<PAGE>

                                                                      EXHIBIT 13


MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

General This section of the annual report provides a narrative discussion and
analysis of AmSouth's financial condition and results of operations for the
previous three years. All tables, graphs and financial statements included in
this report should be considered an integral part of this analysis.

     AmSouth's discussion and analysis will be based on reported financial
information; however, certain information will also be provided which excludes
the impact of certain large or unusual amounts. This additional information is
provided to either enhance comparability of financial information between years
or to provide trend information which AmSouth believes to be more indicative of
continuing operations. Financial information that excludes items will either
specifically indicate the items being excluded or will state that the amount
shown excludes merger-related and other charges. "Other charges" for the year
ended December 31, 2000, included the following losses that occurred as a part
of AmSouth's third-quarter financial restructuring: dealer securitization losses
of $18.5 million; $21.7 million of losses from the sale of healthcare-related
loans included in assets held for accelerated disposition (AHAD); losses of
$105.6 million on the sale of $4.0 billion of investment securities; $88.3
million of provision charges related to AmSouth's syndicated commercial loan
portfolio; and $24.8 million of mortgage conduit asset writedowns. Finally,
AmSouth incurred $4.2 million of after-tax losses associated with the sales of
IFC Holdings, Inc. (IFC), a third-party marketer of investment and insurance
products through other financial institutions, and the Arkansas branch network.

     1999 results do not include pretax charges of $7.6 million to conform First
American Corporation's (First American) accounting policies to AmSouth's
policies; an $8.0 million impairment loss on a First American portfolio
investment; and $71.0 million in loan impairment charges associated with certain
healthcare-related loans transferred to AHAD.

     The following discussion contains forward-looking statements that involve
inherent risks and uncertainties. Actual results may differ materially from
those contained in these forward-looking statements. For additional information
regarding forward-looking statements, see "Forward-Looking Statements" on page
59 of this annual report.

     AmSouth is a regional bank holding company headquartered in Birmingham,
Alabama, with $38.9 billion in assets, approximately 600 branch banking offices
and 1,250 automated teller machines (ATM). AmSouth operates in Tennessee,
Alabama, Florida, Mississippi, Louisiana, and Georgia. AmSouth is a leader among
regional banks in the Southeast in several key business areas, including
consumer and commercial banking, small business banking, mortgage lending,
equipment leasing, annuity and mutual fund sales, and other wealth management
services. AmSouth also offers an extensive line of banking products and services
at the Web site, www.amsouth.com.

<TABLE>
<CAPTION>

               DILUTED EARNINGS               RETURN ON                       RETURN ON
                 PER SHARE                  AVERAGE EQUITY                  AVERAGE ASSETS
<S>       <C>             <C>             <C>             <C>            <C>            <C>
             (1)            (2)            (1)             (2)            (1)            (2)
96          $0.98          $1.03          13.92%          14.63%          1.14%          1.19%
97          $1.18          $1.18          16.00%          16.00%          1.32%          1.32%
98          $1.20          $1.40          15.33%          17.96%          1.22%          1.43%
99          $0.86          $1.53          10.69%          18.99%          0.81%          1.45%
00          $0.86          $1.46          11.57%          19.76%          0.79%          1.34%

(1)  As reported
(2)  Excludes Merger-related and other charges
</TABLE>

                                      33
<PAGE>


COMPOSITION OF INTEREST-EARNING ASSETS TABLE 1

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------

                                         2000                       1999                    1998
----------------------------------------------------------------------------------------------------------
                                 Average       Percent      Average      Percent     Average       Percent
(Dollars in thousands)           Balance      of Total      Balance     of Total     Balance      of Total
----------------------------------------------------------------------------------------------------------
<S>                           <C>             <C>         <C>           <C>         <C>          <C>
Loans net of unearned income    $25,879,910       67.4%   $25,471,295       66.7%   $24,027,839       67.7%
Held-to-maturity securities       6,862,355       17.8      4,899,856       12.8      3,594,397       10.1
Available-for-sale securities     4,946,905       12.9      7,369,119       19.3      7,365,385       20.8
Other interest-earning assets       723,182        1.9        422,907        1.2        513,290        1.4
                              ----------------------------------------------------------------------------
                                $38,412,352      100.0%   $38,163,177      100.0%   $35,500,911      100.0%
==========================================================================================================
</TABLE>

Note: Available-for-sale securities excludes adjustment for market valuation and
certain noninterest-earning marketable equity securities.


Earnings Overview AmSouth reported diluted earnings per common share of $.86 in
2000 compared to $.86 in 1999 and $1.20 in 1998. Net income totaled $329.1
million in 2000, $340.5 million in 1999 and $474.1 million in 1998.

     AmSouths' reported earnings in 2000 were impacted by charges associated
with the integration of First American following its merger with AmSouth in 1999
(the Merger), rapidly rising interest rates, a slowing economy and related
deterioration in credit quality.

     The Federal Reserve raised short-term interest rates 175 basis points in a
little more than ten months during 1999 and 2000, resulting in slower loan
growth and higher rates paid on interest-bearing deposits and floating rate
borrowed funds. To address the impact of rapidly rising rates, AmSouth in the
third quarter initiated a comprehensive financial restructuring, substantially
reducing low-yielding investments and loans and, as a result, significantly
reducing earning assets. AmSouth sold approximately $4.0 billion of low-yield
securities from its available-for-sale portfolio and securitized approximately
$1.0 billion of lower yielding automobile loans. The proceeds were used to
reduce wholesale borrowings. These actions significantly reduced interest rate
risk while improving the net interest margin and capital ratios and created
substantial balance sheet capacity for more profitable earning asset growth. At
the same time, AmSouth, as a result of the higher interest rates, recorded a
permanent impairment loss of $24.8 million associated with mortgage
conduit-related assets. Together, these items produced pretax charges of $148.8
million. See further discussion in the Noninterest Revenues Section beginning on
page 40.

     As interest rates rose and the economy slowed during 2000, credit quality
began to rapidly deteriorate, particularly among syndicated commercial
loans-loans to large corporate borrowers that AmSouth shares with other banks.
To address these credit quality issues, AmSouth, as part of the restructuring,
sold approximately $200 million of problem syndicated loans, including $47
million that were recorded in AHAD, and strengthened the allowance for loan
losses. Together, these steps resulted in pretax charges totaling $110.0
million.

     AmSouth also completed the integration and conversion of First American's
systems and branches, incurring pretax charges of $110.2 million. As part of the
integration of First American, AmSouth evaluated each business unit and, as a
result, decided to sell IFC and the branch network located in Arkansas.
Together, these sales resulted in after-tax charges totaling $4.2 million.

     Adjusting for the impact of merger-related and other charges mentioned
above, earnings were $562.1 million in 2000. This represented a 7.0 percent
decrease from 1999 earnings, adjusted for merger-related and other charges, of
$604.7 million. On the same basis, fully diluted earnings per share were $1.46
in 2000 versus $1.53 in 1999.

     Earnings in 1999 declined compared to 1998 due to merger-related charges,
increases in noninterest expenses, and higher credit costs. Higher net interest
income and noninterest revenues partially offset the negative variances and
merger-related charges.

     AmSouth's reported earnings in 1999 reflected the impact of the Merger,
credit quality issues brought on by federal legislation that reduced Medicare
reimbursements to healthcare providers, and an impairment loss on a portfolio
investment. Reported earnings in 1999 included pretax charges of $258.3 million
resulting from the merger with First American and $43.1 million in connection
with First American's 1998 mergers with various banks including Deposit Guaranty
Corporation.

                                      34

<PAGE>

Earnings also included pretax charges of $7.6 million to conform First
American's accounting policies to AmSouth's policies, an $8.0 million impairment
loss on a First American portfolio investment and $71.0 million in loan
impairment losses associated with certain healthcare-related loans transferred
to AHAD. On an after-tax basis, these items totaled $264.3 million. Excluding
the merger-related and other charges, 1999 diluted earnings per share were $1.53
on income of $604.7 million.

     Refer to Note 3 in the Notes to Consolidated Financial Statements for a
more detailed discussion of merger and other related charges.

     Two key measures of profitability in the banking industry are return on
average equity (ROE) and return on average assets (ROA). ROE measures the
profitability of a company's shareholders' equity, while ROA measures how
effectively a company utilizes its assets. Based on reported earnings, ROE was
11.57 percent in 2000 compared to 10.69 percent in 1999 and 15.33 percent in
1998. ROA was 0.79 percent in 2000, 0.81 percent in 1999 and 1.22 percent in
1998.

Earnings Analysis

Net Interest Income Net interest income (NII), defined as the amount of revenue
generated by interest-earning assets less the interest cost of funding those
assets, is the principal source of earnings for AmSouth. Interest-earning assets
represent assets that generate interest income or yield-related fee income, such
as loans and investment securities. NII constituted 68.3 percent of total net
revenues in 2000, 64.4 percent in 1999 and 64.8 percent in 1998. For purposes of
this earnings analysis, NII has been adjusted to a fully taxable equivalent
basis for certain tax-exempt loans, leases, and investment securities included
in interest-earning assets.


                           AVERAGE EARNING ASSET MIX

                                        2000

                                         LOANS 67.4%          [_]

     [PIE CHART]         INVESTMENT SECURITIES 30.7%          [_]

                  OTHER INTEREST-EARNING ASSETS 1.9%          [_]


                                        1999

                                         LOANS 66.7%          [_]

     [PIE CHART]         INVESTMENT SECURITIES 32.1%          [_]

                  OTHER INTEREST-EARNING ASSETS 1.2%          [_]

     The amount of NII earned is determined primarily by variations in the
volume and mix of interest-earning assets and interest-bearing liabilities and
changes in their related yields and interest rates paid.

     Net interest income was $1.4 billion in 2000, a decrease of $91.6 million
or 6.0 percent from 1999. The decline was primarily caused by a decrease in the
net interest margin (NIM), the result of higher interest rates and lower volumes
of interest-free funding sources. The NIM declined 27 basis points in 2000 to
3.75 percent versus 4.02 percent in 1999. It is expressed as a percentage and is
computed by dividing fully taxable equivalent NII by average interest-earning
assets. The NIM measures how effectively the bank utilizes its interest-earning
assets in relationship to the interest cost of funding them.

     The decline in the NIM during 2000 was a result of higher funding costs
caused by rapidly rising interest rates. Further compounding the impact of
rising interest rates was AmSouth's sensitivity to rising rates caused by the
mix of earning assets and funding sources on the balance sheet. AmSouth had a
substantial portion of fixed-rate earning assets, such as investment securities
and automobile loans, while relying on floating rate funding sources, such as
interest-bearing deposits and wholesale borrowings. As interest rates rose in
1999 and 2000, rates paid on funding liabilities increased more rapidly than
yields on interest-earning assets. The result was margin compression and a
narrowing net interest spread.

     The NIM compression and NII decline were partially offset by benefits
resulting from restructuring a portion of the leasing portfolio during 2000
which permanently lowered the effective tax rate on income from the portfolio.
These transactions resulted in an increase to the taxable equivalent adjustment
of $35.4 million and an increase to NII on a fully taxable equivalent basis of
$10.9 million compared to 1999.

     Interest-earning assets are primarily composed of loans and investment
securities and were relatively flat compared to 1999. Average loans net of
unearned income (net loans) were slightly higher in 2000 due to growth primarily
in commercial real estate and equity lending. See further discussion of loans in
the Balance Sheet Analysis.

                                      35

<PAGE>

YIELDS EARNED ON AVERAGE EARNING ASSETS AND
RATES PAID ON AVERAGE INTEREST-BEARING LIABILITIES TABLE 2

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------

(Taxable equivalent basis-dollars in thousands)                                            2000
                                                                      -----------------------------------------
                                                                         AVERAGE         REVENUE/        YIELD/
                                                                         BALANCE         EXPENSE         RATE
                                                                      -----------------------------------------
<S>                                                                   <C>              <C>               <C>
ASSETS
Interest-earning assets:
  Loans net of unearned income......................................  $ 25,879,910     $  2,277,775      8.80%
  Available-for-sale securities:
    Taxable.........................................................     4,882,055          328,612      6.73
    Tax-free........................................................        64,850            4,564      7.04
                                                                      ------------     ------------
      Total available-for-sale securities...........................     4,946,905          333,176      6.74
  Held-to-maturity securities:
    Taxable.........................................................     6,469,385          444,682      6.87
    Tax-free........................................................       392,970           28,357      7.22
                                                                      ------------     ------------
      Total held-to-maturity securities.............................     6,862,355          473,039      6.89
                                                                      ------------     ------------
        Total investment securities.................................    11,809,260          806,215      6.83
  Trading securities................................................        31,955            2,122      6.64
  Federal funds sold and securities purchased
    under agreements to resell......................................       417,709           27,455      6.57
  Loans held for sale...............................................       168,836           12,582      7.45
  Other interest-earning assets.....................................       104,682            6,966      6.65
                                                                      ------------     ------------
    Total interest-earning assets...................................    38,412,352        3,133,115      8.16
Cash and other assets...............................................     3,968,747
Allowance for loan losses...........................................      (356,006)
Market valuation on available-for-sale securities...................      (164,922)
                                                                      ------------
                                                                      $ 41,860,171
                                                                      ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
  Interest-bearing demand deposits..................................  $  9,376,473          327,664      3.49
  Savings deposits..................................................     1,661,398           37,030      2.23
  Time deposits.....................................................     7,760,806          445,713      5.74
  Foreign time deposits.............................................     1,087,636           64,540      5.93
  Certificates of deposit of $100,000 or more.......................     2,778,184          166,224      5.98
  Federal funds purchased and securities sold
    under agreements to repurchase..................................     3,420,781          188,410      5.51
  Other borrowed funds..............................................     1,547,155           96,808      6.26
  Long-term Federal Home Loan Bank advances.........................     5,048,876          296,158      5.87
  Subordinated debt.................................................       885,445           61,194      6.91
  Senior notes......................................................        91,482            7,321      8.00
  Other long-term debt..............................................         6,180              261      4.22
                                                                      ------------     ------------
    Total interest-bearing liabilities..............................    33,664,416        1,691,323      5.02
                                                                                       ------------      ----
      Net interest spread...........................................                                     3.14%
                                                                                                         ====
Noninterest-bearing demand deposits.................................     4,658,636
Other liabilities...................................................       692,132
Shareholders' equity................................................     2,844,987
                                                                      ------------
                                                                      $ 41,860,171
                                                                      ============

      Net interest income/margin on a taxable equivalent basis......                      1,441,792      3.75%
                                                                                                         ====
Taxable equivalent adjustment:
  Loans.............................................................                         40,227
  Available-for-sale securities.....................................                          3,410
  Held-to-maturity securities.......................................                         19,052
  Trading securities................................................                            -0-
                                                                                       ------------
    Total taxable equivalent adjustment.............................                         62,689
                                                                                       ------------
      Net interest income...........................................                   $  1,379,103
                                                                                       ============
</TABLE>

Note: The taxable equivalent adjustment has been computed based on the statutory
federal income tax rate, adjusted for applicable state income taxes net of the
related federal tax benefit. Loans net of unearned income includes nonaccrual
loans for all years presented. Certain noninterest-earning marketable equity
securities are not included in available-for-sale securities.

                                      36

<PAGE>




<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------

                                 1999                                                      1998
--------------------------------------------------------------------------------------------------------------------------
              AVERAGE          REVENUE/       YIELD/                      AVERAGE       REVENUE/      YIELD/
              BALANCE          EXPENSE         RATE                       BALANCE        EXPENSE       RATE
--------------------------------------------------------------------------------------------------------------------------
<S>                        <C>                <C>                      <C>            <C>             <C>


          $ 25,471,295     $  2,132,983        8.37%                   $ 24,027,839   $ 2,085,546      8.68%

             7,123,385          459,571        6.45                       7,073,480       486,927      6.88
               245,734           16,339        6.65                         291,905        22,000      7.54
          ------------     ------------                                ------------   -----------
             7,369,119          475,910        6.46                       7,365,385       508,927      6.91

             4,667,059          308,136        6.60                       3,441,212       227,945      6.62
               232,797           18,808        8.08                         153,185        15,063      9.83
          ------------     ------------                                ------------   -----------
             4,899,856          326,944        6.67                       3,594,397       243,008      6.76
          ------------     ------------                                ------------   -----------
            12,268,975          802,854        6.54                      10,959,782       751,935      6.86
                67,333            4,203        6.24                          61,368         4,303      7.01

               124,381            5,694        4.58                         145,554         7,650      5.26
               179,276           10,148        5.66                         278,506        16,457      5.91
                51,917            2,343        4.51                          27,862         1,204      4.32
          ------------     ------------                                ------------   -----------
            38,163,177        2,958,225        7.75                      35,500,911     2,867,095      8.08
             4,076,897                                                    3,665,989
              (362,410)                                                    (365,564)
               (60,424)                                                      41,145
          ------------                                                 ------------
          $ 41,817,240                                                 $ 38,842,481
          ============                                                 ============

          $  9,269,643          266,155        2.87                    $  9,201,511       302,208      3.28
             2,191,546           53,933        2.46                       1,968,461        51,354      2.61
             7,821,761          402,576        5.15                       8,823,928       475,426      5.39
               703,421           34,262        4.87                         203,084        10,048      4.95
             2,837,027          146,422        5.16                       2,246,605       131,231      5.84

             4,051,451          187,946        4.64                       3,359,865       168,435      5.01
               939,831           47,894        5.10                         837,742        43,287      5.17
             4,290,904          222,036        5.17                       2,882,891       153,122      5.31
               881,207           55,321        6.28                         769,107        52,999      6.89
               101,120            7,458        7.38                         101,305         7,471      7.37
                18,986              801        4.22                          38,650         2,042      5.28
          ------------     ------------        4.30                     -----------   -----------      4.59
            33,106,897        1,424,804        ----                      30,433,149     1,397,623      ----
                           ------------        3.45%                                  -----------      3.49%
                                               ====                                                    ====
             4,894,631                                                    4,707,121
               630,628                                                      610,474
             3,185,084                                                    3,091,737
          ------------                                                 ------------
          $ 41,817,240                                                 $ 38,842,481
          ============                                                 ============

                              1,533,421        4.02%                                    1,469,472      4.14%
                                               ====                                                    ====

                                  4,838                                                     5,481
                                  8,411                                                    12,055
                                 12,076                                                     7,527
                                    152                                                       125
                           ------------                                               -----------
                                 25,477                                                    25,188
                           ------------                                               -----------
                           $  1,507,944                                               $ 1,444,284
                           ============                                               ===========
</TABLE>

                                      37

<PAGE>

VOLUME AND YIELD/RATE VARIANCES TABLE 3

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                          2000 COMPARED TO 1999                  1999 COMPARED TO 1998
(Taxable equivalent basis-in thousands)                       CHANGE DUE TO                          CHANGE DUE TO
                                                 --------------------------------------- -------------------------------------------
                                                                  YIELD/                                  YIELD/
                                                     VOLUME        RATE         NET         VOLUME         RATE        NET
                                                 --------------------------------------- -------------------------------------------
<S>                                              <C>            <C>          <C>         <C>           <C>          <C>
INTEREST EARNED ON:
Loans net of unearned income ..................    $  34,639    $ 110,153    $ 144,792    $ 122,501    $ (75,062)   $ 47,439
Available-for-sale securities:
  Taxable .....................................     (150,105)      19,146     (130,959)       3,413      (30,769)    (27,356)
  Tax-free ....................................      (12,678)         903      (11,775)      (3,245)      (2,416)     (5,661)
                                                   -----------------------------------    ----------------------------------
Total available-for-sale securities ...........     (162,783)      20,049     (142,734)         168      (33,185)    (33,017)
Held-to-maturity securities:
  Taxable .....................................      123,419       13,127      136,546       80,936         (745)     80,191
  Tax-free ....................................       11,744       (2,195)       9,549        6,789       (3,044)      3,745
                                                   -----------------------------------    ----------------------------------
Total held-to-maturity securities .............      135,163       10,932      146,095       87,725       (3,789)     83,936
                                                   -----------------------------------    ----------------------------------
Total investment securities ...................      (27,620)      30,981        3,361       87,893      (36,974)     50,919
Trading securities ............................       (2,334)         253       (2,081)         396         (496)       (100)
Federal funds sold and securities purchased
  under agreements to resell ..................       18,367        3,394       21,761       (1,037)        (919)     (1,956)
Loans held for sale ...........................         (620)       3,054        2,434       (5,643)        (666)     (6,309)
Other interest-earning assets .................        3,151        1,472        4,623        1,084           55       1,139
                                                   -----------------------------------    ----------------------------------
Total interest-earning assets .................       25,583      149,307      174,890      205,194     (114,062)     91,132
                                                   -----------------------------------    ----------------------------------
INTEREST PAID ON:
Interest-bearing demand deposits ..............        3,101       58,408       61,509        2,222      (38,275)    (36,053)
Savings deposits ..............................      (12,160)      (4,743)     (16,903)       5,599       (3,020)      2,579
Time deposits .................................       (3,160)      46,297       43,137      (52,266)     (20,584)    (72,850)
Foreign time deposits .........................       21,633        8,645       30,278       24,372         (158)     24,214
Certificates of deposit of $100,000 or more....       (3,093)      22,895       19,802       31,705      (16,514)     15,191
Federal funds purchased and securities sold
  under agreements to repurchase ..............      (31,744)      32,208          464       32,769      (13,258)     19,511
Other borrowed funds ..........................       36,163       12,751       48,914        5,210         (603)      4,607
Long-term Federal Home Loan Bank advances .....       42,206       31,916       74,122       72,955       (4,041)     68,914
Subordinated debt .............................          267        5,606        5,873        7,298       (4,976)      2,322
Senior notes ..................................         (743)         606         (137)         (14)           1         (13)
Other long-term debt ..........................         (541)           1         (540)        (889)        (352)     (1,241)
                                                   -----------------------------------    ----------------------------------
Total interest-bearing liabilities ............       51,929      214,590      266,519      128,961     (101,780)     27,181
                                                   -----------------------------------    ----------------------------------
Net interest income on a
  taxable equivalent basis ....................    $ (26,346)   $ (65,283)     (91,629)   $  76,233    $ (12,282)     63,951
                                                   ======================                 ======================
Add taxable equivalent adjustment .............                                (37,212)                                 (289)
                                                                             ---------                              --------
Net interest income ...........................                              $(128,841)                             $ 63,662
                                                                             =========                              ========
</TABLE>

Notes:

1.   The change in interest not due solely to volume or yield/rate has been
     allocated to the volume column and yield/rate column in proportion to the
     relationship of the absolute dollar amounts of the change in each.

2.   The computation of the taxable equivalent adjustment is based on the
     statutory federal income tax rate, adjusted for applicable state income
     taxes net of the related federal tax benefit.

3.   Certain noninterest-earning marketable equity securities are not included
     in available-for-sale securities.

                                      38

<PAGE>

     Average investment securities were lower in 2000. The majority of the
decrease occurred in the available-for-sale investment category and resulted
from the sale of approximately $4.0 billion of investment securities as part of
the comprehensive financial restructuring late in the third quarter of 2000.

     Interest-earning asset growth was further controlled through the use of
off-balance sheet loan-funding vehicles during 2000. In an effort to reduce the
amount of lower yielding commercial loans maintained on the balance sheet while
retaining the customer relationships, AmSouth sells loans to third-party
commercial loan conduits. AmSouth also sells residential first mortgages and,
beginning in 2000, dealer indirect automobile loans to third-party conduits.
Sales to conduits reduce the amount of loans on the balance sheet and
accordingly the interest revenue associated with those loans. However, because
the loans that are sold to the conduits typically have lower yields, the net
interest margin expands and AmSouth retains higher yielding assets on the
balance sheet, while expanding funding capacity. In addition, the decision to
securitize almost $1 billion of automobile loans at the beginning of the fourth
quarter limited reported loan growth in 2000. On a managed loan basis, average
loans grew by $2.8 billion versus 1999 managed loans.

     The increase in average interest-earning assets was funded by a $716
million increase in borrowed funds while average deposits decreased between
periods by approximately $395 million. The primary areas of increase in
borrowing were long-term Federal Home Loan Bank (FHLB) advances and short-term
bank notes.


                   PROFITABILITY OF INTEREST-EARNING ASSETS

                                    [GRAPH]

<TABLE>
<CAPTION>
                   NET INTEREST MARGIN          INTEREST-EARNING ASSETS

          <S>           <C>                            <C>
          96            4.05%                          $ 31.9

          97            4.27%                          $ 32.9

          98            4.14%                          $ 35.5

          99            4.02%                          $ 38.2

          00            3.75%                          $ 38.4
</TABLE>

     In 1999, NII grew $63.9 million to more than $1.5 billion, an increase of
4.4 percent. The growth was attributable to a higher level of average
interest-earning assets, partially offset by a decrease in the net interest
margin. Average interest-earning assets were $38.2 billion in 1999 compared to
$35.5 billion in 1998, an increase of $2.7 billion. The growth in average
interest-earning assets occurred in both loans and investment securities.

     Net loans grew $1.4 billion in 1999 to $25.5 billion and represented 54.2
percent of the growth in average interest-earning assets. The growth occurred
primarily in commercial real estate, home equity and dealer indirect lending.

     Growth in investment securities accounted for the remainder of the increase
in average interest-earning assets for 1999. The increase, primarily in the
held-to-maturity category, was the result of a planned expansion during the
second half of 1999 in connection with the Merger.

     The increase in average interest-earning assets was funded by a $567.3
million increase in deposits and a $2.3 billion increase in borrowings. Primary
sources for the increase in borrowed funds were short-term federal funds
purchased and securities sold under agreements to repurchase, long-term FHLB
advances and subordinated debt.

     The effects of the growth in average interest-earning assets on NII in 1999
were partially offset by a 12-basis-point decline in the NIM from 4.14 percent
in 1998 to 4.02 percent. The decline in the NIM was the result of a
33-basis-point decline in the yield on interest-earning assets due, primarily,
to the higher level of investment securities and a decline in the yield on loans
during the year. The decrease was partially offset by a 29-basis-point decrease
in rates paid for interest-bearing liabilities.

     Growth in NII during 1999 was also reduced by the use of commercial and
residential first mortgage conduits discussed earlier.

     Management anticipates modest expansion in the NIM in 2001 provided the
economy experiences modest growth and AmSouth's balance sheet management
strategy is successful.

Provision for Loan Losses The provision for loan losses is the charge to
earnings necessary to maintain the allowance for loan losses at an adequate
level to absorb losses inherent in the loan portfolio. In 2000, AmSouth recorded
provision charges for loan losses totaling $227.6 million, compared to $165.6
million recorded in 1999 and $99.1 million in 1998.

     AmSouth recorded provision charges in the third quarter of 2000 totaling
$88.3 million, specifically related to deterioration in

                                      39

<PAGE>

its syndicated loan portfolio caused by higher interest rates and a slowing
economy. See the sections entitled "Loans" and "Allowance for Loan Losses" for
further discussion.

     The provision for 1999 reflected credit quality deterioration among
long-term healthcare providers caused by federal legislation reducing Medicare
reimbursements to healthcare providers. This legislation had a material adverse
financial impact on certain companies in this sector which heavily rely on such
reimbursements. Both AmSouth and First American have been lenders to the
healthcare industry. During 1999, management decided to exit the
Medicare-dependent long-term care segment of the healthcare loan portfolio and
transferred to AHAD $149 million in loans, net of a $71.0 million valuation
allowance. Loan impairment charges associated with these loans of $71.0 million
were included in the loan loss provision for 1999. Another item in the loan loss
provision for 1999 was a $3.0 million charge to conform First American's
accounting policies with AmSouth's.

     Net charge-offs of loans in 2000 were higher compared to 1999. Increases
occurred in the commercial and consumer loan portfolios, primarily the dealer
indirect automobile and equity lending portfolios, and reflected the impact of
higher interest rates and slowing economic growth. The increase in 1999
charge-offs over 1998 was primarily the result of higher charge-offs among
commercial loans and within consumer loans, dealer indirect and equity loans.

     Measured as a percentage of average net loans, net charge-offs followed the
same pattern as the absolute amount of loan losses during the past three years.
In 2000, net charge-offs were 0.48 percent of average net loans versus 0.40
percent in 1999 and 0.35 percent in 1998.

     Management expects net charge-offs to increase in 2001 while the net
charge-off ratio should be in a range more consistent with fourth quarter 2000
charge-offs of 0.66 percent. This reflects AmSouth's expectation of more modest
economic growth in 2001 compared to the above-average economic growth rates
experienced from 1998 through 2000.

