FIRST TENNESSEE NATIONAL CORP - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
- or -
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition period from __________ to__________

Commission File Number 000-4491

FIRST TENNESSEE NATIONAL CORPORATION
(Exact name of registrant as specified in its charter)

TENNESSEE 62-0803242
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

165 MADISON AVENUE, MEMPHIS, TENNESSEE 38103
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including Area Code: 901-523-4444

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class Name of Exchange on which Registered
------------------- ------------------------------------

$0.625 PAR VALUE COMMON CAPITAL STOCK NEW YORK STOCK EXCHANGE, INC.
(INCLUDING RIGHTS ATTACHED THERETO)

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

[X] YES NO

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.
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At February 23, 2001, the aggregate market value of the voting stock of the
registrant held by non-affiliates of the registrant was approximately $3.9
billion.

At February 23, 2001, the registrant had 128,190,138 shares of common stock
outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

1. Portions of Proxy Statement furnished to shareholders in connection
with Annual Meeting of Shareholders scheduled for 4/17/01 - Parts I,
II, III and IV.

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PART I

ITEM 1
BUSINESS

General.

First Tennessee National Corporation (the "Corporation") is a
Tennessee corporation incorporated in 1968. The Corporation is registered as a
bank holding company under the Bank Holding Company Act of 1956, as amended,
and elected, effective March 13, 2000, to become a financial holding company
pursuant to the provisions of the Gramm-Leach-Bliley Act. See "Supervision and
Regulation - Financial Modernization Legislation" below. At December 31, 2000,
the Corporation had total assets of $18.6 billion and ranked second in terms of
total assets among Tennessee-headquartered bank holding companies and ranked
46th nationally.

Through its principal subsidiary, First Tennessee Bank National
Association (the "Bank"), and its other banking and banking-related
subsidiaries, the Corporation provides a broad range of financial services. The
Corporation is engaged in the commercial banking business. Significant
operations are also conducted in the mortgage banking, capital markets, and
transaction processing divisions, which are described in more detail in the
response to Item 7 of Part II hereof and Note 22 to the Consolidated Financial
Statements. During 2000 approximately 64% of revenues were provided by fee
income and approximately 36% of revenues were provided by net interest income.
As a financial holding company, the Corporation coordinates the financial
resources of the consolidated enterprise and maintains systems of financial,
operational and administrative control that allow coordination of selected
policies and activities.

The Bank is a national banking association with principal offices in
Memphis, Tennessee. It received its charter in 1864 and operates primarily on a
regional basis. During 2000 it generated gross revenue (net interest income
plus noninterest income) of approximately $1.6 billion and contributed 98% of
consolidated net income from continuing operations. At December 31, 2000, the
Bank had $17.6 billion in total assets, $11.5 billion in total deposits, and
$11.4 billion in net loans. Within the State of Tennessee at December 31, 2000,
the Bank ranked second in terms of total assets and ranked first in deposit
market share in four of the state's five metropolitan regions. Nationally, it
ranked 49th among banks in terms of total assets as of September 30, 2000. On
December 31, 2000, the Corporation's subsidiary banks had 432 banking locations
(190 financial centers and 242 free-standing ATMs) in 23 Tennessee counties,
including all of the major metropolitan areas of the state, 20 banking
locations (including 13 free-standing ATMs) in Mississippi and 8 banking
locations (including 4 free-standing ATMs) in Arkansas, and consumer finance
offices in 10 states nationwide. First Horizon Home Loan Corporation, a
subsidiary of the Bank, and its affiliates, at December 31, 2000, provided
mortgage banking services through approximately 136 offices in 31 states and
ranked in the top 20 nationally in retail mortgage loan originations and
mortgage loan servicing. First Tennessee Capital Markets, a division of the
Bank, had at December 31, 2000, offices in 6 states and ranked as one of the
leading underwriters of U.S. agency debt.

The Corporation provides the following services through its
subsidiaries:

- general banking services for consumers, businesses, financial
institutions, and governments
- mortgage banking services

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- capital markets--primarily sales and underwriting of
bank-eligible securities and securities eligible for
underwriting by financial subsidiaries, mortgage loans and
advisory services, and equity research.
- transaction processing - credit card merchant processing,
nationwide check clearing services, and remittance
processing
- trust, fiduciary, and agency services
- credit card products
- discount brokerage and brokerage
- venture capital
- equipment finance
- investment and financial advisory services, including
investment advisor to First Funds, a family of mutual funds
- mutual fund sales as agent
- insurance sales as agent
- check processing software and systems
- private mortgage reinsurance
- consumer finance lending

An element of the Corporation's business strategy is to seek
acquisitions and consider divestitures that would enhance long-term shareholder
value. The Corporation has a department charged with this responsibility which
is constantly reviewing and developing opportunities to achieve this element of
the Corporation's strategy. Acquisitions and divestitures which closed during
the past three years are described in Note 2 to the Consolidated Financial
Statements contained in an Appendix to the Corporation's Proxy Statement
furnished to shareholders in connection with the Annual Meeting of Shareholders
scheduled for April 17, 2001 (herein referred to, including such Appendix, as
the "2001 Proxy Statement"), which note is incorporated herein by reference.

All of the Corporation's subsidiaries are listed in Exhibit 21. The
Bank has filed notice with the Comptroller of the Currency ("Comptroller") as a
government securities broker/dealer. The Capital Markets division of the Bank
is registered with the Securities and Exchange Commission ("SEC") as a
municipal securities dealer with offices in Memphis and Nashville, Tennessee;
Mobile, Alabama; Chicago, Illinois; Overland Park, Kansas; Dallas, Texas; and
New York, New York. The subsidiary banks are supervised and regulated as
described below. Highland Capital Management Corp. and Martin and Company,
Inc., are registered with the SEC as investment advisers. First Tennessee
Brokerage, Inc. is registered as an investment adviser in Tennessee, Texas and
Virginia. Hickory Venture Capital Corporation is licensed as a Small Business
Investment Company. First Tennessee Brokerage, Inc. and First Tennessee
Securities Corporation are registered as broker-dealers with the SEC and all
states in which registration is required. First Horizon Home Loan Corporation
is licensed as a mortgage lender (or exempt from licensing) in all states where
it does business and is regulated by the Comptroller as well as various state
regulators. First Tennessee Insurance Services ("FTIS"), a department of the
Bank with offices in Dandridge, Tennessee, is licensed in all states in which
licensing is required. FT Reinsurance Company is licensed by the state of South
Carolina as a monoline insurance company. FT Insurance Corporation is licensed
as an insurance agency in Alabama. First Horizon Insurance Services, Inc. is
licensed as an insurance agency in all states in which licensing is required.
First Tennessee Brokerage is licensed as an insurance agency in the states
where licensing is required for the sale of annuity products. First Tennessee
Securities Corporation and First Horizon Insurance Services, Inc. are financial
subsidiaries under the Gramm-Leach-Bliley Act.

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Expenditures for research and development activities were not material
for the years 1998, 1999 or 2000.

Neither the Corporation nor any of its significant subsidiaries is
dependent upon a single customer or very few customers.

At December 31, 2000, the Corporation and its subsidiaries had 9,445
full-time-equivalent employees, not including contract labor for certain
services.

For additional information on the business of the Corporation, refer
to the Management's Discussion and Analysis and Glossary sections contained in
the 2001 Proxy Statement, which sections are incorporated herein by reference.

Supervision and Regulation.

The following summary sets forth certain of the material elements of
the regulatory framework applicable to bank holding companies and financial
holding companies and their subsidiaries and to companies engaged in securities
and insurance activities and provides certain specific information about the
Corporation. The bank regulatory framework is intended primarily for the
protection of depositors and the Federal Deposit Insurance Funds and not for
the protection of security holders. In addition, certain activities of the
Corporation and its subsidiaries are subject to various securities and
insurance laws and are regulated by the Securities and Exchange Commission and
the state insurance departments of the states in which they operate. To the
extent that the following information describes statutory and regulatory
provisions, it is qualified in its entirety by express reference to each of the
particular statutory and regulatory provisions. A change in applicable
statutes, regulations or regulatory policy may have a material effect on the
business of the Corporation.

General

The Corporation is a bank holding company and financial holding
company within the meaning of the Bank Holding Company Act of 1956, as amended
(the "BHCA") and is registered with the Board of Governors of the Federal
Reserve System (the "Federal Reserve"). The Corporation is subject to the
regulation and supervision of and examination by the Federal Reserve under the
BHCA. The Corporation is required to file with the Federal Reserve annual
reports and such additional information as the Federal Reserve may require
pursuant to the BHCA.

