<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
- --- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period to .
--- ---
Commission File No. 1-10160
-------
UNION PLANTERS CORPORATION
(Exact name of registrant as specified in its charter)
Tennessee 62-0859007
----------- ----------
(State of incorporation) (IRS Employer Identification No.)
7130 Goodlett Farms Parkway, Memphis, Tennessee 38018
- ------------------------------------------------ ------
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code: (901) 383-6000
--------------
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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Class Outstanding at October 31, 1995
- ------------------------- -------------------------------
Common stock $5 par value 41,329,451
<PAGE> 2
UNION PLANTERS CORPORATION AND SUBSIDIARIES
FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
INDEX
<TABLE>
<CAPTION>
Page
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
a) Consolidated Balance Sheet - September 30, 1995,
September 30, 1994, and December 31, 1994 3
b) Consolidated Statement of Earnings -
Three and Nine Months Ended September 30, 1995 and 1994 4
c) Consolidated Statement of Changes in
Shareholders' Equity - Nine Months Ended
September 30, 1995 5
d) Consolidated Statement of Cash Flows - Nine Months Ended
September 30, 1995 and 1994 6
e) Notes to Unaudited Consolidated Financial
Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 35
Item 2. Changes in Securities 35
Item 3. Defaults Upon Senior Securities 35
Item 4. Submission of Matters to a Vote of Security Holders 35
Item 5. Other Information 35
Item 6. Exhibits and Reports on Form 8-K 35
Signatures 36
</TABLE>
-2-
<PAGE> 3
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30,
-----------------------------
DECEMBER 31,
1995 1994 1994
---------- ----------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 464,960 $ 426,295 $ 488,722
Interest-bearing deposits at financial institutions 12,639 11,910 10,641
Federal funds sold and securities purchased
under agreements to resell 198,873 85,196 29,953
Trading account securities, at market 141,798 154,556 155,951
Loans held for resale 65,818 32,529 24,493
Investment securities
Available for sale (Amortized cost: $2,396,130;
$2,138,677; and $1,975,897, respectively) 2,423,224 2,115,915 1,928,984
Held to maturity (Market value: $--; $1,389,420;
and $1,009,969, respectively) - 1,405,545 1,033,160
Loans 6,273,070 5,578,667 5,980,581
Less: Unearned income (30,706) (29,143) (31,453)
Allowance for losses on loans (120,087) (122,978) (122,089)
---------- ----------- -----------
Net loans 6,122,277 5,426,546 5,827,039
Premises and equipment, net 202,240 211,909 204,136
Accrued interest receivable 98,967 92,109 87,509
Goodwill and other intangibles 51,637 54,757 50,236
Other assets 121,251 151,705 174,245
---------- ----------- -----------
TOTAL ASSETS $9,903,684 $10,168,972 $10,015,069
========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing $1,251,797 $ 1,244,739 $ 1,380,737
Certificates of deposit of $100,000 and over 609,861 553,341 559,593
Other interest-bearing 6,479,031 6,469,844 6,477,512
---------- ----------- -----------
TOTAL DEPOSITS 8,340,689 8,267,924 8,417,842
Short-term borrowings 141,409 672,712 415,171
Federal Home Loan Bank advances 291,706 216,618 224,103
Long-term debt 116,893 120,934 116,848
Accrued interest, expenses, and taxes 80,324 67,186 72,211
Other liabilities 57,483 38,891 38,187
---------- ----------- -----------
TOTAL LIABILITIES 9,028,504 9,384,265 9,284,362
---------- ----------- -----------
Commitments and contingent liabilities - - -
Shareholders' equity
Preferred stock
Convertible 91,810 87,298 87,298
Nonconvertible - 17,250 -
Common stock, $5 par value; 100,000,000 shares authorized;
41,298,627 issued and outstanding (39,959,881 at
September 30, 1994 and 40,179,474 at December 31, 1994) 206,493 199,799 200,897
Additional paid-in capital 87,649 66,021 69,204
Net unrealized gain (loss) on available for sale securities 16,642 (13,979) (28,527)
Retained earnings 472,586 428,318 401,835
---------- ----------- -----------
TOTAL SHAREHOLDERS' EQUITY 875,180 784,707 730,707
---------- ----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $9,903,684 $10,168,972 $10,015,069
========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE> 4
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------- ---------------------
1995 1994 1995 1994
-------- -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $145,900 $118,675 $417,752 $335,761
Interest on investment securities
Taxable 30,970 40,745 99,364 116,331
Tax-exempt 7,649 7,992 23,457 24,466
Interest on deposits at financial institutions 312 150 1,272 530
Interest on federal funds sold and securities
purchased under agreements to resell 2,118 763 4,613 2,775
Interest on trading account securities 3,926 2,613 9,931 6,591
Interest on loans held for resale 1,128 130 2,367 959
-------- -------- -------- --------
Total interest income 192,003 171,068 558,756 487,413
-------- -------- -------- --------
INTEREST EXPENSE
Interest on deposits 79,854 59,549 226,146 171,804
Interest on short-term borrowings 1,745 7,054 8,848 13,441
Interest on Federal Home Loan Bank advances
and long-term debt 6,706 5,154 19,797 14,329
-------- -------- -------- --------
Total interest expense 88,305 71,757 254,791 199,574
-------- -------- -------- --------
NET INTEREST INCOME 103,698 99,311 303,965 287,839
Provision for losses on loans 4,844 991 8,530 2,791
-------- -------- -------- --------
NET INTEREST INCOME AFTER PROVISION FOR
LOSSES ON LOANS 98,854 98,320 295,435 285,048
-------- -------- -------- --------
NONINTEREST INCOME
Service charges on deposit accounts 17,681 13,193 51,782 38,624
Bank card income 4,533 2,420 13,972 7,261
Mortgage servicing income 2,212 2,103 6,826 6,870
Trust service income 1,828 1,837 5,864 5,850
Profits and commissions from trading activities 2,967 1,506 8,003 5,307
Investment securities gains (losses) 159 (8,111) 156 (7,837)
Other income 8,307 8,941 23,157 22,477
-------- -------- -------- --------
Total noninterest income 37,687 21,889 109,760 78,552
-------- -------- -------- --------
NONINTEREST EXPENSE
Salaries and employee benefits 40,028 40,269 118,931 119,634
Net occupancy expense 6,176 6,626 18,682 19,433
Equipment expense 6,959 6,539 21,367 19,428
Other expense 32,343 33,273 96,720 97,075
-------- -------- -------- --------
Total noninterest expense 85,506 86,707 255,700 255,570
-------- -------- -------- --------
EARNINGS BEFORE INCOME TAXES 51,035 33,502 149,495 108,030
Applicable income taxes 15,672 9,768 46,960 32,657
-------- -------- -------- --------
NET EARNINGS $ 35,363 $ 23,734 $102,535 $ 75,373
======== ======== ======== ========
NET EARNINGS APPLICABLE TO COMMON SHARES $ 33,398 $ 21,521 $ 97,120 $ 68,734
======== ======== ======== ========
EARNINGS PER COMMON SHARE
Primary $ .81 $ .54 $ 2.37 $ 1.72
Fully diluted .77 .52 2.25 1.66
AVERAGE COMMON SHARES OUTSTANDING (IN THOUSANDS)
Primary 41,430 40,071 41,054 40,026
Fully diluted 46,160 44,549 45,625 44,507
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE> 5
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
NET
UNREALIZED
GAIN (LOSS) ON
AVAILABLE
ADDITIONAL FOR SALE
PREFERRED COMMON PAID-IN SECURITIES, RETAINED
STOCK STOCK CAPITAL NET OF TAXES EARNINGS TOTAL
--------- ------- -------- -------------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995 $87,298 $200,897 $69,204 $(28,527) $401,835 $730,707
Net earnings - - - - 102,535 102,535
Cash dividends
Common Stock, $.73 per share - - - - (29,599) (29,599)
Series B Preferred Stock, $6.00
per share - - - - (264) (264)
Series D Preferred Stock, $ .65
per share - - - - (165) (165)
Series E Preferred Stock, $1.50
per share - - - - (4,986) (4,986)
Issuance of 348,029 shares of Common Stock
for an acquisition (Note 2) - 1,740 1,760 (436) 3,584 6,648
Issuance of 388,497 shares of Series E
Preferred Stock for an acquisition
(Note 2) 9,712 - 3,791 - - 13,503
Conversion of Series D Preferred Stock
to Common Stock (5,200) 1,268 3,932 - - -
Common shares issued under employee benefit
plans and dividend reinvestment plan,
net of shares repurchased - 2,588 8,962 - (375) 11,175
Change in net unrealized gain (loss)
on available for sale securities,
net of taxes - - - 45,605 - 45,605
Other - - - - 21 21
------- -------- ------- -------- -------- --------
BALANCE, SEPTEMBER 30, 1995 $91,810 $206,493 $87,649 $ 16,642 $472,586 $875,180
======= ======== ======= ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE> 6
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------
1995 1994
-------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings $ 102,535 $ 75,373
Reconciliation of net earnings to net cash provided by operating activities
Provision for losses on loans and other real estate 8,746 3,400
Depreciation and amortization 15,760 15,015
Amortization and write-off of intangibles 6,075 6,319
Net (accretion) amortization of investment securities (432) 3,246
Net realized (gains) losses on sale of investment securities (156) 7,837
Deferred income tax expense (benefit) 3,951 (589)
(Increase) decrease in assets
Trading account securities and loans held for resale (27,172) 102,324
Accrued interest receivable and other assets 14,273 (11,860)
Increase in accrued interest, expenses,
taxes, and other liabilities 25,341 2,205
Other, net 2,443 177
--------- ---------
Net cash provided by operating activities 151,364 203,447
--------- ---------
INVESTING ACTIVITIES
Net decrease in short-term investments 3,192 41,707
Proceeds from sales of available for sale securities 392,433 566,740
Proceeds from maturities, calls, and prepayments
of available for sale securities 411,796 672,603
Purchases of available for sale securities (181,656) (830,440)
Proceeds from sales of held to maturity securities - 225
Proceeds from maturities, calls, and prepayments
of held to maturity securities 45,799 168,945
Purchases of held to maturity securities (3,300) (565,544)
Net increase in loans (214,311) (391,017)
Net cash received from purchases of financial institutions 18,252 98,667
Sales of premises and equipment 5,846 2,671
Purchases of premises and equipment, net (18,622) (22,290)
--------- ---------
Net cash provided (used) by investing activities 459,429 (257,733)
--------- ---------
FINANCING ACTIVITIES
Net decrease in deposits (228,233) (261,371)
Net (decrease) increase in short-term borrowings (275,762) 395,137
Proceeds from FHLB advances and long-term debt 151,186 97,165
Repayment of FHLB advances and long-term debt (84,012) (88,419)
Proceeds from issuance of common stock, net 11,704 8,323
Purchase and retirement of common stock, net (529) (3,079)
Cash dividends paid (34,967) (28,158)
--------- --------
Net cash (used) provided by financing activities (460,613) 119,598
--------- ---------
Net increase in cash and cash equivalents 150,180 65,312
Cash and cash equivalents at the beginning of the period 513,932 441,469
--------- ---------
Cash and cash equivalents at the end of the period $ 664,112 $ 506,781
========= =========
SUPPLEMENTAL DISCLOSURES
Purchases of other financial institutions:
Fair value of assets acquired $ 175,263 $ 976,775
Liabilities assumed (155,112) (891,761)
Common stock issued (6,648) (64,250)
Preferred stock issued (13,503) -
--------- ---------
Cash paid for the purchase of other financial institutions - 20,764
Cash and cash equivalents acquired (18,252) (119,431)
---------- ---------
Net cash received from purchases of financial institutions $ (18,252) $ (98,667)
========== =========
Cash paid for
Interest $ 242,130 $ 194,058
Taxes 25,358 33,942
Unrealized gain (loss) on securities available for sale 27,094 (22,762)
</TABLE>
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE> 7
UNION PLANTERS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. PRINCIPLES OF ACCOUNTING
The consolidated financial statements have been prepared in accordance with
generally accepted accounting principles. The foregoing financial statements
are unaudited; however, in the opinion of management, all adjustments,
consisting only of normal recurring adjustments necessary for a fair statement
of the consolidated financial condition, results of operations, and cash flows
for the interim period have been included.
