Amsouth Bank 2000 Annual Report

2000 Annual Report

AmSouth Bancorporation and Subsidiaries
Notes to Consolidated Financial Statements

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


			2000		1999

			Carrying	Estimated	Carrying	Estimated
(in thousands)			Amount	Fair Value	Amount	Fair Value

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)

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 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.