Under the BHCA, prior to March 13, 2000, bank holding companies could
not in general directly or indirectly acquire the ownership or control of more
than 5% of the voting shares or substantially all of the assets of any company,
including a bank, without the prior approval of the Federal Reserve, and the
BHCA also generally limited the types of activities in which a bank holding
company and its subsidiaries could engage to banking and activities found by
the Federal Reserve to be so closely related to banking as to be a proper
incident thereto. Since March 13, 2000, eligible bank holding companies that
elect to become financial holding companies may affiliate with securities firms
and insurance companies and engage in activities that are "financial in
nature"generally without the prior approval of the Federal Reserve. See
"-Financial Modernization Legislation" below.

In addition, the BHCA permits the Federal Reserve to approve an
application by a bank holding company to acquire a bank located outside the
acquirer's principal state of operations without regard to whether the
transaction is prohibited under state law. See " --Interstate Banking and
Branching Legislation."

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Effective September 29, 1995, the Tennessee Bank Structure Act of
1974 was amended to, among other things, prohibit (subject to certain
exceptions) a bank holding company from acquiring a bank for which the home
state is Tennessee (a "Tennessee bank") if, upon consummation, the company
would directly or indirectly control 30% or more of the total deposits in
insured depository institutions in Tennessee. As of June 30, 2000, the
Corporation estimates that it held approximately 17% of such deposits. Subject
to certain exceptions, the Tennessee Bank Structure Act prohibits a bank
holding company from acquiring a bank in Tennessee which has been in operation
for less than five years. Tennessee law permits a Tennessee bank to establish
branches in any county in Tennessee. See also "- Interstate Banking and
Branching Legislation" below.

The Corporation's subsidiary banks (the "Subsidiary Banks") are
subject to supervision and examination by applicable federal and state banking
agencies. The Bank and First National Bank of Springdale, Springdale, Arkansas,
are national banking associations subject to regulation and supervision by the
Comptroller as their primary federal regulator. The remaining Subsidiary Banks
are Cleveland Bank and Trust Company ("Cleveland"), Cleveland, Tennessee, and
Peoples and Union Bank ("PUB"), Lewisburg, Tennessee, which are Tennessee
state-chartered banks, and Peoples Bank, Senatobia, Mississippi, which is a
Mississippi state-chartered bank, none of which is a member of the Federal
Reserve System, and therefore each is subject to the regulations of and
supervision by the Federal Deposit Insurance Corporation (the "FDIC") as well
as state banking authorities. Cleveland and the Bank have entered into an
agreement pursuant to which Cleveland will merge with and into the Bank during
2001. The Corporation and PUB have entered into an agreement with a
nonaffiliate pursuant to which it will acquire PUB by merging PUB with and into
the nonaffiliate during 2001, subject to regulatory and other customary
approvals. In addition, all of the Subsidiary Banks are insured by, and subject
to regulation by, the FDIC. The Subsidiary Banks are also subject to various
requirements and restrictions under federal and state law, including
requirements to maintain reserves against deposits, restrictions on the types
and amounts of loans that may be granted and the interest that may be charged
thereon and limitations on the types of investments that may be made,
activities that may be engaged in, and types of services that may be offered.
Various consumer laws and regulations also affect the operations of the
Subsidiary Banks. In addition to the impact of regulation, commercial banks are
affected significantly by the actions of the Federal Reserve as it attempts to
control the money supply and credit availability in order to influence the
economy.

Payment of Dividends

The Corporation is a legal entity separate and distinct from its
banking and other subsidiaries. The principal source of cash flow of the
Corporation, including cash flow to pay dividends on its stock or principal
(premium, if any) and interest on debt securities, is dividends from the
Subsidiary Banks. There are statutory and regulatory limitations on the payment
of dividends by the Subsidiary Banks to the Corporation, as well as by the
Corporation to its shareholders.

Each Subsidiary Bank that is a national bank is required by federal
law to obtain the prior approval of the Comptroller for the payment of
dividends if the total of all dividends declared by the board of directors of
such Subsidiary Bank in any year will exceed the total of (i) its net profits
(as defined and interpreted by regulation) for that year plus (ii) the retained
net profits (as defined and interpreted by regulation) for the preceding two
years, less any required transfers to surplus. A national bank also can pay
dividends only to the extent that retained net profits (including the portion
transferred to surplus) exceed bad debts (as defined by regulation).

State-chartered banks are subject to varying restrictions on the
payment of dividends under

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applicable state laws. Tennessee law imposes dividend restrictions on Tennessee
state banks substantially similar to those imposed under federal law on
national banks, as described above. Mississippi law prohibits Mississippi state
banks from declaring a dividend without the prior written approval of the
Mississippi Banking Commissioner.

If, in the opinion of the applicable federal bank regulatory
authority, a depository institution or a holding company is engaged in or is
about to engage in an unsafe or unsound practice (which, depending on the
financial condition of the depository institution or holding company, could
include the payment of dividends), such authority may require that such
institution or holding company cease and desist from such practice. The federal
banking agencies have indicated that paying dividends that deplete a depository
institution's or holding company's capital base to an inadequate level would be
such an unsafe and unsound banking practice. Moreover, the Federal Reserve, the
Comptroller and the FDIC have issued policy statements which provide that bank
holding companies and insured depository institutions generally should only pay
dividends out of current operating earnings.

In addition, under the Federal Deposit Insurance Act ("FDIA"), an
FDIC-insured depository institution may not make any capital distributions
(including the payment of dividends) or pay any management fees to its holding
company or pay any dividend if it is undercapitalized or if such payment would
cause it to become undercapitalized.

At December 31, 2000, under dividend restrictions imposed under
applicable federal and state laws, the Subsidiary Banks, without obtaining
regulatory approval, could legally declare aggregate dividends of approximately
$334.5 million. Under Tennessee law, the Corporation is not permitted to pay
dividends if, after giving effect to such payment, it would not be able to pay
its debts as they become due in the usual course of business or the
Corporation's total assets would be less than the sum of its total liabilities
plus any amounts needed to satisfy any preferential rights if the Corporation
was dissolving.

The payment of dividends by the Corporation and the Subsidiary Banks
may also be affected or limited by other factors, such as the requirement to
maintain adequate capital above regulatory guidelines and debt covenants.

Transactions with Affiliates

There are various legal restrictions on the extent to which the
Corporation and its nonbank subsidiaries (including for purposes of this
paragraph, in certain situations, subsidiaries of the Subsidiary Banks) can
borrow or otherwise obtain credit from the Subsidiary Banks. There are also
legal restrictions on the Subsidiary Banks' purchases of or investments in the
securities of and purchases of assets from the Corporation and its nonbank
subsidiaries, a Subsidiary Bank's loans or extensions of credit to third
parties collateralized by the securities or obligations of the Corporation and
its nonbank subsidiaries, the issuance of guaranties, acceptances and letters
of credit on behalf of the Corporation and its nonbank subsidiaries, and
certain bank transactions with the Corporation and its nonbank subsidiaries, or
with respect to which the Corporation and its nonbank subsidiaries act as
agent, participate or have a financial interest. Subject to certain limited
exceptions, a Subsidiary Bank (including for purposes of this paragraph all
subsidiaries of such Subsidiary Bank) may not extend credit to the Corporation
or to any other affiliate (other than another Subsidiary Bank and certain
exempted affiliates) in an amount which exceeds 10% of the Subsidiary Bank's
capital stock and surplus and may not extend credit in the aggregate to all
such affiliates in an amount which exceeds 20% of its capital stock and
surplus. Further, there are legal requirements as to the type, amount and
quality of collateral which must secure such extensions of credit by the
Subsidiary Banks to the Corporation or to such other affiliates. Also,
extensions of credit and other transactions between a Subsidiary Bank and the
Corporation or such other affiliates must be on

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terms and under circumstances, including credit standards, that are
substantially the same or at least as favorable to such Subsidiary Bank as
those prevailing at the time for comparable transactions with non-affiliated
companies. Also, the Corporation and its subsidiaries are prohibited from
engaging in certain tie-in arrangements in connection with any extension of
credit, lease or sale of property or furnishing of services.

Capital Adequacy

The Federal Reserve has adopted risk-based capital guidelines for bank
holding companies. The minimum guideline for the ratio of total capital ("Total
Capital") to risk-weighted assets (including certain off-balance-sheet items,
such as standby letters of credit) is 8%, and the minimum ratio of Tier 1
Capital (defined below) to risk-weighted assets is 4%. At least half of the
Total Capital must be composed of common stock, minority interests in the
equity accounts of consolidated subsidiaries, noncumulative perpetual preferred
stock and a limited amount of cumulative perpetual preferred stock, less
goodwill and certain other intangible assets ("Tier 1 Capital"). The remainder
may consist of qualifying subordinated debt, certain types of mandatory
convertible securities and perpetual debt, other preferred stock and a limited
amount of loan loss reserves. At December 31, 2000, the Corporation's
consolidated Tier 1 Capital and Total Capital ratios were 8.90% and 12.11%,
respectively.