The accounting policies followed by Union Planters Corporation and its
subsidiaries (the Corporation) for interim financial reporting are consistent
with the accounting policies followed for annual financial reporting except as
noted below. The notes included herein should be read in conjunction with the
notes to the consolidated financial statements included in the Corporation's
1994 Annual Report to Shareholders, a copy of which is Exhibit 13 to the
Corporation's Annual Report on Form 10-K for the year ended December 31, 1994
(1994 10-K). Certain 1994 amounts have been reclassified to be consistent with
the 1995 financial reporting presentation. Operating results for the nine
months ended September 30, 1995 are not necessarily indicative of the results
that may be expected for the year.
NOTE 2. MERGERS AND ACQUISITIONS
Two acquisitions have been completed during the first nine months of 1995.
Reference is made to Note 2 on pages 43 through 47 of the Corporation's 1994
Annual Report to Shareholders for information regarding acquisitions completed
in 1994.
On July 1, 1995, the Corporation completed the acquisition of the
$110-million First State Bancorporation, Inc., the parent company of First
Exchange Bank in Tiptonville, Tennessee. As consideration therefor, the
Corporation issued 388,497 shares of 8% Cumulative, Convertible Preferred
Stock, Series E. The acquisition was accounted for as a purchase and,
accordingly, the financial position and results of operations have been
included from the date of acquisition.
On September 1, 1995, the Corporation completed the acquisition of the
$60-million Planters Bank & Trust Company in Forrest City, Arkansas. As
consideration therefor, the Corporation issued 348,029 shares of its Common
Stock. The acquisition was accounted for as a pooling of interests.
Accordingly, the financial position and results of operations of the acquired
entity have been reflected as of January 1, 1995 and prior period financial
information was not restated.
The Corporation has signed definitive agreements pursuant to which
management believes it is probable that the Corporation would acquire the
entities listed on the following page subject to receiving regulatory approvals
and satisfaction of certain contractual conditions precedent. Reference is
made to the Corporation's Current Report of Form 8-K dated August 22, 1995, for
unaudited pro forma financial statements reflecting certain completed and
pending acquisitions.
-7-
<PAGE> 8
PENDING ACQUISITIONS
<TABLE>
<CAPTION>
ANTICIPATED APPROXIMATE
TYPE OF METHOD OF TOTAL
INSTITUTION CONSIDERATION ACCOUNTING ASSETS
- ------------------------------- ----------------- ---------------- -------------
(IN MILLIONS)
<S> <C> <C> <C>
Capital Bancorporation, Inc., Approximately 4,192,376 Pooling of interests $1,115
Cape Girardeau, Missouri; shares of Common Stock
Parent Company of Capital Bank
of Cape Girardeau County; Capital
Bank of Columbia; Capital Bank of
Southwest Missouri; Capital Bank &
Trust; Capital Bank of Sikeston;
Capital Bank of Perryville, N.A.;
Maryland Avenue Bancorporation, Inc.;
Century State Bancshares, Inc.; and
Capital Bank, a Federal Savings Bank
(Jonesboro, Arkansas)
Eastern National Bank, Cash, Series E Purchase 266
Miami, Florida Preferred Stock, and
Promissory Notes (1)
First Bancshares of Eastern Cash ($10.6 million) Purchase 58
Arkansas, Inc., West Memphis,
Arkansas and its subsidiary
First National Bank of West Memphis
First Bancshares of North Eastern Cash ($9.3 million) Purchase 60
Arkansas, Inc., Osceola, Arkansas
and its subsidiary First National Bank
of Osceola
Valley Federal Savings Bank Approximately 480,000 Pooling of interests 126
Sheffield, Alabama shares of Common Stock ------
Total $1,625
- ----------------- ======
</TABLE>
(1) Cash in the amount of $4.5 million, UPC Promissory Notes in the face
amount of $14.5 million, and up to 317,459 shares of Series E Preferred
Stock
NOTE 3. LOANS
Loans are summarized by type as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994 1994
---------- ---------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Commercial, financial, and agricultural $1,335,373 $1,257,298 $1,364,729
Real estate - construction 247,218 210,495 225,591
Real estate - mortgage
Secured by 1-4 family residential mortgages 2,045,512 1,967,073 2,035,290
Other mortgage loans 1,023,305 988,994 990,779
Home equity 213,729 112,452 140,305
Consumer
Credit cards and other related plans 362,485 135,125 263,927
Other consumer 987,994 868,030 919,618
Direct lease financing, net 57,454 39,200 40,342
---------- ---------- ----------
Total Loans $6,273,070 $5,578,667 $5,980,581
========== ========== ==========
</TABLE>
-8-
<PAGE> 9
Nonperforming loans and loans 90 days or more past due are summarized as
follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------ -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Nonaccrual loans $ 24,172 $ 17,476
Restructured loans 1,156 1,564
---------- ----------
Total nonperforming loans $ 25,328 $ 19,040
========== ==========
Loans 90 days or more past due and not
on nonaccrual status $ 13,872 $ 5,874
========== ==========
</TABLE>
NOTE 4. ALLOWANCE FOR LOSSES ON LOANS
The changes in the allowance for losses on loans for the three and nine
months ended September 30, 1995, are summarized as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1995
-------------------- --------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Beginning balance $119,183 $122,089
Provision charged to expense 4,844 8,530
Allowances of banks acquired 875 1,362
Recoveries 3,441 9,909
Amounts charged off (8,256) (21,803)
-------- --------
Balance, September 30, 1995 $120,087 $120,087
======== ========
</TABLE>
On January 1, 1995, the Corporation adopted Statement of Financial
Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for Impairment
of a Loan," as amended by SFAS No. 118, "Accounting by Creditors for Impairment
of a Loan - Income Recognition and Disclosures." As of September 30, 1995, the
amount of the Corporation's impaired loans and disclosures related thereto were
not material.
-9-
<PAGE> 10
NOTE 5. INVESTMENT SECURITIES
The amortized cost and fair value of investment securities are summarized as
follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, 1995
------------------------------------------------------
UNREALIZED
AMORTIZED ------------------ FAIR
COST GAINS LOSSES VALUE
--------- ------- -------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE SECURITIES
U.S. Government obligations
U.S. Treasury $ 819,217 $ 5,814 $ 1,313 $ 823,718
U.S. Government agencies
Collateralized mortgage obligations 166,904 458 1,515 165,847
Mortgage-backed 549,039 5,051 2,809 551,281
Other 261,368 1,208 1,498 261,078
---------- ------- ------- ----------
Total U.S. Government obligations 1,796,528 12,531 7,135 1,801,924
Obligations of states and political
subdivisions 497,059 24,238 2,282 519,015
Other 102,543 131 389 102,285
---------- ------- ------- ----------
TOTAL AVAILABLE FOR SALE SECURITIES $2,396,130 $36,900 $ 9,806 $2,423,224
========== ======= ======= ==========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1994
------------------------------------------------------
UNREALIZED
AMORTIZED ------------------ FAIR
COST GAINS LOSSES VALUE
--------- ------- -------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE SECURITIES
U.S. Government obligations
U.S. Treasury $ 484,414 $ 745 $ 9,302 $ 475,857
U.S. Government agencies
Collateralized mortgage obligations 325,084 33 11,221 313,896
Mortgage-backed 816,683 1,061 22,669 795,075
Other 211,922 189 4,426 207,685
---------- ------ ------- ----------
Total U.S. Government obligations 1,838,103 2,028 47,618 1,792,513
Other stocks and securities 137,794 1,018 2,341 136,471
---------- ------ ------- ----------
TOTAL AVAILABLE FOR SALE SECURITIES $1,975,897 $3,046 $49,959 $1,928,984
========== ====== ======= ==========
HELD TO MATURITY SECURITIES
U.S. Government obligations
U.S. Treasury $ 451,897 $ 40 $13,250 $ 438,687
U.S. Government agencies 62,449 15 3,881 58,583
---------- ------ ------- ----------
Total U.S. Government obligations 514,346 55 17,131 497,270
Obligations of states and political
subdivisions 518,583 9,097 15,212 512,468
Other 231 - - 231
---------- ------ ------- ----------
TOTAL HELD TO MATURITY SECURITIES $1,033,160 $9,152 $32,343 $1,009,969
========== ====== ======= ==========
</TABLE>
Effective September 30, 1995, the Corporation transferred approximately $1.0
billion of held to maturity securities to the available for sale portfolio.
This transfer constitutes the Corporation's entire held to maturity portfolio.
