##### Table of Contents

---

SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





---




FORM 10-Q





xQUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF


THE SECURITIES EXCHANGE ACT OF 1934





For the Quarterly Period Ended March 31, 2002





OR





 ̈ TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF


THE SECURITIES EXCHANGE ACT OF 1934





Commission File No. 0-25160





---




Alabama National BanCorporation


(Exact Name of Registrant as Specified in Its
Charter)





Delaware

63-1114426(State of Incorporation)

(I.R.S. Employer Identification No.)





1927 First Avenue North, Birmingham, Alabama 35203-4009


(Address of principal executive office)





(205) 583-3600


(Registrants telephone number, including area code)





---

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)





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  ̈





Indicate the number of shares outstanding of each of the registrants classes of common stock, as of the latest practicable date.





Class

Outstanding at May 10, 2002Common Stock, $1.00 Par Value

12,357,212


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##### Table of Contents

INDEX





ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES





PagePART I.     FINANCIAL INFORMATIONItem 1.       Financial Statements (Unaudited)Consolidated statements of conditionMarch 31, 2002 and December 31, 2001

3Consolidated statements of incomeThree months ended March 31, 2002 and 2001

4Consolidated statements of comprehensive incomeThree months ended March 31, 2002 and 2001

6Consolidated condensed statements of cash flowsThree months ended March 31, 2002 and 2001

7Notes to the unaudited consolidated financial statementsMarch 31, 2002

8Item 2.       Managements Discussion and Analysis of Financial Condition and Results of Operations

10Item 3.       Quantitative and Qualitative Disclosures about Market Risk

17PART II.    OTHER INFORMATIONItem 6.       Exhibits and Reports on Form 8-K

17Signatures

18





FORWARD-LOOKING INFORMATION





Statements contained in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements. In addition, Alabama National BanCorporation (Alabama
National), through its senior management, from time to time makes forward-looking public statements concerning its expected future operations and performance and other developments. Such forward-looking statements are necessarily estimates
reflecting Alabama Nationals best judgment based upon current information and involve a number of risks and uncertainties, and various factors could cause results to differ materially from those contemplated by such forward-looking statements.
Such factors could include those identified from time to time in Alabama Nationals Securities and Exchange Commission filings and other public announcements, including the factors described in Alabama Nationals Annual Report on Form 10-K
for the year ended December 31, 2001. With respect to the adequacy of the allowance for loan losses for Alabama National, these factors include the rate of growth in 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. The forward-looking statements contained in this Quarterly Report speak only as of the date of this report, and Alabama National
undertakes no obligation to revise these statements following the date of this Quarterly Report on Form 10-Q.




2




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##### Table of Contents

PART I
FINANCIAL INFORMATION





Item 1
Financial Statements (Unaudited)





ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF CONDITION


(In thousands, except share amounts)





March 31, 2002


December 31, 2001ASSETSCash and due from banks

$
91,940


$
78,262Interest-bearing deposits in other banks


25,084



10,813Investment securities (market value $245,708 and $234,808, respectively)


247,662



234,766Securities available for sale


352,260



332,922Trading securities






1,341Federal funds sold and securities purchased under resell agreements


33,213



32,241Loans held for sale


20,818



36,554Loans


2,013,502



1,966,631Unearned income


(2,340
)


(2,462
)Loans, net of unearned income


2,011,162



1,964,169Allowance for loan losses


(29,613
)


(28,519
)Net loans


1,981,549



1,935,650Property, equipment and leasehold improvements, net


65,809



60,821Goodwill


15,325



14,813Intangible assets


3,884



4,062Cash surrender value of life insurance


53,888



53,171Receivable from investment division customers


17,559



16,551Other assets


41,071



31,500Totals

$
2,950,062


$
2,843,467LIABILITIES AND STOCKHOLDERS EQUITYDeposits:Noninterest bearing

$
320,101


$
306,319Interest bearing


1,859,126



1,760,440Total deposits


2,179,227



2,066,759Federal funds purchased and securities sold under repurchase agreements


222,570



240,060Treasury, tax and loan accounts


660



3,490Short-term borrowings


91,100



68,350Payable for securities purchased for investment division customers


17,349



16,428Accrued expenses and other liabilities


41,820



30,863Long-term debt


184,631



209,631Total liabilities


2,737,357



2,635,581Common stock, $1 par, authorized 17,500,000 shares; 12,424,544 shares issued at March 31, 2002 and December 31, 2001


12,425



12,425Additional paid-in capital


104,016



103,624Retained earnings


98,207



92,866Treasury stock at cost, 71,664 and 77,476 shares at March 31, 2002 and December 31, 2001, respectively


(1,930
)


(2,087
)Accumulated other comprehensive income (loss), net of tax


(13
)


1,058Total stockholders equity


212,705



207,886Totals

$
2,950,062


$
2,843,467





See accompanying notes to unaudited consolidated financial statements




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##### Table of Contents




ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)


(In thousands, except per share data)





For the three months ended March 31,2002


2001Interest income:Interest and fees on loans

$
34,953


$
38,279Interest on securities


8,748



6,758Interest on deposits in other banks


41



69Interest on trading securities


15



26Interest on Federal funds sold and securities purchased under resell agreements


200



693Total interest income


43,957



45,825Interest expense:Interest on deposits


13,105



20,248Interest on Federal funds purchased and securities sold under repurchase agreements


935



2,636Interest on long and short-term borrowings


2,840



2,602Total interest expense


16,880



25,486Net interest income


27,077



20,339Provision for loan losses


1,270



593Net interest income after provision for loan losses


25,807



19,746Noninterest income:Securities gains


30



Gain (loss) on disposition of assets


(133
)


21Service charges on deposit accounts


2,722



2,215Investment services income


3,081



3,706Securities brokerage and trust income


2,808



2,382Origination and sale of mortgage loans


2,413



1,315Bank owned life insurance


713



548Insurance commissions


527



515Other


1,066



1,105Total noninterest income


13,227



11,807




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##### Table of Contents

ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(Continued)


(in thousands, except per share data)