The Federal Reserve Board, the FDIC and the OCC have adopted rules to
incorporate market and interest-rate risk components into their risk-based
capital standards and that explicitly identify concentration of credit risk and
certain risks arising from non-traditional activities, and the management of
such risks, as important factors to consider in assessing an institution's
overall capital adequacy. Under the market risk requirements, capital is
allocated to support the amount of market risk related to a financial
institution's ongoing trading activities for banks with relatively large
trading activities. Institutions will be able to satisfy this additional
requirement, in part, by issuing short-term subordinated debt that qualifies as
Tier 3 capital. The amount of the Corporation's trading activities does not
presently require an allocation of capital.

In addition, the Federal Reserve has established minimum leverage
ratio guidelines for bank holding companies. These guidelines provide for a
minimum ratio of Tier 1 Capital to quarterly average assets, less goodwill and
certain other intangible assets (the "Leverage Ratio"), of 3% for bank holding
companies that meet certain specific criteria, including having the highest
regulatory rating. All other bank holding companies generally are required to
maintain a Leverage Ratio of at least 3%, plus an additional cushion of 100 to
200 basis points. The Corporation's Leverage Ratio at December 31, 2000 was
6.98%. The guidelines also provide that bank holding companies experiencing
internal growth or making acquisitions will be expected to maintain strong
capital positions substantially above the minimum supervisory levels without
significant reliance on intangible assets. Furthermore, the Federal Reserve has
indicated that it will consider a "tangible Tier 1 Capital leverage ratio"
(deducting all intangibles) and other indicia of capital strength in evaluating
proposals for expansion or new activities.

Each of the Subsidiary Banks is subject to risk-based and leverage
capital requirements similar to those described above adopted by the
Comptroller or the FDIC, as the case may be. The Corporation believes that each
of the Subsidiary Banks was in compliance with applicable minimum capital
requirements as of December 31, 2000. Neither the Corporation nor any of the
Subsidiary Banks has been advised by any federal banking agency of any specific
minimum Leverage Ratio requirement applicable to it.

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Failure to meet capital guidelines could subject a bank to a variety
of enforcement remedies, including the termination of deposit insurance by the
FDIC, and to certain restrictions on its business and in certain circumstances
to the appointment of a conservator or receiver. See "--Prompt Corrective
Action."
On February 17, 2000, the federal banking regulators proposed for
comment regulations previously released on November 5, 1997. This proposal
would 1) assign a risk-based charge to positions in securitized transactions
according to the relative credit risk of those positions, as measured by credit
ratings received from nationally recognized rating agencies, 2) treat recourse
obligations and direct credit substitutes more consistently under risk-based
capital rules, 3) define "recourse" and revise the definition of "direct credit
substitute" ("recourse" is defined as any retained risk of loss associated with
any transferred asset that exceeds a pro rata share of the bank's or bank
holding company's remaining claim on the asset, if any, and "direct credit
substitute" is defined as any assumed risk of loss associated with any asset or
other claim that exceeds the bank's or bank holding company's pro rata share of
the asset or claim, if any), 4) permit the limited use of an institution's
internal risk-rating system and other alternative approaches in determining the
risk-based capital requirement for unrated direct credit substitutes associated
with asset-backed commercial paper programs and other structured finance
programs, and 5) require banking organizations to hold additional risk-based
capital against risks presented by the early amortization feature of revolving
asset securitization. The proposal was subject to an industry comment period
that ended June 7, 2000. The Corporation can not predict at this time the
effect adoption of this proposal would have on the financial condition or
results of operations of the Bank or the Corporation.

On January 16, 2001, the Basel Committee proposed its second draft of
a new capital adequacy framework. The new capital framework would consist of
minimum capital requirements, a supervisory review process and the effective
use of market discipline. In its proposal for minimum capital requirements, the
Committee set out options from which banks could choose depending on the
complexity of their business and the quality of their risk management. A
standardized approach would refine the current measurement framework and
introduce the use of external credit assessments to determine a bank's capital
charge. Banks with more advanced risk management capabilities could make use of
an internal risk-rating based approach. Under this approach, some of the key
elements of credit risk, such as the probability of default of the borrower,
would be estimated internally by a bank. The Committee is also proposing an
explicit capital charge for operational risk to provide for problems like
internal systems failure.

The supervisory review aspect of the new framework would seek to
ensure that a bank's capital position is consistent with its overall risk
profile and strategy. The supervisory review process would also encourage early
supervisory intervention when a bank's capital position deteriorates. The third
aspect of the new framework, market discipline, would call for detailed
disclosure of a bank's capital adequacy in order to encourage high disclosure
standards and to enhance the role of market participants in encouraging banks
to hold adequate capital. Banks must also disclose how they evaluate their own
capital adequacy.

The Basel Committee intends to finalize its new capital adequacy
framework by the end of 2001. Federal regulators have asked banks to examine
the newly proposed capital rules to determine whether their complexity and
regulatory burden would outweigh the benefits of their increased rate
sensitivity. It is envisioned that some form of the new capital guidelines
would be drafted into national rules which could take another two years to be
implemented. The Corporation cannot predict at this time whether the new
capital adequacy framework will be adopted or in what form, or the effect it
would have on the financial condition or results of operations of the Bank or
the Corporation.

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Holding Company Structure and Support of Subsidiary Banks

Because the Corporation is a holding company, its right to participate
in the assets of any subsidiary upon the latter's liquidation or reorganization
will be subject to the prior claims of the subsidiary's creditors (including
depositors in the case of the Subsidiary Banks) except to the extent that the
Corporation may itself be a creditor with recognized claims against the
subsidiary. In addition, depositors of a bank, and the FDIC as their subrogee,
would be entitled to priority over the creditors in the event of liquidation of
a bank subsidiary.

Under Federal Reserve policy, the Corporation is expected to act as a
source of financial strength to, and to commit resources to support, each of
the Subsidiary Banks. This support may be required at times when, absent such
Federal Reserve policy, the Corporation may not be inclined to provide it. In
addition, any capital loans by a bank holding company to any of its subsidiary
banks are subordinate in right of payment to deposits and to certain other
indebtedness of such subsidiary bank. In the event of a bank holding company's
bankruptcy, any commitment by the bank holding company to a federal bank
regulatory agency to maintain the capital of a subsidiary bank will be assumed
by the bankruptcy trustee and entitled to a priority of payment.

Cross-Guarantee Liability

Under the FDIA, a depository institution insured by the FDIC can be
held liable for any loss incurred by, or reasonably expected to be incurred by,
the FDIC after August 9, 1989 in connection with (i) the default of a commonly
controlled FDIC-insured depository institution or (ii) any assistance provided
by the FDIC to any commonly controlled FDIC-insured depository institution "in
danger of default." "Default" is defined generally as the appointment of a
conservator or receiver and "in danger of default" is defined generally as the
existence of certain conditions indicating that a default is likely to occur in
the absence of regulatory assistance. The FDIC's claim for damages is superior
to claims of shareholders of the insured depository institution or its holding
company but is subordinate to claims of depositors, secured creditors and
holders of subordinated debt (other than affiliates) of the commonly controlled
insured depository institution. The Subsidiary Banks are subject to these
cross-guarantee provisions. As a result, any loss suffered by the FDIC in
respect of any of the Subsidiary Banks would likely result in assertion of the
cross-guarantee provisions, the assessment of such estimated losses against the
Corporation's other Subsidiary Banks and a potential loss of the Corporation's
investment in such Subsidiary Banks.

Prompt Corrective Action

The FDIA requires, among other things, the federal banking regulators
to take "prompt corrective action" in respect of FDIC-insured depository
institutions that do not meet minimum capital requirements. Under the FDIA,
insured depository institutions are divided into five capital tiers: "well
capitalized," "adequately capitalized," "undercapitalized," "significantly
undercapitalized" and "critically undercapitalized." Under applicable
regulations, an institution is defined to be well capitalized if it maintains a
Leverage Ratio of at least 5%, a Tier 1 Capital ratio of at least 6% and a
Total Capital ratio of at least 10% and is not subject to a directive, order or
written agreement to meet and maintain specific capital levels. An institution
is defined to be adequately capitalized if it meets all of its minimum capital
requirements as described above. An institution will be considered
undercapitalized if it fails to meet any minimum required measure,
significantly undercapitalized if it has a Total Risk-Based Capital ratio of
less than 6%, a Tier 1 Risk-Based Capital ratio of less than 3% or a Leverage
Ratio of less than 3% and critically undercapitalized if it fails to maintain a
level of tangible equity equal to at least 2% of total

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assets. An institution may be deemed to be in a capitalization category that is
lower than is indicated by its actual capital position if it receives an
unsatisfactory examination rating.