The transfer was made in response to specific conditions which arose during the
third quarter of 1995 and led management and the Board of Directors to change
its intent to hold these securities to maturity. The changes included a need
to provide additional funding sources for current and anticipated loan growth
and the need to manage interest-rate risk and liquidity considerations which
arose during the quarter in connection with certain acquisitions of the
Corporation and the internal reorganizations of its banking subsidiaries. The
transfer had no impact on earnings and the fair value adjustment related to
these securities was $24.7 million, resulting in a net increase in
shareholders' equity of $15.1 million, net of taxes.
On January 1, 1994, and in connection with the adoption of SFAS No. 115,
$1.6 billion of investment securities were transferred to the available for
sale category. In addition, approximately $446 million (fair value
approximately $436 million) of securities were transferred to available for
sale securities in order to effect and maintain compliance with the
Corporation's existing interest-rate-risk position and credit-risk policies
after taking into account the securities portfolios of financial institutions
acquired.
-10-
<PAGE> 11
The aforementioned transfers of held to maturity investment securities to
the available for sale investment securities classification represent noncash
transactions which have been excluded from the accompanying statement of cash
flows.
Investment securities having a carrying value of approximately $1.004
billion and $1.017 billion at September 30, 1995 and December 31, 1994,
respectively, were pledged to secure public and trust funds on deposit and
securities sold under agreements to repurchase.
The following table presents the gross realized gains and losses on
investment securities for the nine months ended September 30, 1995 and 1994.
<TABLE>
<CAPTION>
REALIZED GAINS REALIZED LOSSES
--------------------- ------------------
1995 1994 1995 1994
-------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Available for sale securities $3,229 $777 $(3,142) $(8,709)
Held to maturity securities 70 106 (1) (11)
------ ---- ------- --------
Total $3,299 $883 $(3,143) $(8,720)
====== ==== ======= =======
</TABLE>
NOTE 6. OTHER NONINTEREST INCOME AND EXPENSE
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------- ----------------------
1995 1994 1995 1994
-------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
OTHER NONINTEREST INCOME
Credit life insurance commissions $ 1,188 $ 1,040 $ 3,571 $ 3,168
Customer ATM usage fees 759 727 2,305 1,980
VSIBG partnership earnings 765 385 1,418 1,672
Brokerage fee income 454 325 1,169 1,035
Sale of servicing 298 109 562 743
Other 4,843 6,355 14,132 13,879
------- ------- ------- -------
TOTAL OTHER NONINTEREST INCOME $ 8,307 $ 8,941 $23,157 $22,477
======= ======= ======= =======
OTHER NONINTEREST EXPENSE
FDIC insurance assessments $ 532 $ 4,394 $ 9,686 $13,787
Advertising and promotion 3,529 2,546 8,212 7,734
Stationery and supplies 3,121 2,345 8,275 7,133
Postage and other carrier 2,576 2,167 7,763 6,603
Amortization of goodwill and
other intangibles 1,728 1,607 4,926 4,706
Other contracted services 1,947 1,583 5,425 4,880
Communications 1,952 1,616 5,239 4,716
Legal fees 1,256 1,328 2,818 3,410
Other personnel services 1,175 907 3,562 2,851
Dues,subscriptions,and
contributions 852 873 2,604 2,676
Merchant credit card charges 935 771 2,640 2,757
Audit fees 524 912 1,759 2,418
Taxes other than income taxes 855 826 2,421 2,466
Brokerage and clearing fees 1,785 671 4,489 2,129
Insurance 531 679 1,396 1,920
Miscellaneous charge-offs 1,544 496 3,055 1,360
Travel 675 509 1,950 1,627
Amortization of mortgage servicing rights 460 492 1,149 1,613
Federal Reserve fees 439 384 1,255 1,301
Consultant fees 560 455 2,061 1,019
Other real estate expense 387 (26) 744 727
Other 4,980 7,738 15,291 19,242
------- ------- ------- -------
TOTAL OTHER NONINTEREST EXPENSE $32,343 $33,273 $96,720 $97,075
======= ======= ======= =======
</TABLE>
-11-
<PAGE> 12
NOTE 7. INCOME TAXES
Applicable income taxes for the nine months ended September 30, 1995, were
$47.0 million, resulting in an effective tax rate of 31.4%. Applicable income
taxes for the same period in 1994 were $32.7 million, resulting in an effective
tax rate of 30.2%. The tax expense (benefit) applicable to investment
securities gains (losses) for the nine months ended September 30, 1995 and 1994
was $61,000 and ($3,049,000), respectively. The increase in the effective rate
for the nine months ended September 30, 1995, as compared to the nine months
ended September 30, 1994, is due primarily to the increase in taxable earnings
for the period.
At September 30, 1995, the Corporation had a net deferred tax asset of $36.7
million compared to $69.2 million at December 31, 1994. Included in the net
deferred tax asset at September 30, 1995 was a deferred tax liability of $10.5
million compared to a deferred tax asset of $18.4 million at December 31, 1994,
relating to the fair market value adjustment for available for sale securities
as required by SFAS No. 115. A change in the market value of the available for
sale securities portfolio accounted for the decrease in the net deferred tax
asset related to the SFAS No. 115 adjustment.
Management continues to believe that, based upon historical earnings, normal
operations will continue to generate sufficient taxable income to realize the
portion of the deferred tax asset that is dependent upon the generation of
future taxable income.
NOTE 8. FEDERAL HOME LOAN BANK (FHLB) ADVANCES
The Corporation's subsidiaries had outstanding from the Federal Home Loan
Bank (FHLB) various advances totaling $292 million at September 30, 1995, under
Blanket Agreements for Advances and Security Agreements (the Agreements). The
Agreements entitle the Corporation's subsidiaries to borrow funds from the FHLB
to fund their mortgage-loan programs and to satisfy other funding needs.
Interest rates on the advances are both fixed-rate and variable-rate with the
majority of the advances at September 30, 1995 being variable-rate tied to the
three-month LIBOR rate. Maturity dates for the advances range from 1995 to
2025. The value of the collateral (mortgage loans) under the Agreements is
required to be maintained at not less than 150% of the advances outstanding
($292 million at September 30, 1995).
NOTE 9. SHAREHOLDERS' EQUITY
PREFERRED STOCK
The Corporation's outstanding preferred stock, all of which is convertible
into shares of the Corporation's Common Stock, is summarized as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Preferred stock, without par value,
10,000,000 shares authorized
Series A Preferred Stock,
250,000 shares authorized, none issued $ - $ -
Series B, $8 Nonredeemable,
Cumulative, Convertible
Preferred Stock (stated at
liquidation value of $100 per share),
44,000 shares issued and outstanding 4,400 4,400
Series D, 9.5% Redeemable,
Cumulative, Convertible
Preferred Stock (stated at
liquidation value of $20.50 per share); no
shares outstanding at September 30, 1995;
253,655 shares issued and outstanding at
December 31, 1994 - 5,200
Series E, 8% Cumulative,
Convertible, Preferred Stock
(stated at liquidation value
of $25 per share), 3,496,419 shares and 3,107,922
issued and outstanding, respectively (Note 2) 87,410 77,698
------- -------
Total preferred stock $91,810 $87,298
======= =======
</TABLE>
-12-
<PAGE> 13
All shares of the Corporation's Series D Preferred Stock were converted into
253,655 shares of the Corporation's Common Stock.
NOTE 10. CONTINGENT LIABILITIES
LEGAL PROCEEDINGS
The Corporation and/or various subsidiaries are parties to certain pending
or threatened civil actions which are described in Item 3, Part I of the
Corporation's 1994 10-K, in Note 19 to the Corporation's consolidated financial
statements found on pages 68 and 69 of the 1994 Annual Report to Shareholders
(1994 Annual Report), and in Note 10 of the Corporation's quarterly reports on
Form 10-Q dated March 31, 1995 and June 30, 1995. Various other legal
proceedings pending against the Corporation and/or its subsidiaries have arisen
in the ordinary course of business.
Based upon present information, including evaluations of certain actions by
outside counsel, management believes that neither the Corporation's financial
position, results of operations, nor liquidity will be materially affected by
the ultimate resolution of pending or threatened legal proceedings. There were
no significant developments in any of the pending or threatened actions which
affected such opinions during the third quarter of 1995.
LINE OF CREDIT
Effective May 24, 1995, the Corporation terminated its $25 million credit
facility prior to its contractual expiration. After reviewing the Corporation's
cash flow needs, management did not anticipate any usage under this facility
for its remaining one-year term.
NOTE 11. SUBSEQUENT EVENT
On November 7, 1995, the Corporation issued in a public offering $100
million of 6 3/4% Subordinated Notes due 2005 (the Notes) at 99.408. Interest
on the Notes is payable in arrears semiannually on May 1 and November 1. The
Notes are not redeemable prior to maturity and will mature on November 1, 2005.
The Notes are subordinated to all present and future "senior indebtedness" of
the Corporation (as defined in the Indenture under which they were issued) and
payment may be accelerated only in the case of certain events involving
bankruptcy, insolvency, or reorganization of the Corporation. The Notes qualify
as Tier 2 capital under existing risk-based capital guidelines.
-13-
<PAGE> 14
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following provides a narrative discussion and analysis of significant
changes in the Corporation's results of operations and financial condition.
This discussion should be read in conjunction with the audited consolidated
financial statements and related financial analysis set forth in the
Corporation's 1994 Annual Report, the Corporation's interim unaudited
consolidated financial statements included in its Quarterly Reports on Form
10-Q dated March 31, 1995 and June 30, 1995, the Corporation's interim
unaudited financial statements and notes for the three and nine months ended
September 30, 1995, included in Part I hereof, and the other supplemental
financial data included in this discussion.
The following table presents selected financial highlights for the three and
nine months ended September 30, 1995 and 1994.
