<PAGE>
 
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                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
 
                               ----------------
 
                                   FORM 10-Q
 
 QUARTERLY REPORT PURSUSANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934
 
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997     COMMISSION FILE NUMBER 1-7476
 
                            AMSOUTH BANCORPORATION
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
                               ----------------
 
              DELAWARE                                 63-0591257
   (STATE OR OTHER JURISDICTION OF        (I.R.S. EMPLOYER IDENTIFICATION NO.)
   INCORPORATION OR ORGANIZATION)
 
        AMSOUTH--SONAT TOWER
       1900 FIFTH AVENUE NORTH
         BIRMINGHAM, ALABAMA                              35203
   (ADDRESS OF PRINCIPAL EXECUTIVE                     (ZIP CODE)
              OFFICES)
                                (205) 320-7151
             (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
 
 
  Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
                               Yes   X   No
 
  As of May 2, 1997, AmSouth Bancorporation had 82,947,971 shares of common
stock outstanding.
 
                             --------
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<PAGE>
 
                            AMSOUTH BANCORPORATION
 
                                   FORM 10-Q
 
                                     INDEX
 
                                                                           PAGE
 
Part I. Financial Information
 
   Item 1. Financial Statements (Unaudited)
 
            Consolidated Statement of Condition--March 31, 1997,
               December 31, 1996, and March 31, 1996.....................     3
 
            Consolidated Statement of Earnings--Three months ended
               March 31, 1997 and 1996...................................     4
 
            Consolidated Statement of Shareholders' Equity--Three months
               ended March 31, 1997......................................     5
 
            Consolidated Statement of Cash Flows--Three months ended
               March 31, 1997 and 1996...................................     6
 
            Notes to Consolidated Financial Statements...................     7
 
            Independent Accountants' Review Report.......................     8
 
   Item 2. Management's Discussion and Analysis of Financial
             Condition and Results of Operations.........................     9
 
Part II. Other Information
 
   Item 1. Legal Proceedings.............................................    18
 
   Item 6. Exhibits and Reports on Form 8-K..............................    18
 
Signatures...............................................................    19
 
Exhibit Index............................................................    20
 
  Forward Looking Information. This Quarterly Report on Form 10-Q contains
certain forward looking statements with respect to the adequacy of the
allowance for loan losses and the effect of legal proceedings on AmSouth's
financial condition and results of operations. These forward looking
statements involve certain risks, uncertainties, estimates and assumptions by
management.
 
  Various factors could cause actual results to differ materially from those
contemplated by such forward looking statements. With respect to the adequacy
of the allowance for loan losses, these factors include the rate of growth of
the economy, especially in the Southeast, the relative strength and weakness
in the consumer and commercial credit sectors and in the real estate markets
and the performance of the stock and bond markets. With regard to the effect
of legal proceedings, various uncertainties are discussed in "Item 1. Legal
Proceedings." Moreover, the outcome of litigation is inherently uncertain and
depends on judicial interpretations of law and the findings of judges and
juries.
 
                                       2
<PAGE>
 
                                     PART I
                             FINANCIAL INFORMATION
                    ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
 
                    AMSOUTH BANCORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CONDITION
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                          MARCH 31    DECEMBER 31   MARCH 31
                                            1997         1996         1996
                                         -----------  -----------  -----------
                                                   (IN THOUSANDS)
<S>                                      <C>          <C>          <C>
ASSETS
Cash and due from banks................. $   585,108  $   648,494  $   587,278
Federal funds sold and securities pur-
 chased under agreements to resell......       2,275       15,000        1,600
Trading securities......................       5,346        3,879        3,510
Available-for-sale securities...........   2,022,396    2,290,478    2,534,791
Held-to-maturity securities (market
 value of $2,541,803, $2,649,481 and
 $2,565,870, respectively)..............   2,567,247    2,644,706    2,574,911
Mortgage loans held for sale............      41,822       60,582      121,672
Loans...................................  12,107,303   12,168,572   11,546,007
Less: Allowance for loan losses.........     179,049      179,049      177,930
  Unearned income.......................      82,426       88,326       69,810
                                         -----------  -----------  -----------
    Net loans...........................  11,845,828   11,901,197   11,298,267
Premises and equipment, net.............     311,158      301,592      279,218
Customers' acceptance liability.........       2,236        3,190        3,311
Accrued interest receivable and other
 assets.................................     631,036      538,146      509,828
                                         -----------  -----------  -----------
                                         $18,014,452  $18,407,264  $17,914,386
                                         ===========  ===========  ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits and interest-bearing
 liabilities:
 Deposits:
  Noninterest-bearing demand............ $ 1,907,841  $ 1,951,543  $ 1,795,572
  Interest-bearing demand...............   3,531,330    3,599,987    3,819,011
  Savings...............................   1,073,954    1,068,555    1,025,472
  Time..................................   5,071,932    5,073,387    5,739,433
  Certificates of deposit of $100,000 or
   more.................................     804,511      774,127      915,576
                                         -----------  -----------  -----------
    Total deposits......................  12,389,568   12,467,599   13,295,064
 Federal funds purchased and securities
  sold under agreements to repurchase...   1,165,664    1,872,286    1,898,094
 Other borrowed funds...................   1,344,238    1,025,383      483,321
 Long-term Federal Home Loan Bank ad-
  vances................................   1,073,436    1,023,729      234,195
 Other long-term debt...................     411,910      411,946      426,301
                                         -----------  -----------  -----------
    Total deposits and interest-bearing
     liabilities........................  16,384,816   16,800,943   16,336,975
Acceptances outstanding.................       2,236        3,190        3,311
Accrued expenses and other liabilities..     251,107      207,302      204,546
                                         -----------  -----------  -----------
    Total liabilities...................  16,638,159   17,011,435   16,544,832
                                         -----------  -----------  -----------
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--200,000,000 shares
  Issued--90,033,326, 90,034,023 and
   90,044,613 shares, respectively......      90,033       90,034       90,045
 Capital surplus........................     562,320      562,459      559,974
 Retained earnings......................     887,247      858,329      812,767
 Cost of common stock in treasury--
  6,888,744, 5,997,737 and 5,375,898
  shares, respectively..................    (160,361)    (128,889)    (105,479)
 Deferred compensation on restricted
  stock.................................     (11,780)     (10,400)      (5,097)
 Unrealized gains on available-for-sale
  securities, net of deferred taxes.....       8,834       24,296       17,344
                                         -----------  -----------  -----------
    Total shareholders' equity..........   1,376,293    1,395,829    1,369,554
                                         -----------  -----------  -----------
                                         $18,014,452  $18,407,264  $17,914,386
                                         ===========  ===========  ===========
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       3
<PAGE>
 