The FDIA generally prohibits an FDIC-insured depository institution
from making any capital distribution (including payment of dividends) or paying
any management fee to its holding company if the depository institution would
thereafter be undercapitalized. Undercapitalized depository institutions are
subject to restrictions on borrowing from the Federal Reserve System. In
addition, undercapitalized depository institutions are subject to growth
limitations and are required to submit capital restoration plans. An insured
depository institution's holding company must guarantee the capital plan, up to
an amount equal to the lesser of 5% of the depository institution's assets at
the time it becomes undercapitalized or the amount of the capital deficiency
when the institution fails to comply with the plan, for the plan to be accepted
by the applicable federal regulatory authority. The federal banking agencies
may not accept a capital plan without determining, among other things, that the
plan is based on realistic assumptions and is likely to succeed in restoring
the depository institution's capital. If a depository institution fails to
submit an acceptable plan, it is treated as if it is significantly
undercapitalized.

Significantly undercapitalized depository institutions may be subject
to a number of requirements and restrictions, including orders to sell
sufficient voting stock to become adequately capitalized, requirements to
reduce total assets and cessation of receipt of deposits from correspondent
banks. Critically undercapitalized depository institutions are subject to
appointment of a receiver or conservator, generally within 90 days of the date
on which they become critically undercapitalized.

The Corporation believes that at December 31, 2000 all of the
Subsidiary Banks had sufficient capital to qualify as "well capitalized" under
the regulatory capital requirements discussed above.

Interstate Banking and Branching Legislation

The Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994 (the "IBBEA") authorizes interstate acquisitions of banks and bank holding
companies without geographic limitation beginning one year after enactment. In
addition, since June 1, 1997, a bank may merge with a bank in another state as
long as neither of the states has opted out of interstate branching between the
date of enactment of the IBBEA and May 31, 1997. Tennessee did not opt out of
interstate branching. The IBBEA further provides that states may enact laws
permitting interstate merger transactions prior to June 1, 1997. Tennessee did
not enact such a law. A bank may establish and operate a de novo branch in a
state in which the bank does not maintain a branch if that state explicitly
permits de novo branching. Tennessee does not permit de novo branching. Once a
bank has established branches in a state through an interstate merger
transaction, the bank may establish and acquire additional branches at any
location in the state where any bank involved in the interstate merger
transaction could have established or acquired branches under applicable
federal or state law. A bank that has established a branch in a state through
de novo branching may establish and acquire additional branches in such state
in the same manner and to the same extent as a bank having a branch in such
state as a result of an interstate merger. If a state opts out of interstate
branching within the specified time period, no bank in any other state may
establish a branch in the opting out of state, whether through an acquisition
or de novo.

Financial Modernization Legislation

The Gramm-Leach-Bliley Act was enacted into law on November 12, 1999.
The Act repeals or modifies a number of significant provisions of current laws,
including the Glass-Steagall Act and the

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Bank Holding Company Act of 1956, which impose restrictions on banking
organizations' ability to engage in certain types of activities. The Act
generally allows bank holding companies such as the Corporation broad authority
to engage in activities that are financial in nature or incidental to such a
financial activity, including insurance underwriting and brokerage; merchant
banking; securities underwriting, dealing and market-making; real estate
development; and such additional activities as the Federal Reserve in
consultation with the Secretary of the Treasury determines to be financial in
nature or incidental thereto. A bank holding company may engage in these
activities directly or through subsidiaries by qualifying as a "financial
holding company." To qualify a bank holding company must file a declaration
with the Federal Reserve and certify that all of its subsidiary depository
institutions are well-managed and well-capitalized. The Act also permits
national banks such as the Bank to engage in certain of these activities
through financial subsidiaries. To control or hold an interest in a financial
subsidiary, a national bank must meet the following requirements: (1) the
national bank must receive approval from the Comptroller for the financial
subsidiary to engage in the activities, (2) the national bank and its
depository institution affiliates must each be well-capitalized and
well-managed, (3) the aggregate consolidated total assets of all of the
national bank's financial subsidiaries must not exceed 45% of the national
bank's consolidated total assets or, if less, $50 billion, (4) the national
bank must have in place adequate policies and procedures to identify and manage
financial and operational risks and to preserve the separate identities and
limited liability of the national bank and the financial subsidiary, and (5) if
the financial subsidiary will engage in principal transactions and the national
bank is one of the one hundred largest banks, the national bank must have
outstanding at least one issue of unsecured long-term debt that is currently
rated in one of the three highest investment grade rating categories (or if in
the second fifty largest banks, an alternative requirement is that the national
bank has a current long-term issuer credit rating within the three highest
investment grade rating categories). No new financial activity may be commenced
under the Act unless the national bank and all of its depository institution
affiliates have at least "satisfactory" CRA ratings. Certain restrictions apply
if the bank holding company or the national bank fails to continue to meet one
or more of the requirements listed above. In addition, the Act contains a
number of other provisions that may affect the Bank's operations, including
functional regulation of the Bank's securities and investment management
operations by the SEC and the Bank's insurance operations by the States and
limitations on the use and disclosure to third parties of customer information.
The Act generally became effective March 11, 2000, although certain provisions
take effect later, such as functional regulation (May 12, 2001), and compliance
with privacy regulations is required by July 1, 2001. The Corporation has
elected to become a financial holding company and currently, the Bank has two
financial subsidiaries. The Corporation cannot predict at this time the
potential effect that the Act will have on its business and operations,
although the Corporation expects that the general effect of the Act will be to
increase competition in the financial services industry generally.

FDIC Insurance Assessments; DIFA

The FDIC reduced the insurance premiums it charges on bank deposits
insured by the Bank Insurance Fund ("BIF") to the statutory minimum of $2,000
for "well capitalized" banks, effective January 1, 1996. Premiums related to
deposits assessed by the Savings Association Insurance Fund ("SAIF"), including
savings association deposits acquired by banks, continued to be assessed at a
rate of between 23 cents and 31 cents per $100 of deposits. On September 30,
1996, the Deposit Insurance Funds Act of 1996 ("DIFA") was enacted and signed
into law. DIFA provided for a special assessment to recapitalize the SAIF to
bring the SAIF up to statutory required levels. The assessment imposed a
one-time fee to banks that own previously acquired thrift deposits of $ .526
per $100 of thrift deposits they held at March 31, 1995. The pre-tax cost to
the Corporation of the one-time assessment in the third quarter of 1996 was
$3.8 million. DIFA further provides for assessments to be imposed on insured

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depository institutions with respect to deposits insured by the BIF (in
addition to assessments currently imposed on depository institutions with
respect to SAIF-insured deposits) to pay for the cost of Financing Corporation
("FICO") bonds. All banks are being assessed to pay the interest due on FICO
bonds since January 1, 1997. The cost to the Corporation on an annual basis has
been immaterial.

Under the FDIA, insurance of deposits may be terminated by the FDIC
upon a finding that the institution has engaged in unsafe and unsound
practices, is in an unsafe or unsound condition to continue operations or has
violated any applicable law, regulation, rule, order or condition imposed by a
federal bank regulatory agency.

Depositor Preference

Federal law provides that deposits and certain claims for
administrative expenses and employee compensation against an insured depository
institution would be afforded a priority over other general unsecured claims
against such an institution, including federal funds and letters of credit, in
the "liquidation or other resolution" of such an institution by any receiver.

Securities Regulation

Certain of the Corporation's subsidiaries are subject to various
securities laws and regulations and capital adequacy requirements promulgated
by the regulatory and exchange authorities of the jurisdictions in which they
operate.

The Corporation's registered broker-dealer subsidiaries are subject to
the SEC's net capital rule, Rule 15c3-1. That rule requires the maintenance of
minimum net capital and limits the ability of the broker-dealer to transfer
large amounts of capital to a parent company or affiliate. Compliance with the
rule could limit operations that require intensive use of capital, such as
underwriting and trading.

Certain of the Corporation's subsidiaries are registered investment
advisers who are regulated under the Investment Advisers Act of 1940. These
subsidiaries, among other activities, provide investment advice to investment
companies regulated under the Investment Company Act of 1940. Advisory
contracts with these investment companies automatically terminate under these
laws upon an assignment of the contract by the investment adviser unless
appropriate consents are obtained. Subsidiaries of the Corporation are subject
to certain restrictions in their dealings with investment companies advised by
a subsidiary of the Corporation.