<TABLE>
<CAPTION>
PERCENTAGE
THREE MONTHS ENDED NINE MONTHS ENDED CHANGE
SEPTEMBER 30, SEPTEMBER 30, ----------------
--------------------- --------------------- THREE NINE
1995 1994 1995 1994 MONTHS MONTHS
-------- -------- -------- -------- ------ ------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Earnings before securities transactions $35,266 $28,689 $102,440 $80,161 23% 28%
Net earnings 35,363 23,734 102,535 75,373 49 36
Earnings before securities transactions
Primary earnings per common share .80 .66 2.36 1.84 21 28
Fully diluted earnings per common share .76 .63 2.25 1.77 21 27
Return on average assets 1.42% 1.12% 1.39% 1.07%
Return on average common equity 17.58 15.34 18.10 14.64
Net earnings
Primary earnings per common share $ .81 $ .54 $ 2.37 $ 1.72 50 38
Fully diluted earnings per common share .77 .52 2.25 1.66 48 36
Return on average assets 1.42% .93% 1.39% 1.01%
Return on average common equity 17.63 12.47 18.12 13.69
Dividends per common share $ .25 $ .23 $ .73 $ .65 9 12
Net interest margin (FTE) 4.70% 4.39% 4.65% 4.36%
Interest rate spread (FTE) 3.98 3.88 3.97 3.88
Expense ratio 1.97 2.23 1.98 2.26
Efficiency ratio 59.49 64.34 59.99 65.73
Book value per common share $ 18.97 $ 17.02 11
Shareholders equity to total assets 8.84% 7.72%
Leverage ratio 8.29 7.50
</TABLE>
- --------------------
Net interest margin - Net interest income as a percentage of average earning
assets
Interest rate spread - Difference in the yield on average earning assets and
the rate on average interest-bearing liabilities
Expense ratio - Operating net noninterest expense [noninterest expense minus
noninterest income, excluding significant nonrecurring revenues/expenses and
investment securities gains (losses)] divided by average assets
Efficiency ratio - Operating noninterest expense (excluding significant
nonrecurring expenses) divided by net interest income (FTE) plus noninterest
income, excluding significant nonrecurring revenues and investment securities
gains (losses)
FTE - Fully taxable-equivalent basis
-14-
<PAGE> 15
OPERATING RESULTS - NINE MONTHS ENDED SEPTEMBER 30, 1995
The following table presents the contributions to fully diluted earnings per
common share. A discussion of the operating results follows this table.
UNION PLANTERS CORPORATION
CONTRIBUTIONS TO FULLY DILUTED EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, EPS
----------------- INCREASE
1995 1994 (DECREASE)
------ ------ ----------
<S> <C> <C> <C>
Net interest income - FTE $6.94 $6.77 $ .17
Provision for losses on loans (.19) (.06) (.13)
----- ----- -----
Net interest income after provision
for losses on loans - FTE 6.75 6.71 .04
----- ----- -----
Noninterest income
Service charges on deposit accounts 1.13 .87 .26
Bank card income .31 .16 .15
Mortgage servicing income .15 .15 -
Trust service income .13 .13 -
Profits and commissions from
trading activities .18 .12 .06
Investment securities gains (losses) - (.18) .18
Other income .51 .51 -
----- ----- -----
Total noninterest income 2.41 1.76 .65
----- ----- -----
Noninterest expense
Salaries and employee benefits 2.60 2.68 .08
Net occupancy expense .41 .44 .03
Equipment expense .47 .44 (.03)
Other expense 2.12 2.18 .06
----- ----- -----
Total noninterest expense 5.60 5.74 .14
----- ----- -----
Earnings before income taxes - FTE 3.56 2.73 .83
Applicable income taxes - FTE 1.31 1.04 (.27)
----- ----- -----
Net earnings 2.25 1.69 .56
Less preferred stock dividends - .03 .03
----- ----- -----
Fully diluted earnings per share $2.25 $1.66 $ .59
===== ===== =====
Change in net earnings applicable
to common shares using previous
year average shares outstanding $ .64
Change in average shares outstanding (.05)
-----
Change in net earnings $ .59
=====
</TABLE>
- --------------------
FTE - Fully taxable-equivalent basis
EARNINGS OVERVIEW
For the third quarter of 1995, the Corporation reported record earnings of
$35.4 million, or $.77 per fully diluted common share. This compares to net
earnings of $23.7 million, or $.52 per fully diluted common share in the third
quarter of 1994. Excluding securities transactions, earnings were up $6.6
million, or 23%. Returns on average assets and average common equity for the
third quarter of 1995 were 1.42% and 17.63%, respectively, which compares to
.93% and 12.47% for the same period in 1994.
-15-
<PAGE> 16
Net earnings for the nine months ended September 30, 1995 were $102.5
million, or $2.25 per fully diluted common share. This compares to net earnings
of $75.4 million for the same period in 1994.
The improvement in net earnings for the third quarter of 1995 is
attributable to increases in both net interest income and noninterest income
(before securities transactions) while noninterest expense and investment
securities losses decreased. The following is a more complete discussion and
analysis of the operating results for the three and nine months ended September
30, 1995 compared to the same periods in 1994.
EARNINGS ANALYSIS
NET INTEREST INCOME
Net interest income (FTE) for the third quarter of 1995 was $107.9 million,
a 4% increase over the third quarter of 1994 and a 2% increase over the second
quarter of 1995 which were $103.7 million and $105.3 million, respectively. For
the first nine months of 1995, net interest income was $316.6 million compared
to $301.5 million for the same period in 1994. The improvement is attributable
to loan growth, higher yields on both investment securities and loans, and a
higher net interest margin. Reference is made to the Corporation's average
balance sheet and analysis of volume and rate changes which follow this
discussion for additional information regarding the changes in net interest
income.
The net interest margin for the third quarter of 1995 was 4.70% which
compares to 4.39% for the same quarter last year and 4.66% for the second
quarter of 1995. The net interest margin for the first nine months of 1995 was
4.65%, 29 basis points higher than the net interest margin for the same period
in 1994. The interest-rate spread increased to 3.98% for the third quarter of
1995 from 3.88% for the same period a year ago and compared to 3.96% for the
second quarter of 1995.
INTEREST INCOME
The following table presents a breakdown of average earning assets for the
three and nine months ended September 30, 1995 and 1994.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ ------------------
1995 1994 1995 1994
-------- -------- -------- --------
(DOLLARS IN BILLIONS)
<S> <C> <C> <C> <C>
Average earning assets $9.1 $9.4 $9.1 $9.2
Comprised of:
Loans 69% 59% 67% 58%
Investment securities 27 39 29 39
Other earning assets 4 2 4 3
- --------------------
Fully taxable-equivalent yield on
average earning assets 8.55% 7.43% 8.39% 7.25%
</TABLE>
Fully taxable-equivalent interest income for the third quarter of 1995
increased 12% compared to the same period in 1994 and increased 2% compared to
the second quarter of 1995. For the first nine months of 1995, the increase was
14% over the same period in 1994. The increase is attributable primarily to
loan growth and higher yields on earning assets. Average loans for the third
quarter of 1995 increased 2% over the second quarter of 1995 and increased 14%
over the same period in 1994. Year to date average loans have increased 15%
compared to the same period in 1994. The growth in loans occurred in almost all
categories. The yield on average earning assets increased in 1995 compared to
the previous year primarily due to a higher interest rate environment and the
shift in the Corporation's mix of earning assets from investment securities to
loans, with loans generally yielding a higher rate of interest than securities.
-16-
<PAGE> 17
INTEREST EXPENSE
The following table presents a breakdown of average interest-bearing
liabilities for the three and nine months ended September 30, 1995 and 1994.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ ------------------
1995 1994 1995 1994
-------- -------- -------- --------
(DOLLARS IN BILLIONS)
<S> <C> <C> <C> <C>
Average interest-bearing liabilities $7.7 $8.0 $7.7 $7.9
Comprised of:
Deposits 93% 88% 92% 90%
Short-term borrowings 2 8 3 6
FHLB advances and long-term debt 5 4 5 4
- --------------------
Rates paid on average interest-
bearing liabilities 4.57% 3.55% 4.42% 3.37%
</TABLE>
Interest expense increased 23% in the third quarter of 1995 compared to the
same period in 1994 and increased 2% over the second quarter of 1995. For the
nine months ended September 30, 1995, interest expense increased 28% compared
to the same period in 1994. The increase is due to increased rates in almost
all categories of interest-bearing liabilities and is reflective of the
interest-rate environment. Most of the increase relates to deposits, the
largest category of interest-bearing liabilities. Partially offsetting the
increase due to higher rates paid has been a decrease in average
interest-bearing liabilities, primarily deposits and short-term borrowings.
-17-
<PAGE> 18
The Corporation's interest-rate swaps decreased net interest income for the
three and nine months ended September 30, 1995 by approximately $613,000 and
$1.8 million, respectively, compared to an increase in net interest income of
approximately $46,000 and $1.9 million, respectively, in the same periods in
1994. The change in the impact is reflective of the increase in interest rates
over the twelve-month period. The impact of the interest-rate swaps has been
substantially offset by corresponding changes in interest rates and yields
related to the underlying assets and liabilities.
PROVISION FOR LOSSES ON LOANS
The provision for losses on loans for the third quarter of 1995 was $4.8
million, or .31% of average loans on an annualized basis, compared to $991,000,
or .07% of average loans, for the same period in 1994 and $2.0 million, or .13%
of average loans, for the second quarter of 1995. For the nine months ended
September 30, 1995, the provision for losses on loans was $8.5 million compared
to $2.8 million for the same period in 1994. The low level of provisions
reflects the good asset quality the Corporation has maintained over the last
two years. The increased provision in 1995 relates primarily to consumer loan
growth. The level of the provision for losses on loans is expected to increase
over the remainder of 1995 commensurate with the loan growth.
NONINTEREST INCOME
Noninterest income for the third quarter of 1995 was $37.7 million, an
increase of 72% over the same period in 1994 and level with the second quarter
of 1995. For the first nine months of 1995, noninterest income was $109.8
million compared to $78.6 million for the same period a year ago. The
improvement is attributable to increases in fees and other income identified as
a result of the Corporation's restructuring plan initiated in the third quarter
of 1994, an increase in fees on consumer transactions related to implementation
of a consumer loan marketing plan, increased revenues attributable to increased
transaction volumes in the SBA trading activities, and a decline in investment
securities losses.
For the three and nine months periods ended September 30, 1995, investment
securities gains were $159,000 and $156,000, respectively, compared to
investment securities losses of $8.1 million and $7.8 million for the same
periods in 1994. The investment securities losses in 1994 related to a partial
realignment of the available for sale securities portfolio in response to
higher interest rates. Future securities transactions cannot be predicted with
any certainty and are dependent on a number of factors including funding needs,
liquidity, and the level of market interest rates.