     For additional details on net charge-offs, see Tables 16 and 18. Also,
additional discussion of asset quality trends may be found in the section of
this report entitled Credit Risk Management Process and Loan Quality.

Noninterest Revenues Noninterest revenues (NIR) represent fees and income
derived from sources other than interest-earning assets such as deposit account
service charges or consumer investment services. NIR totaled $669.5 million in
2000 compared to $847.6 million in 1999 and $799.9 million in 1998. Noninterest
revenues represented 31.7 percent of total tax equivalent net revenues in 2000
versus 35.6 percent in 1999 and 35.2 percent in 1998.

     The decrease in NIR during 2000 reflected decreases in service charges on
deposit accounts, investment services income and other NIR, partially offset by
an increase in trust income.

     Service charges in 2000 were lower compared to 1999 primarily as a result
of fewer consumer service charges resulting from the popularity of AmSouth's
free checking products.

     The decrease in consumer investment services income reflected the loss of
revenue from the sale, at the end of the third quarter, of IFC.

     Excluding the impact of the IFC sale, 2000 consumer investment services
income was $87.0 million versus $74.8 million in 1999, a 16.4 percent increase.
The growth was the result of higher sales of annuities, traditional brokerage
services and mutual funds. At the end of 2000, AmSouth had approximately 1,300
trained and licensed professionals selling annuity products in branches across
the franchise and more than 190 trained and licensed investment sales
representatives. In addition, AmSouth had $7.2 billion in mutual fund assets
under management in 28 proprietary mutual funds at the end of 2000.

     Trust income was higher in 2000 due to growth in AmSouth's wealth
management business, new employee benefit plan administration business and
increases in fees. Discretionary trust assets under management were $15.6
billion at the end of 2000. Total trust assets were $26.2 billion.

     The decrease in other NIR reflected decreases in portfolio income, mortgage
income and other NIR, partially offset by increases in interchange income,
income from bank-owned life insurance (BOLI) and gains on sales of businesses.

     During 2000, AmSouth recorded $105.3 million of portfolio losses versus
$21.3 million of portfolio income in 1999. The decrease reflects $105.6 million
of portfolio losses resulting from management's decision to sell $4.0 billion of
lower yielding securities as part of the third-quarter financial restructuring.
Also included in the portfolio losses was a $12.1 million writedown in the third
quarter of interest-only "strips" related to mortgage loan sales to third-party
conduits. Portfolio income in 1999 included $8.0 million associated with the
impairment of a First American portfolio investment. This charge was related to
the Merger. Exclusive of these amounts, portfolio income for 2000 was

                                      40

<PAGE>

$12.4 million, a decrease of $17.0 million compared to 1999. The decline
primarily reflected the lower level of gains on the sale of available-for-sale
securities during 2000 due to the overall decline in investment portfolio values
caused by higher interest rates.

     Mortgage income in 2000 was $18.0 million, a decrease of $27.0 million
versus $45.0 million in 1999. The decrease reflected $12.7 million of impairment
charges related to mortgage conduit servicing assets. Due to the structure of
the mortgage conduits, AmSouth retains the related interest rate risk.
Consequently, the valuation of both the mortgage conduit servicing asset and the
interest-only strips related to mortgage loan sales to third-party conduits
mentioned in the preceding paragraph is based on the projection of future net
cash flows from those assets. As a result of the rapid rise in interest rates
beginning in 1999 and continuing through the second quarter of 2000, a cash flow
deficit from these assets began to occur in the third quarter of 2000. At that
time, management determined, based on its economic forecast of future interest
rates, that the cash flow deficit occurring was other than a temporary event and
required an impairment charge. The remaining decrease in mortgage income
reflected a decline in net gains from the sale of mortgages and servicing in
2000 as well as a reduction in mortgage servicing fees due to the sale of a
third-party servicing portfolio in the third quarter of 1999.

     Other NIR in 2000 also included $23.4 million of losses on the sale of
Medicare-dependent loans held in AHAD and $18.5 million of losses related to the
securitization of approximately $1.0 billion of automobile loans. These losses
were primarily the result of AmSouth's financial restructuring during the third
quarter of 2000.

     Partially offsetting the decreases in other NIR was interchange income,
which increased $3.6 million in 2000 to $50.2 million due to higher ATM and
CheckCard fees. AmSouth now has approximately 1,250 ATMs and more than one
million CheckCards outstanding. The growth was the result of higher sales of
convenience services through AmSouth's strategic initiative to aggressively grow
consumer banking.

     Income from BOLI increased $17.6 million in 2000 to $48.8 million. The
increase reflected normal increases in cash surrender value on policies
purchased in prior years and additional purchases in 2000. In connection with
the merger integration of First American, AmSouth decided to sell IFC and the
Arkansas banking operations, resulting in net pretax gains of $584 thousand.
AmSouth subsequently decided to exit its Kentucky and Virginia markets through
the sale of its branches in those markets, producing net pretax gains totaling
$19.9 million.

     In 2000, excluding the revenues generated from IFC of $117.6 million, the
losses on the asset sales and securitization

<TABLE>
<CAPTION>
NONINTEREST REVENUES AND NONINTEREST EXPENSES  TABLE 4
----------------------------------------------------------------------------------------------------------------
                                                                      Years Ended December 31

(Dollars in thousands)                                2000         1999         1998         1997         1996
----------------------------------------------------------------------------------------------------------------
<S>                                               <C>          <C>          <C>          <C>          <C>
  NONINTEREST REVENUES:
    Service charges on deposit accounts           $  229,383   $  233,045   $  234,849   $  216,085   $  191,430
    Consumer investment services income              199,270      213,292      183,831      149,205       86,300
    Trust income                                     114,353      109,223      109,453      102,506       93,229
    Other noninterest revenues                       126,488      292,000      271,721      190,928      171,330
                                                  --------------------------------------------------------------
                                                  $  669,494   $  847,560   $  799,854   $  658,724   $  542,289
                                                  ==============================================================
  NONINTEREST EXPENSES:
    Salaries and employee benefits                $  583,794   $  612,687   $  596,050   $  572,903   $  527,614
    Equipment expense                                121,798      135,590      123,480      113,716      102,544
    Net occupancy expense                            114,783      111,432      106,497      103,698       97,512
    Subscribers' commissions                          82,618       99,588       89,918       70,785       35,075
    SAIF assessment                                      -0-          -0-          -0-          -0-       32,296
    Merger-related costs                             110,178      301,415      121,725          -0-          -0-
    Other noninterest expenses                       353,264      387,795      368,602      360,573      334,468
                                                  --------------------------------------------------------------
                                                  $1,366,435   $1,648,507   $1,406,272   $1,221,675   $1,129,509
                                                  ==============================================================
</TABLE>

                                      41

<PAGE>

arising from the financial restructuring, the loss on the mortgage conduit
assets and the net gains on the sale of IFC and the Arkansas branch network in
2000, NIR were $722.3 million compared to $709.6 million in 1999, exclusive of
IFC revenues of $146.8 million, and charges related to the First American
acquisition of $8.8 million associated with a portfolio investment impairment
charge and conforming accounting adjustments. On the same basis, NIR represented
33.4 percent of total tax equivalent revenue in 2000 and 31.8 percent in 1999.
Management expects total NIR in 2001 to exceed these levels, provided the
economy experiences modest growth, AmSouth's strategic initiatives are
successfully implemented and sales production levels continue to improve.
Performance of the stock and bond markets will also influence management's
ability to achieve its NIR goals, especially with respect to consumer investment
services and trust revenues.

     For 1999, leading growth categories in NIR included consumer investment
services income and other noninterest revenues. Partially offsetting the growth
in these categories were decreases in service charges on deposit accounts and
trust income.

     Consumer investment services income was the leading growth category among
NIR for 1999 compared to 1998. The growth was attributable to strong sales
across all categories of investment products and services. Within consumer
investment services, sales of annuities and mutual fund products were leading
growth areas. Also contributing to the increase in consumer investment services
income in 1999 was an increase in commissions from higher brokerage sales and
higher sales volume in IFC.

     Growth in other NIR in 1999 reflected increases in interchange income,
BOLI, mortgage income, and other NIR. Fees from interchange services increased
$10.1 million to $46.5 million in 1999, a 27.8 percent increase. The growth
reflected growth in the ATM network and an increase in debit cards outstanding.

     Income from BOLI increased in 1999 as a result of normal increases in cash
surrender value on policies purchased in prior years by AmSouth and new policies
purchased in 1999. In 1999, income from BOLI was $31.2 million compared to $17.4
million in 1998, an increase of $13.8 million, or 79.2 percent.

     Mortgage income was another area of growth among NIR in 1999. The growth
was the result of a very favorable residential mortgage environment during the
first half of 1999 and the continued benefit from the expansion of the mortgage
lending program in 1998. Mortgage income consisted of income from the sale of
mortgage loans and related servicing rights. In 1999, mortgage income was $45.0
million versus $39.7 million in 1998, an increase of 13.5 percent.

     Other NIR also included an $8.6 million pretax gain on the sale of First
American's third-party mortgage servicing business and a $13.3 million pretax
gain associated with the outsourcing of the merchant card processing operation.
The remainder of the increase in other NIR was primarily from an increase in
fees from commercial loan conduit activity.

     The growth in 1999 among these categories was partially offset by decreases
in service charges on deposit accounts, primarily due to increased sales of free
consumer checking products and lower trust income due to the sale in 1998 of
AmSouth's bond administration and stock transfer business.

     Each of the major categories of NIR for 1996 through 2000 is shown in Table
4.

Noninterest Expenses In 2000, noninterest expenses (NIE) were $1.4 billion, a
decrease of $282.1 million, or 17.1 percent. Decreases occurred primarily in
salaries and employee benefits, equipment expense, subscribers' commissions,
merger-related costs and other NIE. NIE included merger-related charges totaling
$110.2 million in 2000 and $301.4 million in 1999. Excluding merger-related
charges, NIE were $1.3 billion in 2000, a decrease of $90.8 million or 6.7
percent compared to 1999. The decline occurred across most major categories
reflecting cost savings from the Merger. Each of the major categories of NIE for
1996 through 2000 is shown in Table 4.

     Salaries and employee benefits were lower in 2000 due to a reduction in the
number of employees as a result of the Merger. At December 31, 2000, AmSouth had
12,300 full-time employees compared to 13,896 at December 31, 1999, a net
reduction of 1,596 employees. Reductions occurred primarily in administrative
and operational areas and, to a lesser extent, from branch closings and sales
that resulted from the Merger.

     Equipment expense was lower in 2000 compared to 1999 due to the elimination
of certain duplicate technology and equipment associated with the Merger, as
well as the elimination in 2000 of expenses incurred in 1999 in preparation for
the Year 2000 conversion.

     Net occupancy expense was higher in 2000 as a result of higher net rent
expense and depreciation. The increases were partially offset by reductions from
the consolidation of office and branch space associated with the Merger. As a
result of the Merger, 60 branches were closed or consolidated.

                                      42

<PAGE>

     Subscribers' commissions consist of fees which were paid on sales of
investment products marketed through IFC and were paid to subscribing (client)
institutions. These fees were lower in 2000 due to the sale of IFC at the end of
September 2000.

     Other NIE were lower in 2000 primarily due to decreases in marketing
expense, FDIC assessments and professional and outside services fees. The
overall reduction of other NIE was a result of cost savings achieved through the
Merger.

     In 1999, NIE were $1.6 billion, an increase of $242.2 million over 1998.
Increases occurred across most major categories with the primary increases
occurring in merger-related costs, salary and employee benefits expense,
subscribers' commissions, net occupancy expense, and equipment expense.

     Salaries and employee benefits expense increased in 1999 due primarily to
merit increases, higher performance-based compensation and an increase in the
number of employees. The increase in performance-based compensation in 1999
correlated directly with improvement in operating earnings and revenues.

     Investments in technology supporting the consumer, commercial and capital
management lines of business resulted in higher equipment expense in 1999
compared to 1998.

     Net occupancy expense increased in 1999 due to branch expansion in Florida,
higher net rent expense and depreciation expense on leasehold improvements.


                               EFFICIENCY RATIO

                                    [GRAPH]

<TABLE>
<CAPTION>

                                            EXCLUDES MERGER-RELATED
                         AS REPORTED        AND OTHER CHARGES
          <S>              <C>                     <C>
          96               61.3%                   59.5%

          97               59.2%                   59.2%

          98               62.0%                   56.6%

          99               69.2%                   56.2%

          00               64.7%                   55.1%
</TABLE>

     The increase in 1999 subscribers' commissions reflected higher investment
sales volume in 1999 over 1998.

     Other NIE increased in 1999 due to higher marketing expenses associated
with increased promotions and direct marketing projects and costs for other
professional and outsourced services.

Operating Efficiency Productivity in the banking industry is commonly measured
by the operating efficiency ratio. It measures the amount of expense dollars
utilized to generate a dollar of revenue. The ratio is calculated by dividing
total NIE by the sum of NII, on a taxable equivalent basis, and total NIR. Based
on reported earnings, AmSouth's operating efficiency ratio was 64.7 percent in
2000 compared to 69.2 percent in 1999 and 62.0 percent in 1998. Excluding the
revenues and expenses of IFC as well as merger-related and other charges, the
efficiency ratio was 53.0 percent in 2000 compared to 53.9 percent in 1999.
Improvement in the ratio primarily reflected lower expenses due to synergies
created by the Merger.

     Management's ability to improve operating efficiency during 2001 will
depend upon its ability to meet its revenue growth objectives while maintaining
control across all noninterest expense categories.

Income Taxes AmSouth's income tax expense was $125.4 million in 2000, $200.9
million in 1999 and $264.7 million in 1998. The decrease in 2000 and 1999 was
the result of lower pretax income. The effective tax rate for 2000 was 27.6
percent compared to 37.1 percent in 1999 and 35.8 percent in 1998. The decrease
in the effective tax rate for 2000 is primarily due to the restructuring of a
portion of AmSouth's lease portfolio in 2000 which lowered the effective tax
rate on income from leases. In addition, the reduction in the effective tax rate
reflected a decrease in nondeductible acquisition cost in 2000 and the increase
in the cash surrender value of bank-owned life insurance as compared to 1999.
Details of the deferred tax assets and liabilities are included in Note 20 of
the Notes to Consolidated Financial Statements.

Balance Sheet Analysis

At December 31, 2000, AmSouth reported total assets of $38.9 billion compared to
$43.4 billion at the end of 1999. Average total assets were $41.9 billion in
2000, basically unchanged compared to 1999. The comprehensive balance sheet
restructuring, completed late in the third quarter of 2000,

                                      43

<PAGE>

resulted in a substantial reduction in assets on the balance sheet at the end of
2000. Loans and securities totaling $5.1 billion were sold as part of the
financial restructuring.

Interest-Earning Assets  In banking, the predominant interest-earning assets are
loans and investment securities. The proportion of interest-earning assets to
total assets measures the effectiveness of management's effort to invest
available funds into the most profitable interest-earning assets. In 2000,
interest-earning assets were 91.8 percent of total average assets compared to
91.3 percent in 1999. The categories which comprise interest-earning assets are
shown in Table 1.

Securities  AmSouth classifies its debt and equity securities as either
held-to-maturity, available-for-sale or trading securities. Securities are
classified as held-to-maturity and carried at amortized cost only if AmSouth has
the positive intent and ability to hold those securities to maturity. If not
classified as held-to-maturity, such securities are classified as trading
securities or available-for-sale securities. Trading securities are carried at
market value with unrealized gains and losses included in other noninterest
revenues. Available-for-sale securities are also carried at market value with
unrealized gains and losses, net of deferred taxes, reported in accumulated
other comprehensive income within shareholders' equity.

     At December 31, 2000, available-for-sale securities totaled $1.9 billion
and represented 22.3 percent of the total securities portfolio compared to $6.0
billion or 45.6 percent in available-for-sale securities at the end of 1999. The
decrease in 2000 was primarily the result of the sale of $4.0 billion of
securities as part of the comprehensive financial restructuring in the third
quarter. The securities at year-end 2000 consisted of U.S. Treasury and federal
agency securities, variable and fixed rate mortgage-backed securities, state and
municipal securities, other private asset-backed securities, and equities. The
average life of the portfolio is estimated to be 4.6 years with a duration of
approximately 3.0 years. Total net realized losses of $95.3 million from the
sale of available-for-sale securities were included in other noninterest
revenues in 2000, compared to $11.4 million of net realized gains in 1999.
Included in 2000 were losses totaling $105.6 million on the sale of $4.0 billion
of securities associated with the comprehensive financial restructuring.
Unrealized gains on the available-for-sale portfolio of $7.1 million, net of
deferred taxes, and $114.6 million of unrealized losses net of deferred taxes,
associated with the transfer of available-for-sale securities to the
held-to-maturity portfolio in 1999, were included in accumulated other
comprehensive income within shareholders' equity at December 31, 2000.

     Held-to-maturity securities were $6.7 billion at the end of 2000 compared
to $7.1 billion at year-end 1999. Securities classified as held-to-maturity at
the end of 2000 consisted primarily of collateralized mortgage obligations, U.S.
Treasury and federal agency securities, mortgage-backed securities and state,
county and municipal obligations. The average life of these securities is
estimated to be 5.4 years with a duration of 3.1 years.

SECURITIES TABLE 5


--------------------------------------------------------------------------------
                                                             December 31
(In millions)                                         2000      1999      1998
--------------------------------------------------------------------------------
Trading securities                                   $    12   $    52   $    48
Available-for-sale securities:
  U.S. Treasury and federal agency securities          1,304     5,135     5,975
  Other securities                                       538       756     1,170
  State, county and municipal securities                  67        74       380
                                                     ---------------------------
                                                       1,909     5,965     7,525
                                                     ---------------------------
Held-to-maturity securities:
  U.S. Treasury and federal agency securities          4,798     5,284     2,459
  Other securities                                     1,465     1,390     1,197
  State, county and municipal securities                 387       377       222
                                                     ---------------------------
                                                       6,650     7,051     3,878
                                                     ---------------------------
                                                     $ 8,571   $13,068   $11,451
================================================================================

                                      44

<PAGE>

At December 31, 2000, the held-to-maturity portfolio had unrealized gains,
before taxes, of $79.4 million.

     On January 1, 2001, AmSouth, as permitted by Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and for
Hedging Activities" (Statement 133), transferred approximately $2.1 billion of
securities from held-to-maturity to available-for-sale. In conjunction with this
transfer, AmSouth recorded an after-tax increase to other comprehensive income
of $26.6 million to reflect the fair value of the securities transferred on
January 1, 2001. See Note 1 of the Notes to Consolidated Financial Statements
for further discussion of the transfer.

     AmSouth's policy requires all securities purchased for the securities
portfolio, except state, county and local municipal obligations, to be rated
investment grade or better. Securities backed by the U.S. Government and its
agencies, both on a direct and indirect basis, represented approximately 76
percent of the portfolio at December 31, 2000. Approximately 95 percent of
state, county and local municipal securities at year-end 2000 were rated either
single A or above by the rating agencies or were escrowed in U.S. Treasury
obligations.

     Management anticipates that investment securities will remain relatively
stable in 2001 from ending 2000 levels and will fluctuate mainly based on loan
funding needs and liquidity levels.

AVAILABLE-FOR-SALE SECURITIES AND HELD-TO-MATURITY SECURITIES

RELATIVE CONTRACTUAL MATURITIES AND WEIGHTED AVERAGE YIELDS  TABLE 6

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                       Due Within       Due After One but    Due After Five but       Due After
                                                        One Year        Within Five Years     Within Ten Years        Ten Years
-----------------------------------------------------------------------------------------------------------------------------------
(Taxable equivalent basis-dollars in thousands)      Amount    Yield    Amount     Yield    Amount       Yield     Amount     Yield
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>        <C>     <C>         <C>     <C>           <C>     <C>          <C>
AVAILABLE-FOR-SALE SECURITIES:
 U.S. Treasury and
  federal agency securities                         $ 33,065    7.96%  $ 30,683    5.10%   $104,509       6.70%  $1,116,677   6.99%
 State, county and municipal obligations               5,585    6.92     15,679    6.86      26,319       7.61       18,259   7.77
 Other securities                                     73,913    5.67     52,045    0.00       8,074       6.81       73,151   7.08
                                                    -------------------------------------------------------------------------------
                                                    $112,563    6.40%  $ 98,407    2.68%   $138,902       6.88%  $1,208,087   7.00%
                                                    ===============================================================================
Taxable equivalent adjustment for
  calculation of yield                              $    126           $    358            $    664              $      363

HELD-TO-MATURITY SECURITIES:
 U.S. Treasury and
  federal agency securities                         $ 36,151    6.93%  $ 97,623    6.17%   $876,108       6.72%  $3,787,982   6.57%
 State, county and municipal obligations               5,166   10.00     15,052    8.72      36,881       7.03      329,734   6.53
 Other securities                                        925    7.03     15,272    6.57      17,539       7.13    1,432,006   6.82
                                                    -------------------------------------------------------------------------------
                                                    $ 42,242    7.31%  $127,947    6.51%   $930,528       6.74%  $5,549,722   6.63%
                                                    ===============================================================================
Taxable equivalent adjustment for
  calculation of yield                              $    188           $    455            $    744              $    5,825
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Notes:

1.   The weighted average yields were computed by dividing the taxable
     equivalent interest income by the amortized cost of the appropriate
     securities. The taxable equivalent interest income has been computed based
     on the statutory federal income tax rate and does not give effect to the
     disallowance of interest expense, for federal income tax purposes, related
     to certain tax-free assets.

2.   The amount of available-for-sale securities indicated as maturing after
     five but within ten years includes $67 million of mortgage-backed
     securities, and those indicated as maturing after ten years includes $1.2
     billion of mortgage-backed securities. Although these securities have
     stated long-term final maturities, according to mortgage industry
     standards, the estimated weighted average remaining life of these
     securities held in AmSouth's investment portfolio is approximately 3.8
     years.

3.   The amount of held-to-maturity securities indicated as maturing after five
     but within ten years includes $460 million of mortgage-backed securities,
     and those indicated as maturing after ten years includes $5.1 billion of
     mortgage-backed securities. Although these securities have stated long-term
     final maturities, according to mortgage industry standards, the estimated
     weighted average remaining life of these securities held in AmSouth's
     investment portfolio is approximately 6.1 years.

4.   Federal Reserve Bank stock, Federal Home Loan Bank stock, and equity stock
     of other corporations held by AmSouth are not included in the above table.

                                      45

<PAGE>

Loans  Loans are the single largest category of interest-earning assets for
AmSouth and produce the highest level of revenues. At December 31, 2000, loans,
net of unearned income, totaled $24.6 billion, a decrease of 6.3 percent from
the $26.3 billion reported at the end of 1999.

     The decline in the loan portfolio at December 31, 2000, was primarily the
result of increased sales of participations in certain narrow-spread loans to
third-party conduits, as well as the securitization of $1.0 billion of
automobile dealer indirect loans during the year.

     The residential mortgage portfolio continued to decline in 2000 as the
result of management's decision in 1997 to reduce the amount of these loans on
the balance sheet. This was accomplished through normal runoff, selling a
portion of new originations into the secondary market and participating loans
into third-party conduits. At the end of 2000, there were approximately $2.7
billion of outstanding mortgage loans that had been sold to conduits, or
approximately $1.0 billion higher than at year-end 1999.

     During 2000, AmSouth continued to reduce the amount of low-yield commercial
loans on the balance sheet through the use of commercial loan conduits. At the
end of 2000, there were approximately $1.8 billion of commercial loans in
third-party conduits, approximately 24.9 percent higher than at the end of 1999.


                                  TOTAL LOANS
                                 (in billions)

                                    [GRAPH]
<TABLE>
                              <S>          <C>
                               96          $23.1
                               97          $24.4
                               98          $24.4
                               99          $26.3
                               00          $24.6
</TABLE>

     AmSouth also sold, in 2000, low-spread dealer indirect automobile loans to
conduits. At the end of 2000, there were approximately $793.6 million of
outstanding dealer indirect loans in conduits.

MAJOR LOAN CATEGORIES TABLE 7

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                                                          December 31
(In millions)                                        2000        1999          1998         1997         1996
--------------------------------------------------------------------------------------------------------------
<S>                                               <C>          <C>          <C>          <C>          <C>
Commercial:
  Commercial and industrial                       $  7,313     $  7,967     $  7,943     $  7,653     $  7,014
  Commercial loans secured by real estate            1,765        2,036        1,833        2,496        2,407
                                                  ------------------------------------------------------------
    Total commercial                                 9,078       10,003        9,776       10,149        9,421
                                                  ------------------------------------------------------------
Commercial real estate:
  Commercial real estate mortgages                   2,323        2,295        2,221        1,465        1,337
  Real estate construction                           2,517        2,417        1,800        1,321        1,091
                                                  ------------------------------------------------------------
    Total commercial real estate                     4,840        4,712        4,021        2,786        2,428
                                                  ------------------------------------------------------------
Consumer:
  Residential first mortgages                        1,358        1,701        2,306        3,482        3,755
  Other residential mortgages                        4,656        3,874        3,346        3,378        3,108
  Dealer indirect                                    2,990        4,149        2,909        1,883        1,834
  Revolving credit                                     505          489          477          682          688
  Other consumer                                     1,189        1,339        1,610        2,055        1,891
                                                  ------------------------------------------------------------
    Total consumer                                  10,698       11,552       10,648       11,480       11,276
                                                  ------------------------------------------------------------
Total loans net of unearned income                 $24,616      $26,267      $24,445      $24,415      $23,125
==============================================================================================================
</TABLE>

                                      46

<PAGE>

                          LOAN PORTFOLIO DISTRIBUTION


                              2000

                              CONSUMER                      37.9%
[PIE CHART]                   COMMERCIAL REAL ESTATE        19.7%
                              RESIDENTIAL                    5.5%
                              COMMERCIAL                    36.9%

                              1999

                              CONSUMER                      38.1%
[PIE CHART]                   COMMERCIAL REAL ESTATE        17.9%
                              RESIDENTIAL                    6.5%
                              COMMERCIAL                    37.5%

     At the end of 2000, total managed loans net of unearned income, which
include loans contained in the conduits and loans securitized, grew 4.6 percent
to $30.7 billion compared to year-end 1999.

     The loan portfolio at AmSouth includes four main components: commercial
loans, commercial real estate loans, consumer loans, and, within the consumer
loan category, residential first mortgage loans. At the end of 2000, commercial
loans represented 36.9 percent of the total portfolio, commercial real estate
loans were 19.7 percent, while consumer loans, excluding residential first
mortgages, were 37.9 percent and residential first mortgages represented 5.5
percent. This compared with 38.1 percent, 17.9 percent, 37.5 percent, and 6.5
percent at the end of 1999 for commercial loans, commercial real estate loans,
consumer loans, and residential first mortgages, respectively.

     Total commercial loans were $9.1 billion at the end of 2000 compared to
$10.0 billion at year-end 1999.

     In 2000, the level of commercial loans declined 9.2 percent and reflected
AmSouth's strategy to exit a substantial portion of its syndicated commercial
loan portfolio. This strategy resulted in the sale or runoff of approximately
$500 million of loans. In addition, the increased level of commercial loan
participations to commercial loan conduits in 2000 reduced the level of
commercial loans on the balance sheet. Further controlling growth in AmSouth's
commercial loan portfolio was the application of more selective pricing
standards in response to rising interest rate environments during the first half
of 2000.

SELECTED LOAN MATURITIES AND SENSITIVITY TO CHANGE IN INTEREST RATES TABLE 8

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
                                        Due in One            Due After One
                                       Year or Less       but Within Five Years           Due After Five Years
------------------------------------------------------------------------------------------------------------------------------
                                                        Fixed    Variable               Fixed    Variable
(In millions)                                           Rate       Rate       Total      Rate      Rate     Total      Total
------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>             <C>        <C>        <C>        <C>      <C>        <C>       <C>
Commercial and industrial                 $1,986       $2,044     $2,869     $4,913     $1,815     $364     $2,179    $  9,078
Commercial real estate mortgages             488          728        521      1,249        383      203        586       2,323
Real estate construction                   1,019          270        722        992        406      100        506       2,517
                                          ------------------------------------------------------------------------------------
  Total                                   $3,493       $3,042     $4,112     $7,154     $2,604     $667     $3,271    $ 13,918
==============================================================================================================================
</TABLE>

     Management expects modest growth in commercial loans in 2001 due to new
business development resulting from the initiative to aggressively grow high
growth markets where AmSouth has relatively low market share, expansion of
services to small businesses through the business banking initiative, continued
growth of commercial lease financing and asset-based lending, and further
application of its relationship banking concept in all of its markets. For this
growth to occur, the economy must experience modest growth throughout 2001 for
loan demand to be sufficient to meet the company's goals. In addition,
management must be able to provide satisfactory sales results and service
quality and develop new products in the commercial lending area.