Insurance Activities

Subsidiaries of the Corporation sell various types of insurance as
agent in a number of the states. Insurance activities are subject to regulation
by the states in which such business is transacted. Although most of such
regulation focuses on insurance companies and their insurance products,
insurance agents and their activities are also subject to regulation by the
states, including, among other things, licensing and marketing and sales
practices.

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Competition.

The Corporation and its subsidiaries face substantial competition in
all aspects of the businesses in which they engage from national and state
banks located in Tennessee and large out-of-state banks as well as from savings
and loan associations, credit unions, other financial institutions, consumer
finance companies, trust companies, investment counseling firms, money market
mutual funds, insurance companies, securities firms, mortgage banking companies
and others. For certain information on the competitive position of the
Corporation and the Bank, refer to page 2. Also, refer to the subsections
entitled "Supervision and Regulation" and "Effect of Governmental Policies,"
both of which are relevant to an analysis of the Corporation's competitors. Due
to the intense competition in the financial industry, the Corporation makes no
representation that its competitive position has remained constant, nor can it
predict whether its position will change in the future.

Sources and Availability of Funds.

Specific reference is made to the Management's Discussion and Analysis
and Glossary sections, including the subsection entitled "Deposits, Other
Sources of Funds, and Liquidity Management," contained in the 2001 Proxy
Statement, which sections are incorporated herein by reference.

Effect of Governmental Policies.

The Bank is affected by the policies of regulatory authorities,
including the Federal Reserve System and the Comptroller. An important function
of the Federal Reserve System is to regulate the national money supply.

Among the instruments of monetary policy used by the Federal Reserve
are: purchases and sales of U.S. Government securities in the marketplace;
changes in the discount rate, which is the rate any depository institution must
pay to borrow from the Federal Reserve; and changes in the reserve requirements
of depository institutions. These instruments are effective in influencing
economic and monetary growth, interest rate levels and inflation.

The monetary policies of the Federal Reserve System and other
governmental policies have had a significant effect on the operating results of
commercial banks in the past and are expected to continue to do so in the
future. Because of changing conditions in the national economy and in the money
market, as well as the result of actions by monetary and fiscal authorities, it
is not possible to predict with certainty future changes in interest rates,
deposit levels, loan demand or the business and earnings of the Corporation and
the Bank or whether the changing economic conditions will have a positive or
negative effect on operations and earnings.

Various bills are from the time to time introduced in the United
States Congress and the Tennessee General Assembly and other state
legislatures, and regulations are proposed by the regulatory agencies which
could affect the business of the Corporation and its subsidiaries. It cannot be
predicted whether or in what form any of these proposals will be adopted or the
extent to which the business of the Corporation and its subsidiaries may be
affected thereby.

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Statistical Information Required by Guide 3.

The statistical information required to be displayed under Item I
pursuant to Guide 3, "Statistical Disclosure by Bank Holding Companies," of the
Exchange Act Industry Guides is incorporated herein by reference to the
Consolidated Financial Statements and the notes thereto and the Management's
Discussion and Analysis and Glossary sections in the 2001 Proxy Statement;
certain information not contained in the 2001 Proxy Statement, but required by
Guide 3, is contained in the tables immediately following:

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FIRST TENNESSEE NATIONAL CORPORATION
ADDITIONAL GUIDE 3 STATISTICAL INFORMATION
AS OF DECEMBER 31
(Unaudited)

INVESTMENT PORTFOLIO
(Dollars in thousands) 2000 1999 1998
- -------------------------------------------------------------------------------------------

Mortgage-backed securities &
collateralized mortgage
obligations $2,303,079 $ 2,579,259 $2,068,529
U.S. Treasury and other
U. S. government agencies 143,152 165,477 151,215
States and political subdivisions 55,976 41,603 60,807
Other 336,849 314,953 145,738
---------- ----------- ----------
Total $2,839,056 $ 3,101,292 $2,426,289
========== =========== ==========

LOAN PORTFOLIO
(Dollars in thousands) 2000 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------

Commercial:
Commercial, financial and
industrial $3,964,396 $ 3,660,642 $3,460,215 $3,103,563 $2,866,882
Real estate commercial 946,903 776,553 667,674 673,046 663,855
Real estate construction 415,713 353,659 303,759 360,187 277,124
Retail:
Real estate residential 3,573,260 2,814,249 2,476,355 2,641,707 2,396,666
Real estate construction 179,515 132,740 73,115 45,148 21,528
Consumer 840,228 1,018,110 981,479 906,248 937,345
Credit card receivables 319,435 607,205 594,467 581,451 564,803
---------- ----------- ---------- ---------- ----------
Total $10,239,450 $ 9,363,158 $8,557,064 $8,311,350 $7,728,203
=========== =========== ========== ========== ==========

SHORT-TERM BORROWINGS
(Dollars in thousands) 2000 1999 1998
- -------------------------------------------------------------------------------------------

Federal funds purchased and
securities sold under
agreements to repurchase $2,981,026 $ 2,856,282 $2,912,018
Commercial paper 19,169 16,272 23,203
Other short-term borrowings 437,366 1,533,957 1,404,071
---------- ----------- ----------
Total $3,437,561 $ 4,406,511 $4,339,292
========== =========== ==========

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FOREIGN OUTSTANDINGS AT DECEMBER 31

2000 1999 1998
------------------- ------------------- ----------------
% TOTAL % Total % Total
(Dollars in thousands) AMOUNT ASSETS Amount Assets Amount Assets
- -------------------------------------------------------------------------------------------------------------------

BY COUNTRY:
Israel $ 1,062 .01% $ 1,061 .01% $ 1,313 .01%
Canada 790 .01 370 -- 433 --
Taiwan 556 -- 759 .01 161 --
Saudi Arabia 151 -- 33 -- 570 --
Switzerland 3 -- 9 -- 14 --
Denmark -- -- -- -- 6,000 .03
All other 599 -- 632 -- 702 .01
- -------------------------------------------------------------------------------------------------------------------
Total $ 3,161 .02% $ 2,864 .02% $ 9,193 .05%
===================================================================================================================
BY TYPE:
Loans:
Banks and other financial institutions $ 1,721 .01% $ 1,174 .01% $ 7,971 .04%
Governments and other institutions 1,000 .01 1,000 .01 1,000 .01
- -------------------------------------------------------------------------------------------------------------------
Total loans 2,721 .02 2,174 .02 8,971 .05
Customers' acceptances 384 -- 187 -- 93 --
Cash 33 -- 480 -- 129 --
Accrued interest receivable 23 -- 23 -- -- --
- -------------------------------------------------------------------------------------------------------------------
Total $ 3,161 .02% $ 2,864 .02% $ 9,193 .05%
===================================================================================================================

MATURITIES OF SHORT-TERM PURCHASED FUNDS AT DECEMBER 31, 2000

0-3 3-6 6-12 Over 12
(Dollars in thousands) Months Months Months Months Total
- -------------------------------------------------------------------------------------------------------------

Certificates of deposit
$100,000 and more $ 2,547,940 $ 348,605 $ 254,159 $ 159,644 $ 3,310,348
Federal funds purchased and
securities sold under
agreements to repurchase 2,981,026 -- -- -- 2,981,026
Commercial paper and
other short-term borrowings 250,804 400 150,000 55,331 456,535
- -------------------------------------------------------------------------------------------------------------
Total $ 5,779,770 $ 349,005 $ 404,159 $ 214,975 $ 6,747,909
=============================================================================================================

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CONTRACTUAL MATURITIES OF COMMERCIAL & REAL ESTATE CONSTRUCTION LOANS AT
DECEMBER 31, 2000

After 1 Year
(Dollars in thousands) Within 1 Year Within 5 Years After 5 Years Total
- ---------------------------------------------------------------------------------------------------------------------------

Commercial, financial and industrial $ 2,223,082 $ 1,469,009 $ 272,305 $ 3,964,396
Real estate commercial 341,043 515,823 90,037 946,903
Commercial real estate construction 328,229 81,861 5,623 415,713
Consumer real estate construction 178,524 494 497 179,515
- ---------------------------------------------------------------------------------------------------------------------------
Total $ 3,070,878 $ 2,067,187 $ 368,462 $ 5,506,527
===========================================================================================================================
For maturities over one year:
Interest rates - floating $ 919,158 $ 154,555 $ 1,073,713
Interest rates - fixed 1,148,029 213,907 1,361,936
- ---------------------------------------------------------------------------------------------------------------------------
Total $ 2,067,187 $ 368,462 $ 2,435,649
===========================================================================================================================

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ITEM 2
PROPERTIES

The Corporation has no properties that it considers materially
important to its financial statements.

