AmSouth Bank
2000 Annual Report
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.