Service charges on deposit accounts increased $4.5 million to $17.7 million
for the third quarter of 1995 compared to the same period in 1994 and were even
with the second quarter of 1995. For the nine months ended September 30, 1995,
service charges on deposits were $51.8 million, an increase of $13.2 million
over the same period in 1994. The growth related primarily to the Corporation's
restructuring plan which included an evaluation of banking services with a goal
of implementing "best practices" in all areas. As a result, the Corporation's
banking subsidiaries evaluated their practices related to service charges on
deposit accounts and increased certain fees (primarily overdraft fees),
implemented new fees, and reduced the number of fees that were being waived. A
small portion of the increase related to the acquisitions completed this year.
The level of service charges on deposit accounts is expected to stabilize and
future increases, if any, will not be as large as in the first nine months of
1995.
Bank card income increased $2.1 million to $4.5 million for the third
quarter of 1995 compared to the same period in 1994. Compared to the second
quarter of 1995, bank card income decreased $259,000. Year-to-date bank card
income is $14.0 million which is an increase of $6.7 million over the first
nine months of 1994. The growth is directly attributable to the increased
volume of credit card outstandings as a result of a 1994 marketing program.
Future revenue levels are dependent on the credit card customer usage levels
and the number of cards outstanding. Additional marketing efforts are expected
to be implemented over the next twelve months to further increase the credit
card outstandings.
Trading revenues increased $1.5 million for the third quarter of 1995 to
$3.0 million as compared to $1.5 million for the same period in 1994 and $3.4
million for the second quarter of 1995. For the nine months ended September 30,
1995, these revenues were $8.0 million, an increase
-18-
<PAGE> 19
of $2.7 million over the prior year. The increase is attributable to an
increased level of trading activity during the third quarter in the SBA trading
operations. Revenues from this activity are volatile such that future levels
cannot be predicted with any certainty.
NONINTEREST EXPENSE
Noninterest expense for the third quarter of 1995 decreased $1.2 million to
$85.5 million which compares to $86.7 million for the third quarter of 1994.
Noninterest expense decreased $1.0 million compared to the second quarter of
1995. For the first nine months of 1995, noninterest expense was $255.7 million
which constituted a $130,000 increase over the same period in 1994.
Noninterest expense for the third quarter of 1995 is net of a FDIC deposit
assessment refund which reflects the effect of lower FDIC deposit insurance
premiums (down from $.26 to $.04 per $100 of deposits per year) for Bank
Insurance Fund (BIF) deposits. The reduction was effective June 1, 1995, and
reduced FDIC insurance assessments approximately $4.0 million (approximately $1
million related to the second quarter of 1995).
Salaries and employee benefits, the largest component of noninterest
expense, decreased $241,000 between the third quarters of 1995 and 1994.
Compared to the second quarter of 1995, salaries and employee benefits
increased approximately $657,000. For the first nine months of 1995, salaries
and employee benefits were $118.9 million compared to $119.6 million for the
same period in 1994. The reduction in these expenses relates primarily to the
Corporation's voluntary and involuntary separation plan implemented in the
fourth quarter of 1994. (See Note 13 to the 1994 Annual Report for additional
details). Partially offsetting the reductions resulting from implementation of
this plan, have been added employees related to expanding product lines (credit
card operations), acquisitions, and new services being provided by the
Corporation.
The number of full-time-equivalent employees at September 30, 1995 was
4,742 compared to 5,306 when the Corporation's restructuring plan was
implemented (restated for acquisitions accounted for as poolings of interest).
This compares to 4,768 full-time-equivalent employees at June 30, 1995. The
number of full-time-equivalent employees has increased approximately 150
related to acquisitions, expansion of existing product areas, and new services
being offered. Excluding the impact of those increases, the Corporation's
full-time-equivalent headcount has decreased approximately 700 employees since
its restructuring plan was implemented. The reduction in employees has
resulted in annual expense reductions of approximately $14 million. This total
amount of savings will not all be realized in 1995 since the reductions have
occurred throughout the year.
The Corporation has refined its goals with respect to the reduction of the
number of full-time-equivalent employees to approximately 900, with expected
annual savings of approximately $18 million. At September 30, 1995, the
Corporation's reserve for employee separations was $1.8 million which is
considered by management to be adequate.
The Corporation has also begun to implement its plans to consolidate or
divest certain branch locations in accordance with its restructuring plan (38
locations were identified at year end). These consolidations and divestitures
are not expected to be completed until the end of 1995 or possibly the first
quarter of 1996, depending on the time of receipt of regulatory approvals.
Since December 31, 1994, 15 branches have been sold, closed, or consolidated
with other branches and the Corporation has plans to consolidate or divest an
additional 38 branches. At September 30, 1995, the Corporation had reserves
related to these branch closings of approximately $6.9 million which is
considered adequate by management.
Plans to consolidate certain subsidiary banks are also being implemented and
are expected to be substantially completed during 1995. The number of
subsidiary banks has been reduced from 47 at December 31, 1994 to 34 as of
October 1, 1995 (net of the two acquisitions to date). The consolidation of
these subsidiaries is expected to result in operating efficiencies that should
improve the profitability of the Corporation, although quantification of the
savings cannot be accurately estimated.
-19-
<PAGE> 20
EARNINGS CONSIDERATIONS RELATED TO PENDING ACQUISITIONS
Note 2 to the unaudited interim consolidated financial statements presents
the Corporation's pending acquisitions. It is anticipated that the Corporation
or the institutions to be acquired will incur charges related to such
acquisitions and to the assimilation of those institutions into the UPC
organization. Anticipated charges would be for matters such as, but not limited
to, legal and accounting fees, financial advisory fees, consulting fees,
payment of contractual benefits triggered by a change of control, early
retirement and involuntary separation and related benefits, postretirement and
postemployment benefit expenses related to employees of entities which were
acquired in a transaction accounted for as a pooling of interests and who were
given credit for prior service, costs associated with elimination of duplicate
facilities and branch closures, data processing charges, cancellation of vendor
contracts, the potential for additional provisions for loan losses and similar
costs which normally arise from the consolidation of operational activities.
Charges associated with the pending acquisitions have been preliminarily
estimated to be between $8 million to $10 million after taxes. To the extent
any of these charges are contingent upon consummation of a particular
transaction, those charges would be recognized in the period in which the
particular transaction closes. This range of potential charges is based on
currently available information as well as preliminary estimates and is subject
to change. The range is provided as a preliminary estimate of the significance
of the charges which may be required and should be viewed accordingly.
EARNINGS CONSIDERATIONS RELATING TO POTENTIAL SPECIAL REGULATORY ASSESSMENT
There are several bills currently under consideration by the Congress, the
purpose of which is to provide additional financing for the Savings Association
Insurance Fund ("SAIF") and to provide for interest payments on the Financing
Corporation ("FICO") bonds issued in connection with earlier efforts to support
the then failing thrift industry. A common feature of the proposed bills is a
one-time special assessment of from 85 to 90 basis points on all deposits
insured by the SAIF as of March 31, 1995 ($.85 to $.90 per $100 of covered
deposits). The special assessment may be less for SAIF-insured deposits held by
banks (sometimes referred to as "Oakar Deposits"). In addition to the special
assessment on SAIF deposits, the bills also contemplate a special assessment on
deposits which are insured by the Bank Insurance Fund ("BIF"). This assessment
on BIF-covered deposits assumedly would be to provide financial support to pay
interest on the FICO bonds. At September 30, 1995, the Corporation's
subsidiaries held approximately $1.6 billion in SAIF-insured deposits,
approximately $1.2 billion of which were Oakar Deposits. Should the proposed
legislation be adopted at levels indicated, the Corporation would be required
to expense aggregate SAIF assessments as early as the fourth quarter of 1995 of
approximately $14.6 million in pretax dollars (based on a 90 basis points
assessment), which would more than offset the benefit of the Federal Deposit
Insurance Corporation ("FDIC") premium reduction realized in the last half of
1995.
-20-
<PAGE> 21
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED DAILY AVERAGE BALANCE SHEET AND INTEREST RATES
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
-------------------------------------------------------------------------
1995 1994
--------------------------------- ----------------------------------
INTEREST INTEREST
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE
--------- --------- ------ --------- --------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-bearing deposits at
financial institutions $ 18,032 $ 312 6.86% $ 11,337 $ 150 5.25%
Federal funds sold and securities
purchased under agreements to resell 150,430 2,118 5.59 63,923 763 4.74
Trading account securities 190,099 3,926 8.19 168,255 2,613 6.16
Investment securities (1)(2) 2,478,511 42,304 6.77 3,623,537 52,771 5.78
Loans, net of unearned income (1) 6,262,712 147,525 9.35 5,502,170 119,208 8.60
---------- -------- ----------- --------
TOTAL EARNING ASSETS (1)(2) 9,099,784 196,185 8.55 9,369,222 175,505 7.43
-------- --------
Cash and due from banks 426,729 387,822
Premises and equipment 202,901 213,233
Allowance for losses on loans (121,198) (124,085)
Other assets 279,512 272,986
---------- -----------
TOTAL ASSETS $9,887,728 $10,119,178
========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Money market accounts $1,243,357 $ 10,149 3.24% $ 1,411,293 $ 9,049 2.54%
Savings deposits 1,738,908 11,735 2.68 1,779,335 10,463 2.33
Certificates of deposit of
$100,000 and over 597,743 8,797 5.84 554,419 5,630 4.03
Other time deposits 3,531,239 49,173 5.52 3,305,526 34,407 4.13
Short-term borrowings 141,947 1,745 4.88 627,332 7,054 4.46
Federal Home Loan Bank advances 294,655 4,295 5.78 217,946 2,860 5.21
Long-term debt 119,956 2,411 7.97 120,971 2,294 7.52
---------- -------- ----------- --------
TOTAL INTEREST-BEARING LIABILITIES 7,667,805 88,305 4.57 8,016,822 71,757 3.55
-------- --------
Noninterest-bearing demand deposits 1,243,639 1,206,972
---------- -----------
TOTAL SOURCES OF FUNDS 8,911,444 9,223,794
Other liabilities 132,925 106,055
Shareholders' equity 843,359 789,329
---------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $9,887,728 $10,119,178
========== ===========
NET INTEREST INCOME $107,880 $103,748
======== ========
INTEREST RATE SPREAD 3.98% 3.88%
==== ====
NET INTEREST MARGIN 4.70% 4.39%
==== ====
- --------------------
(1) Taxable-equivalent adjustments:
Loans $ 497 $ 403
Investment securities 3,685 4,034
-------- --------
$ 4,182 $ 4,437
======== ========
(2) Yields are calculated based on historical cost and exclude the impact of the net unrealized gains and losses on available
for sale securities.
