets 6.76% 6.79% 6.87% End of period shareholders' equity to end of period total assets 6.64 6.84 6.91 Return on average assets (annualized) 1.39 1.39 1.40 Return on average shareholders' equity (annualized) 20.59 20.52 20.36 Net interest margin - taxable equivalent 3.39 3.42 3.37 Efficiency ratio 52.65 52.53 51.71 Loans net of unearned income to total deposits 100.04 98.97 98.76 Book value per common share $ 10.42 $ 10.44 $ 10.44 Tangible book value per common share 9.56 9.58 9.59 Three Months Ended Percent EARNINGS SUMMARY ------------------------- Change 2005 Versus ------------------------- Prior September 30 June 30 Year ------------ ------------ ------- Net interest income $ 374,733 $ 378,643 6.4% Provision for loan and lease losses 34,800 17,700 35.6% ------------ ------------ Net interest income after provision 339,933 360,943 4.9% Noninterest revenues 259,649 223,151 3.7% Noninterest expenses 336,905 314,942 7.8% ------------ ------------ Income before income taxes 262,677 269,152 0.5% Income taxes 82,349 84,553 1.6% ------------ ------------ Net income $ 180,328 $ 184,599 0.0% ============ ============ Earnings per common share - basic $ 0.52 $ 0.52 3.8% Earnings per common share - diluted 0.51 0.52 1.9% Cash dividends declared per common share 0.25 0.25 4.0% Weighted-average common shares outstanding - basic 349,346 352,054 Weighted-average common shares outstanding - diluted 354,654 357,026 End of period common shares outstanding 348,562 352,349 KEY PERFORMANCE RATIOS Three Months Ended ------------------------- 2005 ------------------------- September 30 June 30 ------------ ------------ Average shareholders' equity to average total assets 7.06% 7.03% End of period shareholders' equity to end of period total assets 7.00 7.20 Return on average assets (annualized) 1.41 1.47 Return on average shareholders' equity (annualized) 20.02 20.92 Net interest margin - taxable equivalent 3.31 3.40 Efficiency ratio 52.22 51.41 Loans net of unearned income to total deposits 96.23 94.96 Book value per common share $ 10.26 $ 10.33 Tangible book value per common share 9.41 9.48 Percent EARNINGS SUMMARY YTD Change ------------------------- Versus 2006 2005 Prior June 30 June 30 Year ------------ ------------ ------- Net interest income $ 800,505 $ 758,391 5.6% Provision for loan and lease losses 51,300 38,300 33.9% ------------ ------------ Net interest income after provision 749,205 720,091 4.0% Noninterest revenues 451,064 438,587 2.8% Noninterest expenses 669,557 634,459 5.5% ------------ ------------ Income before income taxes 530,712 524,219 1.2% Income taxes 165,040 160,975 2.5% ------------ ------------ Net income $ 365,672 $ 363,244 0.7% ============ ============ Earnings per common share - basic $ 1.06 $ 1.03 2.9% Earnings per common share - diluted 1.04 1.01 3.0% Cash dividends declared per common share 0.52 0.50 4.0% Weighted-average common shares outstanding - basic 345,038 353,170 Weighted-average common shares outstanding - diluted 350,192 357,914 End of period common shares outstanding 343,484 352,349 KEY PERFORMANCE RATIOS YTD ------------------------- 2006 2005 June 30 June 30 ------------ ------------ Average shareholders' equity to average total assets 6.77% 7.03% End of period shareholders' equity to end of period total assets 6.64 7.20 Return on average assets (annualized) 1.39 1.46 Return on average shareholders' equity (annualized) 20.56 20.70 Net interest margin - taxable equivalent 3.41 3.42 Efficiency ratio 52.59 52.06 Loans net of unearned income to total deposits 100.04 94.96 Book value per common share $ 10.42 $ 10.33 Tangible book value per common share 9.56 9.48 Unaudited AmSouth Bancorporation SUMMARY FINANCIAL INFORMATION ($ in thousands) BALANCE SHEET INFORMATION Three Months Ended AVERAGE BALANCES -------------------------------------- 2006 2005 ------------------------- ------------ June 30 March 31 December 31 ------------ ------------ ------------ Loans net of unearned income $37,012,965 $36,344,524 $34,993,552 Total investment securities(a) 11,526,166 11,530,789 11,792,136 Interest-earning assets(a) 48,937,299 48,394,488 47,373,341 Total assets 53,182,063 52,708,707 51,673,254 Noninterest-bearing deposits 7,948,217 7,956,264 7,949,605 Interest-bearing deposits(b) 29,118,925 28,790,160 28,166,662 Total deposits(b) 37,067,142 36,746,424 36,116,267 Shareholders' equity 3,597,112 3,576,492 3,548,566 Three Months Ended Percent BALANCE SHEET INFORMATION ------------------------- Change AVERAGE