For the three months ended March 31,2002

2001Noninterest expense:Salaries and employee benefits


13,428


11,291Commission based compensation


3,440


3,044Occupancy and equipment expenses


2,768


2,532Amortization of intangibles


184


280Other


6,635


5,812Total noninterest expense


26,455


22,959Income before provision for income taxes


12,579


8,594Provision for income taxes


3,971


2,751Net income

$
8,608

$
5,843Net income per common share (basic)

$
.70

$
.50Weighted average common shares outstanding (basic)


12,350


11,788Net income per common share (diluted)

$
.68

$
.49Weighted average common and common equivalent shares outstanding (diluted)


12,634


12,027











See
accompanying notes to unaudited consolidated financial statements




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##### Table of Contents

ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)


(in thousands)





For the three months ended March 31,2002


2001Net income

$
8,608


$
5,843Other comprehensive income (loss):Unrealized gains (losses) on securities available for sale


(1,520
)


4,047Less: Reclassification adjustment for net gains included in net income


30



Other comprehensive income (loss), before tax


(1,550
)


4,047Provision for (benefit from) income taxes related to items of other comprehensive income


(479
)


1,382Other comprehensive income (loss), net of tax


(1,071
)


2,665Comprehensive income

$
7,537


$
8,508














See accompanying notes to unaudited consolidated financial statements




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##### Table of Contents

ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES





CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)


(in thousands)





For the three months ended March 31,2002


2001Net cash flows provided by operating activities

$
13,388


$
10,757Cash flows from investing activities:Proceeds from maturities of investment securities


26,696



5,256Purchases of investment securities


(39,570
)


(59,032
)Purchases of securities available for sale


(81,568
)


(29,045
)Proceeds from sale of securities available for sale


1,030



Proceeds from maturities of securities available for sale


59,738



62,456Net increase in interest bearing deposits in other banks


(14,271
)


(13,992
)Net increase in Federal funds sold and securities purchased under resell agreements


(972
)


(55,736
)Net increase in loans


(31,717
)


(38,185
)Purchases of property, equipment and leasehold improvements


(6,038
)


(1,248
)Premiums returned for bank-owned life insurance






791Proceeds from sale of other real estate owned


159



303Proceeds from sale of property, equipment and leasehold improvements






51Net cash used in investing activities


(86,513
)


(128,381
)Cash flows from financing activities:Net increase in deposits


112,468



72,214Increase (decrease) in Federal funds purchased and securities sold under agreements to repurchase


(17,490
)


46,625Net increase (decrease) in short and long-term borrowings and capital leases


(5,080
)


4,814Exercise of stock options






(14
)Changes incidental to merger


(7
)


(10
)Dividends on common stock


(3,088
)


(2,712
)Net cash provided by financing activities


86,803



120,917Increase in cash and cash equivalents


13,678



3,293Cash and cash equivalents, beginning of period


78,262



80,476Cash and cash equivalents, end of period

$
91,940


$
83,769Supplemental schedule of noncash investing and financing activitiesAcquisition of collateral in satisfaction of loans

$
284


$
1,468Adjustment to market value of securities available for sale, net of deferred income taxes

$
(1,071
)

$
2,665








See accompanying notes to unaudited consolidated
financial statements




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##### Table of Contents




ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES





NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


MARCH 31, 2002





NOTE ABASIS OF PRESENTATION





The accompanying unaudited consolidated financial
statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three months ended March 31, 2002 are subject to year-end audit and are not necessarily indicative of the results of operations to be expected for the year ending December 31, 2002. These interim financial
statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in Alabama Nationals Form 10-K for the year ended December 31, 2001.





NOTE BCOMMITMENT AND CONTINGENCIES





Alabama Nationals subsidiary
banks make loan commitments and incur contingent liabilities in the normal course of business, which are not reflected in the consolidated statements of condition.





NOTE CRECENTLY ISSUED PRONOUNCEMENTS





Business Combinations and Goodwill and
Other Intangibles





In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 141, Business Combinations and SFAS No. 142, Goodwill and Other Intangible Assets, having a required effective date for fiscal years beginning after December 15, 2001. Under the new
rules, goodwill and other intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to annual impairment tests in accordance with the Statements. Other intangible assets will continue to be amortized over
their useful lives.





Alabama National adopted the new rules on accounting for goodwill and other intangible assets in the first
quarter of 2002. Application of the non-amortization provisions of SFAS No.142 is expected to result in an increase in net income of approximately $521,000 for the year ended December 31, 2002. Under the transitional provisions of SFAS No. 142,
Alabama National identified its reporting units and performed impairment tests on the net goodwill associated with each of the reporting units. The testing resulted in no impairment losses to any recorded goodwill.





The recorded amount of goodwill increased during the first quarter of 2002 from $14.8 million at December 31, 2001, to $15.3 million at March 31, 2002.
This increase was attributable to items related to the fourth quarter acquisition of Farmers National Bank of Opelika.





The
following table details the impact of the amortization of goodwill on net income for the periods ended March 31, 2002 and 2001 (amounts in thousands, except per share data):





For the three months ended March 31,2002

2001Net Income:Reported net income

$
8,608

$
5,843Add back:Goodwill amortization, net of taxes





117Net income excluding goodwill amortization, net of taxes

$
8,608

$
5,960Basic net income per common share:Reported net income

$
0.70

$
0.50Add back:Goodwill amortization, net of taxes





0.01Net income excluding goodwill amortization, net of taxes

$
0.70

$
0.51Weighted average shares outstanding (basic)


12,350


11,788Diluted net income per common share:Reported net income

$
0.68

$
0.49Add back:Goodwill amortization, net of taxes





0.01Net income excluding goodwill amortization, net of taxes

$
0.68

$
0.50Weighted average shares outstanding (diluted)


12,634


12,027





Intangible assets other than goodwill that have finite useful lives will continue
to be amortized over their useful lives. Alabama Nationals other intangible assets consist solely of core deposit intangibles and are considered to have finite lives. The gross carrying amount of such intangible assets as of March 31, 2002 was
$7.0 million with a balance of $3.1 million in accumulated amortization. As a result of adoption of the Statements, there have been no changes to amortizable lives or methods. The amortization of such intangible assets for the three months ended
March 31, 2002 and 2001 was $184,000 and $157,000, respectively. The estimated amortization expense for each of the five succeeding fiscal years is as follows (amounts in thousands):





For the year ended December 31,2002

$6832003

$6202004

$5692005

$5282006

$528







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NOTE E - EARNINGS PER SHARE





The following table reflects the reconciliation of the numerator and denominator of the basic earnings per share computation to the diluted earnings per share computation for the
quarters ended March 31, 2002 and 2001.