                    AMSOUTH BANCORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENT OF EARNINGS
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                      THREE MONTHS
                                                     ENDED MARCH 31
                                          -------------------------------------
                                                 1997               1996
                                          ------------------ ------------------
                                          (IN THOUSANDS EXCEPT PER SHARE DATA)
<S>                                       <C>                <C>
REVENUE FROM EARNING ASSETS
Loans.................................... $          254,172 $          250,828
Available-for-sale securities............             37,456             38,472
Held-to-maturity securities..............             44,231             40,221
Trading securities.......................                 21                 41
Mortgage loans held for sale.............                487              1,453
Federal funds sold and securities
 purchased under agreements to resell....                301                349
                                          ------------------ ------------------
    Total revenue from earning assets....            336,668            331,364
                                          ------------------ ------------------
INTEREST EXPENSE
Interest-bearing demand deposits.........             27,050             30,356
Savings deposits.........................              7,603              6,682
Time deposits............................             69,585             83,372
Certificates of deposit of $100,000 or
 more....................................             11,209             13,348
Federal funds purchased and securities
 sold under agreements to repurchase.....             19,290             21,805
Other borrowed funds.....................             12,954              7,585
Long-term Federal Home Loan Bank
 advances................................             14,149              2,411
Other long-term debt.....................              7,661              8,100
                                          ------------------ ------------------
    Total interest expense...............            169,501            173,659
                                          ------------------ ------------------
NET INTEREST INCOME......................            167,167            157,705
Provision for loan losses................             17,717             15,120
                                          ------------------ ------------------
NET INTEREST INCOME AFTER PROVISION FOR
 LOAN LOSSES.............................            149,450            142,585
                                          ------------------ ------------------
NONINTEREST REVENUES
Service charges on deposit accounts......             24,331             23,122
Trust income.............................             14,795             13,481
Investment services income...............              5,338              3,488
Credit card income.......................              3,553              3,186
Interchange income.......................              2,667              1,683
Mortgage administration fees.............              1,284              1,122
Letters of credit income.................              2,223              2,034
Portfolio income.........................              2,564              1,875
Other operating revenues.................              6,927              5,027
                                          ------------------ ------------------
    Total noninterest revenues...........             63,682             55,018
                                          ------------------ ------------------
NONINTEREST EXPENSES
Salaries and employee benefits...........             61,159             57,239
Net occupancy expense....................             13,714             13,190
Equipment expense........................             13,564             12,803
Marketing expense........................              4,593              4,377
Postage and office supplies..............              5,746              5,876
Telephone expense........................              4,601              3,350
Professional fees........................              2,604              2,225
FDIC premiums............................                585              2,562
Foreclosed properties expense............                213                453
Amortization expense.....................              4,545              4,238
Other operating expenses.................             17,300             16,458
                                          ------------------ ------------------
    Total noninterest expenses...........            128,624            122,771
                                          ------------------ ------------------
INCOME BEFORE INCOME TAXES...............             84,508             74,832
Income taxes.............................             29,935             27,669
                                          ------------------ ------------------
    NET INCOME........................... $           54,573 $           47,163
                                          ================== ==================
Average common shares outstanding*.......             83,789             85,532
Earnings per common share*............... $             0.65 $             0.55
</TABLE>
--------
 
* Restated for three-for-two common stock split.
 
                See notes to consolidated financial statements.
 
                                       4
<PAGE>
 
                    AMSOUTH BANCORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                                UNREALIZED
                         COMMON   CAPITAL   RETAINED  TREASURY     DEFERRED   GAINS/(LOSSES)
                          STOCK   SURPLUS   EARNINGS    STOCK    COMPENSATION ON SECURITIES    TOTAL
                         -------  --------  --------  ---------  ------------ -------------- ----------
                                                       (IN THOUSANDS)
<S>                      <C>      <C>       <C>       <C>        <C>          <C>            <C>
BALANCE AT JANUARY 1,
 1997................... $60,023  $592,470  $858,329  $(128,889)   $(10,400)     $ 24,296    $1,395,829
Adjustment for the
 effect of 3-for-2
 common stock split.....  30,011   (30,011)      -0-        -0-         -0-           -0-           -0-
                         -------  --------  --------  ---------    --------      --------    ----------
BALANCE AT JANUARY 1,
 1997 RESTATED..........  90,034   562,459   858,329   (128,889)    (10,400)       24,296     1,395,829
Net income..............     -0-       -0-    54,573        -0-         -0-           -0-        54,573
Cash dividends declared
 ($0.28 per common
 share)*................     -0-       -0-   (23,604)       -0-         -0-           -0-       (23,604)
Common stock
 transactions:
 Purchase of common
  stock.................     -0-       -0-       -0-    (42,470)        -0-           -0-       (42,470)
 Employee stock plans...      (1)     (150)   (2,051)     9,739      (1,380)          -0-         6,157
 Dividend reinvestment..     -0-        11       -0-      1,259         -0-           -0-         1,270
Unrealized losses on
 available-for-sale
 securities, net of
 deferred taxes.........     -0-       -0-       -0-        -0-         -0-       (15,462)      (15,462)
                         -------  --------  --------  ---------    --------      --------    ----------
BALANCE AT MARCH 31,
 1997................... $90,033  $562,320  $887,247  $(160,361)   $(11,780)     $  8,834    $1,376,293
                         =======  ========  ========  =========    ========      ========    ==========
</TABLE>
--------
* Restated for three-for-two common stock split.
 
 
                See notes to consolidated financial statements.
 
                                       5
<PAGE>
 
                    AMSOUTH BANCORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED
                                                                MARCH 31
                                                           --------------------
                                                             1997       1996
                                                           ---------  ---------
                                                             (IN THOUSANDS)
<S>                                                        <C>        <C>
OPERATING ACTIVITIES
Net income...............................................  $  54,573  $  47,163
Adjustments to reconcile net income to net cash provided
 by operating activities:
 Provision for loan losses...............................     17,717     15,120
 Provision for foreclosed property losses................        171        -0-
 Depreciation and amortization of premises and equipment.      8,123      6,799
 Amortization of premiums and discounts on held-to-
  maturity securities
  and available-for-sale securities......................       (402)    (1,043)
 Net decrease (increase) in mortgage loans held for sale.     18,760    (59,655)
 Net increase in trading securities......................     (1,504)      (532)
 Net gains on sales of available-for-sale securities.....     (2,406)    (1,339)
 Net gains on calls of held-to-maturity securities.......        -0-       (118)
 Net (increase) decrease in accrued interest receivable
  and other assets.......................................    (94,707)    20,835
 Net increase in accrued expenses and other liabilities..     34,675     49,247
 Provision for deferred income taxes.....................      3,139      5,545
 Amortization of intangible assets.......................      4,141      4,167
 Other...................................................      1,803        451
                                                           ---------  ---------
    Net cash provided by operating activities............     44,083     86,640
                                                           ---------  ---------
INVESTING ACTIVITIES
Proceeds from maturities and prepayments of available-
 for-sale securities.....................................     68,070    203,677
Proceeds from sales of available-for-sale securities.....    378,435    303,731
Purchases of available-for-sale securities...............   (185,150)  (299,836)
Proceeds from maturities, prepayments and calls of held-
 to-maturity securities..................................     77,726    124,525
Purchases of held-to-maturity securities.................        -0-   (532,154)
Net decrease in federal funds sold and securities
 purchased under agreements to resell....................     12,725        175
Net decrease (increase) in loans.........................     33,652    (20,342)
Net purchases of premises and equipment..................    (17,689)    (9,591)
                                                           ---------  ---------
    Net cash provided (used) by investing activities.....    367,769   (229,815)
                                                           ---------  ---------
FINANCING ACTIVITIES
Net decrease in demand deposits and savings accounts.....   (106,960)  (112,056)
Net increase (decrease) in time deposits.................     29,142    (44,025)
Net (decrease) increase in federal funds purchased and
 securities sold under agreements to repurchase..........   (706,622)    37,004
Net increase in other borrowed funds.....................    293,759     36,008
Issuance of long-term Federal Home Loan Bank advances and
 other long-term debt....................................     75,000    220,000
Payments for maturing long-term debt.....................       (261)      (850)
Cash dividends paid......................................    (23,604)   (22,566)
Proceeds from employee stock plans and dividend
 reinvestment plan.......................................      6,778      4,702
Purchase of common stock.................................    (42,470)   (39,405)
                                                           ---------  ---------
    Net cash (used) provided by financing activities.....   (475,238)    78,812
                                                           ---------  ---------
Decrease in cash and cash equivalents....................    (63,386)   (64,363)
Cash and cash equivalents at beginning of period.........    648,494    651,641
                                                           ---------  ---------
Cash and cash equivalents at end of period...............  $ 585,108  $ 587,278
                                                           =========  =========
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       6
<PAGE>
 