BALANCES 2005 Versus ------------------------- Prior September 30 June 30 Year ------------ ------------ ------- Loans net of unearned income $33,765,529 $33,361,522 10.9% Total investment securities(a) 11,969,618 12,374,769 (6.9%) Interest-earning assets)(a) 46,276,262 46,007,898 6.4% Total assets 50,635,581 50,341,297 5.6% Noninterest-bearing deposits 7,565,672 7,454,032 6.6% Interest-bearing deposits(b) 27,848,894 27,403,908 6.3% Total deposits(b) 35,414,566 34,857,940 6.3% Shareholders' equity 3,572,805 3,540,078 1.6% YTD Percent BALANCE SHEET INFORMATION ------------------------- Change AVERAGE BALANCES 2006 2005 Versus ------------ ------------ Prior June 30 June 30 Year ------------ ------------ ------- Loans net of unearned income $36,680,591 $33,285,458 10.2% Total investment securities(a) 11,528,465 12,452,245 (7.4%) Interest-earning assets(a) 48,667,393 45,968,517 5.9% Total assets 52,946,693 50,318,828 5.2% Noninterest-bearing deposits 7,952,219 7,340,457 8.3% Interest-bearing deposits(b) 28,955,450 27,445,215 5.5% Total deposits(b) 36,907,669 34,785,672 6.1% Shareholders' equity 3,586,859 3,539,233 1.3% (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 ------------------------- ------------ June 30 March 31 December 31 ------------ ------------ ------------ Loans net of unearned income $37,454,093 $36,737,948 $35,897,939 Total investment securities 11,389,462 11,394,687 11,669,483 Interest-earning assets 49,372,999 48,491,173 48,072,394 Total assets 53,929,814 52,858,162 52,607,110 Noninterest-bearing deposits 8,188,068 8,291,134 8,233,137 Interest-bearing deposits 29,249,432 28,828,184 28,115,245 Total deposits 37,437,500 37,119,318 36,348,382 Shareholders' equity 3,579,061 3,617,742 3,634,577 Percent BALANCE SHEET INFORMATION Change ENDING BALANCES 2005 Versus ------------------------- Prior September 30 June 30 Year ------------ ------------ ------- Loans net of unearned income $34,335,169 $33,533,382 11.7% Total investment securities 11,855,712 12,245,731 (7.0%) Interest-earning assets 46,779,359 46,191,133 6.9% Total assets 51,105,385 50,546,831 6.7% Noninterest-bearing deposits 8,022,022 7,687,525 6.5% Interest-bearing deposits 27,658,103 27,626,183 5.9% Total deposits 35,680,125 35,313,708 6.0% Shareholders' equity 3,577,455 3,638,225 (1.6%) Unaudited AmSouth Bancorporation SUMMARY FINANCIAL INFORMATION ($ in thousands) NONPERFORMING ASSETS 2006 2005 ------------------- ----------------------------- June March December September June 30 31 31 30 30 --------- --------- --------- --------- --------- Nonaccrual loans(a) $ 94,892 $ 84,150 $102,981 $ 80,421 $ 70,421 Foreclosed properties 12,684 14,566 17,667 15,853 17,791 Repossessions 1,833 1,599 2,274 1,869 1,755 --------- --------- --------- --------- --------- Total nonperforming assets(a) $109,409 $100,315 $122,922 $ 98,143 $ 89,967 ========= ========= ========= ========= ========= Nonperforming assets to loans net of unearned income, foreclosed properties and repossessions 0.29% 0.27% 0.34% 0.29% 0.27% Accruing loans 90 days past due $ 43,542 $ 49,208 $ 54,005 $ 52,404 $ 49,185 ========= ========= ========= ========= ========= (a) Exclusive of accruing loans 90 days past due ALLOWANCE FOR LOAN AND LEASE LOSSES 2006 2005 ------------------- ----------------------------- 2nd 1st 4th 3rd 2nd Quarter Quarter Quarter Quarter Quarter --------- --------- --------- --------- --------- Balance at beginning of period $352,242 $366,695 $384,647 $365,626 $366,836 Loans charged off (25,926) (50,571) (47,314) (23,926) (27,170) Recoveries of loans previously charged off 8,776 8,818 8,512 8,147 9,528 --------- --------- --------- --------- --------- Net Charge-offs (17,150) (41,753) (38,802) (15,779) (17,642) Addition to allowance charged to expense 24,000 27,300 20,850 34,800 17,700 Reduction of allowance related to sold loans 0 0 0 0 (1,268) --------- --------- --------- --------- --------- Balance at end of period $359,092 $352,242 $366,695 $384,647 $365,626 ========= ========= ========= ========= ========= Allowance for loan and lease losses to loans net of unearned income 0.96% 0.96% 1.02% 1.12% 1.09% Net charge-offs to average loans net of unearned income(a) 0.19% 0.47% 0.44% 0.19% 0.21% Allowance for loan and lease losses to nonperforming loans(b) 378.42% 418.59% 356.08% 478.29% 519.20% Allowance for loan and lease losses to nonperforming assets(b) 328.21% 351.14% 298.32% 391.93% 406.40% (a) Annualized (b) Exclusive of accruing loans 90 days past due *T