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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. At December 31, 2000, the held-to-maturity portfolio had unrealized gains, before taxes, of $79.4 million. |
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Securities Table 5
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