Income

Shares

Per Share Amount(In thousands, except per share amounts)Three months ended March 31, 2002Basic EPS net income

$
8,608

12,350

$
0.70Effect of dilutive securities




284Diluted EPS

$
8,608

12,634

$
0.68Three months ended March 31, 2001Basic EPS net income

$
5,843

11,788

$
0.50Effect of dilutive securities




239Diluted EPS

$
5,843

12,027

$
0.49





NOTE FSEGMENT REPORTING





Alabama Nationals reportable segments represent the distinct major product lines it offers and are viewed separately for strategic planning purposes by management. The following
table is a reconciliation of the reportable segment revenues, expenses and profit to Alabama Nationals consolidated totals (in thousands).





Investment Services Division

Securities Brokerage & Trust Division

Mortgage Lending Division

Insurance Division


Retail and Commercial Banking

Corporate Overhead


Elimination Entries


TotalThree months ended March 31, 2002:Interest income

$


$
251

$
424

$



$
43,339

$
(18
)

$
(39
)

$
43,957Interest expenses





39


161


1



16,382


336



(39
)


16,880Net interest income





212


263


(1
)


26,957


(354
)






27,077Provision for loan losses















1,270










1,270Noninterest income


3,081


2,808


2,446


527



4,365










13,227Noninterest expense


2,277


2,672


1,437


606



18,356


1,107







26,455Net income before tax

$
804

$
348

$
1,272

$
(80
)

$
11,696

$
(1,461
)

$



$
12,579Three months ended March 31, 2001:Interest income

$


$
706

$
178

$
5


$
45,511

$
(12
)

$
(563
)

$
45,825Interest expenses





220


137


3



25,235


454



(563
)


25,486Net interest income





486


41


2



20,276


(466
)






20,339Provision for loan losses















593










593Noninterest income


3,706


2,382


1,358


515



3,835


11







11,807Noninterest expense


2,694


2,243


902


503



14,813


1,804







22,959Net income before tax

$
1,012

$
625

$
497

$
14


$
8,705

$
(2,259
)

$



$
8,594


Corporate overhead is comprised of compensation and benefits for certain members of management, merger related costs,
interest expense on parent company debt, amortization of intangibles and other expenses.




9




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##### Table of Contents




ITEM 2.   
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND                   RESULTS OF OPERATIONS





Basis of Presentation





The following
is a discussion and analysis of the consolidated financial condition of Alabama National and results of operations as of the dates and for the periods indicated. All significant intercompany accounts and transactions have been eliminated. The
accounting and reporting policies of Alabama National conform with generally accepted accounting principles and with general financial services industry practices.





This information should be read in conjunction with Alabama Nationals unaudited consolidated financial statements and related notes appearing elsewhere in this report and
Managements Discussion and Analysis of Financial Condition and Results of Operations appearing in Alabama Nationals Annual Report on Form 10-K for the year ended December 31, 2001.





Performance Overview





Alabama Nationals net
income for the three month period ended March 31, 2002 (the 2002 three months) was $8.61 million compared to $5.84 million for the three months ended March 31, 2001 (the 2001 three months). Net income per diluted common share
for the 2002 three months and the 2001 three months was $0.68 and $0.49, respectively. Excluding after tax merger-related charges relating to the Peoples State Bank merger during the 2001 three months, Alabama Nationals net operating earnings
increased $1.98 million, or 30.0% during the 2002 three months, and net operating earnings per diluted common share for the 2002 three months and the 2001 three months was $0.68 and $0.55, respectively, an increase of 23.7%.





The annualized return on average assets for Alabama National was 1.21% and 0.98% for the 2002 three months and the 2001 three months, respectively. On
an operating basis, the annualized return on average equity was 1.21% and 1.12% for the 2002 three months and the 2001 three months, respectively. The annualized return on average stockholders equity increased for the 2002 three months to
16.35%, as compared to 13.48% for the 2001 three months. On an operating basis, the annualized return on average stockholders equity increased for the 2002 three months to 16.35%, as compared to 15.28% for the 2001 three months. Book value per
share at March 31, 2002 was $17.22, an increase of $0.38 from year-end 2001. Tangible book value per share at March 31, 2002 was $15.66, an increase of $0.35 from year-end 2001. Alabama National paid cash dividends totaling $0.25 on common shares
during the 2002 three months, compared to $0.23 paid on common shares during the 2001 three months.





Net Income





The principal reasons for the increase in net income during the 2002 three months was the growth in net interest income and increased revenue from
noninterest income business lines. Net interest income in the 2002 three months totaled $27.1 million, compared to $20.3 million during the 2001 three months, an increase of $6.7 million, or 33.1%. Net interest income is the difference between
the income earned on interest bearing assets and the interest paid on deposits and borrowings used to support such assets. Noninterest income in the 2002 three months totaled $13.2 million, compared to $11.8 million during the 2001 three months, an
increase of $1.4 million, or 12.0%. The increased net interest income and noninterest income were offset by an increase in noninterest expense of $3.5 million to $26.5 million for the 2002 three months, compared with $23.0 million for the 2001 three
months, an increase of 15.2%.





Average earning assets for the 2002 three months increased by approximately $457.1 million as
compared to the 2001 three months, as average interest-bearing liabilities increased $402.8 million. The average taxable equivalent rate earned on assets was 6.76% for the 2002 three months compared to 8.50% for the 2001 three months. The average
rate paid on interest-bearing liabilities was 2.93% for the 2002 three months compared to 5.34% for the 2001 three months. The reduction in each of these rates reflects the effects of rate cuts by the Federal Reserve Bank during 2001. The net
interest margin for the 2002 three months was 4.14%, compared to 3.75% for the 2001 three months. The increased net interest margin is due to Alabama Nationals ability to support its interest earning asset growth with lower cost liabilities
due to the effects of rate cuts by the Federal Reserve Bank throughout 2001. The net interest margin increased 12 basis points during the 2002 three months as compared the fourth quarter 2001s net interest margin of 4.02%. Management




10




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##### Table of Contents

anticipates the net interest margin to stabilize at current levels, absent any additional rate reductions by the Federal Reserve or significant changes in the
general interest rate environment.