     Commercial real estate loans are composed of two primary categories:
commercial real estate mortgages and real estate construction loans. The growth
in commercial real estate lending reflects the strength of the real estate
markets in AmSouth's Southeastern markets, particularly Florida, and

                                      47

<PAGE>

growth in commercial real estate loans among business banking customers. The
increase, since 1996, was also indicative of AmSouth's efforts to systematically
grow the real estate portfolio while improving loan quality. Substantially all
of AmSouth's real estate growth was made up of loans to finance local home
builders within AmSouth's markets; loans for construction projects that have
been presold, preleased or otherwise have secured permanent financing; and loans
to real estate companies that have significant equity invested in each project
and offer substantive and meaningful guarantees.

     Management anticipates a relatively stable balance of commercial real
estate loans during 2001, compared to 2000, as loans that pay off are replaced
during the year. Fulfillment of this strategy is based, in part, on continued
strength in commercial real estate in AmSouth's markets.

     Consumer loans primarily include home equity loans and lines of credit,
dealer indirect loans, revolving credit, and other direct consumer loans, but
exclude residential first mortgage loans. AmSouth's consumer lending programs
produced strong growth in 2000.

     Among the leading areas of growth, home equity loans and lines of credit
experienced strong growth in all of AmSouth's markets during 2000. The growth is
the result of selling home equity loans and lines of credit in the branches and
acquiring new customers from direct mail marketing promotions in our primary
markets.

     Dealer indirect loans consisted primarily of loans made to individuals to
finance the purchase of new and used automobiles. Dealer indirect loans on the
balance sheet were lower at the end of 2000 due to the sale during the year of
dealer loans to conduits and the securitization of approximately $1 billion of
dealer loans. At December 31, 2000, there were approximately $793.6 million of
dealer loans in conduits and $861.2 million of dealer loans outstanding which
had been securitized and sold. On a managed basis, which includes loans
securitized and in conduits, dealer indirect loans as of December 31, 2000,
increased $496.0 million, or 12.0 percent over the 1999 level. New loan
production in 2000 continued to be strong, with more than $2.5 billion in new
loans originated during the year.

     Revolving credit, which consists primarily of bankcard outstandings, was
limited in 2000 by normal portfolio runoff and more emphasis on promoting home
equity loans and lines of credit.

     Management anticipates that in 2001 consumer loans will grow, provided the
economy experiences modest growth, consumer borrowing patterns improve through
2001 and AmSouth's strategic initiative to aggressively grow consumer banking is
successful.



                                TOTAL  DEPOSITS
                                 (in billions)

                                    [GRAPH]
<TABLE>
                                <S>       <C>
                                96        $26.0
                                97        $27.0
                                98        $28.5
                                99        $27.9
                                00        $26.6
</TABLE>

     Deposits   Deposits are AmSouth's primary source of funding, and their cost
is the largest category of interest expense. There are five principal categories
of deposits: noninterest-bearing demand, interest-bearing demand and money
market, savings, time, and certificates of deposit of $100,000 or more. See
Table 9 for the detailed amounts.

     Total average deposits in 2000 were $27.3 billion compared to $27.7 billion
in 1999, a decline of $394.9 million or 1.4 percent. Most categories of deposits
were lower during 2000, compared to 1999, primarily because consumers shifted
toward higher yielding or more aggressive financial products such as mutual
funds and annuities and because consumer spending and debt were higher. Also
contributing to the decline were higher levels of capital spending by businesses
in 2000, thereby reducing their investable assets. These factors contributed to
a highly competitive market for deposits in 2000, especially among banks.

     A number of factors controlled by AmSouth also contributed to the decline
in deposits during the year. AmSouth sold 16 branches that were outside of its
primary markets with deposits totaling approximately $490 million at the time of
the sales. Additionally, AmSouth aggressively managed down its "cash and due
from" balances during the year and allowed certain foreign

                                      48

<PAGE>

AVERAGE DEPOSITS  TABLE 9

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
                                                                      December 31
(In thousands)                                         2000              1999              1998
---------------------------------------------------------------------------------------------------
<S>                                                <C>               <C>               <C>
Noninterest-bearing demand                         $  4,658,636      $  4,894,631      $  4,707,121
Interest-bearing demand and money market              9,376,473         9,269,643         9,201,511
Savings                                               1,661,398         2,191,546         1,968,461
Time:
  Retail                                              6,142,485         6,203,375         7,142,064
  Individual retirement accounts                      1,411,165         1,541,838         1,581,439
  Other                                                 207,156            76,548           100,425
                                                   ------------------------------------------------
    Total time                                        7,760,806         7,821,761         8,823,928
                                                   ------------------------------------------------
Foreign time                                          1,087,636           703,421           203,084
Certificates of deposit of $100,000 or more           2,778,184         2,837,027         2,246,605
                                                   ------------------------------------------------
                                                   $ 27,323,133      $ 27,718,029      $ 27,150,710
===================================================================================================
</TABLE>

time and public funds deposits totaling $1.3 billion to run off during the
fourth quarter as a result of the financial restructuring.

     Average noninterest-bearing checking deposits were 4.8 percent lower in
2000 as a result of lower balances from commercial and consumer customers.
Interest-bearing demand deposits were higher in 2000 primarily due to growth in
money market and interest checking products. Through promotions and campaigns
throughout the year, AmSouth offered highly competitive interest rates to
attract new deposits in these categories.

     Average savings deposits declined by 24.2 percent as customers moved their
money to higher paying interest checking and money market accounts.

     Time deposits were lower in 2000, primarily due to a growing trend by
consumers toward uninsured financial products. While AmSouth experienced strong
growth in alternative financial products such as annuities and mutual fund
sales, as indicated by growth in consumer investment services income during the
year, sales of core time deposits declined. To a lesser extent, a tendency
toward more frequent "rate shopping" by consumers as interest rates rose during
the year resulted in a highly competitive rate environment for time deposits in
2000.

     Certificates of deposit of $100,000 or more and foreign time deposits were
higher in 2000 as the result of offers of more attractive rates during the year.
These deposits, for the most part, are competitively bid and fluctuate based on
the average level of interest rates and management's determination of the need
for such deposits from time to time. Table 10 provides a maturity schedule for
domestic time deposits of $100,000 or more at December 31, 2000.

     AmSouth expects deposit growth to improve in 2001, provided consumer demand
for insured deposit products improves, AmSouth's strategic initiatives to double
the contribution from business banking and aggressively grow consumer banking
are successful, and AmSouth is able to offer competitive products and prices in
each of its markets.

MATURITY OF TIME DEPOSITS OF $100,000 OR MORE TABLE 10

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
                                                                      December 31
(In thousands)                                         2000              1999              1998
---------------------------------------------------------------------------------------------------
<S>                                                  <C>               <C>               <C>
Three months or less                                 $  635,263        $1,329,618        $1,312,931
Over three through six months                           454,478           493,883           550,072
Over six through twelve months                          918,331           533,104           666,806
Over twelve months                                      741,904           603,530           391,098
                                                     ----------------------------------------------
                                                     $2,749,976        $2,960,135        $2,920,907
===================================================================================================
</TABLE>

                                      49

<PAGE>

Other Interest-Bearing Liabilities   Other interest-bearing liabilities include
all interest-bearing liabilities except deposits. Short-term liabilities
included in this category consist of federal funds purchased and securities sold
under agreements to repurchase (repurchase agreements) and other borrowed funds.
Average other borrowed funds, which include master notes, short-term FHLB
advances, term fed fund purchases, bank notes, and treasury, tax and loan notes,
increased in 2000 to $1.5 billion versus $939.8 million in 1999, an increase of
64.6 percent. These sources were utilized in 2000 primarily to fund lending
activities in light of the lower level of deposits during the year. However,
AmSouth began reducing its short-term borrowings in the fourth quarter with
funds received from the sale of securities and loans as part of its
third-quarter financial restructuring.

     Average federal funds purchased and repurchase agreements were $3.4 billion
in 2000, a 15.6 percent decrease from $4.1 billion in 1999. At December 31,
2000, 1999 and 1998, federal funds purchased and repurchase agreements totaled
$2.3 billion, $4.1 billion and $3.5 billion, respectively, with weighted-average
interest rates of 5.37 percent, 4.57 percent and 4.37 percent, respectively. The
maximum amount outstanding at any month end during each of the last three years
was $4.5 billion, $4.8 billion and $3.8 billion, respectively. The average daily
balance and average interest rates for each year are presented in Table 2.

     Long-term debt consists of long-term FHLB advances, subordinated notes and
debentures, and various long-term notes payable. The most significant increase
during the year occurred in FHLB advances as average long-term FHLB advances
grew by $758.0 million. The result was average long-term borrowings in 2000 of
$6.0 billion, an increase of $739.8 million or 14.0 percent over 1999. These
funds were utilized in 2000 because of their relatively low cost and the ability
to match their maturities with those of the assets being funded.

Shareholders' Equity  Shareholders' equity was reduced by cash dividends
declared of $307.2 million and the purchase of 22.7 million shares of AmSouth
common stock for $375.8 million to provide shares for employee benefit plans,
dividend reinvestment and other corporate purposes. Partially offsetting these
items during 2000 were the retention of net income, issuances of common stock
under the various stock-based employee benefit plans and the dividend
reinvestment plan, and a $141.3 million decrease in unrealized losses on
available-for-sale securities as the result of improved market values in the

CAPITAL RATIOS TABLE 11

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
                                                                      December 31
(Dollars in thousands)                                         2000                  1999
----------------------------------------------------------------------------------------------
<S>                                                         <C>                    <C>
RISK-BASED CAPITAL:
 Shareholders' equity                                       $  2,813,407           $  2,959,205
 Unrealized losses on available-for-sale securities              107,550                248,849
 Less certain intangible assets                                 (344,286)              (438,397)
                                                            -----------------------------------
   Tier I capital                                              2,576,671              2,769,657
 Adjusted allowance for loan losses                              380,434                354,679
 Qualifying long-term debt                                       773,981                823,570
                                                            -----------------------------------
   Tier II capital                                             1,154,415              1,178,249
                                                            -----------------------------------
     Total capital                                          $  3,731,086           $  3,947,906
                                                            ===================================
 Risk-adjusted assets                                       $ 33,655,620           $ 37,119,733
                                                            ===================================

CAPITAL RATIOS:
 Tier I capital to total risk-adjusted assets                       7.66%                  7.46%
 Total capital to total risk-adjusted assets                       11.09                  10.64
 Leverage                                                           6.72                   6.21
 Ending equity to assets                                            7.23                   6.82
 Ending tangible equity to assets                                   6.41                   5.96
-----------------------------------------------------------------------------------------------
</TABLE>

                                      50

<PAGE>

available-for-sale portion of the investment portfolio. Information on prior
years may be found in the Consolidated Statement of Shareholders' Equity.

     AmSouth maintains a capital and dividend policy based on industry
standards, regulatory requirements, perceived risk of the various lines of
business, and future growth opportunities. At least annually, management
reevaluates the policy and presents its findings to the Board of Directors to
ensure that the policy continues to support corporate objectives and be
consistent with the regulatory environment and changes in market conditions.

     At December 31, 2000, AmSouth met or exceeded all of the minimum capital
standards for the parent company and its banking subsidiary as established by
regulatory requirements and the Company's capital policy. Refer to Table 11 and
Notes 15 and 18 of the Notes to Consolidated Financial Statements for specific
information.

Risk Management

Risk identification and management are key elements in the overall management of
AmSouth. Management believes the primary risk exposures are interest rate,
liquidity and credit risk. Interest rate risk is the risk to NII represented by
the impact of higher or lower interest rates. Liquidity risk is the possibility
that the Company will not be able to fund present and future obligations, and
credit risk represents the possibility that borrowers may not be able to repay
loans. External factors beyond management's control may from time to time result
in losses despite risk management efforts. Some of the more significant
processes used to manage and control these risks are described in the following
paragraphs.

Asset and 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 NIM under varying interest
rate environments. This is accomplished through the development and
implementation of lending, funding, pricing and hedging strategies designed to
maximize net interest income performance under varying interest rate
environments subject to specific liquidity and interest rate risk guidelines.

Interest Rate Risk AmSouth uses a number of measures to monitor and manage
interest rate risk. An earnings simulation model is the primary tool used to
assess the direction and magnitude of the changes in NII caused by changes in
interest rates. Key

INTEREST RATE SWAPS, CAPS AND FLOORS TABLE 12

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                   Receive Fixed    Pay Fixed                  Forward Swaps    Caps &
(In millions)                       Rate Swaps      Rate Swaps   Basis Swaps    Pay Fixed       Floors       Total
--------------------------------------------------------------------------------------------------------------------
<S>                                <C>              <C>          <C>            <C>          <C>            <C>
Balance at January 1, 1998           $ 1,670         $   256         $ 50        $ 1,350        $  300      $ 3,626
  Additions                              469             300            -          1,300             -        2,069
  Maturities                            (130)             (1)           -           (150)            -         (281)
  Calls                                 (255)              -            -              -             -         (255)
  Terminations                          (250)            (50)         (50)          (450)         (300)      (1,100)
                                   ---------------------------------------------------------------------------------
Balance at December 31, 1998           1,504             505            -          2,050             -        4,059
  Additions                            2,389               -            -            800             -        3,189
  Maturities                            (125)             (1)           -              -             -         (126)
  Calls                                 (450)              -            -              -             -         (450)
  Terminations                             -            (504)           -         (2,850)            -       (3,354)
                                   ---------------------------------------------------------------------------------
Balance at December 31, 1999           3,318               -            -              -             -        3,318
  Additions                              818               -            -              -             -          818
  Maturities                            (259)              -            -              -             -         (259)
  Calls                                 (850)              -            -              -             -         (850)
  Terminations                          (360)              -            -              -             -         (360)
                                   ---------------------------------------------------------------------------------
Balance at December 31, 2000         $ 2,667         $     -         $  -       $      -        $    -      $ 2,667
====================================================================================================================
</TABLE>

                                      51

<PAGE>

MATURITIES AND INTEREST RATES EXCHANGED ON SWAPS TABLE 13

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
                                                        Mature During
(Dollars in millions)        2001     2002     2003     2004     2005     2008     2009     Total
-------------------------------------------------------------------------------------------------
<S>                         <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>
  RECEIVE FIXED SWAPS:
  Notional amount           $ 607    $ 970    $ 290    $ 350    $ 150    $ 125    $ 175    $2,667
  Receive rate               6.44%    6.62%    6.34%    6.21%    6.25%    6.15%    6.22%     6.43%
  Pay rate                   6.41%    6.72%    6.73%    6.73%    6.82%    6.80%    6.82%     6.67%
-------------------------------------------------------------------------------------------------
</TABLE>

assumptions in the model include prepayment speeds on mortgage-related assets;
cash flows and maturities of derivatives and other financial instruments held
for purposes other than trading; changes in market conditions, loan volumes and
pricing; deposit sensitivity; customer preferences; and management's financial
and capital plans. These assumptions are inherently uncertain and, as a result,
the model cannot precisely estimate NII or precisely predict the impact of
higher or lower interest rates on NII, but it can indicate the likely direction
of change. Actual results will differ from simulated results due to timing,
magnitude and frequency of interest rate changes and changes in market
conditions and management's strategies, among other factors.

     Based on the results of the simulation model as of December 31, 2000, NII
would decrease $2.0 million or 0.10 percent if interest rates gradually
increased from then-current rates by 100 basis points over a 12-month period and
would be unchanged if interest rates gradually decreased under the same
scenario. This level of interest rate risk is well within the Company's policy
guidelines. As of December 31, 1999, the simulation model indicated that NII
would decrease $38.4 million or 2.3 percent and increase $25.3 million or 1.5
percent if interest rates gradually increased or decreased, respectively, from
their current rates by 100 basis points over a 12-month period. For June 1999
through May 2000, interest rates rose 175 basis points.

     The significant reduction in AmSouth's interest sensitivity compared to
1999 is primarily the result of the financial restructuring initiated in the
third quarter of 2000. As part of the financial restructuring, AmSouth sold $4.0
billion of low-yielding fixed-rate investment securities and securitized and
sold approximately $1.0 billion of low-yielding fixed-rate automobile loans.
These fixed-rate assets were primarily funded by floating-rate overnight and
other short-term borrowings. This action has significantly reduced the impact of
interest rate fluctuations on NII.

     In connection with the financial restructuring, an independent review was
done of the interest rate risk management process. While AmSouth's existing
simulation model was found to be operating appropriately, management began
expanding the interest rate sensitivity model to include different and more
extreme interest rate scenarios such as those experienced in 1999 and 2000. In
addition, variations in other key assumptions, such as loan and deposit volume
and pricing, are also being stress-tested in net interest income risk modeling.

     AmSouth uses various off-balance sheet financial instruments to assist in
managing interest rate risk. AmSouth had interest rate swaps as of December 31,
2000, in the notional amount of $2.7 billion. Of these swaps, $1.0 billion of
notional value was used to hedge the cash flow of variable-rate securities and
commercial loans. The remaining $1.7 billion of notional value of swaps was used
to hedge the fair value of fixed-rate consumer certificates of deposit and
corporate and bank debt. See Note 1 and Note 13 to the Consolidated Financial
Statements for further discussion of off-balance-sheet derivatives.

     Table 12 summarizes the activity, by notional amount, of off-balance sheet
financial instruments utilized in the asset and liability management process at
AmSouth for the years 2000, 1999 and 1998.

     Table 13 summarizes the expected maturities on all of AmSouth's off-balance
sheet positions at December 31, 2000, and interest rates exchanged on swaps.
Both the timing of the maturities and the variable interest payments and
receipts vary as certain interest rates change. The maturities and interest
rates exchanged are calculated assuming that interest rates remain unchanged
from average December 2000 rates. The information presented could change as
future interest rates increase or decrease.

     Liquidity AmSouth's goal in liquidity management is to satisfy the cash
flow requirements of depositors and borrowers while

                                      52

<PAGE>

CREDIT RATINGS Table 14

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                                          Standard &
                                            Moody's         Poor's         Fitch
--------------------------------------------------------------------------------
<S>                                         <C>           <C>              <C>
6.875% Subordinated Notes Due 2003            A3             BBB+           BBB+
7.75% Subordinated Notes Due 2004             A3             BBB+           BBB+
6.625% Subordinated Notes Due 2005            A3             BBB+           BBB+
6.125% Subordinated Notes Due 2009            A3             BBB+           BBB+
6.45% Subordinated Notes Due 2018             A2*              A-*            -
6.75% Subordinated Debentures Due 2025        A3             BBB+           BBB+
7.25% Senior Notes Due 2006                   A2               A-             A-
Commercial paper                              P-1              A-2            F1
Certificates of deposit                       A1*              A*             A
Short-term counterparty                       P-1              A-1*           F1
Long-term counterparty                        A1*              A*             A
Financial Strength Rating                     B*               -            B/C*
--------------------------------------------------------------------------------
</TABLE>

*AmSouth Bank

Table reflects ratings as of January 31, 2001

at the same time meeting the cash flow needs of the Company. This is
accomplished through the active management of both the asset and liability sides
of the balance sheet. The liquidity position of AmSouth is monitored on a daily
basis by AmSouth's Treasury Division. In addition, the Asset/Liability
Committee, which consists of members of AmSouth's senior management team,
reviews liquidity on a regular basis and approves any changes in strategy that
are necessary as a result of balance sheet or anticipated cash flow changes.
Management also compares on a monthly basis the Company's liquidity position to
established corporate liquidity guidelines. At December 31, 2000, AmSouth was
within all of its established guidelines. The primary sources of liquidity on
the asset side of the balance sheet are maturities and cash flows from both
loans and investments as well as the ability to securitize or sell certain loans
and investments. Liquidity on the liability side is generated primarily through
growth in core deposits and the ability to obtain economical wholesale funding
in national and regional markets through a variety of sources. AmSouth's most
commonly used sources of wholesale funding are (1) federal funds (i.e., the
excess reserves of other financial institutions); (2) repurchase agreements,
whereby U.S. government and government agency securities are pledged as
collateral for short-term borrowings; and (3) pledges of acceptable assets as
collateral for public deposits and certain tax collection monies.

     In addition to these sources, AmSouth can access other wholesale funding
sources such as Eurodollar deposits and certificates of deposit. AmSouth Bank
also has the ability to borrow from the FHLB. FHLB advances are competitively
priced and are a reliable source of funds. Also, AmSouth Bank maintains a short
and medium-term note issuance program with a borrowing capacity of $3.0 billion.
There was $450.0 million outstanding under the issuance program at December 31,
2000.

     Maintaining adequate credit ratings on debt issues is critical to liquidity
because it affects the ability of AmSouth to attract funds from various sources
on a cost competitive basis. Table 14 summarizes AmSouth's current credit
ratings.

     Credit Risk Management Process and Loan Quality. The loan portfolio at
AmSouth holds the highest degree of risk for the Company. AmSouth manages and
controls risk in the loan portfolio through adherence to consistent standards
established by senior management, combined with commitment to producing quality
assets, developing profitable relationships and meeting strategic growth
targets. AmSouth has written credit policies which establish underwriting
standards, place limits on exposure and set other limits or standards as deemed
necessary and prudent. Also included in the policy, primarily determined by the
amount and type of loan, are various approval levels, ranging from the branch or
department level to those which are more centralized.

                                      53

<PAGE>

AmSouth maintains a diversified portfolio intended to spread its risk and
reduce its exposure to economic downturns, which may occur in different segments
of the economy or in particular industries. Industry and loan type
diversification is reviewed quarterly.

     Commercial real estate loans are categorized by the type of collateral.
Owner-occupied properties include mortgages where the borrower is a primary
tenant, such as factory or warehouse loans. Nonowner-occupied lending represents
those loans where the primary method of repayment is anticipated to come from
the rental income and generally has inherently more risk than owner-occupied
lending.

     Each commercial loan recorded at AmSouth is assigned a risk rating on a
13-point numerical scale by the loan officer using established credit policy
guidelines. Consumer loan portfolios are assigned risk ratings based on a
nine-point scale and are based on the type of loan and its performance. All risk
ratings are subject to review by an independent Credit Review Department. In
addition, regular reports are made to senior management and the Board of
Directors regarding the credit quality of the loan portfolio as well as trends
in the portfolio.

     The Credit Administration function includes designated credit officers,
some of whom are industry specialists and all of whom are organizationally
independent of the production areas. They oversee the loan approval process,
ensure adherence to credit policies and monitor efforts to reduce nonperforming
and classified assets. Additionally, a centralized special assets function
handles the resolution and disposition of certain problem loans. Risk in the
consumer loan portfolio is further managed through utilization of computerized
credit scoring, in-depth analysis of portfolio components and specific account
selection, management and collection techniques. In addition, the consumer
collection function is centralized and automated to ensure timely collection of
accounts and consistent management of risk associated with delinquent accounts.

     Finally, AmSouth's Credit Review Department performs ongoing independent
reviews of the risk management process, adequacy of loan documentation and the
risk ratings or specific loan loss reserves for outstanding loans. Furthermore,
this department is independent of the lending function. The results of its
examinations are reported to the Audit and Community Responsibility Committee of
the Board of Directors.

     Nonperforming Assets. Management closely monitors loans and other assets
that are classified as nonperforming assets. Nonperforming assets include
nonaccrual loans, restructured loans, foreclosed properties, and repossessions.
Loans are generally placed on nonaccrual if full collection of principal and
interest becomes unlikely (even if all payments are current) or if the loan is
delinquent in principal or interest payments for 90 days or more, unless the
loan is well-secured and in the process of collection. The Special Assets
Department manages collection of commercial nonperforming loans and business
banking loans greater than $250,000 while the Consumer Collections Department
manages the consumer nonperforming loan portfolio. The Business Banking
Collections Department manages collections of business banking loans under
$250,000.

NONPERFORMING ASSETS TABLE 15

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
                                                                                December 31
(Dollars in thousands)                              2000            1999            1998            1997            1996
--------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>             <C>             <C>             <C>             <C>
Nonaccrual loans                                  $179,659        $141,134        $113,985        $109,488        $112,509
Restructured loans                                     -0-             -0-             -0-             -0-             694
                                                  ------------------------------------------------------------------------
    Nonperforming loans                            179,659         141,134         113,985         109,488         113,203
                                                  ------------------------------------------------------------------------
Foreclosed properties                               12,360          17,767          17,322          19,143          26,844
Repossessions                                        4,259           2,644             828             632           1,822
                                                  ------------------------------------------------------------------------
  Total nonperforming assets*                     $196,278        $161,545        $132,135        $129,263        $141,869
                                                  ========================================================================
Nonperforming assets* to loans net of
  unearned income, foreclosed properties
  and repossessions                                   0.80%           0.61%           0.54%           0.53%           0.61%
                                                  ========================================================================
Accruing loans 90 days past due                   $ 85,410        $ 61,050        $ 62,528        $ 66,792        $ 58,943
==========================================================================================================================
</TABLE>

*Exclusive of accruing loans 90 days past due

                                      54

<PAGE>

     Nonperforming assets, excluding accruing loans 90 days past due, increased
$34.7 million, to $196.3 million, during 2000. The graph entitled Asset Quality
Trends and Table 15 provide trend information and detailed components of
nonperforming assets for each of the last five years.

                             ASSET QUALITY TRENDS

                                    [GRAPH]
<TABLE>
<CAPTION>
                           NONPERFORMING     NONPERFORMING
                           ASSETS/LOANS         ASSETS
                    <S>    <C>               <C>
                    96        0.61%              $142
                    97        0.53%              $129
                    98        0.54%              $132
                    99        0.61%              $162
                    00        0.80%              $196
</TABLE>

     The increase in nonperforming assets in 2000 compared to 1999 was primarily
the result of a higher level of nonperforming loans in the commercial and
industrial loan portfolio. The increase was the result of deterioration in
syndicated loans-loans to large corporate borrowers that are shared among
several banks. Deterioration among syndicated loans at the time was addressed,
in part, through the financial restructuring.

     Additionally, the majority of consumer nonaccrual loans are secured by
residential real estate.

     Table 16 presents nonperforming loans and net charge-offs and each as a
percentage of average net loans by category for December 31, 2000 and 1999.