                    AMSOUTH BANCORPORATION AND SUBSIDIARIES
 
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)
 
                  THREE MONTHS ENDED MARCH 31, 1997 AND 1996
 
  General--The consolidated financial statements conform to generally accepted
accounting principles and to general industry practices. The accompanying
interim financial statements are unaudited; however, in the opinion of
management, all adjustments necessary for the fair presentation of the
consolidated financial statements have been included. All such adjustments are
of a normal recurring nature. Certain amounts in the prior year's financial
statements have been reclassified to conform with the 1997 presentation. These
reclassifications had no effect on net income. All common share data presented
reflect a three-for-two stock split completed in April 1997. The notes
included herein should be read in conjunction with the notes to consolidated
financial statements included in AmSouth Bancorporation's (AmSouth) 1996
annual report on Form 10-K.
 
  On January 1, 1997, AmSouth adopted Statement of Financial Accounting
Standards No. 125, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities," (Statement 125). Statement 125 provides
accounting and reporting standards for transfers and servicing of financial
assets and extinguishment of liabilities based on a consistent application of
a "financial-components approach" that focuses on control. Under that
approach, after a transfer of financial assets, an entity recognizes the
financial and servicing assets it controls and the liabilities it has
incurred, derecognizes financial assets when control has been surrendered and
derecognizes liabilities when extinguished. Statement 125 provides standards
for consistently distinguishing transfers of financial assets that are sales
from transfers that are secured borrowings. The adoption of Statement 125
resulted in no material impact on AmSouth's financial condition or results of
operations.
 
  In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, "Earnings per Share," which AmSouth is required to adopt on December
31, 1997. At that time, AmSouth will be required to change the method
currently used to compute earnings per share and to restate all prior periods.
Under the new requirements for calculating primary earnings per share, the
dilutive effect of stock options will be excluded. The impact of Statement 128
on the calculation of primary and fully diluted earnings per share for the
three months ended March 31, 1997 and 1996 is not expected to be material.
 
  Cash Flows--For the three months ended March 31, 1997 and 1996, AmSouth paid
interest of $159,048,000 and $169,773,000, respectively, and income taxes of
$629,000 and $4,782,000, respectively. Noncash transfers from loans to
foreclosed properties for the three months ended March 31, 1997 and 1996 were
$3,432,000 and $5,105,000, respectively, and noncash transfers from foreclosed
properties to loans were $331,000 and $91,000, respectively. For the three
months ended March 31, 1996, noncash transfers from loans to available-for-
sale securities of approximately $266,814,000 were made in connection with
mortgage loan securitizations.
 
  Shareholders' Equity--During the first quarter of 1997, AmSouth purchased
1,200,000 shares of its common stock at a cost of $42,470,000 for the purpose
of funding employee benefit and dividend reinvestment plans and for general
corporate purposes. This repurchase was part of a plan approved in July 1996.
Approximately 525,000 shares remain to be purchased under this plan.
 
  On March 20, 1997, AmSouth's Board of Directors approved a three-for-two
common stock split in the form of a 50 percent common stock dividend. The
stock dividend was paid on April 30 to shareholders of record as of April 4.
The Board of Directors also authorized a new plan to repurchase up to
6,000,000 shares of AmSouth's common stock over the next two years.
 
                                       7
<PAGE>
 
                    INDEPENDENT ACCOUNTANTS' REVIEW REPORT
 
The Board of Directors
AmSouth Bancorporation
 
  We have reviewed the accompanying consolidated statement of condition of
AmSouth Bancorporation and subsidiaries as of March 31, 1997 and 1996, and the
related consolidated statements of earnings and cash flows for the three-month
periods ended March 31, 1997 and 1996, and the consolidated statement of
shareholders' equity for the three-month period ended March 31, 1997. These
financial statements are the responsibility of the Company's management.
 
  We conducted our reviews in accordance with the standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which will
be performed for the full year with the objective of expressing an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
 
  Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying consolidated financial statements referred
to above for them to be in conformity with generally accepted accounting
principles.
 
  We have previously audited, in accordance with generally accepted auditing
standards, the consolidated statement of condition of AmSouth Bancorporation
and subsidiaries as of December 31, 1996, and the related consolidated
statements of earnings, shareholders' equity, and cash flows for the year then
ended (not presented herein) and in our report dated January 31, 1997, we
expressed an unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying consolidated
statement of condition as of December 31, 1996, is fairly stated, in all
material respects, in relation to the consolidated statement of condition from
which it has been derived.
 
                                          /s/ ERNST & YOUNG LLP
 
May 9, 1997
 
                                       8
<PAGE>
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS
 
  AmSouth reported net income of $54.6 million for the three months ended
March 31, 1997, a 15.7% increase over net income of $47.2 million for the same
period of 1996. On a per common share basis, restated for the three-for-two
stock split, earnings were $.65 and $.55, respectively. First quarter earnings
resulted in an annualized return on average assets of 1.23% and an annualized
return on average equity of 15.94% compared to 1.07% and 13.78%, respectively,
for the first quarter of 1996. AmSouth's 1997 first quarter operating
efficiency ratio improved to 55.24% compared to 57.03% for the prior year.
 
NET INTEREST INCOME
 
  Net interest income on a fully taxable equivalent basis for the three months
ended March 31, 1997 was $169.2 million, a 5.6% increase over the same period
of 1996. The improvement in net interest income was primarily the result of an
increase in the yield earned on average earning assets, primarily investment
securities, combined with a decrease in the rate paid on interest-bearing
liabilities, primarily time deposits. The net interest margin increased 21
basis points to 4.12% .
 
  Average earning assets increased $159.8 million primarily due to an increase
in average loans net of unearned income. Exclusive of residential first
mortgages, average loans net of unearned income increased $1.0 billion, or
12.9%, primarily in commercial, commercial real estate, other residential and
dealer indirect loans. Average interest-bearing liabilities increased $214.2
million. Significant changes included increases of $870.2 million in Federal
Home Loan Bank advances, $279.0 million in treasury, tax and loan notes and
$164.4 million in short-term bank notes partially offset by a decrease in
interest-bearing deposits of $932.6 million.
 