The following table depicts, on a taxable equivalent basis for the 2002 and 2001 three
months, certain information related to Alabama Nationals average balance sheet and its average yields on assets and average costs of liabilities. Such yields or costs are derived by dividing income or expense by the average daily balance of
the associated assets or liabilities.





AVERAGE BALANCES, INCOME AND EXPENSES AND RATES


(Amounts in thousands, except yields and rates)





Three months ended March 31,2002


2001Average Balance



Income/ Expense

Yield/Cost



Average Balance



Income/ Expense

Yield/CostAssets:Earning assets:Loans (1) (3)

$
2,008,617


$
35,030

7.07
%

$
1,730,094


$
38,344

8.99
%Securities:Taxable


561,163



8,351

6.04



380,464



6,379

6.80Tax exempt


32,065



602

7.61



30,281



574

7.69Cash balances in other banks


7,649



41

2.17



6,577



69

4.25Funds sold


44,200



200

1.84



48,864



693

5.75Trading account securities


1,218



15

4.99



1,574



26

6.70Total earning assets (2)


2,654,912



44,239

6.76



2,197,854



46,085

8.50Cash and due from banks


95,123









81,501Premises and equipment


62,987









52,127Other assets


113,201









99,800Allowance for loan losses


(29,267
)








(22,635
)Total assets

$
2,896,956








$
2,408,647Liabilities:Interest-bearing liabilities:Interest-bearing transaction accounts

$
389,228



1,296

1.35


$
291,564



2,434

3.39Savings deposits


395,751



1,445

1.48



307,153



2,722

3.59Time deposits


1,034,979



10,364

4.06



965,129



15,092

6.34Funds purchased


238,725



935

1.59



189,982



2,636

5.63Other short-term borrowings


70,902



399

2.28



42,708



689

6.54Long-term debt


209,355



2,441

4.73



139,566



1,913

5.56Total interest-bearing liabilities


2,338,940



16,880

2.93



1,936,102



25,486

5.34Demand deposits


299,284









244,615Accrued interest and other liabilities


45,270









52,121Stockholdersquity


213,462









175,809Total liabilities and stockholders equity

$
2,896,956








$
2,408,647Net interest spread








3.83
%








3.16
%Net interest income/margin on a taxable equivalent basis






27,359

4.18
%






20,599

3.80
%Tax equivalent adjustment (2)






282









260Net interest income/margin





$
27,077

4.14
%





$
20,339

3.75
%


|(1) |  | Average loans include nonaccrual loans. All loans and deposits are domestic.
|--- |  | ----------------------------------------------------------------------------

|(2) |  | Tax equivalent adjustments are based upon assumed tax rate of 34%, and do not reflect the disallowance for |Federal income tax purposes of interest expense related to certain
tax exempt assets.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Fees in the amount of $1,217,000 and $1,061,000 are included in interest and fees on loans for the three months ended March 31, 2002 and 2001, respectively.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------




The following table sets forth, on a taxable equivalent basis, the effect which varying levels of earning assets and
interest-bearing liabilities and the applicable rates had on changes in net interest income for the 2002 three months compared to the 2001 three months. For the purposes of this table, changes which are not solely attributable to volume or rate are
allocated to volume and rate on a pro rata basis.





ANALYSIS OF CHANGES IN NET INTEREST INCOME


(Amounts in thousands)





Three Months Ended March 31,2002 Compared to 2001 Variances Due toVolume


Yield/Rate


TotalEarning assets:Loans

$
27,130


$
(30,444
)

$
(3,314
)Securities:Taxable


6,278



(4,306
)


1,972Tax exempt


65



(37
)


28Cash balances in other banks


61



(89
)


(28
)Funds sold


(61
)


(432
)


(493
)Trading account securities


(5
)


(6
)


(11
)Total interest income


33,468



(35,314
)


(1,846
)Interest-bearing liabilities:Interest-bearing transaction accounts


3,847



(4,985
)


(1,138
)Savings and money market deposits


3,847



(5,124
)


(1,277
)Time deposits


6,581



(11,309
)


(4,728
)Funds purchased


3,595



(5,296
)


(1,701
)Other short-term borrowings


1,686



(1,976
)


(290
)Long-term debt


2,191



(1,663
)


528Total interest expense


21,747



(30,353
)


(8,606
)Net interest income on a taxable equivalent basis

$
11,721


$
(4,961
)


6,760Taxable equivalent adjustment










(22
)Net interest income









$
6,738


The provision for loan losses represents a charge to current earnings necessary to maintain the allowance for loan losses
at an appropriate level based on managements analysis of the potential risk in the loan portfolio. The amount of the provision is a function of the level of loans outstanding, the level of non-performing loans, historical loan loss experience,
and the amount of loan losses actually charged against the allowance during a given period and current economic conditions. The provision for loan losses was $1.3 million for the 2002 three months, compared to $0.6 million recorded in the 2001 three
months. The increased provision during the 2002 three months is attributable to an increase in potential problem loans, an increase in nonperforming loans and growth in the loan portfolio. The allowance for loan losses as a percentage of outstanding
loans, net of unearned income, was 1.47% at March 31, 2002, compared to 1.45% at December 31, 2001.





Because of the
inherent uncertainty of assumptions made during the assessment process, there can be no assurance that loan losses in future periods will not exceed the allowance for loan losses or that additional allocations to the allowance will not be required.
See Asset Quality.