NONPERFORMING LOANS AND NET CHARGE-OFFS (RECOVERIES)  TABLE 16

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                                                        Nonperforming Loans*
---------------------------------------------------------------------------------------------------------------------
                                                                      % of                                   % of
                                               December 31,         Average          December 31,           Average
                                                   2000           Loans** per           1999              Loans** per
(Dollars in thousands)                                             Category                                Category
---------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                <C>                <C>                  <C>
Commercial:
  Commercial and industrial                      $108,730            1.40%             $ 39,474              0.49%
  Commercial loans secured by real estate          18,989            1.03                35,554              1.73
                                                 --------------------------------------------------------------------
    Total commercial                              127,719            1.33                75,028              0.74
                                                 --------------------------------------------------------------------
  Commercial real estate mortgages                 24,259            0.98                15,530              0.76
  Real estate construction                          4,537            0.20                13,356              0.60
                                                 --------------------------------------------------------------------
    Total commercial real estate                   28,796            0.61                28,886              0.68
                                                 --------------------------------------------------------------------
Consumer:
  Residential first mortgages                      12,494            0.80                22,343              1.02
  Other residential mortgages                      10,126            0.23                13,308              0.39
  Dealer indirect                                       1            0.00                   562              0.02
  Revolving credit                                      0            0.00                   164              0.03
  Other consumer                                      523            0.04                   843              0.06
                                                 --------------------------------------------------------------------
    Total consumer                                 23,144            0.20                37,220              0.33
                                                 --------------------------------------------------------------------
                                                 $179,659            0.69%             $141,134              0.55%
=====================================================================================================================
</TABLE>
 * Exclusive of accruing loans 90 days past due
** Net of unearned income

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                                                    Net Charge-offs/(Recoveries)
---------------------------------------------------------------------------------------------------------------------
                                                                       % of                                  % of
                                               December 31,          Average          December 31,          Average
                                                  2000             Loans** per          1999              Loans** per
(Dollars in thousands)                                              Category                               Category
---------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                 <C>                <C>                 <C>
Commercial:
  Commercial and industrial                      $ 33,581             0.43%             $ 32,219             0.40%
  Commercial loans secured by real estate          11,226             0.61                 2,174             0.11
                                                 --------------------------------------------------------------------
    Total commercial                               44,807             0.46                34,393             0.34
                                                 --------------------------------------------------------------------
  Commercial real estate mortgages                   (210)           (0.01)                2,066             0.10
  Real estate construction                            663             0.03                 1,140             0.05
                                                 --------------------------------------------------------------------
    Total commercial real estate                      453             0.01                 3,206             0.08
                                                 --------------------------------------------------------------------
Consumer:
  Residential first mortgages                         987             0.06                 3,841             0.17
  Other residential mortgages                       8,841             0.20                 4,632             0.14
  Dealer indirect                                  42,518             1.13                29,331             0.82
  Revolving credit                                 15,900             3.35                15,953             3.30
  Other consumer                                   10,845             0.83                11,550             0.79
                                                 --------------------------------------------------------------------
    Total consumer                                 79,091             0.69                65,307             0.59
                                                 --------------------------------------------------------------------
                                                 $124,351             0.48%             $102,906             0.40%
=====================================================================================================================
</TABLE>
** Net of unearned income

                                      55

<PAGE>

ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES  TABLE 17

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
                                             December 31, 2000             December 31, 1999             December 31, 1998
-------------------------------------------------------------------------------------------------------------------------------
                                                      Percentage of                 Percentage of                 Percentage of
                                                      Loans in Each                 Loans in Each                 Loans in Each
                                         Allowance     Category to     Allowance     Category to     Allowance     Category to
(Dollars in thousands)                   Allocation    Total Loans     Allocation    Total Loans     Allocation    Total Loans
-------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>          <C>              <C>          <C>              <C>          <C>
Commercial:
  Commercial and industrial               $144,828        29.7%         $110,059        30.3%         $109,988        32.5%
  Commercial secured by real estate         23,018         7.2            24,924         7.8            21,062         7.5
                                         --------------------------------------------------------------------------------------
    Total commercial                       167,846        36.9           134,983        38.1           131,050        40.0
                                         --------------------------------------------------------------------------------------
Commercial real estate:
  Commercial real estate mortgages          31,238         9.5            29,999         8.7            23,136         9.1
  Real estate construction                  36,760        10.2            42,067         9.2            25,606         7.3
                                         --------------------------------------------------------------------------------------
    Total commercial real estate            67,998        19.7            72,066        17.9            48,742        16.4
                                         --------------------------------------------------------------------------------------
Consumer:
  Residential first mortgages                2,445         5.5             3,010         6.5             7,179         9.4
  Other residential mortgages               14,843        18.9            11,113        14.7             5,311        13.7
  Dealer indirect                           32,291        12.1            44,916        15.8            29,912        11.9
  Revolving credit                          24,885         2.1            18,879         1.9            23,482         2.0
  Other consumer                            12,761         4.8            15,344         5.1            21,868         6.6
                                         --------------------------------------------------------------------------------------
    Total consumer                          87,225        43.4            93,262        44.0            87,752        43.6
                                         --------------------------------------------------------------------------------------
Unallocated                                 57,365           -            54,368           -           102,521           -
                                         --------------------------------------------------------------------------------------
                                          $380,434       100.0%         $354,679       100.0%         $370,065       100.0%
===============================================================================================================================

<CAPTION>
----------------------------------------------------------------------------------------------------
                                              December 31, 1997              December 31, 1996
----------------------------------------------------------------------------------------------------
                                                        Percentage of                  Percentage of
                                                        Loans in Each                  Loans in Each
                                          Allowance      Category to     Allowance      Category to
(Dollars in thousands)                    Allocation     Total Loans     Allocation     Total Loans
----------------------------------------------------------------------------------------------------
<S>                                       <C>           <C>              <C>           <C>
Commercial:
  Commercial and industrial                $ 83,192         31.4%         $ 78,846          30.3%
  Commercial secured by real estate          26,706         10.2            28,908          10.4
                                         -----------------------------------------------------------
    Total commercial                        109,898         41.6           107,754          40.7
                                         -----------------------------------------------------------
Commercial real estate:
  Commercial real estate mortgages           15,791          6.0            17,635           5.8
  Real estate construction                   19,754          5.4            16,694           4.7
                                         -----------------------------------------------------------
    Total commercial real estate             35,545         11.4            34,329          10.5
                                         -----------------------------------------------------------
Consumer:
  Residential first mortgages                13,641         14.3            14,323          16.2
  Other residential mortgages                 8,364         13.8             7,934          13.5
  Dealer indirect                            24,249          7.7            22,865           7.9
  Revolving credit                           43,843          2.8            53,917           3.0
  Other consumer                             25,790          8.4            26,526           8.2
                                         -----------------------------------------------------------
    Total consumer                          115,887         47.0           125,565          48.8
                                         -----------------------------------------------------------
Unallocated                                 104,721            -           102,629             -
                                         -----------------------------------------------------------
                                           $366,051        100.0%         $370,277         100.0%
====================================================================================================
</TABLE>

     Allowances for Loan Losses. 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. Elements of the review
include analysis of historical performance, the level of nonperforming and
adversely rated loans, specific analysis of certain problem loans, loan activity
since the previous quarter, reports prepared by the Credit 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
approved by senior management and subsequently reviewed by the Audit and
Community Responsibility Committee of the Board of Directors.

     For purposes of the quarterly review, the consumer portfolios are treated
as homogenous pools. Specific consumer pools include: direct, bankcard, other
revolving, indirect, residential first mortgages, and home equity lending. In
accordance with regulatory guidelines, the allowance for loan losses is
allocated to the consumer pools based on historical net charge-off rates
adjusted for any current changes in these trends. The commercial, commercial
real estate and business banking portfolios are evaluated separately. Within
this group, every nonperforming loan in excess of $500,000 is reviewed by
AmSouth's Special Assets Department for a specific allocation. For all other
loans in the commercial portfolio, the allowance is allocated based on a
combination of historical loss rates, adjusted for those elements discussed in
the preceding paragraph, and regulatory guidelines. In determining the level of
allowance, AmSouth carefully reviews total credit relationship exposures.

     In determining the appropriate level for the allowance, management ensures
that the overall allowance appropriately reflects a margin for the imprecision
inherent in most estimates of expected credit losses. To reflect model and
estimation risk associated with the formula and specific allowance method used

                                      56

<PAGE>

for the allocated portion, the unallocated amount is adjusted to reflect
management's evaluation of various conditions, the effect of which is not
directly measured in the determination of the allocated allowance. The
evaluation of the inherent loss with respect to these conditions is subject to a
higher degree of uncertainty because they are not identified with specific
problem credits or portfolio segments. The conditions evaluated in connection
with the unallocated allowance include the following, which existed at the
balance sheet date: credit quality trends, including trends in nonperforming
loans expected to result from existing conditions; general economic and business
conditions; loan levels and concentrations; the seasoning of the portfolio;
specific industry conditions within portfolio segments; recent loss experience
within particular segments of the portfolio; and bank regulatory results.

     The chief credit officer reviews these conditions quarterly with executive
management. To the extent that any of these conditions is evidenced by a
specifically identifiable problem credit or portfolio segment, as of the
evaluation date, management's estimate of the effect of such condition may be
reflected as a specific allowance, applicable to such credit or portfolio
segment. Where any of these conditions is not evidenced by a specifically
identifiable problem credit or portfolio segment as of the evaluation date,
management's evaluation of the probable loss related to such condition is
reflected in the unallocated allowance.

     At December 31, 2000, the allowance for loan losses was $380.4 million
versus $354.7 million at year-end 1999. Beyond the impact of net charge-offs and
the provision for loan losses, the allowance in 2000 was reduced by $5.5 million
as a result of selling $750 million of indirect automobile loans to third-party
conduits during the second quarter of 2000. The $5.5 million represented
allowance allocated to these loans at the time of their sale. In addition, the
allowance was reduced by $7.5 million specifically allocated to approximately
$1.0 billion of indirect automobile loans securitized during 2000. AmSouth also
reduced its allowance for loan losses in conjunction with the sale of
approximately $134 million of certain classified, syndicated loans. AmSouth
reduced its loan loss allowance to reflect the $61.6 million of allowance
specifically allocated to the syndicated loans sold. Included as a reduction to
the allowance in Table 18 was the reclassification of a portion of the allowance
directly related to off-balance sheet commitments. AmSouth included, in Table
18, the amount reclassified for all years shown. The amount reclassified to
other liabilities represented off-balance sheet commitments for which AmSouth
specifically calculated a reserve level and for which it could separate the
credit risk from that of any related loans on AmSouth's balance sheet. The level
of allowance for these off-balance sheet commitments is calculated using a rate
which correlates to credit risks associated with similar types of funded loans.

     The overall level of allowance at December 31, 2000, versus December 31,
1999, increased primarily as a result of deterioration of credit quality within
AmSouth's syndicated commercial loan portfolio. This deterioration was primarily
the result of higher interest rates and a weaker economy. The allowance
allocated to commercial and industrial loans increased by 31.6 percent in 2000.
This increase reflected a higher level of impaired and classified loans within
the commercial loan area. The decreases in the allocation of the allowance
associated with commercial loans secured by real estate and construction loans
reflected lower nonperforming loans in these categories at December 31, 2000,
versus 1999. Alternatively, the increase in the allocation of the allowance for
commercial real estate mortgages reflected an increase in nonperforming loans in
this category. On the consumer side of the portfolio, the decrease in the
allowance allocated to residential mortgages, the dealer indirect portfolio and
other consumer loans was the direct result of a decrease in the amount of such
loans outstanding at year-end 2000 versus 1999. Loan growth was the reason for
the increase in the allowance allocated to other residential mortgages. The
increase in the allowance allocated to the revolving credit portfolio reflected
an increase in charge-offs experienced in this category which resulted in a
higher loss factor being applied to this portfolio. The 5.5 percent increase in
the unallocated allowance primarily reflected the generally weaker economic
conditions at December 31, 2000.

     At December 31, 2000, the allowance for loan losses to net loans was 1.55
percent while coverage of nonperforming loans was 211.8 percent. This compares
with an allowance for loan losses to net loans at the end of 1999 of 1.35
percent and to nonperforming loans for the same period of 1999 of 251.3 percent.

Line of Business Results

AmSouth segregates financial information used to assess its performance and
allocate resources based on three reportable segments. The three reportable
segments include Consumer Banking, Commercial Banking and Wealth Management. The
financial performance for each segment is determined based on the

                                      57

<PAGE>

<TABLE>
<CAPTION>
ALLOWANCE FOR LOAN LOSSES Table 18

-----------------------------------------------------------------------------------------------------------------------------------

 (Dollars in thousands)                              2000             1999            1998             1997            1996
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>               <C>             <C>              <C>             <C>
 Balance at January 1                              $    354,679   $     370,065   $     366,051    $     370,277   $     375,457
 Loans charged off:
   Commercial and industrial                            (40,290)        (43,213)        (35,420)         (25,768)        (19,355)
   Commercial loans secured by real estate              (14,617)         (2,539)         (1,865)          (3,859)         (1,361)
                                                -----------------------------------------------------------------------------------
      Total commercial                                  (54,907)        (45,752)        (37,285)         (29,627)        (20,716)
   Commercial real estate mortgages                        (312)         (2,627)         (4,911)          (2,788)         (4,088)
   Commercial real estate construction                   (1,031)         (1,907)           (995)            (698)           (257)
                                                -----------------------------------------------------------------------------------
      Total commercial real estate                       (1,343)         (4,534)         (5,906)          (3,486)         (4,345)
   Residential first mortgages                           (1,114)         (4,346)         (3,877)          (4,033)         (5,068)
   Other residential mortgages                          (10,524)         (5,137)         (2,906)          (2,784)         (1,100)
   Dealer indirect                                      (71,659)        (48,504)        (27,219)         (28,817)        (32,010)
   Revolving credit                                     (19,650)        (19,715)        (31,038)         (43,951)        (36,835)
   Other consumer                                       (19,191)        (20,299)        (26,007)         (37,679)        (31,553)
                                                -----------------------------------------------------------------------------------
      Total charge-offs                                (178,388)       (148,287)       (134,238)        (150,377)       (131,627)
                                                -----------------------------------------------------------------------------------
 Recoveries of loans previously charged off:
   Commercial and industrial                              6,709          10,994          11,748           10,697          17,577
   Commercial loans secured by real estate                3,391             365             554            2,320             785
                                                -----------------------------------------------------------------------------------
      Total commercial                                   10,100          11,359          12,302           13,017          18,362
   Commercial real estate mortgages                         522             561           4,950            1,526           4,831
   Commercial real estate construction                      368             767             280            3,328             881
                                                -----------------------------------------------------------------------------------
      Total commercial real estate                          890           1,328           5,230            4,854           5,712
   Residential first mortgages                              127             505           1,094            1,269           1,181
   Other residential mortgages                            1,683             505             279              560             542
   Dealer indirect                                       29,141          19,173          15,246           16,340          12,955
   Revolving credit                                       3,750           3,762           5,845            5,724           3,427
   Other consumer                                         8,346           8,749          10,590           13,905           8,472
                                                -----------------------------------------------------------------------------------
      Total recoveries                                   54,037          45,381          50,586           55,669          50,651
                                                -----------------------------------------------------------------------------------
 Net charge-offs                                       (124,351)       (102,906)        (83,652)         (94,708)        (80,976)
                                                -----------------------------------------------------------------------------------
 Addition to allowance charged to expense               227,600         165,626          99,067           83,508          71,608
 Allowance sold                                         (74,591)         (2,000)        (14,900)            (252)            -0-
 Allowance transferred to other liabilities              (2,903)         (5,106)         (2,665)          (1,026)            -0-
 Allowance acquired in bank purchase/Other                  -0-         (71,000)          6,164            8,252           4,188
                                                -----------------------------------------------------------------------------------
 Balance at December 31                            $    380,434   $     354,679   $     370,065    $     366,051   $     370,277
                                                ===================================================================================
 Loans net of unearned income,
   outstanding at end of period                     $24,616,435     $26,266,759     $24,445,296      $24,415,004     $23,124,651
 Average loans net of unearned income,
   outstanding for the period                       $25,879,910     $25,471,295     $24,027,839      $23,753,817     $22,318,990
 Ratios:
   Allowance at end of period to loans
      net of unearned income                               1.55%           1.35%           1.51%            1.50%           1.60%
   Allowance at end of period to average
      loans net of unearned income                         1.47            1.39            1.54             1.54            1.66
   Allowance at end of period to
      nonperforming loans*                               211.75          251.31          324.66           334.33          327.09
   Allowance at end of period to
      nonperforming assets*                              193.82          219.55          280.07           283.18          261.00
   Net charge-offs to average loans net
      of unearned income                                   0.48            0.40            0.35             0.40            0.36
   Net charge-offs to allowance
      at end of period                                    32.69           29.01           22.60            25.87           21.87
   Recoveries to prior year charge-offs                   36.44           33.81           33.64            42.29           64.21
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

 * Exclusive of accruing loans 90 days past due

                                      58

<PAGE>

Company's management accounting process, which assigns balance sheet and income
statement items to each segment based on managerial responsibility. Segments are
also defined by customer base and product type. Performance of the operating
segments reflects the management process and structure of AmSouth and is not
necessarily comparable with similar information for any other financial
institution. Selected financial information and a description of the
methodologies used to measure the financial performance of the business segments
are presented in Note 22 to the Consolidated Financial Statements.

     Consumer Banking delivers a full range of financial services to individuals
and small businesses through the retail branch and ATM networks, the Internet
and the business banking group. Services include loan and deposit products
designed to meet the personal finance needs of consumers and the financial needs
of small business owners. In 2000, the Consumer Banking segment produced net
income totaling $303.6 million compared to $284.3 million in 1999. The increase
over 1999 was primarily the result of lower NIE and steady production in
consumer loan categories such as home equity and dealer indirect.

     Commercial Banking provides corporate lending, leasing, international
services, capital markets, and corporate cash management services to large and
middle-market corporate customers. In 2000, the Commercial Banking group
contributed $196.3 million of net income versus $200.8 million in 1999. The
lower level of income in 2000 was primarily the result of higher credit costs
and a reduction in yields on loans in 2000 compared to 1999.

     Wealth Management provides fiduciary, retirement, and investment management
services for both institutional and individual clients. Producing primarily
fee-based income, this area includes Trust, Private Banking, Consumer
Investments, and the AmSouth Mutual Funds. Wealth Management contributed net
income of $39.0 million in 2000 compared to $35.1 million in 1999. This increase
was primarily the result of higher noninterest revenues in 2000 compared to
1999.

     Treasury and Other represents balance sheet management activities,
corporate overhead, unallocated revenues such as BOLI, and other nonrecurring
gains, losses or special charges including merger-related charges and costs
associated with the third-quarter comprehensive financial restructuring. Due to
its sale in 2000, IFC's results for each year are also included in Treasury and
Other. Treasury and Other does not represent a banking line of business, but
encompasses all other activities supporting the business segments.

Forward-Looking Statements

Statements made in this document which are not purely historical are
forward-looking statements (as defined in the Private Securities Litigation
Reform Act of 1995), including any statements regarding descriptions of
management's plans, objectives or goals for future operations, products or
services, and forecasts of its revenues, earnings or other measures of
performance.

     Forward-looking statements are based on current management expectations
and, by their nature, are subject to risks and uncertainties. A number of
factors -- many of which are beyond the Company's control -- could cause actual
conditions, events or results to differ significantly from those described in
the forward-looking statements. Some of the factors which could cause results to
differ materially from management's current expectations have been specified in
the foregoing discussion and analysis. In general these factors include: the
integration of the former First American franchise; legislation; general
economic conditions, especially in the Southeast; changes in interest rates;
deposit flows; the cost of funds; cost of federal deposit insurance premiums;
demand for loan products; demand for financial services; competition; changes in
the quality or composition of AmSouth's loan and investment portfolios; changes
in accounting principles, policies or guidelines; other economic, competitive,
governmental, regulatory, and technical factors affecting AmSouth's operations,
products, services and prices; and the outcome of litigation, which is
inherently uncertain and depends on the findings of judges and juries.

     Forward-looking statements in this report speak only as of the date of the
report. The Company does not undertake a duty to update forward-looking
statements to reflect circumstances or events that occur after the date the
forward-looking statements are made.

                                      59

<PAGE>

Management's Statement on
Responsibility for Financial Reporting

The management of AmSouth is responsible for the content and integrity of the
financial statements and all other financial information included in this annual
report. Management believes that the financial statements have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis to reflect, in all material respects, the substance of events and
transactions that should be included, and that the other financial information
in the annual report is consistent with those financial statements. The
financial statements necessarily include amounts that are based on management's
best estimates and judgements.

     Management maintains and depends upon AmSouth's accounting systems and
related systems of internal controls. The internal control systems are designed
to ensure that transactions are properly authorized and recorded in the
corporation's financial records and to safeguard the corporation's assets from
material loss or misuse. The corporation maintains an internal audit staff which
monitors compliance with the corporation's systems of internal controls and
reports to management and to the Audit and Community Responsibility Committee of
the Board of Directors.

     The Audit and Community Responsibility Committee of the Board of Directors,
composed solely of outside directors, has responsibility for recommending to the
Board of Directors the appointment of the independent auditors for AmSouth. The
Committee meets periodically with the internal auditors and the independent
auditors to review the scope and findings of their respective audits. The
internal auditors, independent auditors and management each have full and free
access to meet privately as well as together with the Committee to discuss
internal controls, accounting, auditing, or other financial reporting matters.

     The consolidated financial statements of AmSouth have been audited by Ernst
& Young LLP, independent auditors, who were engaged to express an opinion as to
the fairness of presentation of such financial statements.




/s/ C. Dowd Ritter                      /s/ Sloan D. Gibson

C. Dowd Ritter                          Sloan D. Gibson
Chairman, President and                 Vice Chairman and
Chief Executive Officer                 Chief Financial Officer

                                      60

<PAGE>

Report of Ernst & Young LLP,
Independent Auditors

Board of Directors
AmSouth Bancorporation

We have audited the accompanying consolidated statements of condition of AmSouth
Bancorporation and subsidiaries (AmSouth) as of December 31, 2000 and 1999, and
the related consolidated statements of earnings, shareholders' equity, and cash
flows for each of the three years in the period ended December 31, 2000. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. The consolidated financial statements give retroactive effect to the
merger of AmSouth and First American Corporation and subsidiaries (First
American) on October 1, 1999, which has been accounted for using the pooling of
interests method as described in Note 2 to the Consolidated Financial
Statements. We did not audit the 1998 consolidated financial statements of First
American, which statements reflect net interest income constituting 52% of the
related AmSouth consolidated total. Those First American statements were audited
by other auditors whose report has been furnished to us, and our opinion,
insofar as it relates to data included for First American, is based solely on
the report of other auditors.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits and the report of other
auditors provide a reasonable basis for our opinion.

     In our opinion, based on our audits and, for 1998, the report of other
auditors, the financial statements referred to above present fairly, in all
material respects, the consolidated financial position of AmSouth Bancorporation
and subsidiaries at December 31, 2000 and 1999, and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended December 31, 2000, in conformity with accounting principles generally
accepted in the United States.



/s/ Ernest & Young LLP


Birmingham, Alabama
January 31, 2001

                                      61

<PAGE>

AmSouth Bancorporation and Subsidiaries

CONSOLIDATED STATEMENT OF CONDITION

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------

(Dollars in thousands)                                                                                     DECEMBER 31
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                       2000               1999
                                                                                                  --------------      ------------
<S>                                                                                               <C>                 <C>
ASSETS
Cash and due from banks........................................................................   $    1,278,691      $  1,563,335
Time deposits in other banks...................................................................              -0-             2,474
                                                                                                  --------------      ------------
  Total cash and cash equivalents..............................................................        1,278,691         1,565,809
Federal funds sold and securities purchased under agreements to resell.........................        2,155,665           132,683
Trading securities.............................................................................           11,942            51,972
Available-for-sale securities..................................................................        1,908,917         5,964,703
Held-to-maturity securities (market value of $6,729,880 and $6,849,344, respectively)..........        6,650,439         7,050,562
Loans held for sale............................................................................           92,811           172,941
Loans..........................................................................................       25,088,186        26,551,602
Less: Allowance for loan losses................................................................          380,434           354,679
      Unearned income..........................................................................          471,751           284,843
                                                                                                  --------------      ------------
      Net loans................................................................................       24,236,001        25,912,080
Other interest-earning assets..................................................................           58,800            17,864
Premises and equipment, net....................................................................          634,201           678,442
Customers' acceptance liability................................................................            1,418             8,617
Accrued interest receivable and other assets...................................................        1,907,093         1,859,678
                                                                                                  --------------      ------------
                                                                                                  $   38,935,978      $ 43,415,351
                                                                                                  ==============      ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits and interest-bearing liabilities:
  Deposits:
      Noninterest-bearing demand...............................................................   $    4,934,466      $  4,739,077
      Interest-bearing demand..................................................................        9,579,868         9,227,907
      Savings..................................................................................        1,212,652         2,349,793
      Time.....................................................................................        7,841,567         7,545,164
      Foreign time.............................................................................          503,414         1,293,552
      Certificates of deposit of $100,000 or more..............................................        2,551,337         2,756,950
                                                                                                  --------------      ------------
         Total deposits........................................................................       26,623,304        27,912,443
  Federal funds purchased and securities sold under agreements to repurchase...................        2,320,264         4,095,747
  Other borrowed funds.........................................................................          536,848         2,135,720
  Long-term Federal Home Loan Bank advances....................................................        4,898,308         4,612,686
  Other long-term debt.........................................................................          985,097           990,800
                                                                                                  --------------      ------------
         Total deposits and interest-bearing liabilities.......................................       35,363,821        39,747,396
Acceptances outstanding........................................................................            1,418             8,617
Accrued expenses and other liabilities.........................................................          757,332           700,133
                                                                                                  --------------      ------------
         Total liabilities.....................................................................       36,122,571        40,456,146
                                                                                                  --------------      ------------
Shareholders' equity:
  Preferred stock-no par value:
      Authorized-2,000,000 shares; Issued and outstanding-none.................................              -0-               -0-
  Common stock-par value $1 a share:
      Authorized-750,000,000 shares
      Issued-416,941,331 and 416,948,890 shares, respectively..................................          416,941           416,949
  Capital surplus..............................................................................          691,677           690,820
  Retained earnings............................................................................        2,466,048         2,482,477
  Cost of common stock in treasury-43,134,387 and 25,574,778 shares, respectively..............         (651,328)         (376,354)
  Deferred compensation on restricted stock....................................................           (2,381)           (5,838)
  Accumulated other comprehensive loss.........................................................         (107,550)         (248,849)
                                                                                                  --------------      ------------
         Total shareholders' equity............................................................        2,813,407         2,959,205
                                                                                                  --------------      ------------
                                                                                                  $   38,935,978      $ 43,415,351
                                                                                                  ==============      ============
</TABLE>

See Notes to Consolidated Financial Statements.

                                      62

<PAGE>

AmSouth Bancorporation and Subsidiaries

CONSOLIDATED STATEMENT OF EARNINGS

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------

(In thousands except per share data)                                                             YEARS ENDED DECEMBER 31
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                          2000               1999          1998
                                                                                       ----------         -----------------------
<S>                                                                                    <C>                <C>          <C>
INTEREST INCOME
Loans.............................................................................     $2,237,548         $2,128,145   $2,080,065
Available-for-sale securities.....................................................        329,766            467,499      496,872
Held-to-maturity securities.......................................................        453,987            314,868      235,481
Trading securities................................................................          2,122              4,051        4,178
Loans held for sale...............................................................         12,582             10,148       16,457
Federal funds sold and securities purchased under agreements to resell............         27,455              5,694        7,650
Other interest-earning assets.....................................................          6,966              2,343        1,204
                                                                                       ----------         -----------------------
   Total interest income..........................................................      3,070,426          2,932,748    2,841,907
                                                                                       ----------         -----------------------

INTEREST EXPENSE
Interest-bearing demand deposits..................................................        327,664            266,155      302,208
Savings deposits..................................................................         37,030             53,933       51,354
Time deposits.....................................................................        445,713            402,576      475,426
Foreign time deposits.............................................................         64,540             34,262       10,048
Certificates of deposit of $100,000 or more.......................................        166,224            146,422      131,231
Federal funds purchased and securities sold under agreements to repurchase........        188,410            187,946      168,435
Other borrowed funds..............................................................         96,808             47,894       43,287
Long-term Federal Home Loan Bank advances.........................................        296,158            222,036      153,122
Other long-term debt..............................................................         68,776             63,580       62,512
                                                                                       ----------         -----------------------
   Total interest expense.........................................................      1,691,323          1,424,804    1,397,623
                                                                                       ----------         -----------------------
NET INTEREST INCOME                                                                     1,379,103          1,507,944    1,444,284
Provision for loan losses.........................................................        227,600            165,626       99,067
                                                                                       ----------         -----------------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                                     1,151,503          1,342,318    1,345,217
                                                                                       ----------         -----------------------

NONINTEREST REVENUES
Service charges on deposit accounts...............................................        229,383            233,045      234,849
Consumer investment services income...............................................        199,270            213,292      183,831
Trust income......................................................................        114,353            109,223      109,453
Other noninterest revenues........................................................        126,488            292,000      271,721
                                                                                       ----------         -----------------------
   Total noninterest revenues.....................................................        669,494            847,560      799,854
                                                                                       ----------         -----------------------

NONINTEREST EXPENSES
Salaries and employee benefits....................................................        583,794            612,687      596,050
Equipment expense.................................................................        121,798            135,590      123,480
Net occupancy expense.............................................................        114,783            111,432      106,497
Subscribers' commissions..........................................................         82,618             99,588       89,918
Merger-related costs..............................................................        110,178            301,415      121,725
Other noninterest expenses........................................................        353,264            387,795      368,602
                                                                                       ----------         -----------------------
   Total noninterest expenses.....................................................      1,366,435          1,648,507    1,406,272
                                                                                       ----------         -----------------------
INCOME BEFORE INCOME TAXES                                                                454,562            541,371      738,799
Income taxes......................................................................        125,435            200,903      264,725
                                                                                       ----------         -----------------------
   NET INCOME                                                                          $  329,127         $  340,468   $  474,074
                                                                                       ==========         =======================
Average common shares outstanding.................................................        382,031            391,136      389,595
Earnings per common share.........................................................     $     0.86         $     0.87   $     1.22
Diluted average common shares outstanding.........................................        384,677            396,515      396,491
Diluted earnings per common share.................................................     $     0.86         $     0.86   $     1.20
</TABLE>

See Notes to Consolidated Financial Statements.

