AmSouth Bancorp. announced a sweeping cost-cutting program that includes the elimination of 44 branches and 1,000 jobs.

The cutbacks - amounting to 14% of both the branch network and total employment - are designed to bring down the company's outsized efficiency ratio, president and chief operating officer C. Dowd Ritter said Monday.

Birmingham, Ala.-based AmSouth is aiming to bring the ratio of expenses as a proportion of revenue, currently 64%, to below 60% by the fourth quarter.

"The banks that have that efficiency ratio in the 50s are going to be the strong players," Mr. Ritter said.

AmSouth has been under intense pressure to cut costs since completing an ambitious acquisition program in 1994. The purchases added $7 billion of assets, mostly in Florida. Total assets were $17.1 billion on March 31.

Including the results of an early retirement program that trimmed 740 jobs last year, AmSouth began 1995 with 7,000 employees and 314 offices in Alabama, Florida, Tennessee, and Georgia.

Of the branches designated to close this year, 21 are in Alabama, 21 in Florida, and two in Tennessee.

Half of the 1,000 jobs being eliminated in the new round of cutbacks will be in AmSouth's mortgage subsidiary. The company recently sold its third-party servicing portfolio to GE Capital Services Inc.

Meanwhile, overall earnings have been depressed by expenses associated with bank acquisitions. AmSouth's first-quarter net income of $40 million produced a 0.96% return on assets, the weakest performance among the major Alabama banks.

During AmSouth's annual shareholders' meeting last Thursday, chairman and chief executive officer John W. Woods said the company had to recapture its earnings momentum.

"The alternative, if we remain inefficient and have too many employees, is that somebody is going to buy this company and pay for it out of our hide," said Mr. Woods, in remarks reported by the Birmingham News.

Elaborating in an interview, Mr. Ritter said, "Banking, after all its years of regulation, is facing more and more of the same issues that other industries - retailing or automotive - have faced for years, and that is getting those costs and management structures at appropriate levels."

Mr. Ritter did not apologize for the price of AmSouth's Florida expansion. The Alabama-based company paid 1.7 times book value for its largest acquisition, Fortune Bancorp, a $2.6 billion-asset thrift company in Clearwater, Fla.

"Pricing today in Florida is higher than the prices we paid," Mr. Ritter said. "From October of 1993 to June of 1994, we went from a $1 billion bank to a $7 billion bank in Florida. Today, no one can go to Florida and replicate that $7 billion franchise at any price."

Mr. Ritter predicted that AmSouth's Florida business will contribute to earnings this year. He said the number of households that bank with AmSouth in Florida grew 5% in March.

"Frankly, in Alabama, if we grew the households 5% a year we would consider it very good," Mr. Ritter said.

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