ASSET/LIABILITY MANAGEMENT
 
  AmSouth maintains a formal asset and liability management process to
quantify, monitor and control interest rate risk and to assist management in
maintaining stability in the net interest margin under varying interest rate
environments. This is accomplished through the development and implementation
of lending, funding and pricing strategies designed to maximize net interest
income performance under varying interest rate environments subject to
specific liquidity and interest rate risk guidelines.
 
  The primary tool used by AmSouth to measure interest rate risk is an
earnings simulation model which evaluates the impact of different interest
rate scenarios on the corporation's projected business plan over a 12 to 24
month horizon. Management feels that a more traditional interest sensitivity
gap analysis does not provide a complete picture of AmSouth's exposure to
interest rate changes since static gap models are a point-in-time measurement
and, therefore, do not incorporate the effects of future balance sheet trends,
changes in the relationship between yields earned and rates paid, patterns of
rate movements in general or changes in prepayment speeds due to changes in
rates. AmSouth's earnings simulation model incorporates the effect of these
factors in addition to the impact of certain embedded interest rate caps and
floors on certain assets and liabilities while also reflecting management's
anticipated action under varying interest rate environments.
 
  Interest rate scenarios are simulated on a regular basis to determine the
range of interest rate risk. Net interest income performance is measured under
scenarios ranging from plus or minus 100 basis points to plus or minus 300
basis points over 12 months compared to a stable interest rate environment.
The net interest income differential is expressed as a percent of net interest
income over twelve months if interest rates are unchanged. As of March 31,
1997, the earnings simulation model results indicated that the corporation was
in a relatively neutral interest rate risk position with the net interest
income differential, in a plus or minus 200 basis point scenario, being less
than two percent when compared to net interest income in a stable interest
rate scenario. This level of interest rate risk is well within the company's
policy guidelines. A very important factor in determining this interest rate
risk position is the extent to which pricing on administered rate deposit
products, including interest checking, savings and money market accounts,
would be affected under varying interest rate scenarios. At AmSouth, pricing
for these products is assumed to be more variable in rising rate scenarios
than in declining rate scenarios. While these assumptions are somewhat
subjective, management reviews the anticipated pricing for these products on a
regular basis and alters these assumptions whenever trends or market
conditions dictate.
 
                                       9
<PAGE>
 
  AmSouth, from time to time, utilizes various off-balance sheet instruments
such as interest rate swaps, caps and floors to assist in managing interest
rate risk. During the first quarter of 1997, AmSouth entered into additional
interest rate swaps in the notional amount of $200.0 million. See Table 3.
These swaps are being used to hedge designated investment securities. At March
31, 1997, AmSouth also held other off-balance sheet instruments to provide
customers and AmSouth a means of managing the risks of changing interest and
foreign exchange rates. These other off-balance sheet instruments were
immaterial. At March 31, 1997, no off-balance sheet instruments were held for
trading purposes.
 
CREDIT QUALITY
 
  AmSouth maintains an allowance for loan losses which it believes is adequate
to absorb losses inherent in the loan portfolio. A formal review is prepared
quarterly to assess the risk in the portfolio and to determine the adequacy of
the allowance for loan losses. The review includes analyses of historical
performance, the level of nonperforming and adversely rated loans, specific
analyses of certain problem loans, loan activity since the previous quarter,
reports prepared by the Loan Review Department, consideration of current
economic conditions, and other pertinent information. The level of allowance
to net loans outstanding will vary depending on the overall results of this
quarterly review. The review is presented to and subsequently approved by
senior management and the Audit and Community Responsibility Committee of the
Board of Directors.
 
  Table 6 presents a five quarter analysis of the allowance for loan losses.
At March 31, 1997, the allowance for loan losses was $179.0 million, or 1.49%
of loans net of unearned income, compared to $177.9 million, or 1.55%, for the
prior year. The coverage ratio of the allowance for loan losses to
nonperforming loans increased from 195.70% at March 31, 1996 to 225.31% for
the same period in 1997 as the level of nonperforming loans decreased $11.5
million.
 
  For the three months ended March 31, 1997, net charge-offs were $17.7
million, an increase of $2.1 million compared to the same period of 1996.
Increases occurred in both the consumer, primarily revolving credit, and
commercial loan portfolios. Consumer net charge-offs rose to 1.11% of average
consumer loans at March 31, 1997 compared to .97% for the prior year.
Declining trends in credit quality in the consumer sector of the economy
contributed to the increase in net charge-offs. Commercial net charge-offs
increased to .06% of average commercial loans as net charge-offs for the first
quarter of 1996 included a higher than normal level of recoveries. Total
annualized net charge-offs to average loans net of unearned income for the
three months ended March 31, 1997 was .60% compared to .54% for the same
period of the prior year. The provision for loan losses for the three months
ended March 31, 1997 was $17.7 million and equaled net charge-offs. Net
charge-offs of impaired loans for the three months ended March 31, 1997
totaled $322 thousand.
 
  Table 7 presents a five quarter comparison of the components of
nonperforming assets. As a percentage of loans net of unearned income,
foreclosed properties and repossessions, nonperforming assets improved from
 .95% at March 31, 1996 to .78% at March 31, 1997. The level of nonperforming
assets decreased $14.7 million during the same period.
 
  Included in nonperforming assets at March 31, 1997 and 1996 was $43.1
million and $53.2 million, respectively, in loans that were considered to be
impaired, substantially all of which were on a nonaccrual basis. Collateral
dependent loans, which were measured at the fair value of the collateral,
constituted approximately all of these impaired loans. There was $9.5 million
in the allowance for loan losses specifically allocated to these impaired
loans. The average balance of impaired loans for the three months ended March
31, 1997 and 1996 was $41.7 million and $55.2 million, respectively. AmSouth
recorded no material interest income on its impaired loans during the three
months ended March 31, 1997.
 
NONINTEREST REVENUES AND NONINTEREST EXPENSES
 
  Noninterest revenues totaled $63.7 million at March 31, 1997 compared to
$55.0 million for the same period of the prior year. Compared to the prior
year, service charges on deposit accounts increased $1.2 million due to
 
                                      10
<PAGE>
 
increased account activity and decreased fee waivers. Trust income increased
$1.3 million primarily from new employee benefit plan administration and
personal trust accounts. Investment services income increased $1.9 million as
a result of a higher sales volume of annuity products. The expansion of
AmSouth's ATM network was the primary reason for a 58.5% increase in
interchange income. Included in other operating revenues in 1997 is income of
$2.2 million generated from bank owned life insurance policies.
 
  Noninterest expenses increased 4.7% to $128.6 million at March 31, 1997
compared to $122.8 million for the same period of the prior year. Salaries and
employee benefits increased $3.9 million primarily due to merit increases and
increases in staffing in income producing areas. Net occupancy expense
increased $524 thousand primarily due to a lease in a new office complex.
Equipment expense increased $761 thousand primarily reflecting the costs of
investments in technology for the consumer and commercial lines of business.
Telephone expense increased $1.3 million as the network was established for
the consumer and commercial technology projects. FDIC premiums decreased $2.0
million as a result of the Federal Deposit Insurance Corporation reducing the
premium rate on deposits insured by the Savings Association Insurance Fund
from $.23 to $.06 per $100 of deposits beginning January 1997.
 
