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