</TABLE>
-21-
<PAGE> 22
UNION PLANTERS CORPORATION AND SUBSIDIARIES
ANALYSIS OF VOLUME AND RATE CHANGES
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
1995 VERSUS 1994
-------------------------------------------------
INCREASE
(DECREASE)
DUE TO CHANGE IN: (1)
-------------------------- TOTAL
AVERAGE AVERAGE INCREASE
VOLUME (2) RATE (2) (DECREASE)
------------ ---------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
INTEREST INCOME
Interest-bearing deposits at
financial institutions $ 107 $ 55 $ 162
Federal funds sold and securities
purchased under agreements to resell 1,196 159 1,355
Trading account securities 371 942 1,313
Investment securities (FTE) (18,533) 8,066 (10,467)
Loans, net of unearned income (FTE) 17,359 10,958 28,317
--------
TOTAL INTEREST INCOME (5,169) 25,849 20,680
--------
INTEREST EXPENSE
Money market accounts (1,166) 2,266 1,100
Savings deposits (243) 1,515 1,272
Certificates of deposit of
$100,000 and over 469 2,698 3,167
Other time deposits 2,483 12,283 14,766
Short-term borrowings (6,031) 722 (5,309)
Long-term debt 1,076 476 1,552
--------
TOTAL INTEREST EXPENSE (3,242) 19,790 16,548
--------
CHANGE IN NET INTEREST INCOME $ 4,132
========
PERCENTAGE INCREASE IN NET INTEREST
INCOME OVER PRIOR PERIOD 3.98%
========
</TABLE>
- --------------------
(1) The change due to both rate and volume has been allocated to change due
to volume and change due to rate in proportion to the relationship of
the absolute dollar amounts of the change in each.
(2) Variances are computed on a line-by-line basis and are nonadditive.
-22-
<PAGE> 23
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED DAILY AVERAGE BALANCE SHEET AND INTEREST RATES
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
--------------------------------------------------------------------------
1995 1994
-------------------------------- ---------------------------------
INTEREST INTEREST
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE
--------- --------- ------ --------- --------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-bearing deposits at
financial institutions $ 26,001 $ 1,272 6.54% $ 14,334 $ 530 4.94%
Federal funds sold and securities
purchased under agreements to resell 107,073 4,613 5.76 99,854 2,775 3.72
Trading account securities 175,095 9,931 7.58 162,747 6,591 5.41
Investment securities (1)(2) 2,659,151 134,146 6.74 3,623,922 153,282 5.66
Loans, net of unearned income (1) 6,138,510 421,476 9.18 5,334,840 337,852 8.47
---------- -------- ----------- --------
TOTAL EARNING ASSETS (1)(2) 9,105,830 571,438 8.39 9,235,697 501,030 7.25
-------- --------
Cash and due from banks 411,320 413,600
Premises and equipment 201,891 210,841
Allowance for losses on loans (123,394) (124,633)
Other assets 264,946 279,056
---------- -----------
TOTAL ASSETS $9,860,593 $10,014,561
========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Money market accounts $1,286,846 $ 30,536 3.17% $ 1,500,066 $ 27,254 2.43%
Savings deposits 1,737,072 34,922 2.69 1,756,071 29,794 2.27
Certificates of deposit of
$100,000 and over 586,306 23,505 5.36 549,830 15,777 3.84
Other time deposits 3,467,997 137,183 5.29 3,317,086 98,979 3.99
Short-term borrowings 220,454 8,848 5.37 461,991 13,441 3.89
Federal Home Loan Bank advances 283,310 12,663 5.98 216,833 7,669 4.73
Long-term debt 118,066 7,134 8.08 121,453 6,660 7.33
---------- -------- ----------- --------
TOTAL INTEREST-BEARING LIABILITIES 7,700,051 254,791 4.42 7,923,330 199,574 3.37
-------- --------
Noninterest-bearing demand deposits 1,236,434 1,210,943
---------- -----------
TOTAL SOURCES OF FUNDS 8,936,485 9,134,273
Other liabilities 118,573 104,324
Shareholders' equity 805,535 775,964
---------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $9,860,593 $10,014,561
========== ===========
NET INTEREST INCOME $316,647 $301,456
======== ========
INTEREST RATE SPREAD 3.97% 3.88%
==== ====
NET INTEREST MARGIN 4.65% 4.36%
==== ====
- --------------------
(1) Taxable-equivalent adjustments:
Loans $ 1,357 $ 1,132
Investment securities 11,325 12,485
-------- --------
$ 12,682 $ 13,617
======== ========
(2) Yields are calculated based on historical cost and exclude the impact of the net unrealized gains and losses on available
for sale securities.
</TABLE>
-23-
<PAGE> 24
UNION PLANTERS CORPORATION AND SUBSIDIARIES
ANALYSIS OF VOLUME AND RATE CHANGES
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1995 VERSUS 1994
----------------------------------------------
INCREASE
(DECREASE)
DUE TO CHANGE IN: (1)
--------------------------- TOTAL
AVERAGE AVERAGE INCREASE
VOLUME (2) RATE (2) (DECREASE)
------------ ---------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
INTEREST INCOME
Interest-bearing deposits at
financial institutions $ 531 $ 211 $ 742
Federal funds sold and securities
purchased under agreements to resell 213 1,625 1,838
Trading account securities 532 2,808 3,340
Investment securities (FTE) (45,368) 26,232 (19,136)
Loans, net of unearned income (FTE) 53,644 29,980 83,624
--------
TOTAL INTEREST INCOME (7,137) 77,545 70,408
--------
INTEREST EXPENSE
Money market accounts (4,251) 7,533 3,282
Savings deposits (325) 5,453 5,128
Certificates of deposit of
$100,000 and over 1,106 6,622 7,728
Other time deposits 4,683 33,521 38,204
Short-term borrowings (8,514) 3,921 (4,593)
Long-term debt 2,489 2,979 5,468
--------
TOTAL INTEREST EXPENSE (5,769) 60,986 55,217
--------
CHANGE IN NET INTEREST INCOME $ 15,191
========
PERCENTAGE INCREASE IN NET INTEREST
INCOME OVER PRIOR PERIOD 5.04%
=======
</TABLE>
- --------------------
(1) The change due to both rate and volume has been allocated to change due
to volume and change due to rate in proportion to the relationship of
the absolute dollar amounts of the change in each.
(2) Variances are computed on a line-by-line basis and are nonadditive.
-24-
<PAGE> 25
FINANCIAL CONDITION
The Corporation's total assets were $9.9 billion at September 30, 1995
compared to $10.2 billion at September 30, 1994, and $9.8 billion at June 30,
1995. Average assets for the three and nine months ended September 30, 1995
were $9.9 billion compared to $10.1 billion and $10.0 billion, respectively,
for the same periods in 1994.
INVESTMENT SECURITIES
The Corporation's investment securities portfolio of $2.4 billion at
September 30, 1995 consisted of available for sale securities which are carried
on the balance sheet at fair value. Reference is made to Note 5 to the interim
financial statements which provides the composition of the investment portfolio
at September 30, 1995 and December 31, 1994.
Effective September 30, 1995, the Corporation transferred approximately $1.0
billion of held to maturity securities to the available for sale portfolio. The
transfer included all of the Corporation's held to maturity portfolio and
management is unable at this time to predict if or when the Corporation will
again maintain a held to maturity portfolio. The transfer had no impact on
earnings. The transfer was made in response to the following specific factors
which arose during the third quarter of 1995 and led management and the Board
of Directors to change its intent to hold these securities to maturity: (i) The
success of the Corporation's 1994 credit card solicitation became apparent in
the third quarter of 1995 as the introductory rate stage ended. This growth was
funded primarily by available for sale securities. (ii) A decision was made
during the third quarter to engage in a second credit card solicitation which
is expected to increase loans approximately $200 million. Funding will need to
be provided from securities sales. (iii) The Corporation is presently engaged
in an internal reorganization of its banking subsidiaries and needs flexibility
to restructure the balance sheets of these subsidiaries. The largest of these
reorganizations, the division of the former Sunburst Bank, Mississippi, into
five banks was completed during the third quarter of 1995. (iv) The Corporation
has a large bank holding company acquisition pending which became probable
during the third quarter of 1995. Loan opportunities in the market served by
the target company are expected to place demands on the Corporation's
liquidity. Overall this transfer will provide the additional funding sources
necessary to manage specific interest-rate and liquidity considerations which
these factors present.
U.S. Treasury and U. S. Government agency obligations represented
approximately 74.4% of the investment securities portfolio at September 30,
1995. The Corporation has some credit risk in the investment portfolio, however
management does not consider that risk to be significant.
The REMIC and CMO issues in the investment securities portfolio are 96% U.S.
Government agencies issues; the remaining 4% are readily marketable,
collateralized mortgage obligations backed by agency-pooled collateral or
whole-loan collateral. All nonagency issues held are currently rated "AAA" by
either Standard & Poors or Moodys. The REMIC and CMO portions of the investment
securities portfolio include approximately 67% in floating-rate issues, the
majority being indexed to LIBOR or PRIME. Normal practice is to purchase
investment securities at or near par value to reduce risk of premium write-offs
resulting from unexpected prepayments. The limited credit risk in the
investment securities portfolio consists of the holdings of nonagency CMOs,
municipal obligations and corporate stocks, and notes and debentures which
accounted for 1.2%, 2.14%, and 3.2%, respectively, of the investment securities
portfolio at September 30, 1995.
At September 30, 1995, the Corporation had approximately $36.4 million of
structured notes (as currently defined by the regulatory agencies), which
constitutes approximately 1.5% of the investment securities portfolio. The
definition of structured notes was broadened by the regulatory agencies during
the second quarter of 1995 resulting in approximately $16 million of additional
securities being included in this classification. Structured notes have
uncertain cash flows which are driven by interest-rate movements and may expose
a company to greater market risk than traditional medium-term notes. All of the
Corporation's investments of this type are government agency issues (primarily
Federal Home Loan Bank and Federal National Mortgage Association). The
structured notes vary in type but primarily include step-up bonds and
index-amortizing notes. These securities are carried in the Corporation's
available for sale securities portfolio and the unrealized loss in these
securities at September 30, 1995 was approximately $792,000. The market risk
associated with the structured notes is not considered material to the
-25-
<PAGE> 26
Corporation's financial position, results of operations, or liquidity and
involves no credit risk.