ITEM 3
LEGAL PROCEEDINGS

The Corporation is a party to no material pending legal proceedings
the nature of which are required to be disclosed pursuant to the Instructions
contained in the Form of this Report.

ITEM 4
SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS

There were no matters submitted during the fourth quarter of 2000 to a
vote of security holders, through the solicitation of proxies or otherwise.

ITEM 4A
EXECUTIVE OFFICERS OF REGISTRANT

The following is a list of executive officers of the Corporation as of
March 1, 2001. The executive officers are elected at the April meeting of the
Corporation's Board of Directors following the annual meeting of shareholders
for a term of one year and until their successors are elected and qualified.

Name and Age Offices and Positions - Year First Elected to Office
- ------------ ----------------------------------------------------

Susan Schmidt Bies Executive Vice President (1985) and Auditor (1998)
Age: 53 of the Corporation and the Bank
and Risk Management Manager (1995)

J. Kenneth Glass President - Retail Financial Services
Age: 54 of the Bank (1999) and the Corporation (2000)

Ralph Horn Chairman of the Board (1996) and Chief
Age: 59 Executive Officer (1994) of the Corporation and
the Bank and President of the Corporation (1991)
and the Bank (1993)

Harry A. Johnson, III Executive Vice President (1990) and
Age: 52 General Counsel (1988) of the
Corporation and the Bank

James F. Keen Senior Vice President
Age: 50 and Corporate Controller of the Corporation (1988)
and principal accounting officer

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John C. Kelley. Jr. President - Business Financial Services/Memphis
Age: 57 Financial Services of the Bank (1999) and the
Corporation (2000)

Sarah L. Meyerrose Executive Vice President of the
Age: 45 Corporation and the Bank and
Employee Services Division Manager (1998)

John P. O'Connor, Jr. Executive Vice President of the Corporation
Age: 57 (1990) and the Bank (1987) and Chief Credit
Officer (1988)

Elbert L. Thomas, Jr. Executive Vice President (1995) and
Age: 52 Chief Financial Officer (1995)
of the Corporation and the Bank

Each of the executive officers has been employed by the Corporation or
its subsidiaries during each of the last five years. Prior to April of 2000,
Mr. Glass was Executive Vice President of the Corporation and prior to April of
1999, he was President - Tennessee Banking Group of the Bank. Prior to April of
2000, Mr. Kelley was Executive Vice President of the Corporation and prior to
April of 1999, he was President - Memphis Banking Group of the Bank. The
Personnel Division changed its name to the Employee Services Division in April
of 1999. Prior to June of 1998, Ms. Meyerrose was President, Kingsport/Bristol
of the Bank.

PART II

ITEM 5
MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS

(a) Market for the Corporation's Common Stock:

The Corporation's common stock, $0.625 par value, is listed and trades
on the New York Stock Exchange, Inc. under the symbol FTN. As of December 31,
2000, there were 9,333 shareholders of record of the Corporation's common
stock. Additional information called for by this Item is incorporated herein by
reference to the Summary of Quarterly Financial Information Table, the Selected
Financial and Operating Data Table, Note 18 to the Consolidated Financial
Statements, and the "Deposits, Other Sources of Funds, and Liquidity
Management" subsection of the Management's Discussion and Analysis section
contained in the 2001 Proxy Statement and to the "Payment of Dividends" and
"Transactions with Affiliates" subsections contained in Item 1 of Part I of
this Form 10-K, which is incorporated herein by reference.

(b) Sale of Unregistered Securities:

During 2000 all sales of shares of the Corporation's common stock
without registration under the Securities Act of 1933, as amended, were
previously disclosed in Form 10-Q's filed during 2000.

(c) Description of the Corporation's Capital Stock:

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Authorized Capital Stock. The authorized capital stock of the
Corporation currently consists of 5,000,000 shares of preferred stock, without
par value ("preferred stock"), which may be issued from time to time by
resolution of the Corporation's Board of Directors (the "Board") and
400,000,000 shares of common stock, $0.625 par value (the "common stock"). As
of December 31, 2000 there were 128,744,573 shares of common stock and no
shares of preferred stock outstanding. As of that date, approximately 32.9
million shares of common stock were reserved for issuance under various
employee stock plans and the Corporation's dividend reinvestment plan, and no
shares of preferred stock were reserved for issuance. Although shares have been
reserved for issuance under the employee stock plans, the plans generally
permit the Corporation to repurchase shares on the open market or privately for
issuance under such plans. The Board has authorized management to repurchase
shares from time to time for the plans. A total of 2.5 million shares were
repurchased and 1.3 million shares were issued for the plans in 2000. Pursuant
to Board authority, the Corporation plans to continue to purchase shares from
time to time for the plans and will evaluate the level of capital and take
action designed to generate or use capital as appropriate for the interest of
the shareholders. Also, in October 2000 the Corporation announced that the
Board approved the repurchase of up to 9.5 million shares by June 30, 2002,
subject to market conditions, accumulation of excess equity and prudent capital
management. During 2000, no shares were repurchased pursuant to this authority.
Also, the Corporation has on file with the SEC one effective shelf registration
pursuant to which it may offer from time to time, at its discretion, senior or
subordinated debt securities, preferred stock, including depository shares, and
common stock at an aggregate initial offering price not to exceed $225 million
(net of prior issuances) and another effective shelf registration pursuant to
which up to $200 million of capital securities (guaranteed preferred beneficial
interests in the Corporation's subordinated debentures) is available for
issuance.

Preferred Stock. The Board is authorized, without further action by
the shareholders, to provide for the issuance of up to 5,000,000 shares of
preferred stock, from time to time in one or more series and, with respect to
each such series, has the authority to fix the powers (including voting power),
designations, preferences and relative, participating, optional or other
special rights and the qualifications, limitations or restrictions thereof.

Common Stock. The Board is authorized to issue a maximum of
400,000,000 shares of common stock. The holders of the common stock are
entitled to receive, ratably, such dividends as may be declared by the Board
from funds legally available therefor, provided that if any shares of preferred
stock are at the time outstanding, the payment of dividends on common stock or
other distributions (including purchases of common stock) may be subject to the
declaration and payment of full cumulative dividends, and the absence of
arrearages in any mandatory sinking fund, on outstanding shares of preferred
stock. The holders of the outstanding shares of common stock are entitled to
one vote for each such share on all matters presented to shareholders and are
not entitled to cumulate votes for the election of directors. Upon any
dissolution, liquidation or winding up of the Corporation resulting in a
distribution of assets to the shareholders, the holders of common stock are
entitled to receive such assets ratably according to their respective holdings
after payment of all liabilities and obligations and satisfaction of the
liquidation preferences of any shares of preferred stock at the time
outstanding. The shares of common stock have no preemptive, redemption,
subscription or conversion rights. Under the Corporation's Charter, the Board
is authorized to issue authorized shares of common stock without further action
by the shareholders. However, the common stock is traded on the New York Stock
Exchange, Inc. which requires shareholder approval of the issuance of
additional shares of common stock in certain situations. The Transfer Agent for
the common stock is Wells Fargo Bank Minnesota, N.A.

The Board is divided into three classes, which results in
approximately one third of the directors being elected each year. In addition,
the Charter and the Bylaws, among other things, generally give to

20
21

the Board the authority to fix the number of directors on the Board and to
remove directors from and fill vacancies on the Board, other than removal for
cause and the filling of vacancies created thereby which are reserved to
shareholders exercising at least a majority of the voting power of all
outstanding voting stock of the Corporation. To change these provisions of the
Bylaws, other than by action of the Board, and to amend these provisions of the
Charter or to adopt any provision of the Charter inconsistent with such Bylaw
provisions, would require approval by the holders of at least 80% of the voting
power of all outstanding voting stock. Such classification of the Board and
such other provisions of the Charter and the Bylaws may have a significant
effect on the ability of the shareholders of the Corporation to change the
composition of an incumbent Board or to benefit from certain transactions which
are opposed by the Board.

Shareholder Protection Rights Plan. On October 20, 1998, the Board
adopted a Shareholder Protection Rights Agreement (the "Rights Plan") and
declared a dividend of one right on each share of common stock outstanding on
November 2, 1998, or issued thereafter and prior to the time the rights
separate and thereafter pursuant to options and convertible securities
outstanding at the time the rights separate. The Rights Plan became operative
upon the expiration on September 18, 1999 of a substantially identical plan
that was adopted in 1989.