Total noninterest income for the 2002 three months was $13.2 million, compared to $11.8 million for
the 2001 three months, an increase of 12.0%. The major components of noninterest income include service charges on deposits, investment services revenue, securities brokerage and trust revenue, insurance commissions, and fees relating to the
origination and sale of mortgage loans. Service charges on deposits were $2.7 million in the 2002 three months, compared to $2.2 million in the 2001 three months, an increase of 22.9%. This increase is primarily attributable to the acquisition of
Farmers National Bank during the fourth quarter of 2001. Revenue from the investment division totaled $3.1 million in the 2002 three months, a decrease of $0.6 million, or 16.9%, as compared to $3.7 million recorded in the 2001 three months. The
revenue generated by the investment division is dependent upon the demand for fixed income securities by its customers that include correspondent community banks and corporate customers. The securities brokerage and trust division revenue increased
17.9%, to $2.8 million in the 2002 three months, compared to $2.4 million for the 2001 three months. This increase is attributable to continued expansion in the number of customers and




11




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##### Table of Contents

total customer assets under management by the securities brokerage and trust division, as well as an increase in the number of registered representatives. Fees
generated from the origination and sale of mortgages increased to $2.4 million for the 2002 three months from $1.3 million in the 2001 three months, representing an 83.5% increase. This increase is primarily a result of declining interest rates and
the impact the interest rate environment has on refinancing and new mortgage origination activity. Other noninterest income for the 2002 three months decreased slightly from the $1.1 million recorded for the 2001 three months.





Noninterest expense was $26.5 million for the 2002 three months, compared to $23.0 million for the 2001 three months. The 2001 three months
balance includes $997,000 of merger-related charges associated with the acquisition of Peoples State Bank. Noninterest expense includes salaries and employee benefits, commission based compensation, occupancy and equipment expenses, amortization of
intangibles, and other expenses. Salaries and employee benefits were $13.4 million for the 2002 three months, compared to $11.3 million for the 2001 three months. The 2002 three months includes the salaries and employee benefit expense for Farmers
National Bank of Opelika which was acquired during the fourth quarter of 2001 and accounted for as a purchase transaction. Also contributing to the increase in salaries and employee benefits were general staffing increases concurrent with expansion
of offices and business lines and merit compensation increases. Commission based compensation was $3.4 million for the 2002 three months compared to $3.0 million for the 2001 three months. The increase in commission based compensation is
attributable to increased production in the mortgage and securities brokerage and trust divisions, as a significant portion of the compensation in these divisions is production based. Net occupancy expenses increased $236,000, or 9.3%, during the
2002 three months. A majority of this increase is due to the effect of the Farmers National acquisition. Other noninterest expense increased to $6.6 million in the 2002 three months, compared with $5.8 million in the 2001 three months.





Income tax expense was $4.0 million for the 2002 three months, compared to $2.8 million for the 2001 three months. The effective tax rates
for the 2002 three months and 2001 three months were 31.6% and 32.0%, respectively. The decrease in the effective tax rate for the 2002 three months is due to merger-related charges that are not deductible for federal or state taxes that occurred
during the 2001 three months. These effective tax rates are also impacted by other items of income and expense that are not subject to federal or state taxation.





Earning Assets





Loans comprised the largest single category of Alabama Nationals earning assets on March
31, 2002. Loans, net of unearned income, were $2.01 billion, or 68.2% of total assets at March 31, 2002, compared to $1.96 billion, or 69.1% at December 31, 2001. Loans grew $47.0 million, or 2.4%, during the 2002 three months. The following table
details the composition of the loan portfolio by category at the dates indicated:





COMPOSITION OF LOAN PORTFOLIO


(Amounts in thousands, except percentages)





March 31, 2002


December 31, 2001Amount


Percent of Total


Amount


Percent of TotalCommercial, financial and agricultural

$
249,959


12.42
%

$
247,613


12.59
%Real estate:Construction


243,606


12.10



231,369


11.76Mortgageresidential


553,989


27.51



546,730


27.80Mortgagecommercial


659,987


32.78



637,575


32.42Mortgageother


5,996


.30



5,645


.29Consumer


85,831


4.26



82,909


4.22Lease financing receivables


76,805


3.81



73,924


3.76Securities brokerage margin loans


13,987


.69



16,302


.83Other


123,342


6.13



124,564


6.33Total gross loans


2,013,502


100.00
%


1,966,631


100.00
%Unearned income


(2,340
)





(2,462
)Total loans, net of unearned income


2,011,162






1,964,169Allowance for loan losses


(29,613
)





(28,519
)Total net loans

$
1,981,549





$
1,935,650


The carrying value of investment securities increased $12.9 million in the 2002 three months. During the 2002 three
months, Alabama National purchased $39.6 million of investment securities and received $26.7 million from maturities, including principal paydowns of mortgage backed securities.





The carrying value of securities available for sale increased $19.3 million in the 2002 three months. During the 2002 three months, purchases of available for sale securities totaled
$81.6 million and maturities, calls, and sales of available for sale securities totaled $60.7 million. Unrealized losses on available for sale securities totaled $1.1 million net of income taxes during the 2002 three months.





Trading account securities, which had a balance of zero at March 31, 2002, are securities owned by Alabama National prior to sale and delivery to
Alabama Nationals customers. It is the policy of Alabama National to limit positions in such securities to reduce its exposure to market and interest rate changes. Federal funds sold and securities purchased under agreements to resell totaled
$33.2 million at March 31, 2002 and $32.2 million at December 31, 2001.





Deposits and Other Funding Sources





Deposits increased $112.5 million from December 31, 2001, to $2.18 billion at March 31, 2002. All categories of deposits experienced growth during the
2002 three months. At March 31, 2002, deposits included $64.0 million of brokered time deposits, compared to $39.0 million at December 31, 2001.




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Federal funds purchased and securities sold under agreements to repurchase totaled $222.6
million at March 31, 2002, a decrease of $17.5 million from December 31, 2001. The treasury, tax and loan account decreased to $0.7 million at March 31, 2002, compared with $3.5 million at December 31, 2001. Short-term borrowings at March 31, 2002
totaled $91.1 million, including a note payable to a third party bank of $19.1 million and advances from the Federal Home Loan Bank (FHLB) totaling $72.0 million.