CAPITAL ADEQUACY
 
  At March 31, 1997, shareholders' equity totaled $1.4 billion or 7.64% of
total assets. Since December 31, 1996, shareholders' equity has decreased
$19.5 million as the increase from net income of $54.6 million was offset by
dividends of $23.6 million and the purchase of 1,200,000 shares of AmSouth
common stock for $42.5 million. Shareholders' equity was further reduced by a
$15.5 million decrease in the unrealized gains on available-for-sale
securities, net of deferred taxes.
 
  Table 10 presents the capital amounts and risk-adjusted capital ratios for
AmSouth and its significant banking subsidiaries at March 31, 1997 and 1996.
At March 31, 1997, AmSouth exceeded the regulatory minimum required risk-
adjusted Tier 1 Capital Ratio of 4.00% and risk-adjusted Total Capital Ratio
of 8.00%. In addition, the risk-adjusted capital ratios for AmSouth's banking
subsidiaries were above the regulatory minimums and each subsidiary was well-
capitalized at March 31, 1997.
 
INTERSTATE BANKING
 
  AmSouth currently owns five subsidiary banks (the Subsidiary Banks) located
in the states of Alabama, Florida, Georgia and Tennessee. AmSouth has received
regulatory approval for the merger into AmSouth Bank of Alabama of each of the
other Subsidiary Banks. The resulting bank would continue to be a state member
bank with its headquarters in Birmingham, Alabama and would operate under the
name "AmSouth Bank". AmSouth currently plans to effect the mergers on or about
July 1, 1997.
 
 
                                      11
<PAGE>
 
                           TABLE 1--FINANCIAL SUMMARY
 
<TABLE>
<CAPTION>
                                               MARCH 31
                                      ------------------------------     %
                                          1997            1996         CHANGE
                                      --------------  --------------  -------------
                                      (IN THOUSANDS EXCEPT PER SHARE DATA)
<S>                                   <C>             <C>             <C>
BALANCE SHEET SUMMARY
End-of-period balances:
  Loans net of unearned income.......    $12,024,877     $11,476,197       4.8%
  Total investment securities........      4,576,077*      5,082,755*    (10.0)
  Total assets.......................     18,014,452      17,914,386       0.6
  Total deposits.....................     12,389,568      13,295,064      (6.8)
  Shareholders' equity...............      1,376,293       1,369,554       0.5
Year-to-date average balances:
  Loans net of unearned income.......    $11,924,065     $11,673,313       2.1%
  Total investment securities........      4,663,404*      4,713,189*     (1.1)
  Total assets.......................     17,972,254      17,683,545       1.6
  Total deposits.....................     12,349,726      13,226,866      (6.6)
  Shareholders' equity...............      1,388,819       1,376,686       0.9
<CAPTION>
                                             THREE MONTHS
                                            ENDED MARCH 31
                                      ------------------------------     %
                                          1997            1996         CHANGE
                                      --------------  --------------  -------------
<S>                                   <C>             <C>             <C>
EARNINGS SUMMARY
  Net income.........................        $54,573         $47,163      15.7%
  Per common share **................           0.65            0.55      18.2
SELECTED RATIOS
  Return on average assets
   (annualized)......................           1.23%           1.07%
  Return on average equity
   (annualized)......................          15.94           13.78
  Average equity to assets...........           7.73            7.79
  End of period equity to assets.....           7.64            7.64
  End of period tangible equity to
   assets............................           6.27            6.17
  Allowance for loan losses to loans
   net of unearned income............           1.49            1.55
  Efficiency ratio...................          55.24           57.03
COMMON STOCK DATA **
  Cash dividends declared............        $  0.28         $  0.27
  Book value at end of period........          16.55           16.17
  Market value at end of period......          32.17           25.92
  Average common shares outstanding..         83,789          85,532
</TABLE>
 
--------
 * Excludes adjustment for market valuation on available-for-sale securities.
** Restated for three-for-two common stock split in April 1997.
 
                                       12
<PAGE>
 
 TABLE 2--QUARTERLY YIELDS EARNED ON AVERAGE EARNING ASSETS AND RATES PAID ON
                     AVERAGE INTEREST-BEARING LIABILITIES
 
<TABLE>
<CAPTION>

                                1997                                          1996
                     ----------------------------  ----------------------------------------------------------
                            FIRST QUARTER                FOURTH QUARTER                 THIRD QUARTER        
                     ----------------------------  ----------------------------  ----------------------------
                       AVERAGE    REVENUE/ YIELD/    AVERAGE    REVENUE/ YIELD/    AVERAGE    REVENUE/ YIELD/
                       BALANCE    EXPENSE   RATE     BALANCE    EXPENSE   RATE     BALANCE    EXPENSE   RATE 
                     -----------  -------- ------  -----------  -------- ------  -----------  -------- ------
                               (TAXABLE EQUIVALENT BASIS--DOLLARS IN THOUSANDS)                             
 <S>                 <C>          <C>      <C>     <C>          <C>      <C>     <C>          <C>      <C>   
 ASSETS                                                                                                     
 Earning assets:                                                                                            
 Loans net of                                                                                               
 unearned income...  $11,924,065  $254,640  8.66%  $11,802,480  $254,051  8.56%  $11,726,594  $252,951  8.58%
 Available-for-                                                                                             
 sale securities...    2,060,299    37,456  7.37     2,324,417    42,081  7.20     2,468,474    43,008  6.93 
 Held-to-maturity                                                                                           
 securities:                                                                                                
  Taxable..........    2,434,686    41,098  6.85     2,502,510    42,208  6.71     2,566,379    43,162  6.69 
  Tax-free.........      168,419     4,679 11.27       183,722     5,590 12.10       191,680     5,106 10.60 
                     -----------  --------         -----------  --------         -----------  --------       
  Total held-to-                                                                                            
  maturity                                                                                                  
  securities           2,603,105    45,777  7.13     2,686,232    47,798  7.08     2,758,059    48,268  6.96 
                     -----------  --------         -----------  --------         -----------  --------       
   Total investment                                                                                         
   securities......    4,663,404    83,233  7.24     5,010,649    89,879  7.14     5,226,533    91,276  6.95 
 Other earning                                                                                              
 assets............       69,198       809  4.74        60,354       742  4.89       102,270     1,578  6.14 
                     -----------  -------- -----   -----------  -------- -----   -----------  -------- ----- 
  Total earning                                                                                             
  assets...........   16,656,667   338,682  8.25    16,873,483   344,672  8.13    17,055,397   345,805  8.07 
                                  -------- -----                -------- -----                -------- ----- 
 Cash and other                                                                                             
 assets............    1,464,118                     1,321,914                     1,332,692                 
 Allowance for loan                                                                                         
 losses............     (180,643)                     (178,725)                     (178,764)                
 Market valuation                                                                                           
 on available-for-                                                                                          
 sale securities...       32,112                        33,873                        13,767                 
                     -----------                   -----------                   -----------                 
                     $17,972,254                   $18,050,545                   $18,223,092                 
                     ===========                   ===========                   ===========                 
LIABILITIES AND SHAREHOLDERS' EQUITY                                                                        
Interest-bearing liabilities:                                                                                
 Interest-bearing                                                                                           
 demand deposits...  $ 3,526,430    27,050  3.11   $ 3,552,445    27,480  3.08   $ 3,587,581    28,305  3.14 
 Savings deposits..    1,073,866     7,603  2.87     1,059,981     7,557  2.84     1,044,721     7,294  2.78 
 Time deposits.....    5,171,390    69,585  5.46     5,292,106    72,724  5.47     5,586,176    79,029  5.63 
 Certificates of                                                                                            
 deposit of                                                                                                 
 $100,000 or more..      806,641    11,209  5.64       777,307    11,066  5.66       853,058    12,296  5.73 
 Federal funds                                                                                              
 purchased and                                                                                              
 securities sold                                                                                            
 under agreements                                                                                           
 to repurchase.....    1,515,388    19,290  5.16     1,771,740    23,146  5.20     1,870,288    24,365  5.18 
 Other interest-                                                                                            
 bearing                                                                                                    
 liabilities.......    2,499,857    34,764  5.64     2,170,005    31,138  5.71     1,894,780    27,251  5.72 
                     -----------  -------- -----   -----------  -------- -----   -----------  -------- ----- 
  Total interest-                                                                                           
  bearing                                                                                                   
  liabilities......   14,593,572   169,501  4.71    14,623,584   173,111  4.71    14,836,604   178,540  4.79 
                                  -------- -----                -------- -----                -------- ----- 
   INCREMENTAL                                                                                              
   INTEREST SPREAD.                         3.54%                         3.42%                         3.28%
                                           =====                         =====                         ===== 
 Noninterest-                                                                                               
 bearing demand                                                                                             
 deposits..........    1,771,399                     1,804,129                     1,781,474                 
 Other liabilities.      218,464                       234,204                       216,683                 
 Shareholders'                                                                                              
 equity............    1,388,819                     1,388,628                     1,388,331                 
                     -----------                   -----------                   -----------                 
                     $17,972,254                   $18,050,545                   $18,223,092                 
                     ===========                   ===========                   ===========                 
   NET INTEREST                                                                                             
   INCOME/MARGIN ON                                                                                         
   A TAXABLE                                                                                                
   EQUIVALENT                                                                                               
   BASIS...........                169,181  4.12%                171,561  4.04%                167,265  3.90%
                                           =====                         =====                         ===== 
 Taxable equivalent                                                                                         
 adjustment:                                                                                                
 Loans.............                    468                           474                           528       
 Securities........                  1,546                         1,621                         1,682       
                                  --------                      --------                      --------       
  Total taxable                                                                                             
  equivalent                                                                                                
  adjustment.......                  2,014                         2,095                         2,210       
                                  --------                      --------                      --------       
   Net interest                                                                                             
   income..........               $167,167                      $169,466                      $165,055       
                                  ========                      ========                      ========       
</TABLE> 