                                      63

<PAGE>

AmSouth Bancorporation and Subsidiaries

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                              DEFERRED      ACCUMULATED
                                                                                            COMPENSATION       OTHER
                                                      COMMON   CAPITAL  RETAINED  TREASURY  ON RESTRICTED  COMPREHENSIVE
(In thousands)                                         STOCK   SURPLUS  EARNINGS    STOCK       STOCK      INCOME (LOSS)  TOTAL
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>      <C>      <C>        <C>       <C>            <C>           <C>

BALANCE AT JANUARY 1, 1998                            $412,450 $732,662 $2,145,248 $(268,019)   $(22,537)     $  29,334  $3,029,138
Comprehensive income:
   Net income.......................................       -0-      -0-    474,074       -0-         -0-            -0-     474,074
   Other comprehensive income, net of tax:
     Changes in unrealized gains and losses on
        securities, net of reclassification adjustment
        (net $18,086 tax benefit)...................       -0-      -0-         -0-      -0-         -0-        (17,322)    (17,322)
                                                                                                                         ----------
Comprehensive income................................                                                                        456,752
Cash dividends declared.............................       -0-      -0-   (101,563)      -0-         -0-            -0-    (101,563)
Cash dividends declared by pooled companies.........       -0-      -0-    (93,997)      -0-         -0-            -0-     (93,997)
Common stock transactions:
   Special rights and warrants......................       -0-     (355)       -0-       -0-         -0-            -0-        (355)
   Employee stock plans.............................     2,598   44,915    (11,409)   32,603     (17,516)           -0-      51,191
   Dividend reinvestment plan.......................       -0-      631        (66)    4,644         -0-            -0-       5,209
   Purchase of common stock.........................    (2,266) (63,109)        (9) (136,514)        -0-            -0-    (201,898)
   Acquisitions.....................................     7,276   48,373      7,280       -0-         -0-             18      62,947
                                                      -----------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1998                           420,058  763,117  2,419,558  (367,286)    (40,053)        12,030   3,207,424
Comprehensive income:
   Net income.......................................       -0-      -0-    340,468       -0-         -0-            -0-     340,468
   Other comprehensive income, net of tax:
     Changes in unrealized gains and losses on
        securities, net of reclassification adjustment
        (net $74,014 tax benefit)...................       -0-      -0-        -0-       -0-         -0-       (260,879)   (260,879)
                                                                                                                         ----------
Comprehensive income................................                                                                         79,589
Cash dividends declared.............................       -0-      -0-   (163,395)      -0-         -0-            -0-    (163,395)
Cash dividends declared by pooled companies.........       -0-      -0-    (94,305)      -0-         -0-            -0-     (94,305)
Common stock transactions:
   Employee stock plans.............................       808   10,998    (18,647)   63,081      34,215            -0-      90,455
   Dividend reinvestment............................       -0-      107     (1,202)    7,007         -0-            -0-       5,912
   Purchase of common stock.........................    (3,917) (83,402)       -0-   (79,156)        -0-            -0-    (166,475)
                                                      -----------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1999                           416,949  690,820  2,482,477  (376,354)     (5,838)      (248,849)  2,959,205
Comprehensive income:
   Net income.......................................       -0-      -0-    329,127       -0-         -0-            -0-     329,127
   Other comprehensive income, net of tax:
     Changes in unrealized gains and losses on
        securities, net of reclassification adjustment
        (net $45,012 tax expense)...................       -0-      -0-        -0-       -0-         -0-        141,299     141,299
                                                                                                                         ----------
Comprehensive income................................                                                                        470,426
Cash dividends declared.............................       -0-      -0-   (307,221)      -0-         -0-            -0-    (307,221)
Common stock transactions:
   Employee stock plans.............................        (8)     857    (29,526)   83,603       3,457            -0-      58,383
   Dividend reinvestment............................       -0-      -0-     (8,809)   17,245         -0-            -0-       8,436
   Purchase of common stock.........................       -0-      -0-        -0-  (375,822)        -0-            -0-    (375,822)
                                                      -----------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 2000                          $416,941 $691,677 $2,466,048 $(651,328)  $  (2,381)     $(107,550) $2,813,407
                                                      =============================================================================
Disclosure of 2000 reclassification amount:
Unrealized holding gains on
   securities arising during the period.............                                                          $  59,974
Less: Reclassification adjustment for losses
   realized in net income...........................                                                            (81,325)
                                                                                                              ---------
Net unrealized gains on securities,
   net of tax.......................................                                                          $ 141,299
                                                                                                              =========
</TABLE>

See Notes to Consolidated Financial Statements.

                                      64

<PAGE>

AmSouth Bancorporation and Subsidiaries

CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------

(In thousands)                                                                                   YEARS ENDED DECEMBER 31
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                         2000               1999           1998
                                                                                        ------          -------------------------
<S>                                                                                  <C>                <C>           <C>
OPERATING ACTIVITIES
Net income.........................................................................  $    329,127       $    340,468  $   474,074
Adjustments to reconcile net income to net cash provided by operating activities:
   Provision for loan losses.......................................................       227,600            165,626       99,067
   Depreciation and amortization of premises and equipment.........................        84,292             97,731       82,622
   Amortization of premiums and discounts on held-to-maturity securities
     and available-for-sale securities.............................................         8,213             (3,004)      (9,445)
   Noncash portion of merger-related costs.........................................        43,389             98,595        5,900
   Net decrease (increase) in loans held for sale..................................        29,907            106,372     (162,028)
   Net decrease (increase) in trading securities...................................        16,200             (4,154)       7,781
   Net losses (gains) on sales of available-for-sale securities....................        95,301            (11,392)     (16,099)
   Net gains on sales of loans to dealer conduits..................................        (9,323)               -0-          -0-
   Net gains on sales of loans to mortgage conduits................................       (16,881)           (19,928)         -0-
   Net loss on dealer securitization...............................................        18,531                -0-          -0-
   Net loss on loans held for accelerated disposition..............................        23,414                -0-          -0-
   Writedown of mortgage conduit assets............................................        24,751                -0-          -0-
   Net gains on sales of businesses................................................       (19,959)               -0-          -0-
   Net increase in accrued interest receivable and other assets....................       (58,989)          (531,927)    (211,009)
   Net (decrease) increase in accrued expenses and other liabilities...............      (176,666)           (32,371)      11,275
   Provision for deferred income taxes.............................................       138,154             56,834       65,807
   Amortization of intangible assets...............................................        37,589             40,306       40,211
   Other operating activities, net.................................................        60,890             42,054       28,924
                                                                                     ------------       ------------  -----------
     Net cash provided by operating activities.....................................       855,540            345,210      417,080
                                                                                     ------------       ------------  -----------

INVESTING ACTIVITIES
Proceeds from maturities and prepayments of available-for-sale securities..........       535,098          1,904,594    2,771,295
Proceeds from sales of available-for-sale securities...............................     4,523,131          2,292,108    2,837,590
Purchases of available-for-sale securities.........................................      (878,539)        (5,319,935)  (6,764,648)
Proceeds from maturities, prepayments and calls of held-to-maturity securities.....       979,239          1,430,693    1,808,077
Purchases of held-to-maturity securities...........................................      (559,395)        (2,275,882)  (1,451,233)
Net (increase) decrease in federal funds sold and securities purchased under
   agreements to resell............................................................    (2,023,473)           225,227      (93,256)
Net (increase) decrease in other interest-earning assets...........................       (40,936)            11,412      (29,276)
Net increase in loans, excluding dealer securitization and
   mortgage and dealer conduits sales..............................................    (3,125,344)        (3,382,611)  (1,101,824)
Proceeds from sales of loans to dealer conduits....................................     1,001,106                -0-          -0-
Proceeds from sales of loans to mortgage conduits..................................     1,301,968          1,434,347          -0-
Proceeds from securitization of dealer loans.......................................       917,080                -0-          -0-
Net purchases of premises and equipment............................................       (51,300)            (2,415)    (133,432)
Net cash provided by acquisitions..................................................           -0-                -0-       63,855
Net cash from sales of branches, business operations,
   subsidiaries and other assets...................................................       796,860             98,102        8,204
                                                                                     ------------       ------------  -----------
     Net cash provided (used) by investing activities..............................     3,375,495         (3,584,360)  (2,084,648)
                                                                                     ------------       ------------  -----------
FINANCING ACTIVITIES
Net (decrease) increase in deposits................................................      (806,172)          (615,042)     961,708
Net (decrease) increase in federal funds purchased and securities sold under
   agreements to repurchase........................................................    (1,775,483)           625,485      488,967
Net (decrease) increase in other borrowed funds....................................    (1,598,872)         1,787,483   (1,177,511)
Issuance of long-term Federal Home Loan Bank advances and
   other long-term debt............................................................     5,379,388          2,735,384    2,528,473
Payments for maturing long-term debt...............................................    (5,097,875)        (1,527,169)    (391,487)
Cash dividends paid................................................................      (305,383)          (183,848)    (195,560)
Proceeds from employee stock plans and dividend reinvestment plan..................        62,066             53,564       45,943
Purchases of common stock..........................................................      (375,822)          (166,475)    (201,898)
                                                                                     ------------       ------------  -----------
     Net cash (used) provided by financing activities..............................    (4,518,153)         2,709,382    2,058,635
                                                                                     ------------       ------------  -----------
(Decrease) increase in cash and cash equivalents...................................      (287,118)          (529,768)     391,067
Cash and cash equivalents at beginning of period...................................     1,565,809          2,095,577    1,704,510
                                                                                     ------------       ------------  -----------
Cash and cash equivalents at end of period.........................................  $  1,278,691       $  1,565,809  $ 2,095,577
                                                                                     ============       ============  ===========
</TABLE>

See Notes to Consolidated Financial Statements.

                                       65
<PAGE>

AmSouth Bancorporation and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------------------

AmSouth Bancorporation (AmSouth), through its banking subsidiary, provides a
broad array of financial products and services through banking offices located
in six Southeastern states with leading market positions in Tennessee, Florida,
Alabama, and Mississippi. In addition, AmSouth provides select financial
services outside of its banking markets through its other subsidiaries.
AmSouth's principal activities include consumer and commercial banking and
wealth management. The accounting policies of AmSouth and the methods of
applying those policies that materially affect the accompanying financial
statements are presented below.

Basis of Presentation

The consolidated financial statements include the accounts of AmSouth and its
subsidiaries. All significant intercompany balances and transactions have been
eliminated. Certain amounts in the prior years' financial statements have been
reclassified to conform to the 2000 presentation. These reclassifications are
immaterial and had no effect on net income.

Use of Estimates

The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

Cash Flows

Cash and due from banks and time deposits in other banks are considered cash and
cash equivalents. For the years ended December 31, 2000, 1999 and 1998, AmSouth
paid interest of $1,685,198,000, $1,420,238,000 and $1,383,089,000,
respectively. For the years ended December 31, 2000, 1999 and 1998, noncash
transfers from loans to foreclosed properties were $26,001,000, $25,467,000 and
$20,692,000, respectively. Noncash transfers from foreclosed properties to loans
for the years ended December 31, 2000, 1999 and 1998 were $1,388,000, $711,000
and $496,000, respectively. For the year ended December 31, 1998, noncash
transfers from loans to available-for-sale securities of approximately
$99,107,000 were made in connection with mortgage loan securitizations. For the
year ended December 31, 1998, noncash transfers from loans to held-to-maturity
securities of approximately $1,176,394,000 were made in connection with mortgage
loan securitizations. In addition, for the year ended December 31, 1998,
$719,000 of noncash transfers were made from loans to other assets in connection
with mortgage loan securitizations. For the years ended December 31, 2000, 1999
and 1998, noncash transfers from loans to available-for-sale securities of
approximately $31,472,000, $9,838,000 and $4,038,000, respectively, were made in
connection with the participation of loans to third-party conduits and the
securitization and sale of automobile loans. For the years ended December 31,
2000, 1999 and 1998, noncash transfers from loans to other assets of
approximately $23,965,000, $16,225,000 and $3,567,000, respectively, were made
in connection with the participation of loans to third-party conduits. During
2000, noncash transfers of approximately $11,413,000 were made from loans to
other liabilities in connection with the participation of loans to third-party
conduits. During 1999, AmSouth had noncash transfers from available-for-sale
securities to held-to-maturity securities in the amount of $3,010,249,000. Also
during 1999, AmSouth had noncash transfers from held-to-maturity securities to
available-for-sale securities in the amount of $516,759,000. The transfers
between categories of securities were the result of portfolio restructurings in
connection with the acquisition of First American Corporation (First American).
During 1999, AmSouth also had noncash transfers from loans and the allowance for
loan losses to loans held for sale of $149,253,000 and $71,000,000,
respectively, associated with a decision to exit a portion of its healthcare
loan business.

Securities

Securities are classified as either held-to-maturity, available-for-sale or
trading. AmSouth defines held-to-maturity securities as debt securities which
management has the positive intent and ability to hold to maturity. Held-to-
maturity securities are stated at cost, adjusted for amortization of premiums
and accretion of discounts on the constant effective yield method. Trading
securities

                                      66
<PAGE>

are carried at market. Market adjustments and realized gains or losses on the
sale of trading securities are reported as other noninterest revenues.
Available-for-sale securities are defined as equity securities and debt
securities not classified as trading securities or held-to-maturity securities.
Available-for-sale securities are carried at fair value. Unrealized holding
gains or losses, net of deferred taxes, on available-for-sale securities are
excluded from earnings and reported in accumulated other comprehensive income
(loss) within shareholders' equity. AmSouth determines the appropriate
classification of debt securities at the time of purchase. Gains and losses from
sales of available-for-sale securities are computed using the specific
identification method.

Loans Held for Sale

At December 31, 2000, loans held for sale represented residential mortgage loans
held for sale. At December 31, 1999, loans held for sale included residential
mortgage loans held for sale and $78,253,000 of healthcare-related loans held
for accelerated disposition (AHAD). Loans held for sale are carried at the lower
of aggregate cost or market value. Market adjustments and realized gains and
losses are classified as other noninterest revenues.

Securities Purchased Under Agreements to Resell and Securities Sold Under
Agreements to Repurchase

Securities purchased under agreements to resell and securities sold under
agreements to repurchase are generally treated as collateralized financing
transactions and are recorded at the amount at which the securities were
acquired or sold plus accrued interest. It is AmSouth's policy to take
possession of securities purchased under resale agreements. The market value of
the collateral is monitored and additional collateral obtained when deemed
appropriate. Securities sold under repurchase agreements are delivered to either
broker-dealers or to custodian accounts or are held in segregated accounts.

Interest Rate Contracts and Other Off-Balance Sheet Financial Instruments

AmSouth has from time to time utilized various off-balance sheet instruments
such as interest rate swaps, forward interest rate swaps, interest rate caps,
floors and futures contracts that are designated to hedge imbalances in
sensitivity to fluctuating interest rates for designated assets and liabilities.
Interest rate impacts of derivative instruments are correlated with interest
rate movements of underlying assets or liabilities. The earnings impact of a
derivative is accrued over the life of the agreement based on expected
settlement payments and is recorded as an adjustment to interest income or
expense in the period in which it accrues and in the category appropriate to the
related assets or liabilities. The related amount receivable from or payable to
the derivative counterparty is included in other assets or liabilities in the
consolidated statement of condition. Realized and unrealized gains and losses on
futures contracts which are designated as hedges of interest rate exposure
arising out of nontrading assets and liabilities are deferred and recognized as
interest income or interest expense, in the category appropriate to the related
assets or liabilities, over the covered periods or lives of the hedged assets or
liabilities. Gains or losses on early terminations of derivative financial
instruments that relate to specific assets or liabilities are deferred and
amortized as an adjustment to the yield or rate of the related assets or
liabilities over the remaining covered period. At such time that there is no
longer correlation of interest rate movements between the derivative instrument
and the underlying assets or liabilities, or if the underlying assets or
liabilities specifically related to a derivative instrument mature, are sold or
terminated, then the related derivative instrument would be closed out or marked
to market as an element of noninterest income on an ongoing basis.

     Interest rate derivatives used in connection with the securities
available-for-sale portfolio are carried at fair value with gains and losses,
net of applicable deferred income taxes, reported in shareholders' equity in
other comprehensive income (loss), consistent with the reporting of unrealized
gains and losses on such securities. Premiums paid for interest rate floors
qualifying for hedge accounting are deferred and classified with the assets and
liabilities hedged and are amortized into interest income or expense over the
life of the instrument.

     On a limited basis, AmSouth also enters into interest rate swap agreements,
as well as interest rate cap and floor agreements, with customers desiring
protection from possible adverse future fluctuations in interest rates. As an
intermediary, AmSouth generally maintains a portfolio of matched offsetting
interest rate contract agreements. At the inception of such agreements, the

                                      67

<PAGE>

portion of the compensation related to credit risk and ongoing servicing, if
any, is deferred and taken into income over the term of the agreements. See
discussion of recent accounting pronouncements within Note 1 for a discussion of
new accounting standards related to derivative instruments and implemented by
AmSouth on January 1, 2001.

Loans

Interest income on commercial and real estate loans is accrued daily based upon
the outstanding principal amounts except for those classified as nonaccrual
loans. Interest income on certain consumer loans is accrued monthly based upon
the outstanding principal amounts except for those classified as nonaccrual
loans. Interest accrual is discontinued when it appears that future collection
of principal or interest according to the contractual terms may be doubtful.
Interest collections on nonaccrual loans for which the ultimate collectibility
of principal is uncertain are applied as principal reductions. Otherwise, such
collections are credited to income when received. Loan and lease origination and
commitment fees and certain direct loan origination costs are deferred and
amortized over the estimated life of the related loans or commitments as a yield
adjustment.

     Impaired loans are specifically reviewed loans for which it is probable
that the creditor will be unable to collect all amounts due according to the
terms of the loan agreement. Impairment of a loan is measured by comparing the
recorded investment in the loan with the present value of expected future cash
flows discounted at the loan's effective interest rate, the loan's observable
market price, or the fair value of the collateral if the loan is collateral
dependent. A valuation allowance is provided to the extent that the measure of
the impaired loans is less than the recorded investment. A loan is not
considered impaired during a period of delay in payment if the ultimate
collectibility of all amounts due is expected. Larger groups of homogeneous
loans such as consumer installment, bankcard and residential real estate
mortgage loans are collectively evaluated for impairment. Impaired loans are,
therefore, primarily commercial and commercial real estate loans. Payments
received on impaired loans for which the ultimate collectibility of principal is
uncertain are generally applied first as principal reductions.

Allowance for Loan Losses

The allowance for loan losses is maintained at a level which is considered to be
adequate to reflect estimated credit losses for specifically identified loans,
as well as estimated probable credit losses inherent in the remainder of the
loan portfolio at the balance sheet date. A formal review of the allowance for
loan losses is prepared quarterly to assess the risk in the portfolio and to
determine the adequacy of the allowance for loan losses. For purposes of the
quarterly review, the consumer loan portfolios are separated by loan type, and
each loan type is treated as a homogeneous pool. In accordance with the
Interagency Policy Statement on the Allowance for Loan and Lease Losses, issued
by the Office of the Comptroller of the Currency, Federal Deposit Insurance
Corporation, Federal Reserve Board, and Office of Thrift Supervision, the
allowance allocated to each of these pools is based upon trends in quarterly
annualized charge-off rates for each pool, adjusted for changes in these pools
which includes current information on the payment performance of each pool of
loans. Every commercial and commercial real estate loan is assigned a risk
rating on a thirteen point numerical scale by loan officers using established
credit policy guidelines. These risk ratings are periodically reviewed, and all
risk ratings are subject to review by an independent Credit Review Department.
Each risk rating is assigned an allocation percentage which, when multiplied
times the dollar value of loans in that risk category, results in the amount of
the allowance for loan losses allocated to these loans. The allocation of
allowance for loans with grades of pass and criticized is based upon historical
loss rates adjusted for current conditions that include current economic
developments. The allocation for loans with a classified grade is based upon
regulatory guidance. Every nonperforming loan in excess of $500,000, however, is
reviewed quarterly by AmSouth's Special Assets Department to determine the level
of loan losses required to be specifically allocated to these impaired loans.
Management reviews its allocation of the allowance for loan losses versus actual
performance of each of its portfolios and adjusts allocation rates to reflect
the recent performance of the portfolio as well as current underwriting
standards and other factors which might impact the estimated losses in the
portfolio.

     In determining the appropriate level for the allowance, management ensures
that the overall allowance appropriately

                                      68

<PAGE>

reflects the current macroeconomic conditions, industry exposure and a margin
for the imprecision inherent in most estimates of expected credit losses. This
additional allowance is reflected in the unallocated portion of the allowance.
Based on management's periodic evaluation of the allowance for loan losses, a
provision for loan losses is charged to operations if additions to the allowance
are required.

Premises and Equipment

Premises and equipment are stated at cost, less accumulated depreciation and
amortization. The provisions for depreciation and amortization are computed
generally by the straight-line method over the estimated useful lives of the
assets or terms of the leases, as applicable. The annual provisions for
depreciation and amortization have been computed principally using estimated
lives of five to forty years for premises and three to twelve years for
furniture and equipment.

Intangible Assets

Intangible assets, primarily goodwill, are included in other assets. Goodwill is
amortized on a straight-line basis primarily over ten to twenty-five years.
Other identified intangibles, primarily core deposit rights, are amortized over
a period no greater than fifteen years. As events or changes in circumstances
warrant, AmSouth reviews the carrying value of goodwill and other identified
intangibles to determine if any impairment has occurred or if the period of
recoverability has changed. If this review indicates that goodwill or deposit
intangibles will not be recoverable, as determined based on the undiscounted
cash flows of the entity acquired over the remaining amortization period, their
carrying value will be reduced by the estimated shortfall of such cash flows. At
December 31, 2000, 1999 and 1998, goodwill, net of amortization, totaled
$320,010,000, $391,221,000 and $426,225,000, respectively, and deposit and other
intangibles equaled $21,090,000, $32,252,000 and $38,808,000, respectively.

Income Taxes

The consolidated financial statements have been prepared on the accrual basis.
When income and expenses are recognized in different periods for financial
reporting purposes and for purposes of computing income taxes currently payable,
deferred taxes are provided on such temporary differences. Deferred tax assets
and liabilities are recorded for the expected future tax consequences of events
that have been recognized in the financial statements or tax returns. Deferred
tax assets and liabilities are measured using the enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be realized or settled.

Stock-Based Compensation

AmSouth adopted the disclosure-only provisions of Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation"
(Statement 123) which allows an entity to continue to measure compensation cost
for those plans using the intrinsic value-based method of accounting prescribed
by APB Opinion No. 25, "Accounting for Stock Issued to Employees" (Opinion 25).
AmSouth has elected to follow Opinion 25 and related interpretations in
accounting for its employee stock options. Compensation cost for fixed and
variable stock-based awards is measured by the excess, if any, of the fair
market price of the underlying stock over the amount the individual is required
to pay. Compensation cost for fixed awards is measured at the grant date, while
compensation cost for variable awards is estimated until both the number of
shares an individual is entitled to receive and the exercise or purchase price
are known (measurement date). See Note 17 for a further description of the
assumptions used for preparing the pro forma disclosures as prescribed by
Statement 123.

Earnings Per Common Share

Earnings per common share is obtained by dividing net income available to common
stockholders by the weighted average outstanding shares of common stock. The
diluted calculation of earnings per common share is obtained by dividing net
income by the weighted average outstanding shares of common stock adjusted for
effects of stock options and restricted stock outstanding. See Note 16 for the
reconciliation of the numerators and denominators of the basic and diluted
earnings per share computations.

     All common stock and per common share data included in the consolidated
financial statements and in the Notes to Consolidated Financial Statements have
been retroactively adjusted to reflect common stock splits.

                                      69

<PAGE>

Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities

AmSouth sells receivables, such as commercial loans, residential mortgage loans
and dealer loans, in securitizations and to third-party conduits. When AmSouth
sells these receivables, it retains interest-only strips, one or more
subordinated tranches, servicing rights, and in some cases a cash reserve
account. Gain or loss on sale of the receivables depends in part on the previous
carrying amount of the financial assets involved in the transfer, allocated
between the assets sold and the retained interests based on their relative fair
value at the date of transfer. To obtain fair values, quoted market prices are
used if available. However, quotes are generally not available for retained
interests, so AmSouth generally estimates fair value based on the present value
of expected future cash flows estimated using management's best estimates of the
key assumptions--expected credit losses, prepayment speeds, weighted average
life, and discount rates commensurate with the risks involved. In calculating
prepayment rates, AmSouth utilizes a variety of prepayment models depending on
the loan type and specific transaction requirements. The models used by AmSouth
include the constant prepayment rate model (CPR), the absolute prepayment speed
model (ABS) and the Bond Market Trade Association's Mortgaged Asset-Backed
Securities Division's prepayment model (PSA). See Note 23 for the assumptions
used by AmSouth in 2000. See additional discussion of recent accounting
pronouncements below.

Recent Accounting Pronouncements

In June 1998, Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and for Hedging Activities" (Statement 133), was
issued by the Financial Accounting Standards Board (FASB). Statement 133
provides a comprehensive and consistent standard for the recognition and
measurement of derivatives and hedging activities. It requires all derivatives
to be recorded on the balance sheet at fair value and establishes unique
accounting treatment for the following three different types of hedges: hedges
of changes in the fair value of assets, liabilities or firm commitments,
referred to as fair value hedges; hedges of the variable cash flows of
forecasted transactions, referred to as cash flow hedges; and hedges of foreign
currency exposures of net investments in foreign operations. The accounting for
each of the three types of hedges results in recognizing offsetting changes in
value or cash flows of both the hedge and the hedged item in earnings in the
same period. Changes in the fair value of derivatives that do not meet the
criteria of one of these three types of hedges are included in earnings in the
period of change. Statement 133 was originally effective for fiscal years
beginning after June 15, 1999. In June 1999, the FASB issued Statement of
Financial Accounting Standards No. 137, "Accounting for Derivative Instruments
and Hedging Activities--Deferral of the Effective Date of FASB Statement No.
133," which defers the effective date of Statement 133 to fiscal years beginning
after June 15, 2000. In June 2000, the FASB issued Statement of Financial
Accounting Standards No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities--an amendment of FASB Statement No. 133," which is
effective simultaneously with Statement 133. Statement 138 does not amend any of
the fundamental precepts of Statement 133, but does address a limited number of
implementation issues.

     As discussed in Note 13, AmSouth uses derivative instruments to protect
against the risk of adverse interest rate movements on the value of certain
assets and liabilities or on future cash flows. The fair value of these
derivatives is not currently on the balance sheet. On January 1, 2001, AmSouth
adopted Statement 133, as amended, and at that time, designated anew the
derivative instruments used for risk management into hedging relationships in
accordance with the requirements of the new standard. Derivative instruments
used to hedge changes in the fair value of assets and liabilities due to changes
in interest rates were designated as fair value hedges. Derivative instruments
used to hedge the variability of forecasted cash flows attributable to interest
rate risk were designated as cash flow hedges. The impact of adopting Statement
133 on AmSouth's financial condition was a net-of-tax increase to other
comprehensive income of approximately $5,650,000. The impact to net income of
adopting Statement 133 was immaterial. AmSouth also recorded an after-tax
increase to other comprehensive income of $26,612,000 as a result of
transferring $2,107,919,000 of securities from held-to-maturity to
available-for-sale in conjunction with the adoption of Statement No. 133. The
transition amounts were determined based on the interpre-

                                      70

<PAGE>

tive guidance issued by the FASB to date. The FASB continues to issue
interpretive guidance which could require changes to AmSouth's application of
Statement 133 and adjustments to the transition amounts.

     In September 2000, Statement of Financial Accounting Standards No. 140,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities" (Statement 140), was issued by the FASB. Statement 140 replaces
Statement 125, issued in June 1996. Statement 140 revises the standards for
accounting for securitizations and other transfers of financial assets and
collateral and requires certain disclosures, but carries over most of Statement
125's provisions without reconsideration. Statement 140 is effective for
transfers occurring after March 31, 2001. However, the expanded disclosures
about securitizations and collateral are effective for fiscal years ending after
December 15, 2000. The adoption of Statement 140 will not have a material impact
on AmSouth's financial condition or results of operations. See Note 23 for the
disclosure required by Statement 140.