Alabama Nationals short-term borrowings at March 31, 2002 and December 31, 2001 are summarized as follows:





SHORT-TERM BORROWINGS


(Amounts in thousands)





March 31, 2002

December 31, 2001Note payable to third party bank under secured master note agreement; rate varies with LIBOR and was 2.65% and 2.68125% at March 31,
2002 and December 31, 2001, respectively; collateralized by the Company's stock in subsidiary banks

$
19,100

$
16,350FHLB debt due at various maturities ranging from May 30, 2002 through February 11, 2003; bearing interest at fixed and variable
rates ranging from 2.17% to 5.0275% and 2.17% to 2.53% at March 31, 2002 and December 31, 2001, respectively; collateralized by FHLB stock and certain first mortgages. The increase from December 31, 2001 resulted from a $25 million note being
classified as long-term at December 31, 2001


72,000


47,000FHLB open ended note payable; rate varies daily based on the FHLB Daily Rate Credit interest price and was 1.83% at December 31,
2001; collateralized by FHLB stock and certain first mortgage loans. This note was repaid during the first quarter of 2002





5,000Total short-term borrowings

$
91,100

$
68,350





Alabama Nationals long-term debt at March 31, 2002 and December 31, 2001 is
summarized as follows:





LONG-TERM DEBT


(Amounts in
thousands)





March 31, 2002

December 31, 2001FHLB debt due at various maturities ranging from November 5, 2003 through November 7, 2011; bearing interest at fixed rates ranging
from 3.31% to 6.00% at March 31, 2002 and December 31, 2001; convertible at the option of the FHLB at dates ranging from April 7, 2002 to November 7, 2006; collateralized by FHLB stock, certain first mortgage loans and pledged available for sale
securities


169,000


169,000FHLB debt due February 11, 2003; interest rate varies with LIBOR and was 5.3275% at December 31, 2001; collateralized by FHLB stock
and certain first mortgage loans. At March 31, 2002, note was classified as short-term





25,000Trust preferred securities due December 18, 2031; rate varies with LIBOR and was 5.59% and 5.60% at March 31, 2002 and December 31,
2001, respectively


15,000


15,000Various notes payable


559


554Capital leases payable


72


77$
184,631

$
209,631





Asset Quality





Nonperforming loans are comprised of loans past due 90 days or more and still accruing interest, loans accounted for on a nonaccrual basis and loans in which the terms have been
restructured to provide a reduction or deferral of interest or principal because of a deterioration in the financial position of the borrower. At March 31, 2002, Alabama National had no loans past due 90 days or more and still accruing interest.
Accrual of interest is discontinued on a loan when management believes, after considering economic and business conditions and collection efforts that the borrowers financial condition is such that the collection of interest is doubtful. It is
Alabama Nationals policy to place a delinquent loan on nonaccrual status when it becomes 90 days or more past due. When a loan is placed on nonaccrual status, all interest that is accrued on the loan is reversed and deducted from earnings as a
reduction of reported interest. No additional interest is accrued on the loan balance until the collection of both principal and interest becomes reasonably certain. When a problem loan is finally resolved, there may ultimately be an actual
writedown or charge-off of the principal balance of the loan which would necessitate additional charges to the allowance for loan losses.





At March 31, 2002, nonperforming assets totaled $9.6 million, compared to $9.2 million at year-end 2001. Nonperforming assets as a percentage of period-end loans plus other real estate were 0.48% at March 31, 2002,
compared to 0.47% at December 31, 2001. The following table presents Alabama Nationals nonperforming assets for the dates indicated.





NONPERFORMING ASSETS


(Amounts in thousands, except percentages)





March 31, 2002


December 31, 2001Nonaccrual loans

$
7,978


$
7,563Restructured loans






Loans past due 90 days or more and still accruing






Total nonperforming loans


7,978



7,563Other real estate owned


1,633



1,680Total nonperforming assets

$
9,611


$
9,243Allowance for loan losses to period-end loans


1.47
%


1.45
%Allowance for loan losses to period-end nonperforming loans


371.18



377.09Allowance for loan losses to period-end nonperforming assets


308.12



308.55Net charge-offs to average loans


0.04



0.09Nonperforming assets to period-end loans and other real estate owned


0.48



0.47Nonperforming loans to period-end loans


0.40



0.39





Net loan charge-offs for the 2002 three months totaled $176,000, or 0.04%
(annualized) of average loans for the period. The allowance for loan losses as a percentage of total loans, net of unearned income, was 1.47% at March 31, 2002, compared to 1.45% at December 31, 2001. The following table analyzes activity in the
allowance for loan losses for the 2002 three months.





ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES


For the Three Months Ended March 31, 2002


(Amounts in thousands, except percentages)





Allowance for loan losses at beginning of period

$
28,519Charge-offs:Commercial, financial and agricultural


246Real estatemortgage


375Consumer


255Total charge-offs


876Recoveries:Commercial, financial and agricultural


381Real estatemortgage


195Consumer


124Total recoveries


700Net charge-offs


176Provision for loan losses


1,270Allowance for loan losses at end of period

$
29,613





The loan portfolio is periodically reviewed to evaluate the outstanding loans and
to measure both the performance of the portfolio and the adequacy of the allowance for loan losses. This analysis includes a review of delinquency trends, actual losses and internal credit ratings. Based on this analysis, management considers the
allowance for loan losses at March 31, 2002, to be adequate to cover possible loan losses in the portfolio as of that date. However, because of the inherent uncertainty of assumptions made during the evaluation process, there can be no assurance
that loan losses in future periods will not exceed the allowance for loan losses or that additional allocations to the allowance will not be required.




13




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##### Table of Contents

Interest Rate Sensitivity





Alabama National monitors and manages the pricing and maturity of its assets and liabilities in order to diminish the potential adverse impact that changes in interest rates could have on net interest income. The principal monitoring
technique employed by Alabama National is simulation analysis, which technique is augmented by gap analysis.





In
simulation analysis, Alabama National reviews each individual asset and liability category and its projected behavior in various different interest rate environments. These projected behaviors are based upon managements past experiences and
upon current competitive environments, including the various environments in the different markets in which Alabama National competes. Using this projected behavior and differing rate scenarios as inputs, the simulation analysis generates as output
a projection of net interest income. Alabama National also periodically verifies the validity of this approach by comparing actual results with those that were projected in previous models. See Market Risk.





Another technique used by Alabama National in interest rate management is the measurement of the interest sensitivity gap, which is the
positive or negative dollar difference between assets and liabilities that are subject to interest rate repricing within a given period of time. Interest rate sensitivity can be managed by repricing assets and liabilities, selling securities
available for sale, replacing an asset or liability at maturity or by adjusting the interest rate during the life of an asset or liability.