<TABLE> 
<CAPTION> 

                                                  1996
                      ------------------------------------------------------------
                              SECOND QUARTER                 FIRST QUARTER        
                        ----------------------------  ----------------------------
                          AVERAGE    REVENUE/ YIELD/    AVERAGE    REVENUE/ YIELD/
                          BALANCE    EXPENSE   RATE     BALANCE    EXPENSE   RATE 
                        -----------  -------- ------  -----------  -------- ------ 

 <S>                   <C>          <C>      <C>     <C>          <C>      <C>
 ASSETS              
 Earning assets:     
 Loans net of        
 unearned income...    $11,575,473  $248,225  8.62%  $11,673,313  $251,430  8.66%
 Available-for-      
 sale securities...      2,419,311    40,912  6.80     2,354,687    38,472  6.57
 Held-to-maturity    
 securities:         
  Taxable..........      2,477,564    41,531  6.74     2,142,855    36,259  6.81
  Tax-free.........        201,702     5,594 11.15       215,647     5,912 11.03
                       -----------  --------         -----------  --------
  Total held-to-     
  maturity           
  securities             2,679,266    47,125  7.07     2,358,502    42,171  7.19
                       -----------  --------         -----------  --------
   Total investment  
   securities......      5,098,577    88,037  6.94     4,713,189    80,643  6.88
 Other earning       
 assets............        156,952     2,446  6.27       110,407     1,843  6.71
                       -----------  -------- -----   -----------  -------- -----
  Total earning      
  assets...........     16,831,002   338,708  8.09    16,496,909   333,916  8.14
                                    -------- -----                -------- -----
 Cash and other      
 assets............      1,324,032                     1,333,274
 Allowance for loan  
 losses............       (178,475)                     (178,402)
 Market valuation    
 on available-for-   
 sale securities...         21,508                        31,764
                       -----------                   -----------
                       $17,998,067                   $17,683,545
                       ===========                   ===========
LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                             
Interest-bearing liabilities:                                                                                                     
 Interest-bearing    
 demand deposits...    $ 3,700,373    29,051  3.16   $ 3,846,397    30,356  3.17
 Savings deposits..      1,025,627     6,899  2.71     1,014,277     6,682  2.65
 Time deposits.....      5,771,320    83,283  5.80     5,721,948    83,372  5.86
 Certificates of     
 deposit of          
 $100,000 or more..        880,157    12,602  5.76       928,322    13,348  5.78
 Federal funds       
 purchased and       
 securities sold     
 under agreements    
 to repurchase.....      1,767,378    22,473  5.11     1,674,720    21,805  5.24
 Other interest-     
 bearing             
 liabilities.......      1,492,290    21,822  5.88     1,193,692    18,096  6.10
                       -----------  -------- -----   -----------  -------- -----
  Total interest-    
  bearing            
  liabilities......     14,637,145   176,130  4.84    14,379,356   173,659  4.86
                                    -------- -----                -------- -----
   INCREMENTAL       
   INTEREST SPREAD.                           3.25%                         3.28%
                                             =====                         =====
 Noninterest-        
 bearing demand      
 deposits..........      1,767,696                     1,715,922
 Other liabilities.        219,469                       211,581
 Shareholders'       
 equity............      1,373,757                     1,376,686
                       -----------                   -----------
                       $17,998,067                   $17,683,545
                       ===========                   ===========
   NET INTEREST      
   INCOME/MARGIN ON  
   A TAXABLE         
   EQUIVALENT        
   BASIS...........                  162,578  3.89%                160,257  3.91%
                                             =====                         =====
 Taxable equivalent  
 adjustment:         
 Loans.............                      574                           602
 Securities........                    1,849                         1,950
                                    --------                      --------
  Total taxable      
  equivalent         
  adjustment.......                    2,423                         2,552
                                    --------                      --------
   Net interest      
   income..........                 $160,155                      $157,705
                                    ========                      ========


</TABLE> 

----
NOTE: The taxable equivalent adjustment has been computed based on a 35%
federal income tax rate.
 