NOTE 2-MERGERS AND ACQUISITIONS
--------------------------------------------------------------------------------

On October 1, 1999, AmSouth issued 214.5 million common shares to acquire First
American. AmSouth exchanged 1.871 shares of its common stock for each share of
First American common stock. First American was a $22.2 billion asset financial
service holding company headquartered in Nashville, Tennessee, with banking
offices in Tennessee, Mississippi, Louisiana, Arkansas, Virginia, and Kentucky.
The transaction was accounted for as a pooling-of-interests, and, accordingly,
the consolidated financial statements have been restated to include the results
of First American for all periods presented. In addition, during 1998 and prior
to its merger with AmSouth, the former First American completed acquisitions,
all of which were accounted for as poolings-of-interests. The information
related to these mergers is presented in the following table (in millions):

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
                                                                                          Common
                                                                                          Shares
   Acquiree                                  Location         Date          Assets        Issued
-------------------------------------------------------------------------------------------------
<S>                                          <C>           <C>              <C>           <C>
   Victory Bancshares, Inc.                     TN         Mar. 1998        $   131         1.6
   Deposit Guaranty Corporation                 MS         May 1998           7,151        91.2
   Peoples Bank (Peoples)                       TN         Oct. 1998            142         1.7
   The Middle Tennessee Bank (MTB)              TN         Oct. 1998            225         2.2
   CSB Financial Corporation (CSB)              TN         Oct. 1998            148         1.7
   Pioneer Bancshares, Inc. (Pioneer)           TN         Nov. 1998            990        11.5
-------------------------------------------------------------------------------------------------
</TABLE>

     For the acquisitions of Deposit Guaranty Corporation (Deposit Guaranty) and
Pioneer, accounted for as poolings-of-interests, the consolidated financial
statements were restated to include the results of both companies for all
periods presented. For all other acquisitions accounted for as
poolings-of-interests in the above table, the results of operations have been
included in the consolidated financial statements from the date of the
acquisition as preacquisition amounts were not material. Accordingly, prior
period financial statements were not restated since the changes to prior periods
were immaterial.

     On December 16, 1998, AmSouth through its subsidiary IFC Holdings, Inc.
(IFC), purchased the assets of the Specialized Investment Division of Financial
Service Corporation, a subsidiary of Sun America, Inc., which provided
investment products to customers of community banks and credit unions that did
not have their own broker/dealer capabilities. The $9 million purchase price was
primarily for goodwill and other intangible assets. On September 29, 2000,
AmSouth sold IFC.

                                      71
<PAGE>

NOTE 3-MERGER-RELATED COSTS
--------------------------------------------------------------------------------

AmSouth recorded merger and integration charges of $77.4 million, $268.8 million
and $103.4 million in 2000, 1999 and 1998, respectively. In addition, AmSouth
recorded other merger-related charges of $32.8 million, $32.6 million and $18.3
million in 2000, 1999 and 1998, respectively. Merger-related charges in 2000
were associated with the acquisition of First American. Merger-related charges
of $301.4 million recorded in 1999 were associated with the acquisition of First
American as well as conversion costs related to the acquisitions of Deposit
Guaranty, Pioneer, MTB, CSB and Peoples. The components of the charges are shown
below:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                                                                  Years Ended December 31
 (In millions)                                               2000                          1999                          1998
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>                        <C>                                  <C>
 Merger and integration costs:
 Severance and personnel-related costs                      $  15.9                        $130.1                      $  25.8
 Investment banking and other transaction costs                 0.9                          53.8                         29.1
 Occupancy and equipment charges                               40.8                          59.2                          2.7
 Systems and operations conversions                            19.8                          25.7                         45.8
                                                       --------------------------------------------------------------------------
   Total merger and integration costs                          77.4                         268.8                        103.4
Other merger-related charges                                   32.8                          32.6                         18.3
                                                       --------------------------------------------------------------------------
         Total merger-related charges                        $110.2                        $301.4                       $121.7
=================================================================================================================================
</TABLE>

     Severance and personnel-related costs included the cost of severance,
retention, change-in-control, outplacement, and other benefits associated with
the termination of employees primarily in corporate support and data processing
functions. For the First American merger, approximately 2,200 positions were
eliminated in 1999 and 2000 of which approximately 1,700 were through
merger-related workforce reduction and 500 were through merger-related
divestitures. Occupancy and equipment charges represented lease termination
costs and impairment of assets for redundant office space, equipment and
branches vacated and disposed of as part of the integration plan. Systems and
operations conversion costs resulted from the conversions and integration of the
acquired branches and operations and included incremental costs such as special
contract labor and incentives, consulting fees and mailing and preparation costs
for customer communications for the conversion of customer accounts. Other
merger-related costs included printing and distribution of conversion related
instructional materials and manuals and relocation expenses and, in 1999, a
provision for losses resulting from systems conversions and process integration
related to prior First American mergers. The 1999 loss provision covers
dishonored return items, unidentified customer debits, unmatched or unlocated
items, and other similar losses. Also included in other merger-related costs in
1998 was charitable foundation costs related to the funding of a charitable
foundation for the Deposit Guaranty market. The following table presents a


                                      72
<PAGE>

summary of activity with respect to the merger and integration accrual:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------

 (In millions)                                                2000                         1999                          1998
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                        <C>                           <C>
 Balance at the beginning of the year                        $ 70.7                      $   18.8                     $    -0-
 Provision charged to operating expense                        44.8                         301.4                       121.7
 Cash outlays                                                 (75.0)                       (150.9)                      (97.0)
 Noncash writedowns and charges                                (0.9)                        (98.6)                       (5.9)
                                             --------------------------------------------------------------------------------------
 Balance at the end of the year                              $ 39.6                      $   70.7                     $  18.8
===================================================================================================================================
</TABLE>

The components of the merger and integration accrual at December 31 were as
follows:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------

 (In millions)                                                            2000                             1999
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                              <C>
 Severance and personnel-related costs                                   $24.8                            $68.2
 Occupancy and equipment charges                                          14.8                              0.9
 Systems and operations conversions                                        -0-                              0.1
 Other merger and integration costs                                        -0-                              1.5
                                             ------------------------------------------------------------------------------------
 Total                                                                   $39.6                            $70.7
=================================================================================================================================
</TABLE>

     At December 31, 2000, the liability for severance and personnel-related
costs was primarily accrued for retirement and severance liabilities that will
be paid out over an extended period of time based on the retirement and life
expectancy of the beneficiaries. The remaining occupancy and equipment accrual
is primarily related to long-term lease agreements on redundant branch and
office space vacated as part of the merger restructuring. This liability will be
paid down over the lives of the various leases.

     In addition to the merger-related costs, AmSouth also recorded, during
1999, the following charges related to the First American acquisition: an $8.0
million impairment charge on a portfolio investment and $7.6 million of charges
related to conforming accounting adjustments. The impairment charge and $0.8
million of the conforming accounting adjustments were recorded as reductions to
other noninterest revenues. $3.0 million of the conforming accounting charges
were recorded in the provision for loan losses. The remaining $3.8 million of
conforming accounting adjustments were recorded in various categories of
noninterest expense.

NOTE 4-CASH AND DUE FROM BANKS
--------------------------------------------------------------------------------

AmSouth's banking subsidiaries are required to maintain reserve balances with
the Federal Reserve Bank based on a percentage of deposits reduced by their cash
on hand. The average amount of those reserves was approximately $13,150,000 and
$45,200,000 for the years ended December 31, 2000 and 1999, respectively.

                                      73

<PAGE>

NOTE 5-AVAILABLE-FOR-SALE SECURITIES
--------------------------------------------------------------------------------

The following is a summary of available-for-sale securities at December 31:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------

                                                2000                                                  1999
-----------------------------------------------------------------------------------------------------------------------------------
                                           Gross      Gross                                    Gross       Gross
                           Amortized    Unrealized Unrealized     Carrying       Amortized  Unrealized  Unrealized     Carrying
 (In thousands)              Cost          Gains     Losses        Amount          Cost        Gains      Losses        Amount
-----------------------------------------------------------------------------------------------------------------------------------
<S>                      <C>            <C>        <C>           <C>            <C>         <C>         <C>          <C>
 U.S. Treasury and
   federal agency
   securities              $  124,470     $ 4,336     $   497     $  128,309     $  328,318    $  456     $ 11,703     $  317,071
 Mortgage-backed
   securities               1,242,565      17,719       2,048      1,258,236      5,239,298     4,926      140,668      5,103,556
 State, county and
   municipal securities        65,842       1,426         399         66,869         74,219       702        1,206         73,715
 Other debt securities        125,082         -0-         160        124,922        106,994       -0-        5,378        101,616
 Equity securities            339,360          22       8,801        330,581        397,541        58       28,854        368,745
                        -----------------------------------------------------------------------------------------------------------
                           $1,897,319     $23,503     $11,905     $1,908,917     $6,146,370    $6,142     $187,809     $5,964,703
===================================================================================================================================
</TABLE>

     The carrying amount and amortized cost of available-for-sale securities by
maturity at December 31, 2000, are as follows:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------

                                                                 Amortized                                     Carrying
 (In thousands)                                                    Cost                                         Amount
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>                                           <C>
 Due within 1 year                                               $  112,250                                    $  113,111
 Due after 1 year through 5 years                                    97,048                                        96,777
 Due after 5 years through 10 years                                  71,464                                        74,209
 Due after 10 years                                                  34,632                                        36,003
 Mortgage-backed securities                                       1,242,565                                     1,258,236
 Equity securities                                                  339,360                                       330,581
                                       -------------------------------------------------------------------------------------------
                                                                 $1,897,319                                    $1,908,917
==================================================================================================================================
</TABLE>

     In 2000, 1999 and 1998, AmSouth realized gross gains of $10,784,000,
$32,672,000 and $20,529,000, respectively, and gross losses of $106,085,000,
$21,280,000 and $4,430,000, respectively, on sales of available-for-sale
securities. Equity securities included $327.9 million and $265.8 million in
amortized cost related to Federal Reserve Bank stock and Federal Home Loan Bank
stock as of December 31, 2000 and 1999, respectively.

                                      74

<PAGE>

NOTE 6-HELD-TO-MATURITY SECURITIES
--------------------------------------------------------------------------------

The amounts at which held-to-maturity securities are carried and their
approximate fair market values at December 31 are summarized as follows:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------

                                                2000                                                  1999
---------------------------------------------------------------------------------------------------------------------------------
                                           Gross      Gross                                    Gross       Gross
                           Carrying     Unrealized Unrealized      Market        Carrying   Unrealized  Unrealized      Market
 (In thousands)             Amount         Gains     Losses         Value         Amount       Gains      Losses         Value
---------------------------------------------------------------------------------------------------------------------------------
<S>                       <C>           <C>        <C>            <C>            <C>        <C>         <C>           <C>
 U.S. Treasury and
   federal agency
   securities              $  551,894    $ 10,675     $ 8,071     $  554,498     $  562,696    $  -0-     $ 18,432     $  544,264
 State, county and
   municipal securities       386,832      19,682       4,229        402,285        376,891       621       13,443        364,069
 Mortgage-backed
   securities               5,574,040     119,947      60,415      5,633,572      5,992,397     3,777      172,857      5,823,317

 Other securities             137,673       2,068         216        139,525        118,578       183        1,067        117,694
                         --------------------------------------------------------------------------------------------------------
                           $6,650,439    $152,372     $72,931     $6,729,880     $7,050,562    $4,581     $205,799     $6,849,344
=================================================================================================================================
</TABLE>

     The carrying amount and approximate market value of held-to-maturity
securities by maturity at December 31, 2000, are as follows:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------

                                                                 Carrying                                       Market
 (In thousands)                                                   Amount                                         Value
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>                                          <C>
 Due within 1 year                                               $   42,028                                    $   38,505
 Due after 1 year through 5 years                                    91,048                                        90,644
 Due after 5 years through 10 years                                 470,533                                       479,531
 Due after 10 years                                                 472,790                                       487,628
 Mortgage-backed securities                                       5,574,040                                     5,633,572
                                     -------------------------------------------------------------------------------------------
                                                                 $6,650,439                                    $6,729,880
================================================================================================================================
</TABLE>

     During 1999, certain held-to-maturity securities with a total amortized
cost of $516,759,000 were transferred to available-for-sale. The unrealized loss
at the date of transfer was $7,018,000. The transfer resulted from portfolio
restructurings in connection with the acquisition of First American. There were
no sales of held-to-maturity securities during 2000, 1999 or 1998.
Held-to-maturity and available-for-sale securities with a carrying amount of
$7,805,807,000 and $11,406,179,000 at December 31, 2000 and 1999, respectively,
were pledged to secure short-term and long-term borrowings, public deposits,
trust funds and for other purposes as required or permitted by law.

                                      75

<PAGE>

NOTE 7-LOANS
--------------------------------------------------------------------------------

The major categories of loans net of unearned income at December 31 are
summarized as follows:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------

                                                                  2000                                         1999
---------------------------------------------------------------------------------------------------------------------------------
 (Dollars in thousands)                               Amount               Percent                Amount                Percent
---------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>                    <C>                <C>                     <C>
 Commercial:
   Commercial and industrial                      $ 7,312,845                29.7%              $ 7,967,190                30.3%
   Commercial loans secured by real estate          1,765,092                 7.2                 2,036,120                 7.8
                                            -------------------------------------------------------------------------------------
      Total commercial                              9,077,937                36.9                10,003,310                38.1
 Commercial real estate:
   Commercial real estate mortgages                 2,322,952                 9.5                 2,295,157                 8.7
   Real estate construction                         2,517,172                10.2                 2,416,849                 9.2
                                            -------------------------------------------------------------------------------------
      Total commercial real estate                  4,840,124                19.7                 4,712,006                17.9
 Consumer:
   Residential first mortgages                      1,358,060                 5.5                 1,701,435                 6.5
   Other residential mortgages                      4,655,895                18.9                 3,873,599                14.7
   Dealer indirect                                  2,989,910                12.1                 4,148,747                15.8
   Revolving credit                                   505,234                 2.1                   489,238                 1.9
   Other consumer                                   1,189,275                 4.8                 1,338,424                 5.1
                                            -------------------------------------------------------------------------------------
      Total consumer                               10,698,374                43.4                11,551,443                44.0
                                            -------------------------------------------------------------------------------------
                                                  $24,616,435               100.0%              $26,266,759               100.0%
=================================================================================================================================
</TABLE>

     Included in commercial and industrial loans was $1,085,689,000 and
$710,898,000 of rentals receivable on leveraged leases, $367,715,000 and
$271,719,000 of estimated residuals on leveraged leases, net of $452,110,000 and
$260,593,000 of unearned income on leveraged leases at December 31, 2000 and
1999, respectively. Pretax income from leveraged leases for the years ending
December 31, 2000, 1999 and 1998 was $40,373,000, $54,616,000 and $14,287,000,
respectively. The tax effect of pretax income was a benefit of $21,131,000, an
expense of $20,758,000, and an expense of $5,538,000 for the years ending
December 31, 2000, 1999 and 1998, respectively. During 2000, AmSouth transferred
the responsibility for the management of certain operations to a foreign
subsidiary, thereby lowering the effective tax rate on certain existing
leveraged lease investments. In accordance with Statement of Financial
Accounting Standards (SFAS) No. 13, "Accounting for Leases", the net income from
the leases was recalculated from their inception based on the new effective tax
rate increasing net income for the year by $7.0 million. This adjustment
included a deferral of previously recognized pretax leveraged lease earnings to
later periods, which reduced current pretax net interest income by $24.5
million. Total pretax income over the terms of the leveraged leases will be
unaffected by the change in the effective tax rate. The reduction in net
interest income was more than offset by a $31.5 million reduction in deferred
income taxes. AmSouth intends to permanently reinvest earnings of this foreign
subsidiary and, therefore, in accordance with SFAS 109, "Accounting for Income
Taxes",

                                      76

<PAGE>

deferred taxes of $31.5 million have not been provided as of December 31, 2000.

     At December 31, 2000 and 1999, nonaccrual loans totaled $179,659,000 and
$141,134,000, respectively. The amount of interest income actually recognized on
these loans during 2000 and 1999 was approximately $5,159,000 and $4,350,000,
respectively. The additional amount of interest income that would have been
recorded during 2000 and 1999 if these loans had been current in accordance with
their original terms was approximately $12,687,000 and $11,386,000,
respectively.

     At December 31, 2000 and 1999, the recorded investment in loans that were
considered to be impaired was $110,968,000 and $56,923,000, respectively
(primarily 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 impaired loans at December 31, 2000 and 1999. There was
approximately $43,849,000 and $18,419,000 at December 31, 2000 and 1999,
respectively, in the allowance for loan losses specifically allocated to
$106,625,000 and $49,860,000 of impaired loans. No specific reserve was required
for $4,343,000 and $7,063,000 of impaired loans at December 31, 2000 and 1999,
respectively. The average recorded investment in impaired loans for the years
ended December 31, 2000, 1999 and 1998 was approximately $70,471,000,
$61,880,000 and $87,305,000, respectively. No material amount of interest income
was recognized on impaired loans for the years ended December 31, 2000, 1999 and
1998.

     Certain executive officers and directors of AmSouth and their associates
were loan customers of AmSouth during 2000 and 1999. Such loans are made in the
ordinary course of business at normal credit terms, including interest rates and
collateral, and do not represent more than a normal risk of collection. Total
loans to these persons at December 31, 2000 and 1999, amounted to approximately
$70,987,000 and $156,487,000, respectively. Activity during 2000 in loans to
related parties included loans of approximately $964,286,000 and payments of
approximately $1,017,816,000. Reductions of $31,885,000 were made for directors
that are no longer related, and net reductions of $85,000 were made representing
other changes.

NOTE 8-ALLOWANCE FOR LOAN LOSSES
--------------------------------------------------------------------------------

A summary of changes in the allowance for loan losses is shown below:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
(In thousands)                                                 2000              1999            1998
----------------------------------------------------------------------------------------------------------
 <S>                                                         <C>               <C>              <C>
 Balance at January 1                                        $ 354,679         $ 370,065        $ 366,051
 Loans charged off                                            (178,388)         (148,287)        (134,238)
 Recoveries of loans previously charged off                     54,037            45,381           50,586
                                                            ----------------------------------------------
 Net charge offs                                              (124,351)         (102,906)         (83,652)
 Addition to allowance charged to expense                      227,600           165,626           99,067
 Additions due to business combinations                            -0-               -0-            6,164
 Allowance sold/transferred to loans held for sale, net        (74,591)          (73,000)         (14,900)
 Allowance transferred to other liabilities                     (2,903)           (5,106)          (2,665)
                                                            ----------------------------------------------
 Balance at December 31                                      $ 380,434         $ 354,679        $ 370,065
==========================================================================================================
</TABLE>

                                      77
<PAGE>

NOTE 9-PREMISES AND EQUIPMENT
--------------------------------------------------------------------------------

Premises and equipment at December 31 are summarized as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
 (In thousands)                                                 2000         1999
------------------------------------------------------------------------------------
<S>                                                         <C>           <C>
 Land                                                       $  108,020    $  112,265
 Buildings                                                     407,077       407,576
 Furniture and fixtures                                        611,368       661,107
 Leasehold improvements                                        120,140       136,069
                                                            ------------------------
                                                             1,246,605     1,317,017
 Less: Allowances for depreciation and amortization            612,404       638,575
                                                            ------------------------
                                                            $  634,201    $  678,442
====================================================================================
</TABLE>

NOTE 10-DEPOSITS
--------------------------------------------------------------------------------

The aggregate amount of time deposits of $100,000 or more, excluding
certificates of deposit of $100,000 or more, in domestic bank offices was
$198,639,000 and $203,185,000 at December 31, 2000 and 1999, respectively. In
addition, a majority of foreign time deposits were in amounts in excess of
$100,000.

     At December 31, 2000, the aggregate maturities, in thousands, of time
deposits are summarized as follows:

<TABLE>
<S>                                                                      <C>
------------------------------------------------------------------------------------
 2001                                                                    $ 7,947,551
 2002                                                                      1,909,567
 2003                                                                        406,227
 2004                                                                         87,004
 2005 and thereafter                                                         545,969
                                                            ------------------------
                                                                         $10,896,318
====================================================================================
</TABLE>

NOTE 11-OTHER BORROWED FUNDS
--------------------------------------------------------------------------------

Other borrowed funds at December 31 are summarized as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
 (In thousands)                                                 2000         1999
------------------------------------------------------------------------------------
<S>                                                         <C>           <C>
 Treasury, tax and loan notes                                 $ 24,785    $1,109,951
 Short-term Federal Home Loan Bank advances                        -0-       150,000
 Term federal funds purchased                                      -0-       515,000
 Short-term bank notes                                         450,000       300,000
 Commercial paper                                               12,494         8,749
 Other short-term debt                                          49,569        52,020
                                                            ------------------------
                                                              $536,848    $2,135,720
====================================================================================
</TABLE>

                                      78
<PAGE>

     At December 31, 2000, AmSouth had a line of credit arrangement for
short-term debt enabling it to borrow up to $25,000,000 subject to such terms as
AmSouth and the lender may mutually agree. The arrangement is reviewed annually
for renewal of the credit line. The line is available solely to support
commercial paper borrowings and was not in use at December 31, 2000.

     The interest rate on the treasury, tax and loan notes was 6.50% and 5.00%
at December 31, 2000 and 1999, respectively. All other borrowed funds had
interest rates ranging from 3.50% to 6.72% at December 31, 2000, and from 3.15%
to 6.51% at December 31, 1999.

NOTE 12-LONG-TERM DEBT
--------------------------------------------------------------------------------

Long-term debt at December 31 is summarized as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
 (In thousands)                                                 2000                     1999
------------------------------------------------------------------------------------------------------
<S>                                                          <C>                       <C>
 Long-term Federal Home Loan Bank advances                   $4,898,308                $4,612,686
------------------------------------------------------------------------------------------------------
 Other long-term debt:
   6.45% Subordinated Notes Due 2018                            303,523                   304,020
   6.125% Subordinated Notes Due 2009                           174,495                   174,351
   6.75% Subordinated Debentures Due 2025                       149,915                   149,898
   7.75% Subordinated Notes Due 2004                            149,687                   149,595
   7.25% Senior Notes Due 2006                                   99,620                   101,028
   6.875% Subordinated Notes Due 2003                            49,926                    49,895
   6.625% Subordinated Notes Due 2005                            49,736                    49,709
   Long-term notes payable                                        7,215                    11,170
   Capitalized lease obligations                                    980                     1,134
                                                       -----------------------------------------------
 Total other long-term debt                                     985,097                   990,800
                                                       -----------------------------------------------
                                                             $5,883,405                $5,603,486
======================================================================================================
</TABLE>

     Advances from the Federal Home Loan Bank (FHLB) had maturities ranging from
2001 to 2020 and interest rates ranging from 0.50% to 8.10%. Of the balances
outstanding at December 31, 2000, $4,365,000,000 is callable by the FHLB during
the first quarter of 2001. Under the Blanket Agreement for Advances and Security
Agreement with the FHLB, residential mortgage loans, mortgage-backed securities
and home equity lines and loans are pledged as collateral for the FHLB advances
outstanding.

     The 6.45% Subordinated Notes Due 2018 were issued February 1, 1998, by
AmSouth's bank subsidiary (AmSouth Bank) at a price of 101.702%. The net
proceeds to AmSouth Bank after commissions totaled $303,156,000. The notes will
mature February 1, 2018, and were issued with embedded put and call options that
could require AmSouth Bank to repurchase the notes at face value on February 1,
2008. If the bank does not repurchase the debt, the interest rate on the notes
will be reset on February 1, 2008, based on a set formula. AmSouth Bank
purchased interest rate swaps in the notional amount of $300,000,000 to hedge
the fair value of these notes. These swaps require AmSouth Bank to pay variable
rates based on the 30-day and 90-day London Interbank Offered Rate (LIBOR) on
notional amounts of $200,000,000 and $100,000,000, respectively.

     The 6.125% Subordinated Notes Due 2009 were issued March 1, 1999, at a
discounted price of 99.175%. The net proceeds to AmSouth after commissions
totaled $172,419,000. The notes will mature March 1, 2009, and AmSouth may
redeem some, or all, of the notes prior to March 1, 2009, at the greater of

                                      79
<PAGE>

100 percent of the principal amount, or an amount based on a preset formula.
AmSouth purchased interest rate swaps in the notional amount of $175,000,000 to
hedge the fair value of these notes. These swaps require AmSouth to pay variable
interest rates based on the 30-day LIBOR on notional amounts of $175,000,000.

     The 6.75% Subordinated Debentures Due November 1, 2025, were issued
November 6, 1995, at a discounted price of 99.883 percent. The net proceeds to
AmSouth after commissions totaled $148,900,000. The debentures will mature on
November 1, 2025, and may be redeemed on November 1, 2005, at the option of the
registered holders thereof. AmSouth purchased interest rate swaps in the
notional amount of $150,000,000 to hedge the fair value of these debentures.
These swaps require AmSouth to pay a variable rate based on the 30-day LIBOR
while receiving a fixed rate.

     The 7.75% Subordinated Notes Due 2004 were issued May 19, 1994, at a
discounted price of 99.389 percent. The net proceeds to AmSouth after
commissions totaled $148,100,000. The notes will mature on May 15, 2004, and are
not redeemable prior to maturity.

     The 7.25% Senior Notes Due 2006, were issued April 26, 1996, at a
discounted price of 99.381 percent. The net proceeds to AmSouth after
commissions totaled $98,731,000. The notes will mature May 1, 2006, and are not
redeemable prior to maturity.

     The 6.875% Subordinated Notes Due 2003 were issued April 22, 1993, at a
discounted price of 99.36 percent. The net proceeds to AmSouth after commissions
totaled $49,355,000. The notes will mature April 15, 2003, and are not
redeemable prior to maturity.

     The 6.625% Subordinated Notes Due 2005 were issued December 18, 1995, at a
discounted price of 99.675 percent. The net proceeds to AmSouth after
commissions totaled $49,512,500. The notes will mature December 18, 2005, and
are not redeemable prior to maturity.

     Long-term notes payable at December 31, 2000, included notes maturing from
2004 to 2012 with interest rates ranging from 5.05 percent to 8.00 percent.

     The aggregate stated maturities, in thousands, of long-term debt
outstanding at December 31, 2000, are summarized as follows:

--------------------------------------------------------------------------------
 2001                                                              $   70,124
 2002                                                                   6,141
 2003                                                                 881,778
 2004                                                                 152,959
 2005                                                               1,255,104
 Thereafter                                                         3,517,299
                                                           --------------------
                                                                   $5,883,405
================================================================================


NOTE 13-OFF-BALANCE SHEET FINANCIAL AGREEMENTS
--------------------------------------------------------------------------------

AmSouth uses a variety of off-balance sheet financial instruments to enable it
to manage its exposure to changes in interest rates. AmSouth also enters into
similar instruments to help customers manage their exposure to interest rate and
foreign currency fluctuations and to finance international activities.

     Forward contracts provide AmSouth and its customers a means of managing the
risks of changing interest and foreign exchange rates. These contracts represent
commitments either to purchase or sell securities, loans, other money market
instruments or foreign currency at a future date and at a specified price.
AmSouth is subject to the market risk associated with changes in the value of
the underlying financial instrument as well as the credit risk that another
party will fail to perform. The gross contract amount of forward contracts
represents the extent of AmSouth's involvement. However, those amounts
significantly exceed the future cash requirements as AmSouth intends to close
out open trading positions prior to settlement and thus is subject only to the
change in value of the instruments. The gross amount of contracts represents
AmSouth's maximum exposure to credit risk.

                                      80

<PAGE>

     Interest rate swaps are agreements to exchange interest payments computed
on notional amounts. Swaps subject AmSouth to market risk associated with
changes in interest rates, as well as the credit risk that another party will
fail to perform. Interest rate caps and floors are contracts in which a
counterparty pays or receives a cash payment from another counterparty if a
floating rate index rises above or falls below a predetermined level. The
present value of purchased caps and floors in a gain position represents the
potential credit risk to AmSouth.

     Market risk resulting from a position in a particular off-balance sheet
financial instrument may be offset by other on or off-balance sheet
transactions. AmSouth monitors overall sensitivity to interest rate changes by
analyzing the net effect of potential changes in interest rates on the market
value of both on and off-balance sheet financial instruments and the related
future cash flow streams. AmSouth manages the credit risk of counterparty
defaults in these transactions by limiting the total amount of arrangements
outstanding, both by individual counterparty and in the aggregate, and by
monitoring the size and maturity structure of the off-balance sheet portfolio.
AmSouth requires collateralization by a counterparty on credit exposure above a
specified credit limit. Trading and dealer activities in the aggregate are not
material to AmSouth and are not separately disclosed.

     Note 1 includes a summary of how derivative instruments used for interest
rate risk management are accounted for in the financial statements. In 2001, the
accounting for these instruments will change to comply with the requirements of
Statement 133, which was adopted by AmSouth on January 1, 2001. The new
accounting requirements are discussed in Note 1 as well.