AVAILABLE FOR SALE SECURITIES
Available for sale securities at September 30, 1995 were $2.4 billion and
had unrealized gains of $36.9 million and unrealized losses of $9.8 million,
which resulted in a positive adjustment to the carrying value of available for
sale securities of $27.1 million ($16.6 million, net of taxes). At December 31,
1994, these securities totaled $1.9 billion and had unrealized gains of $3.0
million and unrealized losses of $50.0 million. Holdings of these securities
increased approximately $494 million from December 31, 1994, primarily as a
result of the transfer of all held to maturity securities to the available for
sale portfolio offset partially by a decrease due to loan funding needs.
HELD TO MATURITY SECURITIES
The Corporation had no held to maturity securities at September 30, 1995. At
December 31, 1994, these securities totaled $1.0 billion and had unrealized
gains and losses of $9.2 million and $32.3 million, respectively.
LOANS
Loans at September 30, 1995 were $6.2 billion compared to $5.5 billion and
$5.9 billion at September 30, 1994 and December 31, 1994, respectively. Average
loans for the third quarter of 1995 were $6.3 billion, a 14% increase over the
$5.5 billion for the third quarter of 1994. Note 3 to the interim financial
statements presents the composition of the loan portfolio.
The primary area of growth since December 31, 1994 has been in the consumer
loan portfolio (primarily credit card loans), which is primarily attributable
to the consumer loan marketing program. The growth in loans from September 30,
1994 to September 30, 1995 occurred in almost all categories of loans with the
largest growth occurring in consumer loans, home equity loans, and loans
secured by 1-4 family residential mortgages which increased approximately $347
million, $101 million, and $78 million, respectively. Commercial loans have
increased approximately $96 million and other real-estate-secured loans have
increased approximately $71 million. The Corporation's loan-to-deposit ratio
was 75% at September 30, 1995 compared to 67% and 71%, respectively, at
September 30, 1994, and December 31, 1994.
Management expects continued growth in the loan portfolio. Additional
marketing efforts are planned over the next twelve months.
-26-
<PAGE> 27
ALLOWANCE FOR LOSSES ON LOANS
The following table provides a reconciliation of the allowance for losses on
loans (the allowance) at the dates indicated and certain key ratios for the
nine-month periods ended September 30, 1995 and 1994 and for the year ended
December 31, 1994.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------- FOR THE YEAR ENDED
1995 1994 DECEMBER 31, 1994
---------- ---------- -------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Balance at the beginning
of the period $ 122,089 $ 114,353 $ 114,353
Provision charged to expense 8,530 2,791 3,636
Allowances of banks acquired (a) 1,362 9,252 9,252
Recoveries 9,909 9,604 13,287
Charge-offs (21,803) (13,022) (18,439)
---------- ---------- ---------
Balance at the end of the period $ 120,087 $ 122,978 $ 122,089
========== ========== ==========
Loans outstanding at period end $6,242,364 $5,549,524 $5,949,128
========== ========== ==========
Average loans during the period $6,138,510 $5,334,840 $5,426,880
========== ========== ==========
Ratios:
Allowance/period end loans 1.92% 2.22% 2.05%
Charge-offs/average loans (b) .47 .33 .34
Recoveries/average loans (b) .21 .24 .25
Net charge-offs (recoveries)/
average loans (b) .26 .09 .09
Provision/average loans (b) .19 .07 .07
</TABLE>
- --------------------
(a) At date of acquisition for acquisitions accounted for using the purchase
method of accounting and as of January 1, 1995 for acquisitions
accounted for using the pooling of interests method of accounting.
(b) Amounts annualized for September 30, 1995 and 1994
The allowance at September 30, 1995 was $120.1 million, a decrease of $2.0
million from December 31, 1994, and a decrease of $2.9 million compared to
$123.0 million at September 30, 1994. The decrease resulted from net
charge-offs exceeding the provision for losses on loans. Net charge-offs for
the third quarter were $4.8 million compared to $711,000 for the same period in
1994 and compared to $6.2 million for the second quarter of 1995. An increasing
level of charge-offs is expected over the last three months of 1995 related
primarily to the increase in credit card loans, which is consistent with the
growth in the portfolio. Additionally, the levels of recoveries are expected to
decline from the levels of the past three years. The Corporation's loan growth,
anticipated higher levels of charge-offs, and anticipated lower levels of
recoveries are expected to result in higher provisions for losses on loans in
the future. Management believes that the allowance is sufficient to absorb
estimated losses inherent in the loan portfolio at September 30, 1995.
A breakdown of the Corporation's charge-offs and recoveries for the nine
months ended September 30, 1995 follows (Dollars in thousands):
<TABLE>
<CAPTION>
LOAN TYPE CHARGE-OFFS RECOVERIES
- --------------------- ----------- ----------
<S> <C> <C>
Credit card and related plans $ 6,962 $ 603
Other consumer loans 6,848 3,040
Loans secured by real estate 4,001 1,977
Commercial, financial and agricultural 3,992 4,289
------- ------
Total $21,803 $9,909
======= ======
</TABLE>
-27-
<PAGE> 28
NONPERFORMING ASSETS
NONACCRUAL, RESTRUCTURED, AND PAST DUE LOANS AND FORECLOSED PROPERTIES
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
----------------- ------------
1995 1994 1994
------ ------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Nonaccrual loans $24,172 $18,594 $17,476
Restructured loans 1,156 1,519 1,564
------- ------- -------
Total nonperforming loans 25,328 20,113 19,040
------- ------- -------
Foreclosed property
Other real estate owned,
net of reserve for losses 4,550 6,971 5,434
Other foreclosed properties 474 535 559
------- ------- -------
Total foreclosed properties 5,024 7,506 5,993
------- ------- -------
Total nonperforming assets $30,352 $27,619 $25,033
======= ======= =======
Loans 90 days or more past due
and not on nonaccrual status $13,872 $ 6,584 $ 5,874
======= ======= =======
- --------------------
Nonperforming loans as a
percentage of loans .41% .36% .32%
Nonperforming assets as a
percentage of loans and
foreclosed properties .49 .50 .42
Allowance for losses on loans
as a percentage of
nonperforming loans 474 611 641
Loans 90 days or more past
due and not on nonaccrual
status as a percentage of loans .22 .12 .10
</TABLE>
The Corporation's asset-quality measures remain at acceptable levels as
shown above. The level of nonperforming assets has increased over the
historically low level at year end. Management is not aware of any general
deterioration in the overall loan portfolio, however there has been an increase
in all past due loan categories, primarily related to the consumer-loan
portfolio. Loans 90 days or more past due and not on nonaccrual status
increased $8.0 million over year end due primarily to consumer loans.
POTENTIAL PROBLEM ASSETS
Potential problem assets consist of assets which are generally secured and
not currently considered nonperforming, but with respect to which information
concerning possible credit problems has caused management to have serious
doubts as to the ability of such borrowers to comply in the future with present
repayment terms. Historically these assets have been loans that become
nonperforming. At September 30, 1995, the Corporation had potential problem
assets (all of which were loans) aggregating $10.8 million.
-28-
<PAGE> 29
OFF-BALANCE-SHEET INSTRUMENTS
On a limited basis the Corporation uses off-balance-sheet financial
instruments to manage interest-rate risk. Reference is made to Note 17 to the
audited consolidated financial statements in the Corporation's 1994 Annual
Report to Shareholders for additional information regarding these instruments.
A summary of the Corporation's interest-rate swaps follows:
<TABLE>
<CAPTION>
CURRENT RATES (a) 1995
NOTIONAL AMOUNT ---------------------- YEAR-TO-DATE
------------------------------- VARIABLE FIXED NET INTEREST UNREALIZED
BALANCE SHEET SEPTEMBER 30, DECEMBER 31, RATE RATE MATURITY INCOME GAIN
INSTRUMENTS 1995 1994 PAID RECEIVED DATE IMPACT (LOSS)
- ------------ ------------- -------------- -------- -------- -------- ------------ ----------
(IN MILLIONS) (IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Loans (b) and (c) $150 $150 6.39% 5.22% 1/96-99 (c) $(1.3) $(1.8)
Securities (d) - 100 - - - - -
Long-term debt
debentures 50 50 6.31 4.46 5/96 (.6) (.9)
Long-term FHLB
advances (e) - 10 - - - .1 -
---- ---- ----- -----
Total $200 $310 $(1.8) $(2.7)
==== ==== ===== =====
</TABLE>
- --------------------
(a) The variable rates paid are tied to the three-month LIBOR rate for the
loans and the six-month LIBOR rate for the debenture swaps. The next
repricing dates for the variable rates paid for the loans and long-term
debt debentures are October 1995 and November 1995, respectively. These
variable rates may change significantly in the future due to changes in
the financial markets and interest rates.
(b) This swap was entered into to reduce the volatility of net interest
income. At the time the swap was executed, management reduced the risk
associated with stable or further declining interest rates and the
resultant impact on net interest income.
(c) This interest-rate swap's amortization period may change quarterly based
on changes in the underlying index rate. If the index rate should be
less than or equal to 5.3125% on January 5, 1996, the swap would
terminate on that date. If the index rate should remain at the current
rate (5.938% as of October 16, 1995) through January 5, 1996 and
thereafter, the swap would mature July 5, 1996. The swap maturity has
the potential to extend to January 1999 in the event the index rate
should be equal to or exceed 8.3125% on January 5, 1996 and for the
remainder of the term of the swap.
(d) Management sold the securities related to this interest-rate swap in
January 1995. At December 31, 1994, the Corporation recognized a $1.1
million loss on this interest-rate swap. This swap matured in June 1995.
(e) The long-term FHLB advances interest-rate swap was entered into by Union
Planters Bank of Mississippi (formerly Sunburst Bank, Mississippi), a
subsidiary of Grenada Sunburst System Corporation which was acquired by
the Corporation on December 31, 1994. During the third quarter, the
Corporation reorganized Union Planters Bank of Mississippi (UPBMS) into
five banks (three existing and two new banks). In connection with the
reorganization, management decided to terminate certain outstanding
advances and the related interest-rate swap. In terminating the swap,
the Corporation recognized a gain of approximately $777,000 which was
partially offset by a penalty of approximately $588,000 resulting from
the prepayment of the FHLB advances.