                                       13
<PAGE>
 
                 TABLE 3--INTEREST RATE SWAPS, CAPS AND FLOORS
 
<TABLE>
<CAPTION>
                                                      RECEIVE
                                                     FIXED RATE   CAPS
                                                       SWAPS    & FLOORS TOTAL
                                                     ---------- -------- ------
                                                           (IN MILLIONS)
<S>                                                  <C>        <C>      <C>
Balance at January 1, 1997..........................    $370     $1,077  $1,447
  Additions.........................................     200        -0-     200
  Maturities........................................     -0-        -0-     -0-
  Calls.............................................     -0-        -0-     -0-
  Terminations......................................     -0-        -0-     -0-
                                                        ----     ------  ------
Balance at March 31, 1997...........................    $570     $1,077  $1,647
                                                        ====     ======  ======
</TABLE>
 
       TABLE 4--MATURITIES ON CAPS AND INTEREST RATES EXCHANGED ON SWAPS
 
<TABLE>
<CAPTION>
                                                  MATURE DURING
                                             --------------------------
                                             1997  1998   1999    2000   TOTAL
                                             ----  -----  -----  ------  ------
                                                 (DOLLARS IN MILLIONS)
<S>                                          <C>   <C>    <C>    <C>     <C>
RECEIVE FIXED RATE SWAPS:
  Notional amount........................... $215  $ 275  $  80   $ -0-  $  570
  Receive rate.............................. 6.46%  6.73%  6.82%   0.00%   6.64%
  Pay rate.................................. 5.53%  5.54%  5.58%   0.00%   5.54%
CAPS:
  Notional amount........................... $ 77  $ -0-  $ -0-  $1,000  $1,077
</TABLE>
--------
NOTE: The maturities and interest rates exchanged are calculated assuming that
     interest rates remain unchanged from average March 1997 rates. The
     information presented could change as future interest rates increase or
     decrease.
 
                       TABLE 5--LOANS AND CREDIT QUALITY
 
<TABLE>
<CAPTION>
                                                                         NET CHARGE-OFFS
                                 LOANS*          NONPERFORMING LOANS** THREE MONTHS ENDED
                                MARCH 31               MARCH 31             MARCH 31
                         ----------------------- --------------------- -------------------
                            1997        1996        1997       1996      1997      1996
                         ----------- ----------- ---------- ---------- --------- ---------
                                                  (IN THOUSANDS)
<S>                      <C>         <C>         <C>        <C>        <C>       <C>
Commercial.............. $ 3,582,878 $ 3,049,679 $   15,561 $   17,096 $     322    $ (553)
                         ----------- ----------- ---------- ---------- --------- ---------
Commercial real estate:
 Commercial real estate
  mortgages.............   1,683,402   1,565,544     23,854     35,377       492       573
 Real estate construc-
  tion:.................     622,490     586,903      1,665      1,950         2      (246)
                         ----------- ----------- ---------- ---------- --------- ---------
   Total commercial real
   estate...............   2,305,892   2,152,447     25,519     37,327       494       327
                         ----------- ----------- ---------- ---------- --------- ---------
Consumer:
 Residential first mort-
  gages.................   2,961,672   3,416,763     26,380     31,141       381       784
 Other residential mort-
  gages.................     929,753     700,934      5,106        980       398        24
 Dealer indirect........   1,205,451   1,055,321      5,148      3,384     3,753     5,565
 Revolving credit.......     498,776     471,741        -0-        -0-     8,554     6,388
 Other consumer.........     540,455     629,312      1,755        991     3,815     3,106
                         ----------- ----------- ---------- ---------- --------- ---------
   Total consumer.......   6,136,107   6,274,071     38,389     36,496    16,901    15,867
                         ----------- ----------- ---------- ---------- --------- ---------
                         $12,024,877 $11,476,197 $   79,469 $   90,919 $  17,717 $  15,641
                         =========== =========== ========== ========== ========= =========
</TABLE>
 
--------
 * Net of unearned income.
** Exclusive of accruing loans 90 days past due.
 
                                      14
<PAGE>
 
                       TABLE 6--ALLOWANCE FOR LOAN LOSSES
 
<TABLE>
<CAPTION>
                             1997                          1996
                          ----------- -----------------------------------------------
                          1ST QUARTER 4TH QUARTER 3RD QUARTER 2ND QUARTER 1ST QUARTER
                          ----------- ----------- ----------- ----------- -----------
                                            (DOLLARS IN THOUSANDS)
<S>                       <C>         <C>         <C>         <C>         <C>
Balance at beginning of
 period.................   $179,049    $179,350    $178,724    $177,930    $178,451
Loans charged off.......    (22,632)    (23,009)    (21,202)    (18,442)    (20,626)
Recoveries of loans pre-
 viously charged off....      4,915       4,211       4,323       5,187       4,985
                           --------    --------    --------    --------    --------
Net charge-offs.........    (17,717)    (18,798)    (16,879)    (13,255)    (15,641)
Addition to allowance
 charged to expense.....     17,717      18,497      17,505      14,049      15,120
                           --------    --------    --------    --------    --------
Balance at end of peri-
 od.....................   $179,049    $179,049    $179,350    $178,724    $177,930
                           ========    ========    ========    ========    ========
Allowance for loan
 losses to loans net of
 unearned income........       1.49%       1.48%       1.52%       1.55%       1.55%
Allowance for loan
 losses to nonperforming
 loans..................     225.31%     229.41%     221.40%     213.83%     195.70%
Allowance for loan
 losses to nonperforming
 assets.................     189.69%     189.84%     183.67%     182.29%     163.06%
Net charge-offs to aver-
 age loans net of un-
 earned income
 (annualized)...........       0.60%       0.63%       0.57%       0.46%       0.54%
</TABLE>
 
                         TABLE 7--NONPERFORMING ASSETS
 
<TABLE>
<CAPTION>
                            1997                       1996
                          --------  -------------------------------------------
                          MARCH 31  DECEMBER 31 SEPTEMBER 30 JUNE 30   MARCH 31
                          --------  ----------- ------------ --------  --------
                                        (DOLLARS IN THOUSANDS)
<S>                       <C>       <C>         <C>          <C>       <C>
Nonaccrual loans........  $ 79,469   $ 78,048     $ 81,007   $ 83,583  $ 90,919
Foreclosed properties...    12,890     14,445       13,874     12,845    14,764
Repossessions...........     2,030      1,822        2,769      1,614     3,439
                          --------   --------     --------   --------  --------
 Total nonperforming as-
  sets*.................  $ 94,389   $ 94,315     $ 97,650   $ 98,042  $109,122
                          ========   ========     ========   ========  ========
Nonperforming assets* to
 loans net of unearned
 income, foreclosed
 properties and
 repossessions..........      0.78%      0.78%        0.82%      0.85%     0.95%
Accruing loans 90 days
 past due...............  $ 32,535   $ 36,382     $ 39,535   $ 39,944  $ 40,110
</TABLE>
 
--------
* Exclusive of accruing loans 90 days past due.
 