     Interest Rate Risk Management: As part of managing interest rate risk,
AmSouth uses a variety of derivative instruments to protect against the risk of
interest rate movements on the value of certain assets and liabilities or on
future cash flows. The nature and volume of derivative instruments used by
AmSouth to manage interest rate risk related to loans, deposits and long-term
debt depend on the level and type of these on-balance sheet items and AmSouth's
risk management strategies given the current and anticipated interest rate
environment.

     The fair value of fixed-rate deposit and long-term debt were hedged against
changes in interest rates primarily through the use of receive-fixed interest
rate swaps. Cash flow variability stemming from adjustable-rate loans was hedged
primarily through the use of receive-fixed interest rate swaps.

     The following table identifies the gross contract or notional amounts of
off-balance sheet financial instruments at December 31:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
 (In millions)                                                   2000              1999
--------------------------------------------------------------------------------------------
<S>                                                            <C>               <C>
 Forward contracts-commitments to sell                         $   86.0          $   84.2
 Forward contracts-commitments to purchase                          -0-              17.1
 Notional amount of interest rate swaps:
   Receive fixed rate                                           2,959.7           3,503.8
   Receive variable rate                                          292.7             185.8
 Notional amount of interest rate caps and floors                  80.2              89.4
 Forward foreign exchange contracts:
   Commitments to purchase                                         44.7              54.7
   Commitments to sell                                             44.8              54.6
 Written options sold                                               -0-             100.0
 Written options purchased                                          1.0               2.0
--------------------------------------------------------------------------------------------
</TABLE>

                                      81

<PAGE>

     The notional amounts of interest rate contracts used by AmSouth to hedge
statement of condition items at December 31 are shown below:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
 (In millions)                                        2000              1999
----------------------------------------------------------------------------------
<S>                                              <C>                  <C>
 Loans                                              $  925            $1,515
 Securities                                             25               110
 Deposits                                            1,092               918
 Long-term debt                                        625               775
                                               -----------------------------------
                                                    $2,667            $3,318
==================================================================================
</TABLE>

     The table below presents the deferred gains and losses related to
terminated interest rate swaps at December 31, 2000 and 1999. These deferred
gains and losses are recognized as basis adjustments to existing assets and
liabilities.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
 (In thousands)                                      2000              1999
----------------------------------------------------------------------------------
<S>                                              <C>                 <C>
 Deferred gains                                    $11,850           $21,263
 Deferred losses                                      (402)           (4,365)
                                               -----------------------------------
   Total net deferred gains                        $11,448 (1)       $16,898 (2)
==================================================================================
</TABLE>

(1)  $6.3 million of net deferred gains to be recognized during 2001 and $5.1
     million to be recognized during 2002 through 2007.

(2)  $5.5 million of net deferred gains recognized during 2000 and $11.4 million
     to be recognized during 2001 through 2007.

NOTE 14-COMMITMENTS AND CONTINGENCIES
--------------------------------------------------------------------------------

AmSouth and its subsidiaries lease land, premises and equipment under cancelable
and noncancelable leases, some of which contain renewal options under various
terms. The leased properties are used primarily for banking purposes.

     The total rental expense on operating leases for the years ended December
31, 2000, 1999 and 1998 was $68,574,000, $72,984,000 and $73,493,000,
respectively. Rental income on bank premises for 2000, 1999 and 1998 was
$7,089,000, $14,102,000 and $14,424,000, respectively. There were no material
contingent rental expenses for 2000, 1999 or 1998.

     Future minimum payments, in thousands, by year and in the aggregate, for
noncancelable operating leases with initial or remaining terms of one year or
more consisted of the following at December 31, 2000:

-----------------------------------------------------------------------------
 2001                                                                $ 46,524
 2002                                                                  39,974
 2003                                                                  35,813
 2004                                                                  29,539
 2005                                                                  20,743
 Thereafter                                                           132,320
                                                                     --------
                                                                     $304,913
================================================================================

                                      82
<PAGE>

     AmSouth and its subsidiaries are contingently liable with respect to
various loan commitments and other contingent liabilities in the normal course
of business. AmSouth's maximum exposure to credit risk for loan commitments
(unfunded loans and unused lines of credit) and standby letters of credit at
December 31, 2000, was as follows (in millions):

--------------------------------------------------------------------------------
Commitments to extend credit                                         $18,150.8
Standby letters of credit                                              2,090.0
--------------------------------------------------------------------------------

     The credit risk associated with loan commitments and standby letters of
credit is essentially the same as that involved in extending loans to customers
and is subject to AmSouth's credit policies. Collateral is obtained based on
management's assessment of the customer.

     Various legal proceedings are pending against AmSouth and its subsidiaries.
Some of these proceedings seek relief or allege damages that are substantial.
The actions arise in the ordinary course of AmSouth's business and include
actions relating to its imposition of certain fees, lending, collections, loan
servicing, deposit taking, investment, trust, and other activities. Because some
of these actions are complex and for other reasons, it may take a number of
years to finally resolve them. Although it is not possible to determine with
certainty AmSouth's potential exposure from these proceedings, based upon legal
counsel's opinion, management considers that any liability resulting from the
proceedings would not have a material impact on the financial condition or
results of operations of AmSouth.

NOTE 15-SHAREHOLDERS' EQUITY
--------------------------------------------------------------------------------

AmSouth offers a Dividend Reinvestment and Common Stock Purchase Plan, whereby
shareholders can reinvest dividends to acquire shares of common stock.
Shareholders may also invest additional cash up to $5,000 per quarter with no
brokerage commissions or fees charged.

     On March 20, 1997, AmSouth's Board approved the repurchase by AmSouth of up
to 13,500,000 shares of its common stock. During 1997, 1998 and 1999, AmSouth
purchased 5,859,000, 5,297,000 and 1,352,000 shares, respectively, at a cost of
$110,267,000, $136,514,000 and $41,247,000, respectively, under this plan. The
authorization expired in March 1999.

     On April 15, 1999, AmSouth's Board approved the repurchase by AmSouth of
approximately 13,100,000 shares of its common stock. From April 15, 1999, to May
30, 1999, AmSouth purchased 655,000 shares at a cost of $20,398,000 under this
plan. The authorization was rescinded by the Board on May 31, 1999. On April 15,
1999, AmSouth's Board also approved a three-for-two common stock split in the
form of a 50 percent stock dividend. The stock dividend was paid May 24, 1999,
to shareholders of record as of April 30, 1999.

     On April 15, 1999, AmSouth's shareholders approved an increase in the
common stock authorized to be issued by AmSouth to 350,000,000 shares. On
September 16, 1999, in an action related to its merger with First American,
AmSouth's shareholders approved an increase in the common stock authorized to be
issued by AmSouth from 350,000,000 to 750,000,000 shares.

     On April 20, 2000, AmSouth's Board approved the repurchase by AmSouth of
approximately 35,000,000 shares of its common stock over a two-year period. From
April 20, 2000, to December 31, 2000, AmSouth purchased 22,322,000 shares at a
cost of $369,696,000 under this plan.

     At December 31, 2000, there were 4,365,500 shares reserved for issuance
under the Dividend Reinvestment and Common Stock Purchase Plan, 29,910,900
shares reserved for issuance under stock compensation plans (16,644,800 shares
represent stock options outstanding) and 811,900 shares reserved for issuance
under the employee stock purchase plan for a total of 35,088,300 shares.

     In 2000, AmSouth again increased its dividend per share to $0.81 per common
share, compared to $0.71 in 1999 and $0.57 in 1998.

     Included in other comprehensive income within shareholders' equity at
December 31, 2000 and 1999, was $114,606,000 and $136,463,000, respectively, of
unrealized securities losses associated with the transfer of available-for-sale
securities to held-to-maturity at the time of AmSouth's merger with First
American. This amount is being amortized over the estimated lives of the
transferred securities.

                                      83
<PAGE>

NOTE 16-EARNINGS PER COMMON SHARE
--------------------------------------------------------------------------------
The following table sets forth the computation of earnings per common share and
diluted earnings per common share:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------


 (Dollars in thousands)                                      2000                          1999                          1998
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                           <C>                          <C>
 Earnings per common share computation:
   Numerator:
      Net income                                            $329,127                      $340,468                     $474,074
   Denominator:
      Average common shares outstanding                      382,031                       391,136                      389,595
 Earnings per common share                                  $    .86                      $    .87                     $   1.22
 Diluted earnings per common share computation:
   Numerator:
      Net income                                            $329,127                      $340,468                     $474,074
   Denominator:
      Average common shares outstanding                      382,031                       391,136                      389,595
      Dilutive shares contingently issuable                    2,646                         5,379                        6,896
                                                       ---------------------------------------------------------------------------
      Average diluted common shares outstanding              384,677                       396,515                      396,491
 Diluted earnings per common share                          $    .86                      $    .86                     $   1.20
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

     The effect from assumed exercise of 13.0 million, 6.1 million and 0.9
million of stock options was not included in the computation of diluted earnings
per common share for 2000, 1999 and 1998, respectively, because such shares
would have had an antidilutive effect on earnings per share.

NOTE 17-LONG-TERM INCENTIVE COMPENSATION PLANS
--------------------------------------------------------------------------------

AmSouth has long-term incentive compensation plans which permit the granting of
incentive awards in the form of stock options, restricted stock awards and stock
appreciation rights. Generally, the terms of these plans stipulate that the
exercise price of options may not be less than the fair market value of
AmSouth's common stock at the date the options are granted. Options granted
generally vest between one and three years from the date of the grant. The
majority of the options granted during 2000 expire between three and ten years
depending on certain performance criteria. All other options granted generally
expire not later than ten years from the date of the grant.

     Statement 123 requires pro forma information regarding net income and
earnings per share. This pro forma information has been determined as if AmSouth
had accounted for its employee stock options under the fair value method of that
statement. The fair value for these options was estimated at the date of grant
using a Black-Scholes option pricing model with the following weighted-average
assumptions for 2000, 1999 and 1998, respectively: a risk-free interest rate of
6.83%, 5.29% and 5.62%, a dividend yield of 5.04%, 2.61% and 2.36%, a volatility
factor of 23.83%, 19.24% and 18.04%, and a weighted-average expected life of the
options of 7.0, 6.4 and 6.4 years. The weighted-average fair value of options
granted during 2000, 1999 and 1998 was $3.21, $8.82 and $5.47, respectively.

     For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options'

                                      84
<PAGE>

vesting period. AmSouth's pro forma information follows (in thousands except
for earnings per share information):

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

                                                             2000                          1999                          1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                           <C>                          <C>
 Net income:
   As reported                                              $329,127                      $340,468                     $474,074
   Pro forma                                                 319,120                       315,232                      465,272
 Earnings per common share:
   As reported                                              $    .86                      $    .87                     $   1.22
   Pro forma                                                     .84                           .81                         1.19
 Diluted earnings per common share:
   As reported                                              $    .86                      $    .86                     $   1.20
   Pro forma                                                     .83                           .80                         1.17
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

     The following table summarizes AmSouth's stock option activity and related
information during 1998, 1999 and 2000:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                            Number                     Option Price               Weighted-Average
                                                           of Shares                     per Share                 Exercise Price
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                         <C>                          <C>
 Balance at January 1, 1998                               11,825,697                 $ 2.47 -  $25.52                    $10.13
 Options exercised                                        (2,227,431)                  4.67 -   27.43                     18.89
 Options forfeited                                          (407,883)                  4.67 -   27.49                     16.85
 Options granted                                           2,062,817                  19.07 -   27.49                     24.97
                                                     -------------------------------------------------------------------------------
 Balance at December 31, 1998                             11,253,200                   2.47 -   27.49                     12.83
 Options exercised                                        (1,964,123)                  2.47 -   24.52                     20.88
 Options forfeited                                          (866,531)                  3.69 -   27.49                     17.18
 Options granted                                           5,576,049                  22.08 -   32.92                     23.31
                                                     -------------------------------------------------------------------------------
 Balance at December 31, 1999                             13,998,595                   2.91 -   32.92                     16.94
 Options exercised                                        (2,319,473)                  2.91 -   17.84                      9.31
 Options forfeited                                        (2,855,369)                  6.11 -   27.49                     20.12
 Options granted                                           7,821,044                  12.00 -   19.19                     16.08
                                                     -------------------------------------------------------------------------------
 Balance at December 31, 2000                             16,644,797                 $ 3.17 -  $32.92                    $17.01
====================================================================================================================================
</TABLE>

     Of the options outstanding at December 31, 2000, those options granted
since October 1, 1999, have vesting periods between one and three years from the
date of grant. All other options outstanding were exercisable. At December 31,
2000 and 1999, options exercisable totaled 8,668,858 and 12,677,731,
respectively, and had a weighted-average option price per share of $17.07 and
$16.18, respectively.

                                      85
<PAGE>

     The following table presents the weighted-average remaining life as of
December 31, 2000, for options outstanding within the stated exercise price
ranges.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

                                                  Outstanding                                             Exercisable
------------------------------------------------------------------------------------------------------------------------------------
    Exercise Price              Number of        Weighted-Average    Weighted-Average           Number of         Weighted-Average
    Range Per Share              Options          Exercise Price      Remaining Life             Options           Exercise Price
------------------------------------------------------------------------------------------------------------------------------------
   <S>                          <C>               <C>                <C>                        <C>               <C>
   $ 3.17 - $ 4.31                277,059             $ 3.94            0.93 years                277,059              $ 3.94
     4.94 -   6.82                345,678               5.99            2.42 years                345,678                5.99
     7.42 -  10.85              1,725,470               8.91            3.63 years              1,725,470                8.91
    11.48 -  17.10              9,274,532              15.48            8.32 years              2,255,426               13.76
    17.19 -  25.63              3,936,478              22.86            8.22 years              2,979,645               22.58
    26.32 -  32.92              1,085,580              28.69            7.95 years              1,085,580               28.69
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

     AmSouth also has issued common stock as restricted stock awards to key
officers with the restriction that they remain employed with AmSouth for periods
of three years or longer. The following table summarizes AmSouth's restricted
stock grants and the weighted average fair values at grant date:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

                                                             2000                          1999                          1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>                           <C>                        <C>
 Shares granted                                               75,412                       797,012                    1,312,636
 Weighted-average fair value of restricted
   stock granted during the year                             $ 15.50                      $  24.97                   $    24.33
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

     At December 31, 2000, there were no stock appreciation rights outstanding.

     In addition, effective January 1, 1997, AmSouth adopted the 1997
Performance Incentive Plan (PI Plan). The PI Plan permits the granting of
cash-based, long-term incentive opportunities. The amounts that may be earned
depend on the extent to which predetermined performance goals are achieved. To
date, there have been two sets of grants under the plan, both of which have been
paid. Currently, there are no grants outstanding under this plan.

NOTE 18-REGULATORY CAPITAL REQUIREMENTS AND RESTRICTIONS
--------------------------------------------------------------------------------

Capital is the primary tool used by regulators to monitor the financial health
of insured banks and savings institutions. The Federal Reserve Board and the
Federal Deposit Insurance Corporation have historically had similar capital
adequacy guidelines involving minimum leverage capital and risk-based capital
requirements. Under the capital adequacy guidelines and the regulatory framework
for prompt corrective action, AmSouth and its banking subsidiary must meet
specific capital guidelines that involve quantitative measures of their assets,
liabilities and certain off-balance sheet items as calculated under regulatory
accounting practices. The capital amounts and classification are also subject to
qualitative judgments by the regulators about components, risk weightings and
other factors. Based on the risk-based capital rules and definitions prescribed
by the banking regulators, should an institution's capital ratios decline below
predetermined levels, it would become subject to a series of increasingly
restrictive regulatory actions. AmSouth and its subsidiary bank are required to
have core capital (Tier 1) of at least

                                      86
<PAGE>

4 percent of risk-weighted assets, total capital of 8 percent of risk-weighted
assets and a leverage ratio of 3 percent of adjusted quarterly average assets.
Tier 1 capital consists principally of shareholders' equity, excluding
unrealized gains and losses on securities available-for-sale, less goodwill and
certain other intangibles. Total capital consists of Tier 1 capital plus certain
debt instruments and the reserve for credit losses, subject to limitation. The
regulations also define well capitalized levels of Tier 1 capital, total capital
and leverage as ratios of 6 percent, 10 percent and 5 percent, respectively, for
banking entities. AmSouth's banking subsidiary had Tier 1 capital, total capital
and leverage ratios above the well-capitalized levels at December 31, 2000 and
1999. Management believes that no changes in conditions or events have occurred
since December 31, 2000, which would result in changes that would cause AmSouth
Bank to fall below the well-capitalized level. The actual capital ratios and
amounts for AmSouth and AmSouth Bank are as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

                                                                  2000                                         1999
------------------------------------------------------------------------------------------------------------------------------------
 (Dollars in thousands)                               Amount                Ratio                 Amount                 Ratio
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>                     <C>                   <C>                    <C>
 Tier 1 capital:
   AmSouth                                         $2,576,671               7.66%                $2,769,657              7.46%
   AmSouth Bank                                     3,232,835               9.64                  3,312,497              8.98
                                                ------------------------------------------------------------------------------------
 Total capital:
   AmSouth                                         $3,731,086              11.09%                $3,947,906             10.64%
   AmSouth Bank                                     3,913,269              11.67                  3,964,899             10.75
                                                ------------------------------------------------------------------------------------
 Leverage:
   AmSouth                                         $2,576,671               6.72%                $2,769,657              6.21%
   AmSouth Bank                                     3,232,835               8.44                  3,312,497              7.46
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

     Certain restrictions exist regarding the ability of banking subsidiaries to
transfer funds to the parent company as loans, advances or dividends. The
subsidiary bank can initiate dividend payments in 2001, without prior regulatory
approval, of an amount equal to its net profits for 2001, as defined by statute.
Substantially all of the parent company's retained earnings at December 31, 2000
and 1999, represented undistributed earnings of its banking subsidiary.

NOTE 19-PENSION AND OTHER EMPLOYEE BENEFIT PLANS
--------------------------------------------------------------------------------

AmSouth sponsors noncontributory defined benefit pension plans, covering
substantially all regular full-time employees. Benefits are generally based on
years of service and the employee's compensation during the last 120 months of
employment or average monthly earnings of the participant for the 60 consecutive
months that produce the highest average earnings. Actuarially determined pension
costs are charged to current operations using the projected unit credit method.
AmSouth's funding policy is to contribute an amount that meets the minimum
funding requirements set forth in the Employee Retirement Income Security Act of
1974, plus such additional amounts as the corporation determines to be
appropriate.

     In addition to pension benefits, AmSouth provides postretirement medical
plans to all current employees and provides certain retired and grandfathered
retired participants with postretirement healthcare benefits. Postretirement
life insurance

                                      87
<PAGE>

is also provided to a grandfathered group of employees and retirees. Costs
associated with these postretirement benefit plans are charged to operations
based on actuarial calculations. The following table summarizes the change in
benefit obligation and plan assets and the funded status of the pension and
other postretirement plans at December 31, 2000 and 1999:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

                                                            Retirement Plans                     Other Postretirement Benefits
------------------------------------------------------------------------------------------------------------------------------------

 (Dollars in thousands)                                2000                 1999                   2000                  1999
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                 <C>                       <C>               <C>
 Change in benefit obligation:
   Benefit obligation at January 1                   $477,880            $ 488,284                 $ 30,989          $ 23,993
   Service cost                                        13,731               15,688                    1,174             1,176
   Interest cost                                       34,210               34,560                    3,196             2,283
   Acquisitions                                           -0-                  -0-                      -0-             3,206
   Curtailments                                        (4,764)                (842)                     -0-               -0-
   Special termination benefits                           -0-                5,461                      -0-               -0-
   Amendments                                         (16,968)               3,943                      -0-               -0-
   Actuarial loss/(gain)                                3,943              (42,087)                  11,837             2,621
   Benefits and expenses paid                         (34,694)             (27,127)                  (3,190)           (2,290)
                                                 -----------------------------------------------------------------------------------
   Benefit obligation at December 31                  473,338              477,880                   44,006            30,989
                                                 -----------------------------------------------------------------------------------
 Change in plan assets:
   Fair value of plan assets at January 1             652,204              616,432                    3,509             3,577
   Actual return on plan assets                        19,391               51,623                      578               109
   Company contribution                                 7,178               11,276                      -0-               -0-
   Benefits and expenses paid                         (34,694)             (27,127)                    (249)             (177)
                                                 -----------------------------------------------------------------------------------
 Fair value of plan assets at December 31             644,079              652,204                    3,838             3,509
                                                 -----------------------------------------------------------------------------------
   Funded status of the plan                          170,741              174,324                  (40,168)          (27,480)
   Unrecognized actuarial (gain) / loss               (75,329)            (124,696)                  15,849             5,087
   Unamortized prior service (credit)/cost             (9,199)               7,077                      (49)           (1,140)
   Unrecognized net transition obligation               2,065                1,357                    2,709             2,988
                                                 -----------------------------------------------------------------------------------
 Prepaid/(accrued) benefit cost                      $ 88,278            $  58,062                 $(21,659)         $(20,545)
                                                 ===================================================================================
 Amounts recognized in the
   statement of condition:
   Prepaid benefit cost                              $102,172            $  75,748                 $    795          $    698
   Accrued benefit liability                          (17,145)             (20,557)                 (22,454)          (21,243)
   Intangible assets                                    3,251                2,871                      -0-               -0-
                                                 -----------------------------------------------------------------------------------
 Net amount recognized                               $ 88,278            $  58,062                 $(21,659)         $(20,545)
                                                 ===================================================================================
 Assumptions:
   Discount rate                                         7.75%                7.75%                    7.75%             7.75%
   Expected return on plan assets                        9.50                 9.50                     6.50              6.50
   Rate of compensation increase                         5.50                 5.50                      N/A               N/A
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      88

<PAGE>

     Net periodic benefit cost/(credit) includes the following components for
the years ended December 31:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------

                                                               Retirement Plans                   Other Postretirement Benefits
-----------------------------------------------------------------------------------------------------------------------------------
 (In thousands)                                        2000          1999          1998          2000         1999         1998
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>           <C>            <C>           <C>          <C>          <C>
 Service cost                                        $ 13,731      $ 15,688       $ 16,342      $ 1,174      $ 1,176      $   780
 Interest cost                                         34,210        34,560         31,266        3,196        2,283        2,124
 Expected return on plan assets                       (59,600)      (56,283)       (47,054)        (222)        (227)        (218)
 Amortization of prior service (credit)/cost           (1,007)        1,569          1,115       (1,091)      (1,091)      (1,327)
 Amortization of transitional (asset)/obligation         (709)         (700)          (700)         278          278          278
 Recognized actuarial (gain)/loss                      (5,213)       (2,982)        (2,501)         969          262           77
                                                   --------------------------------------------------------------------------------
 Net periodic benefit cost/(credit)                  $(18,588)     $ (8,148)      $ (1,532)     $ 4,304      $ 2,681      $ 1,714
                                                   ================================================================================
 Additional (gain)/loss recognized due to:
   Curtailment                                       $ (4,450)     $  1,738       $ (7,402)     $   -0-      $   -0-      $(1,237)
   Settlement                                             -0-         1,165            -0-          -0-          -0-          -0-
   Special termination benefits                           -0-         5,461            -0-          -0-          -0-          -0-
===================================================================================================================================
</TABLE>

     During 2000, AmSouth experienced a net curtailment gain of $4.5 million.
The gain was primarily the result of employee terminations associated with the
First American merger. This gain was recorded as a reduction to merger and
integration costs. During 1999, AmSouth experienced a net curtailment loss of
$1.7 million, a net settlement loss of $1.2 million and costs of special
termination benefits of $5.5 million in its retirement plans. These losses were
primarily the net result of employee terminations and change of control
provisions associated with the First American merger. These losses were recorded
as merger and integration costs. During 1998, AmSouth experienced a $7.4 million
curtailment gain in its retirement plans due to the estimated effect of
significant employee terminations associated with the Deposit Guaranty merger.
The curtailment gain was recorded as a reduction of merger and integration
costs. Also, during 1998, AmSouth terminated and settled its postretirement
death benefits plan, resulting in a curtailment gain of $1.2 million.

     For measurement purposes, the increase in the per capita cost of covered
healthcare benefits varies by medical benefit and date of retirement. For
retirements after December 31, 1992, AmSouth's subsidies for all medical
benefits will be capped at a level dollar amount in approximately five years.
For retirements before January 1, 1993, the rates are graded, starting at 7.8
percent in 2000 and dropping to an ultimate rate of 5.0 percent in six years.
Assumed healthcare cost trend rates have an insignificant effect on the costs
and the liabilities reported for the healthcare plan. A one-percentage point
change in assumed healthcare cost trend rates would have the following effects:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------

                                                   1-Percentage        1-Percentage
 (In thousands)                                    Point Increase      Point Decrease
---------------------------------------------------------------------------------------
<S>                                                <C>                 <C>
 Effect on total of service cost and
   interest cost components                        $ 39                $  (66)
 Effect on postretirement benefit obligation        546                  (867)
---------------------------------------------------------------------------------------
</TABLE>

                                      89

<PAGE>

     The Qualified Retirement Plans have a portion of their investments in
AmSouth common stock. The number of shares and the market value of the common
stock were 1,080,307 and $16,474,682, respectively, as of December 31, 2000.
Dividends paid on the AmSouth common stock totaled $871,000 during 2000.

     AmSouth also maintains a thrift plan and an employee stock purchase plan
that cover substantially all regular full-time employees. AmSouth matches pretax
contributions dollar for dollar on the first 6 percent of base pay that each
employee contributes to the thrift plan. After-tax contributions to the thrift
plan are matched at 50 cents for every dollar contributed by an employee through
the first 6 percent of base pay. Employees may make both pretax and after-tax
contributions, but no matching contributions are made on any employee
contributions above 6 percent, with pretax contributions being matched first.
All company-matching contributions are allocated to the AmSouth common stock
investment option. First American had a combination savings, thrift and
profit-sharing plan (FIRST Plan) available to all employees (except the
employees of IFC and hourly paid and special exempt-salaried employees). The
FIRST Plan has been terminated and the employees are participating in AmSouth's
thrift plan. The cost of the thrift plans for the years ended December 31, 2000,
1999 and 1998 was $16.6 million, $10.2 million and $15.3 million, respectively.
Under the employee stock purchase plan, an employee may invest up to $2,000 each
calendar year in purchases of AmSouth common stock, and AmSouth will contribute
a matching 25 percent toward the purchase. Additional purchases of up to $8,000
may be made on an unmatched basis with no administrative or brokerage fees
charged. Under the employee stock purchase plan, 313,332 and 113,885 shares of
AmSouth common stock were purchased during 2000 and 1999, respectively, with
weighted-average fair values of $15.07 and $27.37, respectively.

NOTE 20-INCOME TAXES
--------------------------------------------------------------------------------

The provisions for income taxes charged to earnings are summarized as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                  Years Ended December 31
 (In thousands)                                              2000                          1999                          1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>                          <C>                           <C>
 Current tax (benefit) expense:
   Federal                                                 $(13,370)                    $140,910                      $187,641
   State                                                        651                        3,159                        11,277
                                                 -----------------------------------------------------------------------------------
                                                            (12,719)                     144,069                       198,918
                                                 -----------------------------------------------------------------------------------
 Deferred tax expense:
   Federal                                                  130,833                       50,421                        58,975
   State                                                      7,321                        6,413                         6,832
                                                 -----------------------------------------------------------------------------------
                                                            138,154                       56,834                        65,807
                                                 -----------------------------------------------------------------------------------
                                                           $125,435                     $200,903                      $264,725
====================================================================================================================================
</TABLE>

                                      90
<PAGE>

     The differences between the actual income tax expense and the amount
computed by applying the statutory federal income tax rate to income before
income taxes are as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                  Years Ended December 31
 (In thousands)                                              2000                          1999                          1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                           <C>                           <C>
 Tax at federal income tax rate                           $ 159,097                     $189,480                      $258,580
 State and local income taxes, net of federal benefits        5,182                        6,222                        11,772
 Acquisition cost                                             1,290                       19,505                         6,301
 Goodwill amortization                                       17,341                       11,426                        11,428
 Tax exempt interest                                         (9,584)                     (10,289)                      (10,932)
 Bank-owned life insurance                                  (19,889)                     (13,166)                       (8,306)
 Restructuring of leveraged lease portfolio                 (22,853)                          -0-                           -0-
 Other                                                       (5,149)                      (2,275)                       (4,118)
------------------------------------------------------------------------------------------------------------------------------------
                                                           $125,435                     $200,903                      $264,725
====================================================================================================================================
</TABLE>

     The significant temporary differences that created deferred tax assets and
liabilities at December 31 are as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                  Years Ended December 31
 (In thousands)                                                            2000                              1999
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                               <C>
 Deferred tax assets:
   Loan loss reserves                                                   $ 148,754                         $ 162,175
   Employee benefits                                                        7,598                            13,933
   Acquisition cost                                                            -0-                           41,879
   Accrued expenses                                                         8,307                             8,274
   Mortgage servicing rights                                                8,208                             1,700
   Statement 115 equity adjustment                                         (1,817)                           50,789
   Federal tax credit carryforwards                                        25,184                                -0-
   State net operating loss carryforwards                                  20,095                                -0-
   Other                                                                   23,604                            10,160
                                                               ---------------------------------------------------------------------
                                                                          239,933                           288,910
                                                               ---------------------------------------------------------------------
 Deferred tax liabilities:
   Leasing activities                                                    (548,007)                         (370,237)
   Depreciation                                                           (12,720)                          (23,000)
   Purchase accounting                                                     (7,365)                          (17,680)
   Deferred loan fees                                                         650                            (9,281)
   Other                                                                  (16,881)                          (14,243)
                                                               ---------------------------------------------------------------------
                                                                         (584,323)                         (434,441)
                                                               ---------------------------------------------------------------------
   Net deferred tax liability                                           $(344,390)                        $(145,531)
====================================================================================================================================
</TABLE>

                                      91

<PAGE>

     At December 31, 2000, for income tax purposes, AmSouth had federal tax
credit carryforwards of $25.2 million, of which $21.0 million are AMT tax credit
carryforwards. The AMT tax credit carryforwards have no expiration date. The
other federal tax credit carryforwards expire in 2010. AmSouth also had a
deferred state tax asset of $20.1 million resulting from net operating loss
carryforwards. These carryforwards begin expiring in 2005, with the last one
expiring in 2020. There was no valuation allowance recorded in 2000 because it
is more likely than not that all deferred tax assets will be realized.