Alabama National evaluates interest sensitivity risk and then formulates guidelines regarding asset generation and repricing, and sources and prices of off-balance sheet commitments in order to decrease interest
sensitivity risk. Alabama National uses computer simulations to measure the net income effect of various interest rate scenarios. The modeling reflects interest rate changes and the related impact on net income over specified periods of time.





The following table illustrates Alabama Nationals interest rate sensitivity at March 31, 2002, assuming relevant assets
and liabilities are collected and paid, respectively, based upon historical experience rather than their stated maturities.





INTEREST
SENSITIVITY ANALYSIS


(Amounts in thousands, except ratios)





March 31, 2002Zero Through Three Months


After Three Through Twelve Months


One Through Three Years


Greater Than Three Years


TotalAssets:Earning assets:Loans (1)

$
948,976


$
252,030


$
407,547


$
415,449


$
2,024,002Securities (2)


69,274



92,910



225,262



196,080



583,526Trading securities


















Interest-bearing deposits in other banks


25,084















25,084Funds sold


33,213















33,213Total interest-earning assets

$
1,076,547


$
344,940


$
632,809


$
611,529


$
2,665,825Liabilities:Interest-bearing liabilities:Interest-bearing deposits:Demand deposits

$
141,438


$



$



$
269,859


$
411,297Savings and money market deposits


165,379











222,201



387,580Time deposits (3)


324,143



536,354



168,982



30,770



1,060,249Funds purchased


222,570















222,570Short-term borrowings (4)


88,100



3,000











91,100Long-term debt


94,208



59,012



10,035



22,036



185,291Total interest-bearing liabilities

$
1,035,838


$
598,366


$
179,017


$
544,866


$
2,358,087Period gap

$
40,709


$
(253,426
)

$
453,792


$
66,663Cumulative gap

$
40,709


$
(212,717
)

$
241,075


$
307,738


$
307,738Ratio of cumulative gap to total earning assets


1.53
%


-7.98
%


9.04
%


11.54
%


---

|(1) |  | Excludes nonaccrual loans of $7,978,000
|--- |  | ---------------------------------------

|(2) |  | Excludes available for sale equity securities of $16,396,000
|--- |  | ------------------------------------------------------------

|(3) |  | Excludes matured certificates which have not been redeemed by the customer and on which no interest is accruing.
|--- |  | ----------------------------------------------------------------------------------------------------------------

|(4) |  | Includes treasury, tax and loan account of $660,000
|--- |  | ---------------------------------------------------




Alabama National generally benefits from increasing market rates of interest when it has an asset-sensitive gap and generally benefits from decreasing market rates of interest when it is liability sensitive. Alabama
National is liability sensitive through the one year time frame, except for the zero through three month period. However, Alabama Nationals gap analysis is not a precise indicator of its interest sensitivity position. The analysis presents
only a static view of the timing of maturities and repricing opportunities, without taking into consideration that changes in interest rates do not affect all assets and liabilities equally. For example, rates paid on a substantial portion of core
deposits may change contractually within a relatively short time frame, but those rates are viewed by management as significantly less interest-sensitive than market-based rates, such as those paid on non-core deposits. Accordingly, management
believes that a liability-sensitive gap position is not as indicative of Alabama Nationals true interest sensitivity as it would be for an organization which depends to a greater extent on purchased funds to support earning assets. Net
interest income may be affected by other significant factors in a given interest rate environment, including changes in the volume and mix of earning assets and interest-bearing liabilities.





Market Risk





Alabama Nationals earnings are dependent on its net
interest income which is the difference between interest income earned on all earning assets, primarily loans and securities, and interest paid on all interest bearing liabilities, primarily deposits. Market risk is the risk of loss from adverse
changes in market prices and rates. Alabama Nationals market risk arises primarily from inherent interest rate risk in its lending, investing and deposit gathering activities. Alabama National seeks to reduce its exposure to market risk
through actively monitoring and managing its interest rate risk. Management relies upon static gap analysis to determine the degree of mismatch in the maturity and repricing distribution of interest earning assets and interest bearing
liabilities which quantifies, to a large extent, the degree of market risk inherent in Alabama Nationals balance sheet. Gap analysis is further augmented by simulation analysis to evaluate the impact of varying levels of prevailing interest
rates and the sensitivity of specific earning assets and interest bearing liabilities to changes in those prevailing rates. Simulation analysis consists of evaluating the impact on net interest income given changes from 200 basis points below to 200
basis points above the current prevailing rates. Management makes certain assumptions as to the effect varying levels of interest rates have on certain earning assets and




14




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##### Table of Contents

interest bearing liabilities, which assumptions consider both historical experience and consensus estimates of outside sources.





With respect to the primary earning assets, loans and securities, certain features of individual types of loans and specific securities introduce
uncertainty as to their expected performance at varying levels of interest rates. In some cases, prepayment options exist whereby the borrower may elect to repay the obligation at any time. These prepayment options make anticipating the performance
of those instruments difficult given changes in prevailing rates. At March 31, 2002, mortgage backed securities with a carrying value of $474.2 million, or 16.1% of total assets and essentially every loan, net of unearned income, (totaling $2.01
billion, or 68.2% of total assets), carried such prepayment options. Management believes that assumptions used in its simulation analysis about the performance of financial instruments with such prepayment options are appropriate. However, the
actual performance of these financial instruments may differ from managements estimates due to several factors, including the diversity and financial sophistication of the customer base, the general level of prevailing interest rates and the
relationship to their historical levels, and general economic conditions. The difference between those assumptions and actual results, if significant, could cause the actual results to differ from those indicated by the simulation analysis.