                                       15
<PAGE>
 
                        TABLE 8--INVESTMENT SECURITIES
 
<TABLE>
<CAPTION>
                                       MARCH 31, 1997        MARCH 31, 1996
                                    --------------------- ---------------------
                                     CARRYING    MARKET    CARRYING    MARKET
                                      AMOUNT     VALUE      AMOUNT     VALUE
                                    ---------- ---------- ---------- ----------
                                                  (IN THOUSANDS)
<S>                                 <C>        <C>        <C>        <C>
HELD-TO-MATURITY:
  U.S. Treasury and federal agency
   securities...................... $2,159,255 $2,131,235 $2,109,300 $2,093,261
  State, county and municipal secu-
   rities..........................    162,941    168,413    208,929    219,273
  Other securities.................    245,051    242,155    256,682    253,336
                                    ---------- ---------- ---------- ----------
                                    $2,567,247 $2,541,803 $2,574,911 $2,565,870
                                    ========== ========== ========== ==========
AVAILABLE-FOR-SALE:
  U.S. Treasury and federal agency
   securities...................... $1,831,993            $2,299,853
  Other securities.................    190,403               234,938
                                    ----------            ----------
                                    $2,022,396            $2,534,791
                                    ==========            ==========
</TABLE>
 
--------
NOTES:
1. The weighted average remaining life, which reflects the amortization on
   mortgage related and other asset- backed securities, and the weighted
   average yield on the combined held-to-maturity and available-for-sale
   portfolios at March 31, 1997 were approximately 4.1 years and 7.06%,
   respectively. Included in the balance was $3.5 billion of mortgage-backed
   securities, $851 million of which were variable rate. The weighted average
   remaining life and the weighted average yield of mortgage-backed securities
   at March 31, 1997 were approximately 4.4 years and 7.04%, respectively. The
   duration of the combined portfolios, which considers the repricing
   frequency of variable rate securities, is approximately 2.4 years.
 
2. The available-for-sale portfolio included net unrealized gains of $13.6
   million and $26.9 million at March 31, 1997 and 1996, respectively.
 
                 TABLE 9 - OTHER INTEREST-BEARING LIABILITIES
 
<TABLE>
<CAPTION>
                                                                 MARCH 31
                                                            -------------------
                                                               1997      1996
                                                            ---------- --------
                                                              (IN THOUSANDS)
<S>                                                         <C>        <C>
OTHER BORROWED FUNDS:
  Treasury, tax and loan notes............................. $  849,730 $283,690
  Short-term Federal Home Loan Bank advances...............    185,000  183,000
  Short-term bank notes....................................    200,000      -0-
  Other short-term debt....................................    109,508   16,631
                                                            ---------- --------
    Total other borrowed funds............................. $1,344,238 $483,321
                                                            ========== ========
OTHER LONG-TERM DEBT:
  6 3/4% Subordinated Debentures Due 2025.................. $  149,849 $149,832
  7 3/4% Subordinated Notes Due 2004.......................    149,343  149,252
  Subordinated Capital Notes Due 1999......................     99,731   99,602
  Long-term notes payable..................................     12,987   27,615
                                                            ---------- --------
    Total other long-term debt............................. $  411,910 $426,301
                                                            ========== ========
</TABLE>
 
                                      16
<PAGE>
 
                      TABLE 10--CAPITAL AMOUNTS AND RATIOS
 
<TABLE>
<CAPTION>
                                                         MARCH 31
                                             ----------------------------------
                                                   1997              1996
                                             ----------------  ----------------
                                               AMOUNT   RATIO    AMOUNT   RATIO
                                             ---------- -----  ---------- -----
                                                  (DOLLARS IN THOUSANDS)
<S>                                          <C>        <C>    <C>        <C>
TIER 1 CAPITAL:
  AmSouth................................... $1,103,443  7.82% $1,071,654  7.98%
  AmSouth Bank of Alabama...................    845,507  9.64     795,953  9.45
  AmSouth Bank of Florida...................    425,978  9.91     414,195  9.93
  AmSouth Bank of Tennessee.................    103,191 12.68     100,265 14.26
TOTAL CAPITAL:
  AmSouth................................... $1,619,015 11.47% $1,598,413 11.91%
  AmSouth Bank of Alabama...................    937,007 10.68     884,371 10.50
  AmSouth Bank of Florida...................    479,954 11.16     466,570 11.19
  AmSouth Bank of Tennessee.................    113,386 13.94     109,094 15.51
LEVERAGE:
  AmSouth................................... $1,103,443  6.23% $1,071,654  6.16%
  AmSouth Bank of Alabama...................    845,507  8.52     795,953  8.27
  AmSouth Bank of Florida...................    425,978  6.27     414,195  6.05
  AmSouth Bank of Tennessee.................    103,191  9.26     100,265  9.29
</TABLE>
 
                                       17
<PAGE>
 
                                    PART II
 
                               OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS
 
  Several of AmSouth's subsidiaries are defendants in legal proceedings
arising in the ordinary course of business. Some of these proceedings seek
relief or damages that are substantial. The actions relate to AmSouth's
lending, collections, servicing, investment, trust and other activities.
 
  Among the actions which are pending against AmSouth subsidiaries are actions
filed as class actions in the State of Alabama. The actions are similar to
others that have been brought in recent years in Alabama against financial
institutions in that they seek punitive damage awards in transactions
involving relatively small amounts of actual damages. In recent years, juries
in Alabama state courts have made large punitive damage awards in such cases.
Legislation which would limit these lawsuits has been proposed from time to
time in the Alabama legislature but has not been enacted into law. AmSouth
cannot predict whether any such legislation will be enacted.
 
  It may take a number of years to finally resolve some of these legal
proceedings pending against AmSouth subsidiaries, due to their complexity and
for other reasons. It is not possible to determine with any certainty at this
time the corporation's potential exposure from the proceedings. However, based
upon the advice of legal counsel, AmSouth's management is of the opinion that
the ultimate resolution of these legal proceedings will not have a material
adverse effect on AmSouth's financial condition or results of operations.
 
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
 
  ITEM 6(A)--EXHIBITS
 
  The exhibits listed in the Exhibit Index at page 20 of this Form 10-Q are
filed herewith or are incorporated by reference herein.
 
  ITEM 6(B)--REPORTS ON FORM 8-K
 
  One report on Form 8-K was filed by AmSouth during the period January 1,
1997 to March 31, 1997. The report was filed on March 28, 1997 and reported
that AmSouth's Board of Directors had approved (1) a three-for-two stock split
with respect to the company's common stock and (2) the repurchase of up to
4,000,000 shares of the company's common stock (6,000,000 shares on a post-
split basis).
 
 
                                      18
<PAGE>
 
                                   SIGNATURES
 
  PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, AMSOUTH
HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED
THEREUNTO DULY AUTHORIZED.
 
May 12, 1997                                        /s/ C. Dowd Ritter
                                          By: _________________________________
                                                      C. DOWD RITTER
                                             Chairman of the Board, President
                                                and Chief Executive Officer
 
May 12, 1997                                    /s/ Robert R. Windelspecht
                                          By: _________________________________
                                                   ROBERT R. WINDELSPECHT
                                                 Executive Vice President
                                                        Controller
 
                                       19
<PAGE>
 
                                 EXHIBIT INDEX
 
  The following is a list of exhibits including items incorporated by
reference.
 
<TABLE>
   <C>    <S>
      3-a Restated Certificate of Incorporation of AmSouth Bancorporation (1)
      3-b By-Laws of AmSouth Bancorporation (2)
      11  Statement Re: Computation of Earnings per Share
      15  Letter Re: Unaudited Interim Financial Information
      21  List of Subsidiaries of AmSouth Bancorporation
      27  Financial Data Schedule
</TABLE>
 
                               NOTES TO EXHIBITS
 
(1) Filed as Exhibit 3-b to AmSouth's Form 10-Q Quarterly Report for the
    quarter ended March 31, 1993, incorporated herein by reference.
 
(2) Filed as Exhibit 3-b to AmSouth's Form 10-K Annual Report for the year
    ended December 31, 1996, incorporated herein by reference.
 
 
                                      20