Until the earlier of (i) the 10th business day (subject to certain
adjustments by the Board) after commencement of a tender or exchange offer
which, if consummated, would result in a person or group owning 10% or more
(but not more than 50%) of the outstanding shares of common stock (an
"Acquiring Person") and (ii) the tenth business day (the "Flip-in Date") after
the first date of public announcement by the Corporation that a person has
become an Acquiring Person, the Rights will be evidenced by the common stock
certificates, will automatically trade with the common stock, and will not be
exercisable. Thereafter, separate rights certificates will be distributed, and
each right will entitle its holder to purchase one one-hundredth of a share of
Participating Preferred Stock having economic and voting terms similar to those
of one share of common stock for $150.00, subject to adjustment (the "Exercise
Price").

The Rights will expire on the earliest of (i) the Exchange Time
(defined below), (ii) December 31, 2009, and (iii) the date on which the Rights
are redeemed as described below. The Board may amend the Rights Plan in any
respect prior to the Flip-in Date. The Board may, at its option, at any time
prior to the close of business on the Flip-in Date, redeem all the Rights at a
price of $0.001 per Right.

If a Flip-in Date occurs, each Right (other than Rights beneficially
owned by the Acquiring Person or its affiliates, associates or transferees,
which Rights will become void) will entitle its holder to purchase a number of
shares of common stock or Participating Preferred Stock having a market value
of twice the Exercise Price for an amount in cash equal to the then-current
Exercise Price. In addition, the Board may, at its option, at any time after a
Flip-in Date, elect to exchange the Rights (other than Rights beneficially
owned by the Acquiring Person or its affiliates, associates or transferees) for
shares of common stock or a Participating Preferred Stock at an exchange ratio
of one share of common stock or 1/100th of a share of Participating Preferred
Stock per Right (the "Exchange Time").

Also, if after an Acquiring Person controls the Corporation's Board of
Directors, the Corporation is involved in a merger or sells more than 50% of
its assets or earning power or is involved with an Acquiring Person in certain
self-dealing transactions (or has entered into an agreement to do any of the
foregoing) and, in the case of a merger, the Acquiring Person will receive
different treatment than all other shareholders, each Right will entitle its
holder to purchase a number of shares of common stock of the Acquiring Person
having a market value of twice the Exercise Price for an amount in cash equal
to the then-current Exercise Price.

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The Rights will not prevent a takeover of the Corporation. The Rights,
however, may have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that acquires 10% or more of the
outstanding common stock unless the Rights are first redeemed by the
Corporation's Board.

ITEM 6
SELECTED FINANCIAL DATA

The information called for by this Item is incorporated herein by
reference to the Selected Financial and Operating Data table in the 2001 Proxy
Statement.

ITEM 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION

The information called for by this Item is incorporated herein by
reference to the Management's Discussion and Analysis section, Glossary
section, and the Consolidated Historical Statements of Income and Consolidated
Average Balance Sheets and Related Yields and Rates tables in the 2001 Proxy
Statement.

ITEM 7A
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information called for by this Item is incorporated herein by
reference to Notes 1 and 24 to the Consolidated Financial Statements and the
"Risk Management-Interest Rate Risk Management" subsection of the Management's
Discussion and Analysis section contained in the 2001 Proxy Statement.

ITEM 8
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information called for by this Item is incorporated herein by
reference to the Consolidated Financial Statements and the notes thereto and to
the Summary of Quarterly Financial Information table in the 2001 Proxy
Statement.

ITEM 9
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE

The information called for by this Item is inapplicable.

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23

PART III

ITEM 10
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information called for by this Item as it relates to directors and
nominees for director of the Corporation is incorporated herein by reference to
the "Election of Directors" section of the Corporation's 2001 Proxy Statement
(excluding the Audit Committee Report, the Audit Committee Charter, and the
statements regarding the independence of members of the Audit Committee). The
information required by this Item as it relates to executive officers of the
Corporation is incorporated herein by reference to Item 4A in Part I of this
Report. The information required by this Item as it relates to compliance with
Section 16(a) of the Securities Exchange Act of 1934 is incorporated herein by
reference to the "Section 16(a) Beneficial Ownership Reporting Compliance"
section of the 2001 Proxy Statement.

ITEM 11
EXECUTIVE COMPENSATION

The information called for by this Item is incorporated herein by
reference to the "Executive Compensation" section of the 2001 Proxy Statement
(excluding the Board Compensation Committee Report and the Total Shareholder
Return Performance Graph).

ITEM 12
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The information called for by this Item is incorporated herein by
reference to the "Stock Ownership Information and Table" section of the 2001
Proxy Statement.

The Corporation is unaware of any arrangements which may result in a
change in control of the Corporation.

ITEM 13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information called for by this Item is incorporated herein by
reference to the "Certain Relationships and Related Transactions" section of
the 2001 Proxy Statement.

PART IV

ITEM 14
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K

(a) The following documents are filed as a part of this Report:

Financial Statements:

- Consolidated Statements of Condition as of December
31, 2000 and 1999
- Consolidated Statements of Income for the years
ended December 31, 2000,

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1999 and 1998
- Consolidated Statements of Shareholders' Equity for
the years ended December 31, 2000, 1999 and 1998
- Consolidated Statements of Cash Flows for the years
ended December 31, 2000, 1999 and 1998
- Notes to the Consolidated Financial Statements
- Report of Independent Public Accountants

The consolidated financial statements of the Corporation, the
notes thereto, and the report of independent public
accountants, in the 2001 Proxy Statement, as listed above,
are incorporated herein by reference.

Financial Statement Schedules: Not applicable.

Exhibits:
---------

Exhibits marked with an "*" represent a management
contract or compensatory plan or arrangement
required to be identified and filed as an exhibit.

(3)(i) Restated Charter of the Corporation, as amended, incorporated herein by reference
to Exhibit 3(i) to the Corporation's 1997 Annual Report on Form 10-K.
(3)(ii) Bylaws of the Corporation, as amended and restated, incorporated herein by reference
to Exhibit 3(b) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 9-30-99.
(4)(a) Shareholder Protection Rights Agreement, dated as of October 20, 1998, between
the Corporation and First Tennessee Bank National
Association, as Rights Agent, including as Exhibit A
the forms of Rights Certificate and Election to
Exercise and as Exhibit B the form of Articles of
Amendment designating Participating Preferred Stock,
incorporated herein by reference to Exhibits 1, 2,
and 3 to the Corporation's Registration Statement on
Form 8-A filed 10-23-98.
(4)(b) The Corporation and certain of its consolidated
subsidiaries have outstanding certain long-term
debt. See Note 10 in the Corporation's 2001 Proxy
Statement. None of such debt exceeds 10% of the
total assets of the Corporation and its consolidated
subsidiaries. Thus, copies of constituent
instruments defining the rights of holders of such
debt are not required to be included as exhibits.
The Corporation agrees to furnish copies of such
instruments to the Securities and Exchange
Commission upon request.
*(10)(a) Management Incentive Plan, as amended and restated, incorporated herein by
reference to Exhibit 10(a) to the Corporation's Quarterly Report on Form 10-Q for the
quarter ended 9-30-99.
*(10)(b) 2000 Employee Stock Option Plan, as amended and restated.
*(10)(c) 1997 Employee Stock Option Plan, as amended and restated.
*(10)(d) 1992 Restricted Stock Incentive Plan, as amended and restated, incorporated herein by
reference to Exhibit 10(d) to the Corporation's Quarterly Report on Form 10-Q for the quarter
ended 3-31-99.
*(10)(e) 1984 Stock Option Plan, as amended, 1-21-97 amendment and 10-22-97 amendment,
incorporated herein by reference to Exhibit 10(e) to the Corporations 1992, 1996 and 1997
Annual Reports on Form 10-K.
*(10)(f) 1990 Stock Option Plan, as amended, 1-21-97 amendment
and 10-22-97