     Income taxes (refunded)/paid were $(5,927,000), $187,887,000 and
$135,324,000 for the years ended December 31, 2000, 1999 and 1998, respectively.
Applicable income tax (benefit)/expense of $(35,833,000), $4,283,000 and
$6,053,000 on securities gains and losses for the years ended December 31, 2000,
1999 and 1998, respectively, is included in the provision for income taxes.

NOTE 21-OTHER NONINTEREST REVENUES AND OTHER NONINTEREST EXPENSES
------------------------------------------------------------------------------

The components of other noninterest revenues and other noninterest expenses are
as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
                                                                                  Years Ended December 31
 (In thousands)                                                 2000                       1999                    1998
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>                       <C>
 Other noninterest revenues:
   Interchange income                                        $  50,154                 $  46,526               $  36,411
   Bank-owned life insurance policies                           48,794                    31,161                  17,385
   Gains on sales of businesses                                 19,959                     8,624                  32,687
   (Loss)/gains on sales of available-for-sale securities      (95,301)                   11,392                  16,099
   Other portfolio (loss)/income                                (9,966)                    9,956                  10,217
   Mortgage income                                              18,019                    45,027                  39,667
   Other                                                        94,829                   139,314                 119,255
                                                             ----------------------------------------------------------------
                                                             $ 126,488                 $ 292,000               $ 271,721
                                                             ================================================================
 Other noninterest expenses:
   Postage and office supplies                               $  49,721                 $  47,960               $  48,299
   Communications                                               41,246                    36,691                  37,720
   Amortization of intangibles                                  37,589                    40,305                  40,211
   Marketing                                                    37,408                    42,420                  39,905
   Other                                                       187,300                   220,419                 202,467
                                                             ----------------------------------------------------------------
                                                             $ 353,264                 $ 387,795               $ 368,602
=============================================================================================================================
</TABLE>

                                      92
<PAGE>

NOTE 22-BUSINESS SEGMENT INFORMATION
--------------------------------------------------------------------------------

AmSouth has three reportable segments: Consumer Banking, Commercial Banking, and
Wealth Management. Each of these units provides unique products and services to
a variety of customer groups and has its own management team. Consumer Banking
delivers a full range of financial services to individuals and small businesses.
Services include loan products such as residential mortgages, equity lending,
credit cards, and loans for automobile and other personal financing needs, and
various products designed to meet the credit needs of small businesses. In
addition, Consumer Banking offers various deposit products that meet customers'
savings and transaction needs. Commercial Banking meets corporate and middle
market customers' needs with a comprehensive array of credit, treasury
management, international, and capital markets services. Included among these
are several specialty services such as real estate finance, asset based lending,
commercial leasing, and healthcare banking. Wealth Management is comprised of
client fiduciary services and broker/ dealer services, and provides primarily
fee-based income. This area includes not only traditional trust services, but
also a substantial selection of investment management services including
AmSouth's proprietary mutual fund family. Treasury & Other is comprised of
balance sheet management activities that include the investment portfolio,
nondeposit funding, and off-balance sheet financial instruments. Treasury &
Other also includes corporate expenses such as corporate overhead and goodwill
amortization. Bank-owned life insurance income is included in Treasury & Other
for 2000, 1999 and 1998. As a result of the sale of IFC at the end of the third
quarter in 2000, all revenue and expenses of IFC have been reclassified into
Treasury & Other from Wealth Management for all periods shown. In addition,
Treasury & Other includes the net gains on sale of businesses in 2000, 1999 and
1998 and includes the loss on the dealer securitization, losses on the sales of
AHAD loans and the net gains on sales of fixed and other assets for the year
2000. Merger-related costs are included in Treasury & Other for all years shown.

Measurement of Segment Profit or Loss and Segment Assets

The bank evaluates performance and allocates resources based on profit or loss
from operations. The accounting policies of the reportable segments are the same
as those described in Note 1 except that AmSouth uses matched maturity transfer
pricing to fairly and consistently assign funds costs to assets and earnings
credits to liabilities with a corresponding offset in Treasury & Other. AmSouth
allocates noninterest expenses based on various activity statistics. AmSouth is
disclosing net interest income in lieu of interest income. Performance is
assessed primarily on net interest income by the chief operating decision
makers. Excluding the internal funding, AmSouth does not have intracompany
revenues or expenses. Noninterest expenses are allocated to match revenues. The
provision for loan losses for each segment reflects the net charge-offs in each
segment. The difference between net charge-offs and the provision is included in
Treasury & Other. Additionally, segment income tax expense is calculated using
the marginal tax rate. The difference between the marginal and effective tax
rate is included in Treasury & Other. Management reviews average assets by
segment. Prior years' amounts were restated between segments to consistently
reflect the current segment responsibility for certain deposit and funding
products associated with the former First American entity.

     AmSouth operates primarily in the United States; accordingly, geographic
distribution of revenue and long-lived assets in other countries is not
significant. Revenues from no individual customer exceeded 10 percent of
consolidated total revenues. AmSouth's segments are not necessarily comparable
with similar information for any other financial institution.

                                      93
<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
                                                     Consumer         Commercial       Wealth         Treasury &
 (In thousands)                                      Banking           Banking       Management         Other             Total
--------------------------------------------------------------------------------------------------------------------------------
 2000
<S>                                              <C>               <C>              <C>           <C>               <C>
 Net interest income from external customers     $    435,909      $    799,757     $  (1,059)    $     144,496     $  1,379,103
 Internal funding                                     516,064          (387,066)        3,874          (132,872)             -0-
                                                 -------------------------------------------------------------------------------
 Net interest income                                  951,973           412,691         2,815            11,624        1,379,103
 Noninterest revenues                                 322,261            89,249       204,712            53,272          669,494
                                                 -------------------------------------------------------------------------------
 Total revenues                                     1,274,234           501,940       207,527            64,896        2,048,597
 Provision for loan losses                             96,454            27,896           -0-           103,250          227,600
 Noninterest expenses                                 691,058           159,559       145,098           370,720        1,366,435
                                                 -------------------------------------------------------------------------------
 Income/(loss) before income taxes                    486,722           314,485        62,429          (409,074)         454,562
 Income taxes                                         183,088           118,185        23,465          (199,303)         125,435
                                                 -------------------------------------------------------------------------------
 Segment net income/(loss)                       $    303,634       $   196,300     $  38,964     $    (209,771)    $    329,127
                                                 ===============================================================================
 Average assets                                  $ 15,516,752       $12,407,911     $  42,106     $  13,893,402     $ 41,860,171
                                                 -------------------------------------------------------------------------------
 1999
 Net interest income from external customer      $    357,541       $   857,754     $    (807)    $     293,456     $  1,507,944
 Internal funding                                     605,462          (416,003)        1,407          (190,866)             -0-
                                                 -------------------------------------------------------------------------------
 Net interest income                                  963,003           441,751           600           102,590        1,507,944
 Noninterest revenues                                 334,055            90,481       183,012           240,012          847,560
                                                 -------------------------------------------------------------------------------
 Total revenues                                     1,297,058           532,232       183,612           342,602        2,355,504
 Provision for loan losses                             81,524            21,382           -0-            62,720          165,626
 Noninterest expenses                                 759,736           189,484       127,462           571,825        1,648,507
                                                 -------------------------------------------------------------------------------
 Income/(loss) before income taxes                    455,798           321,366        56,150          (291,943)         541,371
 Income taxes                                         171,495           120,606        21,063          (112,261)         200,903
                                                 -------------------------------------------------------------------------------
 Segment net income/(loss)                       $    284,303       $   200,760     $  35,087     $    (179,682)    $    340,468
                                                 ===============================================================================
 Average assets                                  $ 15,011,516       $12,614,240     $  49,512     $  14,141,972     $ 41,817,240
                                                 -------------------------------------------------------------------------------
 1998
 Net interest income from external customers     $    236,757       $   874,813     $  (2,498)    $     335,212     $  1,444,284
 Internal funding                                     666,019          (434,328)        4,619          (236,310)             -0-
                                                 -------------------------------------------------------------------------------
 Net interest income                                  902,776           440,485         2,121            98,902        1,444,284
 Noninterest revenues                                 321,544            81,392       164,697           232,221          799,854
                                                 -------------------------------------------------------------------------------
 Total revenues                                     1,224,320           521,877       166,818           331,123        2,244,138
 Provision for loan losses                             59,240            24,399           -0-            15,428           99,067
 Noninterest expenses                                 735,661           184,728       114,536           371,347        1,406,272
                                                 -------------------------------------------------------------------------------
 Income/(loss) before income taxes                    429,419           312,750        52,282           (55,652)         738,799
 Income taxes                                         161,462           117,594        19,658           (33,989)         264,725
                                                 -------------------------------------------------------------------------------
 Segment net income/(loss)                       $    267,957       $   195,156     $  32,624     $     (21,663)    $    474,074
                                                 ===============================================================================
 Average assets                                  $ 14,062,287       $11,978,548     $  40,366     $  12,759,034     $ 38,840,235
 -------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      94
<PAGE>

NOTE 23-SECURITIZATIONS
--------------------------------------------------------------------------------

During 2000, AmSouth sold commercial, residential mortgage and dealer loans to
third-party conduits. AmSouth also sold dealer loans and residential mortgage
loans in securitization transactions. AmSouth retained servicing
responsibilities in all of these sales and securitization transactions. In
addition, AmSouth also retained interest in excess interest spreads and in some
cases, subordinated interests. In addition to these transactions, AmSouth also
engaged in an ongoing program of selling residential mortgage loans to third
parties in which no servicing or other interest was retained.

     During 2000, AmSouth recognized $16,881,000 in gains on sales of
residential mortgage loans to conduits, $9,323,000 in gains on sales of dealer
loans to conduits, a loss of $18,531,000 on the securitization of dealer loans,
and a gain of $131,000 on the securitization of mortgage loans to the FHLMC. For
the year 2000, $464,000,000 in residential mortgage loans were sold as part of
AmSouth's ongoing mortgage loan sales program and resulted in a net gain of
$3,784,000. No gains or losses were recognized on commercial loans sold to
third-party conduits nor was any retained interest recorded due to the
relatively short life of the commercial loans sold into the conduits (average
life of 30 days). The following table summarizes the key assumptions used in the
calculation of retained interests and the gain or loss on the sales and
securitization transactions during 2000. It also provides the assumptions used
in the subsequent valuation of retained interests at year-end, the cash flows
received from and paid to third-party conduits and securitization trusts during
the year and the sensitivity of the current fair value of residual cash flows to
the immediate 10 and 20 percent change in the current assumptions:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  Residential
                                                  Residential                                   Dealer              Mortgage
(Dollars in millions)                           Mortgage Conduit      Dealer Conduit         Securitization      Securitization
------------------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>                   <C>                    <C>              <C>
 VALUATION ASSUMPTIONS AT THE
   TIME OF THE TRANSACTIONS:
   Discount rate                                       15-20%                     15%                    15%                 10%
   Prepayment rate                                      9-24% CPR             1 1/2% ABS             1 1/2% ABS        133-300 PSA
   Weighted average life (years)                        4.46                    1.70                   1.55                4.61
   Expected credit losses                                .22%                   1.33%                  1.32%                N/A
 CASH FLOW INFORMATION:
   Proceeds from sales                              $1,302.0                $1,001.1               $  917.1            $  131.6
   Servicing fees and retained interests                13.5                    11.8                    1.6                 1.7
 VALUATION ASSUMPTIONS AT
   DECEMBER 31, 2000:
   Discount rate                                       15-20%                     15%                    15%                 10%
   Prepayment rate                                      9-24% CPR             1 1/2% ABS             1 1/2% ABS        150-600 PSA
   Weighted average life (years)                        4.14                    1.41                   1.48                4.28
   Expected credit losses                                .18%                   1.35%                  1.33%                N/A
 RESIDUAL CASH FLOW SENSITIVITY:
   Fair value of servicing and retained
      interests at December 31, 2000                $   27.3                $   16.0               $   35.9            $    1.5
   PREPAYMENT SPEED:
      10% change                                        (1.1)                   (0.9)                  (0.3)              (0.07)
      20% change                                        (3.0)                   (1.7)                  (0.5)              (0.13)
   CREDIT LOSSES:
      10% change                                        (0.3)                   (0.8)                  (0.9)                N/A
      20% change                                        (0.5)                   (1.5)                  (1.8)                N/A
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
                                      95

<PAGE>

     This sensitivity test is hypothetical and isolates the potential impact of
changes in a single assumption on total fair value. These and other assumptions
used in the calculation of fair values may in fact exhibit some correlation
(which would potentially magnify the impact of a scenario) or may exhibit some
negative correlation (which would potentially have some partial offsetting
benefit). Also, changes in assumptions do not provide linear results. Thus, it
is not possible to extrapolate the impact of other scenarios from these
projections.

     The following table presents managed loan information on loans which have
been securitized or sold to conduits. This information includes the total
principal amount outstanding, the portion that has been derecognized and the
portion that continues to be recognized in the statement of condition as of
December 31, 2000, along with quantitative information about delinquencies and
net credit losses (in millions). In addition to the sales of loans discussed
above, the following table also includes mortgage loans which were securitized
through REMICS in 1998:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
                                              Residential                         Other Residential
 (Dollars in millions)                         Mortgages        Dealer Loans          Mortgages          Commercial Loans
--------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>               <C>               <C>                    <C>
 Outstanding as of 12/31/00:
   Loans held in portfolio                      $1,358             $2,990               $4,656                $ 9,078
   Loans securitized/sold                        2,651              1,655                  -0-                  1,812
   REMIC (bond portfolio)                          151                -0-                  267                    -0-
                                           -------------------------------------------------------------------------------
      Total managed loans                       $4,160             $4,641               $4,923                $10,890
                                           -------------------------------------------------------------------------------
 Total delinquencies at 12/31/00                $  166             $  148               $  131                $   188
 Delinquencies as a percent of
   ending managed loans                           3.99%              3.19%                2.65%                  1.73%
 Net credit losses during 2000                  $    1             $   47               $    9                $    45
 Net credit losses as a percent of
   ending managed loans                           0.02%              1.04%                0.19%                  0.41%
--------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      96

<PAGE>

NOTE 24-CONDENSED PARENT COMPANY INFORMATION
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
 Statement of Condition                                                              December 31
 (In thousands)                                                               2000               1999
-----------------------------------------------------------------------------------------------------------
<S>                                                                        <C>                <C>
 ASSETS

 Investment in subsidiaries                                                $3,470,807         $3,553,778
 Investment in Eurodollars                                                    119,199            159,664
 Available-for-sale securities                                                 10,522             58,824
 Other assets                                                                  13,183             27,418
                                                          -------------------------------------------------
                                                                           $3,613,711         $3,799,684
                                                          =================================================
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Commercial paper                                                          $   12,494         $    8,749
 Subordinated debt                                                            573,759            573,448
 Other borrowed funds                                                         129,659            129,611
 Accrued interest payable and other liabilities                                84,392            128,671
                                                          -------------------------------------------------
   Total liabilities                                                          800,304            840,479
 Shareholders' equity                                                       2,813,407          2,959,205
                                                          -------------------------------------------------
                                                                           $3,613,711         $3,799,684
===========================================================================================================
</TABLE>


<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
 Statement of Earnings                                               Years Ended December 31
 (In thousands)                                              2000              1999               1998
-----------------------------------------------------------------------------------------------------------
<S>                                                    <C>                  <C>                <C>
 INCOME

   Dividends from subsidiaries                            $ 586,000         $ 308,691          $ 421,856
   Interest and other                                         4,813            18,893             18,004
                                                       ----------------------------------------------------
                                                            590,813           327,584            439,860
                                                       ----------------------------------------------------
 EXPENSES

   Interest                                                  51,521            46,548             45,066
   Other                                                      5,020            66,947             62,004
                                                       ----------------------------------------------------
                                                             56,541           113,495            107,070
                                                       ----------------------------------------------------
 Income before income taxes and equity in
   undistributed earnings of subsidiaries                   534,272           214,089            332,790
 Income tax credit                                           18,805            17,669             29,534
                                                       ----------------------------------------------------
 Income before equity in earnings of subsidiaries           553,077           231,758            362,324
 Equity in undistributed/(dividends in excess of)
   subsidiaries' annual earnings                           (223,950)          108,710            111,750
                                                       ----------------------------------------------------
   NET INCOME                                             $ 329,127         $ 340,468          $ 474,074
===========================================================================================================
</TABLE>

                                      97
<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
 Statement of Cash Flows                                                          Years Ended December 31
 (In thousands)                                                   2000                     1999                          1998
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>                     <C>                           <C>
 OPERATING ACTIVITIES
   Net income                                                  $ 329,127               $ 340,468                     $ 474,074
   Adjustments to reconcile net income to net
      cash provided by operating activities:
      Net losses (gains) on sales of
        available-for-sale securities                              4,110                  (6,303)                           (4)
      Amortization of goodwill                                     2,385                   2,406                         2,386
      Other amortization and depreciation                            732                     953                         9,002
      Net decrease (increase) in accrued interest
        receivable and other assets                               12,875                  80,259                       (26,563)
      Net decrease (increase) in accrued expenses
        and other liabilities                                    (47,655)                 52,205                       (17,170)
      Dividends in excess of (equity in undistributed)
        subsidiaries' annual earnings                            223,950                (108,710)                     (111,750)
      Provision for deferred income taxes                            -0-                     707                         2,277
      Other operating activities, net                                -0-                    (294)                         (355)
                                                               ----------------------------------------------------------------
        Net cash provided by operating activities                525,524                 361,691                       331,897
                                                               ----------------------------------------------------------------
 INVESTING ACTIVITIES
   Net decrease (increase) in
      available-for-sale securities                               49,241                 (34,230)                      (38,342)
   Net decrease (increase) in
      other interest-earning assets                               40,465                (159,664)                          -0-
   Net sales of premises and equipment                               -0-                     -0-                         5,751
   Net decrease (increase) in loans                                  -0-                     390                          (227)
   Net decrease in securities purchased under
      agreements to resell                                           -0-                  61,315                        30,359
   Net cash provided by acquisitions, liquidations
      and funding of subsidiaries                                    -0-                     -0-                         8,268
                                                               ----------------------------------------------------------------
        Net cash provided (used) by investing activities          89,706                (132,189)                        5,809
                                                               ----------------------------------------------------------------
 FINANCING ACTIVITIES
   Net increase (decrease) in commercial paper                     3,745                  (1,290)                        1,653
   Net decrease in other borrowed funds                              -0-                  (6,389)                         (230)
   Issuance of long-term debt                                        -0-                 174,539                           -0-
   Payments for maturing long-term debt                              -0-                (100,000)                          -0-
   Cash dividends paid                                          (305,383)               (183,848)                     (195,560)
   Proceeds from employee stock plans and
      dividend reinvestment plan                                  62,066                  53,564                        45,943
   Purchases of common stock                                    (375,822)               (166,475)                     (201,898)
                                                               ----------------------------------------------------------------
        Net cash used by financing activities                   (615,394)               (229,899)                     (350,092)
                                                               ----------------------------------------------------------------
   Decrease in cash                                                 (164)                   (397)                      (12,386)
   Cash at beginning of year                                         622                   1,019                        13,405
                                                               ================================================================
   Cash at end of year                                         $     458               $     622                     $   1,019
                                                               ================================================================
</TABLE>

                                      98
<PAGE>

NOTE 25-QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
------------------------------------------------------------------------------

Selected quarterly results of operations for the four quarters ended December 31
are as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------

                                                2000                                                  1999
-----------------------------------------------------------------------------------------------------------------------------------
 (In thousands except     Fourth         Third       Second        First          Fourth        Third       Second        First
   per share data)        Quarter       Quarter      Quarter      Quarter         Quarter      Quarter      Quarter      Quarter
-----------------------------------------------------------------------------------------------------------------------------------
<S>                       <C>          <C>           <C>          <C>             <C>          <C>          <C>          <C>
 Interest income          $720,097     $782,670      $784,961     $782,698        $775,339     $749,009     $714,438     $693,962
 Interest expense          399,981      444,892       432,325      414,125         394,079      368,662      336,889      325,173
 Net interest income       320,116      337,778       352,636      368,573         381,260      380,347      377,549      368,789
 Provision for loan losses  55,600      123,800        22,800       25,400          97,700       30,604       18,589       18,734
 Net gains/(losses) on
   sales of available-for-
   sale securities           2,979     (104,749)        3,203        3,266           5,964       (5,605)       4,893        6,140
 Income/(loss) before
   income taxes            179,738      (72,116)      139,087      207,853         (81,043)     205,768      204,570      212,076
 Net income/(loss)         126,559      (36,266)       99,897      138,937         (62,554)     134,645      131,581      136,796
 Earnings/(loss) per
   common share                .34         (.10)          .26          .35            (.16)         .35          .34          .35
 Diluted earnings/(loss)
   per common share            .34         (.10)          .26          .35            (.16)         .34          .33          .34
 Cash dividends declared
   per common share            .21          .20           .20          .20             .20          .17          .17          .17
 Market price range:
   High                      15.81        19.00         19.88        18.75           25.81        23.88        32.33        33.92
   Low                       11.88        12.06         14.31        12.75           18.94        21.31        21.88        27.92
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

 Note: Quarterly amounts may not add to year-to-date amounts due to rounding.


NOTE 26-FAIR VALUE OF FINANCIAL INSTRUMENTS
--------------------------------------------------------------------------------
For purposes of this disclosure, the estimated fair value of financial
instruments with immediate and shorter-term maturities (generally 90 days or
less) is assumed to be the same as the recorded book value. These instruments
include the consolidated statement of condition lines captioned cash and due
from banks, time deposits in other banks, federal funds sold and securities
purchased under agreements to resell, other interest-earning assets, customers'
acceptance liability, federal funds purchased and securities sold under
agreements to repurchase, other borrowed funds, and acceptances outstanding.

                                      99
<PAGE>

     The carrying amount and estimated fair value of other
financial instruments at December 31 are summarized as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------

                                                               2000                                                     1999
-------------------------------------------------------------------------------------------------------------------------------
                                                     Carrying             Estimated              Carrying             Estimated
(In thousands)                                        Amount            Fair Value                Amount            Fair Value
-------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>                   <C>                   <C>                   <C>
 Financial assets:
   Net loans                                      $24,236,001           $24,959,625           $25,912,080           $25,919,592
   Loans held for sale                                 92,811                92,811               172,941               172,941
                                                  -----------------------------------------------------------------------------
 Financial liabilities:
   Deposits                                        26,623,304            26,660,502            27,912,443            27,955,939
   Long-term FHLB advances                          4,898,308             5,092,114             4,612,686             4,593,037
   Other long-term debt                               985,097               948,221               990,800               933,339
                                                  -----------------------------------------------------------------------------
 Off-balance sheet:
   Off-balance sheet financial
      instruments (net receivable position)                --                24,941                    --               (36,407)
   Commitments to extend credit and
      standby letters of credit                            --                (8,879)                   --                (6,153)
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

     Statement of Financial Accounting Standards No. 107, "Disclosures about
Fair Value of Financial Instruments" (Statement 107), requires the disclosure of
estimated fair values for all financial instruments, both assets and liabilities
on and off-balance sheet, for which it is practicable to estimate their value
along with pertinent information on those financial instruments for which such
values are not available.

     Fair value estimates are made at a specific point in time and are based on
relevant market information which is continuously changing. Because no quoted
market prices exist for a significant portion of AmSouth's financial
instruments, fair values for such instruments are based on management's
assumptions with respect to future economic conditions, estimated discount
rates, estimates of the amount and timing of future cash flows, expected loss
experience, and other factors. These estimates are subjective in nature
involving uncertainties and matters of significant judgment; therefore, they
cannot be determined with precision. Changes in the assumptions could
significantly affect the estimates.

     Statement 107 fair value estimates include certain on and off-balance sheet
financial instruments without attempting to estimate the value of anticipated
future business and the value of assets and liabilities that are not considered
financial instruments. For example, AmSouth has a substantial trust department
that contributes net fee income annually. The trust department is not considered
a financial instrument, and its value has not been incorporated into the fair
value estimates. Other significant assets and liabilities that are not
considered financial assets or liabilities include the mortgage banking
operation, brokerage network, premises and equipment, core deposit

                                      100
<PAGE>

intangibles, and goodwill. In addition, the tax ramifications related to the
realization of the unrealized gains and losses can have a significant effect on
fair value estimates and have not been considered in the estimates. As a result,
the Statement 107 fair value disclosures should not be considered an indication
of the fair value of the company taken as a whole.

     The following methods and assumptions were used by AmSouth in estimating
its fair value disclosures for financial instruments:

     Loans The fair values of variable rate loans that reprice frequently and
have no significant change in credit risk are assumed to approximate carrying
amounts. For credit card loans and equity lines of credit, the carrying value
reduced by an estimate of credit losses inherent in the portfolio is a
reasonable estimate of fair value. The fair values for other loans (e.g.,
commercial and industrial, commercial real estate, certain mortgage loans, and
consumer loans) are estimated using discounted cash flow analyses, using
interest rates currently being offered for loans with similar terms to borrowers
of similar credit quality and estimates of maturity based on AmSouth's
historical experience. The carrying amount of accrued interest receivable
approximates its fair value.

     Securities and Loans Held for Sale Fair values for securities and loans
held for sale are based on quoted market prices, where available. Where quoted
market prices are not available, fair values are based on quoted market prices
of similar instruments, adjusted for any significant differences between the
quoted instruments and the instruments being valued.

     Commitments to Extend Credit and Standby Letters of Credit The fair value
of commitments to extend credit is estimated based on the amount of unamortized
deferred loan commitment fees. The fair value of letters of credit is based on
the amount of unearned fees plus the estimated cost to terminate the letters of
credit.

     Off-balance Sheet Instruments The fair value of interest rate swaps,
financial futures and interest rate caps and floors are obtained from AmSouth's
in-house pricing system and compared to dealer quotes for reasonableness. These
values represent the estimated amount the company would receive or pay to
terminate the contracts or agreements, taking into account current interest
rates and, when appropriate, the current creditworthiness of the counterparties.

     Deposit Liabilities The fair value of deposits with no stated maturity,
such as noninterest-bearing demand deposits, savings accounts, and money market
and interest-bearing checking accounts is, by definition, equal to the amount
payable on demand (carrying amount). The fair values for variable rate fixed-
term money market accounts and certificates of deposit approximate their
carrying amounts. Fair values for fixed rate certificates of deposit are
estimated using a discounted cash flow calculation that applies interest rates
currently being offered on certificates of deposit to a schedule of aggregated
expected monthly maturities on time deposits.

     Long-term Borrowings The fair values of long-term borrowings (other than
deposits) are estimated using discounted cash flow analyses, based on AmSouth's
current incremental borrowing rates for similar types of borrowing arrangements.


                                      101