Deposits totaled $2.18 billion, or 73.9%, of total assets at March 31, 2002. Since deposits are the primary funding source for
earning assets, the associated market risk is considered by management in its simulation analysis. Generally, it is anticipated that deposits will be sufficient to support funding requirements. However, the rates paid for deposits at varying levels
of prevailing interest rates have a significant impact on net interest income and therefore, must be quantified by Alabama National in its simulation analysis. Specifically, Alabama Nationals spread, the difference between the rates earned on
earning assets and rates paid on interest bearing liabilities, is generally higher when prevailing rates are higher. As prevailing rates reduce, the spread tends to compress, with severe compression at very low prevailing interest rates. This
characteristic is called spread compression and adversely effects net interest income in the simulation analysis when anticipated prevailing rates are reduced from current rates. Management relies upon historical experience to estimate
the degree of spread compression in its simulation analysis. Management believes that such estimates of possible spread compression are reasonable. However, if the degree of spread compression varies from that expected, the actual results could
differ from those indicated by the simulation analysis.





The following table illustrates the results of simulation analysis used
by Alabama National to determine the extent to which market risk would affect net interest margin for the next twelve months if prevailing interest rates increased or decreased the specified amounts from current rates. Due to the current low
interest rate environment, Alabama Nationals net interest income would decrease significantly if prevailing interest rates were to further decrease 100 or 200 basis points. The current rates paid on interest-bearing accounts cannot decrease
below zero, yet rates earned on loans can experience a decrease in the falling rate scenarios, and the interest rate spread would therefore compress. Because of the inherent use of estimates and assumptions in the simulation model used to derive
this information, the actual results of the future impact of market risk on Alabama Nationals net interest margin, may differ from that found in the table.





MARKET RISK


(Amounts in thousands)





As of March 31, 2002


As of December 31, 2001Change in Prevailing Interest Rates (1)

Net Interest Income Amount

Change from Income Amount


Net Interest Income Amount

Change from Income Amount+200 basis points

$
118,776

4.83
%

$
117,465

5.47
%+100 basis points


117,730

3.91



115,562

3.760 basis points


113,299





111,375

-100 basis points


97,594

(13.86
)


101,536

(8.83
)-200 basis points


91,404

(19.32
)


96,871

(13.02
)


---

|(1) |  | Assumes an immediate rate change of this magnitude.
|--- |  | ---------------------------------------------------




Liquidity and Capital Adequacy





Alabama Nationals net loan to deposit ratio was 92.3% at March 31, 2002,
compared to 95.0% at year-end 2001. Alabama Nationals liquid assets as a percentage of total deposits were 6.9% at March 31, 2002, compared to 5.9% at year-end 2001. At March 31, 2002, Alabama National had unused federal funds lines of
approximately $140.7 million, unused lines at the Federal Home Loan Bank of $231.2 million and an unused credit line with a third party bank of $15.9 million. Alabama National also has access to approximately $153.8 million via a credit facility
with the Federal Reserve Bank of Atlanta. At March 31, 2002 and year-end 2001 there were no outstanding borrowings under this credit facility. Management analyzes the level of off-balance sheet assets such as unfunded loan commitments and
outstanding letters of credit as they relate to the levels of cash, cash equivalents, liquid investments, and available funds lines in an attempt to minimize the possibility that a potential liquidity shortfall will exist. Based on this analysis,
management




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##### Table of Contents

believes that Alabama National has adequate liquidity to meet short-term operating requirements. However, no assurances can be given in this regard.





Alabama Nationals stockholders equity increased by $4.8 million from December 31, 2001, to $212.7 million at March
31, 2002. This increase was attributable to the following components (in thousands):





Net income

$
8,608Dividends


(3,088
)Issuance of stock from treasury


46Additional paid in capital related to stock based compensation


324Change in unrealized gain or loss on securities available for sale, net of deferred taxes


(1,071
)Net increase

$
4,819


A strong capital position is vital to the continued profitability of Alabama National because it promotes depositor and
investor confidence and provides a solid foundation for future growth of the organization. The capital of Alabama National and its subsidiary banks (the Banks) exceeded all prescribed regulatory capital guidelines at March 31, 2002.
Under the capital guidelines of their regulators, Alabama National and the Banks are currently required to maintain a minimum risk-based total capital ratio of 8%, with at least 4% being Tier 1 capital. Tier 1 capital consists of common
stockholders equity, qualifying perpetual preferred stock, and minority interests in equity accounts of consolidated subsidiaries, less goodwill. In addition, Alabama National and the Banks must maintain a minimum Tier 1 leverage ratio (Tier 1
capital to total assets) of at least 3%, but this minimum ratio is increased by 100 to 200 basis points for other than the highest rated institutions. The following table sets forth the risk-based and leverage ratios of Alabama National and each
subsidiary bank at March 31, 2002:





Tier 1 Risk Based


Total Risk Based


Tier 1 LeverageAlabama National BanCorporation

9.88
%

11.13
%

7.27
%National Bank of Commerce of Birmingham

10.47


11.72


7.60Alabama Exchange Bank

13.21


14.46


7.33Bank of Dadeville

12.01


13.26


7.87Citizens & Peoples Bank, N.A.

9.69


10.94


7.33Community Bank of Naples, N.A.

9.57


10.82


6.95First American Bank

9.39


10.65


7.54First Citizens Bank

13.93


15.10


7.19First Gulf Bank

10.40


11.65


7.35Georgia State Bank

11.94


13.13


7.37Public Bank

9.56


10.71


7.83Peoples State Bank

10.61


11.86


7.45Required minimums

4.00


8.00


4.00




16




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##### Table of Contents




Item 3
Quantitative and Qualitative Disclosures about Market Risk





The information required by this item is
contained in Item 2 herein under the headings Interest Rate Sensitivity and Market Risk.





PART IIOTHER INFORMATION





Item 6Exhibits and Reports on Form 8-K





(a)  Exhibits:





Exhibit 3.1Restated Certificate of Incorporation





Exhibit 3.2Bylaws (filed as an Exhibit to Alabama Nationals Registration Statement on Form S-1 (Commission File No. 33-83800) and incorporated herein by reference).





Exhibit 11Computation of Earnings Per Share





(b)  Reports on Form 8-K





None.




17




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##### Table of Contents

SIGNATURES





Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.





| | 
| | 

ALABAMA NATIONAL BANCORPORATIONDate: May 10, 2002

/s/    JOHN H. HOLCOMB, IIIJohn H. Holcomb, III, its Chairman and Chief Executive OfficerDate: May 10, 2002

/s/    WILLIAM E. MATTHEWS, V.William E. Matthews, V., its Executive Vice President and Chief Financial
Officer







18