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amendment, incorporated herein by
reference to Exhibit 10(f) to the Corporation's 1992,
1996 and 1997 Annual Reports on Form 10-K, and
10-18-00 amendment.
*(10)(g) Survivor Benefits Plan, as amended and restated, incorporated herein by
reference to Exhibit 10(g) to the Corporation's 1997 Annual Report on
Form 10-K.
*(10)(h) Amendment and Restated Directors and Executives
Deferred Compensation Plan and form of individual
agreement, incorporated herein by reference to Exhibit
10(h) to the Corporation's 1996 Annual Report on Form 10-K.
*(10)(i) Amended and Restated Pension Restoration Plan, as
amended and restated, incorporated herein by reference
to Exhibit 10(i) to the Corporation's 1998 Annual
Report on Form 10-K.
*(10)(j) Director Deferral Agreements with schedule,
incorporated herein by reference to Exhibit 10(k) to
the Corporation's 1992 Annual Report on Form 10-K and
Exhibit 10(j) to the Corporation's 1995 Annual Report
on Form 10-K.
*(10)(k) Form of Severance Agreements dated 1-28-97,
incorporated herein by reference to Exhibit 10(k) to
the Corporation's 1996 Annual Report on Form 10-K.
*(10)(l) 1995 Employee Stock Option Plan, as amended and restated.
*(10)(m) Non-Employee Directors' Deferred Compensation Stock
Option Plan, as amended and restated, incorporated
herein by reference to Exhibit 10(m) to the
Corporation's 1997 Annual Report on Form 10-K.
*(10)(n) 2000 Non-Employee Directors' Deferred Compensation Stock Option Plan,
incorporated herein by reference to Exhibit 10(o) to the Corporation's Quarterly
Report on Form 10-Q for the quarter ended 9-30-99.
(21) Subsidiaries of the Corporation.
(23) Accountants' Consents
(24) Powers of Attorney

(99)(a) The Corporation's Proxy Statement furnished to
shareholders in connection with Annual Meeting of
Shareholders scheduled for April 17, 2001, including
Financial Information Appendix and excluding the Board
Compensation Committee Report, the Total Shareholder
Return Performance Graph, the Audit Committee Report,
the Audit Committee Charter, and the statements
regarding the independence of members of the Audit
Committee,filed March 15, 2001, and incorporated herein
by reference.
(99)(b) Annual Report on Form ll-K for the Corporation's Savings Plan and Trust,
for fiscal year ended 12-31-00, as authorized by SEC Rule 15d-21 (to be
filed as an Amendment to Form 10-K).

(b) No reports on Form 8-K were filed during the fourth quarter of 2000.

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Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

FIRST TENNESSEE NATIONAL CORPORATION

Date: March 28, 2001 By: Elbert L. Thomas, Jr.
------------------------------------------
Elbert L. Thomas, Jr., Executive Vice President
and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Signature Title Date
--------- ----- ----

Ralph Horn* Chairman of the Board, President and March 28, 2001
- -------------------------- Chief Executive Officer (principal executive
Ralph Horn officer) and a Director

Elbert L. Thomas, Jr.* Executive Vice President March 28, 2001
- -------------------------- and Chief Financial Officer
Elbert L. Thomas, Jr. (principal financial officer)

James F. Keen* Senior Vice President and March 28, 2001
- -------------------------- Corporate Controller (principal
James F. Keen accounting officer)

Robert C. Blattberg* Director March 28, 2001
- --------------------------
Robert C. Blattberg

Carlos H. Cantu* Director March 28, 2001
- --------------------------
Carlos H. Cantu

George E. Cates* Director March 28, 2001
- --------------------------
George E. Cates

J. Kenneth Glass* Director March 28, 2001
- --------------------------
J. Kenneth Glass

James A. Haslam, III* Director March 28, 2001
- --------------------------
James A. Haslam, III

John C. Kelley, Jr.* Director March 28, 2001
- --------------------------
John C. Kelley, Jr.

R. Brad Martin* Director March 28, 2001
- --------------------------
R. Brad Martin

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Joseph Orgill, III* Director March 28, 2001
- --------------------------
Joseph Orgill, III

Vicki R. Palmer * Director March 28, 2001
- -------------------------
Vicki R. Palmer

Michael D. Rose* Director March 28, 2001
- --------------------------
Michael D. Rose

William B. Sansom* Director March 28, 2001
- --------------------------
William B. Sansom

*By: Clyde A. Billings, Jr. March 28, 2001
---------------------------
Clyde A. Billings, Jr.
As Attorney-in-Fact

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EXHIBIT INDEX

Item No. Description
- -------- -----------

(3)(i) Restated Charter of the Corporation, as amended, incorporated herein
by reference to Exhibit 3(i) to the Corporation's 1997 Annual Report
on Form 10-K.
(3)(ii) Bylaws of the Corporation, as amended and restated, incorporated
herein by reference to Exhibit 3(b) to the Corporation's Quarterly
Report on Form 10-Q for the quarter ended 9-30-99.
(4)(a) Shareholder Protection Rights Agreement, dated as of October 20, 1998,
between the Corporation and First Tennessee Bank National Association,
as Rights Agent, including as Exhibit A the forms of Rights
Certificate and Election to Exercise and as Exhibit B the form of
Articles of Amendment designating Participating Preferred Stock,
incorporated herein by reference to Exhibits 1, 2, and 3 to the
Corporation's Registration Statement on Form 8-A filed 10-23-98.
(4)(b) The Corporation and certain of its consolidated subsidiaries have
outstanding certain long-term debt. See Note 10 in the Corporation's
2001 Proxy Statement. None of such debt exceeds 10% of the total
assets of the Corporation and its consolidated subsidiaries. Thus,
copies of constituent instruments defining the rights of holders of
such debt are not required to be included as exhibits. The Corporation
agrees to furnish copies of such instruments to the Securities and
Exchange Commission upon request.
*(10)(a) Management Incentive Plan, as amended and restated, incorporated
herein by reference to Exhibit 10(a) to the Corporation's Quarterly
Report on Form 10-Q for the quarter ended 9-30-99.
*(10)(b) 2000 Employee Stock Option Plan, as amended and restated.
*(10)(c) 1997 Employee Stock Option Plan, as amended and restated.
*(10)(d) 1992 Restricted Stock Incentive Plan, as amended and restated,
incorporated herein by reference to Exhibit 10(d) to the Corporation's
Quarterly Report on Form 10-Q for the quarter ended 3-31-99.
*(10)(e) 1984 Stock Option Plan, as amended , 1-21-97 amendment, and 10-22-97
amendment, incorporated herein by reference to Exhibit 10(e) to the
Corporation's 1992, 1996 and 1997 Annual Reports on Form 10-K.
*(10)(f) 1990 Stock Option Plan, as amended, 1-21-97 amendment, and 10-22-97
amendment, incorporated herein by reference to Exhibit 10(f) to the
Corporation's 1992, 1996 and 1997 Annual Reports on Form 10-K and
10-18-00 amendment.
*(10)(g) Survivor Benefits Plan, as amended and restated, incorporated herein
by reference to Exhibit 10(g) to the Corporation's 1997 Annual Report
on Form 10-K.
*(10)(h) Amended and Restated Directors and Executives Deferred Compensation
Plan and form of individual agreement, incorporated herein by
reference to Exhibit 10(h) to the Corporation's 1996 Annual Report on
Form 10-K.
*(10)(i) Amended and Restated Pension Restoration Plan, as amended and
restated, incorporated herein by reference to Exhibit 10(i) to the
Corporation's 1998 Annual Report on Form 10-K.
*(10)(j) Director Deferral Agreements with schedule, incorporated herein by reference
to Exhibit 10(k) to the Corporation's 1992 Annual Report on Form 10-K and Exhibit
10(j) to the Corporation's 1995 Annual Report on Form 10-K.
*(10)(k) Form of Severance Agreements dated 1-28-97, incorporated herein by reference to Exhibit
10(k) to the Corporation's 1996 Annual Report on Form 10-K.
*(10)(l) 1995 Employee Stock Option Plan, as amended and restated.
*(10)(m) Non-Employee Directors Deferred Compensation Stock Option Plan, as
amended and restated, incorporated herein by reference to Exhibit
10(m) to the Corporation's 1997 Annual Report on Form 10-K.
*(10)(n) 2000 Non-Employee Directors' Deferred Compensation Stock Option
Plan, incorporated herein by reference to Exhibit 10(o) to the
Corporation's Quarterly Report on Form 10-Q for the quarter ended 9-30-00.
(21) Subsidiaries of the Corporation.
(23) Accountants' Consents
(24) Powers of Attorney
(99)(a) The Corporation's Proxy Statement furnished to shareholders in
connection with Annual Meeting of Shareholders scheduled for April 17,
2001, including Financial Information Appendix and excluding the Board
Compensation Committee Report, the Total Shareholder Return
Performance Graph, the Audit Committee Report, the Audit Committee
Charter, and the statements regarding the independence of members of
the Audit Committee, filed March 15, 2001, and incorporated herein by
reference.
(99)(b) Annual Report on Form ll-K for the Corporation's Savings Plan and
Trust, for fiscal year ended December 31, 2000, as authorized by SEC
Rule 15d-21 (to be filed as an amendment to Form 10-K).

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* Exhibits marked with an "*" represent a management contract or
compensatory plan or arrangement required to be identified and filed
as an exhibit.

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