ASSET LIABILITY MANAGEMENT
The table on page 31 presents the Corporation's interest-rate sensitivity
analysis at September 30, 1995. This analysis alone cannot be relied upon to
predict how the Corporation is positioned to react to changing interest rates,
since it has been prepared as of a point-in-time and could change significantly
on a daily basis. Other significant factors such as the mix of earning assets
and interest-bearing liabilities, interest-rate spreads, and the level of
interest-rates impact upon the Corporation's net interest income.
-29-
<PAGE> 30
Balance-sheet-simulation analysis is conducted to determine the impact on
net interest income for the next twelve months under several interest-rate
scenarios. One such scenario uses current interest rates at September 30, 1995
and holds the rates and volumes constant for the simulation. When this
projection is subjected to immediate and parallel shifts in interest rates
("rate shocks") of 200 basis points, first rising and then falling, the annual
impact of the "rate shock" at September 30, 1995 on the Corporation's projected
net interest income was a positive $16 million and a negative $21 million
pretax, respectively, which is within the Corporation's policy limits.
-30-
<PAGE> 31
UNION PLANTERS CORPORATION AND SUBSIDIARIES
RATE-SENSITIVITY ANALYSIS AT SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
INTEREST-SENSITIVE WITHIN
------------------------------------------------------------------------------------------
NON-
0-30 31-90 91-180 181-365 1-2 2-5 OVER INTEREST-
DAYS DAYS DAYS DAYS YEARS YEARS 5 YEARS BEARING TOTAL
------ ------ ------ ------- ------ ------- -------- -------- -----
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Loans and leases $1,576 $ 483 $ 517 $ 789 $491 $1,714 $ 679 $ 24 $6,273
Investment securities 273 150 294 442 479 376 409 - 2,423
Other earning assets 312 105 - 1 1 - - - 419
Other assets - - - - - - - 789 789
------ ------ ----- ------ ---- ------ ------ ------ ------
TOTAL ASSETS $2,161 $ 738 $ 811 $1,232 $971 $2,090 $1,088 $ 813 $9,904
====== ====== ===== ====== ==== ====== ====== ====== ======
SOURCES OF FUNDS
Money market
deposits $ 63 $ 339 $ - $ 340 $ - $ 495 $ - $ - $1,237
Other savings and
time deposits 557 1,076 759 751 462 1,612 25 - 5,242
Time deposits
over $100,000 118 102 124 153 62 49 2 - 610
Short-term borrowings 138 2 - 1 - - - - 141
Federal Home Loan Bank
advances 151 77 2 4 12 29 17 - 292
Long-term debt - - - - - - 117 - 117
Noninterest-bearing
deposits - - - - - - - 1,252 1,252
Other liabilities - - - - - - - 138 138
Shareholders' equity - - - - - - - 875 875
------ ------ ----- ------ ---- ------ ------ ------ ------
TOTAL SOURCES OF
FUNDS $1,027 $1,596 $ 885 $1,249 $536 $2,185 $ 161 $2,265 $9,904
====== ====== ===== ====== ==== ====== ====== ====== ======
Interest rate swaps $ (150) $ (50) $ - $ 200 $ - $ - $ - $ - $ -
Interest rate sensitivity
gap $ 984 $ (908) $ (74) $ 183 $435 $ (95) $ 927 $(1,452) $ -
Cumulative interest rate
sensitivity gap $ 984 $ 76 $ 2 $ 185 $620 $ 525 $1,452 $ - $ -
Cumulative gap as a
percentage of total
assets 10% 1% -% 2% 6% 5% 15% -% -%
</TABLE>
- --------------------
Management has made the following assumptions in preparing the above analysis:
(a) Assets and liabilities are generally scheduled according to their
earliest repricing dates regardless of their contractual maturities.
(b) Nonaccrual loans are included in the noninterest-bearing category.
(c) Fixed-rate mortgage loan maturities are estimated based on the currently
prevailing principal prepayment patterns of comparable mortgage-backed
securities.
(d) The scheduled maturities of mortgage-backed securities and CMOs assume
principal prepayment of these securities on dates estimated by
management, relying primarily upon current and consensus interest-rate
forecasts in conjunction with the latest three-month historical
prepayment schedules.
(e) Agency securities are scheduled according to their call dates when
valued at a premium or par.
(f) Money market deposits and savings deposits that have no contractual
maturities are scheduled according to management's best estimate of
their repricing in response to changes in market rates. The impact of
changes in market rates would vary by product type and market.
-31-
<PAGE> 32
(g) If all money-market, NOW, and savings deposits had been included in the
0-30 Days category above, the cumulative gap as a percentage of total
assets would have been negative (20%), (20%), (21%), (15%), (11%), and
positive 5% and 15%, respectively, for the 0-30 Days, 31-90 days, 91-180
Days, 181-365 Days, 1-2 years, 2-5 Years, and over 5 Years categories at
September 30, 1995.
LIQUIDITY
The Corporation's core deposit base is its most important and stable funding
source. These deposits, along with available for sale securities and money
market investments, provide liquidity for the Corporation. The Corporation's
deposit base is comprised of "in-market" deposits, as the Corporation has no
known brokered deposits. Certificates of deposit of $100,000 or more
represented only 7% of total deposits at September 30, 1995. The following
table presents an analysis of the Corporation's deposits:
<TABLE>
<CAPTION>
AVERAGE DEPOSITS
--------------------------------------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED
-------------------------------------- ---------------------
SEPTEMBER 30, JUNE 30, SEPTEMBER 30,
------------------- -------- ---------------------
1995 1994 1995 1995 1994
------ ------ -------- ------ -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Demand deposits $1,244 $1,207 $1,224 $1,236 $1,211
Money market accounts (a) 1,243 1,411 1,271 1,287 1,500
Savings deposits (b) 1,739 1,779 1,717 1,737 1,756
Other time deposits (c) 3,531 3,306 3,482 3,468 3,317
------ ------ ------ ------ ------
Total core deposits 7,757 7,703 7,694 7,728 7,784
Certificates of deposit
of $100,000 and over 598 555 592 586 550
------ ------ ------ ------ ------
Total deposits $8,355 $8,258 $8,286 $8,314 $8,334
====== ====== ====== ====== ======
</TABLE>
- --------------------
(a) Includes money market savings accounts, High Yield accounts, and super
NOW accounts.
(b) Includes regular and premium savings accounts and NOW accounts.
(c) Includes certificates of deposit under $100,000, investment savings
accounts, and other time deposits.
Average deposits were $8.4 billion for the third quarter of 1995, an
increase of $69 million and $97 million, respectively, from the second quarter
of 1995 and the third quarter of 1994. For the nine months ended September 30,
1995 total average deposits decreased $20 million compared to the same period
in 1994. Acquisitions during the third quarter of 1995 increased total deposits
approximately $151 million over the prior year. Partially offsetting the
increase from acquisitions was a decrease resulting primarily from a decline in
money market and savings deposits, a portion of the decline having been offset
by growth in certificates of deposit. Also, approximately $90 million of the
decline relates to the sale of certain branches required as a condition to
receiving prior regulatory approval to consummate the acquisition of Grenada
Sunburst System Corporation at December 31, 1994.
The parent company's source of cash flow is management fees and dividends
from subsidiaries. The number of financial institutions owned by the
Corporation provides a diversified base for the payment of dividends should one
or more of the subsidiaries have capital needs and be unable to pay dividends
to the parent company. At September 30, 1995, the parent company had cash and
short-term investments totaling $117.2 million. The parent company's net
working capital at September 30, 1995 was $ 116.7 million. At October 1, 1995,
the parent company could have received dividends from subsidiary banks of $33
million without prior regulatory approval. The payment of additional dividends
will be dependent on the future earnings of the Corporation's subsidiary banks.
Management believes that the parent company has adequate liquidity to meet its
cash needs, including the payment of its regular dividends and servicing of its
long-term debt.
-32-
<PAGE> 33
Effective May 24, 1995, the Corporation terminated its $25 million credit
facility. After reviewing the Corporation's cash flow needs, management
determined that use of the credit facility was not probable over its remaining
one-year term.
On November 7, 1995, the Corporation issued $100 million of 6 3/4%
Subordinated Capital Notes (see Note 11 to the unaudited interim consolidated
financial statements). The net proceeds will be available for general corporate
purposes, including the acquisition of other financial institutions. Pending
such use, the funds will be invested in investment grade securities. The Notes
qualify as Tier 2 capital which should significantly increase the Corporation's
total capital to risk-based assets ratio.
SHAREHOLDERS' EQUITY
The Corporation's total shareholders' equity increased $144.5 million from
December 31, 1994 to $875.2 million at September 30, 1995. The increase was due
to retained net earnings of $67.5 million, a reduction in the net unrealized
loss on available for sale securities of $45.6 million, Common and Series E
Preferred Stock issued as consideration for acquisitions which increased
shareholders' equity by $20.2 million, and Common Stock issued in connection
with employee benefit and dividend reinvestment plans of $11.2 million.
CAPITAL ADEQUACY
The following table presents certain capital-adequacy ratios of the
Corporation and the table on the following page presents the calculation of the
Corporation's risk-based capital.
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------- DECEMBER 31,
1995 1994 1994
------ ------ ------------
CAPITAL ADEQUACY DATA
- ---------------------
<S> <C> <C> <C>
Total shareholders' equity/
total assets (at period end) 8.84% 7.72% 7.30%
Average shareholders' equity/
average total assets (a) 8.17 7.75 7.76
Tier 1 capital/unweighted
assets (leverage ratio) (b) 8.29 7.50 7.18
Parent company long-term debt/equity 13.12 14.63 15.71
Dividend payout ratio 34.15 37.36 64.68
</TABLE>
- --------------------
(a) Based on year to date average balances.
(b) Based on period-end capital and quarterly adjusted average assets
At September 30, 1995, total shareholders' equity was 8.84% of total assets
and the leverage ratio was 8.29% compared to 7.30% and 7.18%, respectively, at
December 31, 1994. The improvement in these ratios has resulted primarily from
the Corporation's retained net earnings. The shareholders' equity to total
assets ratio improved more than the leverage ratio because the adjustment for
the net unrealized loss on available for sale securities improved $45.6 million
from year end to a net unrealized gain of $16.6 million. This adjustment is not
included in the leverage ratio calculation.
-33-
<PAGE> 34
RISK-BASED CAPITAL
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------------ DECEMBER 31,
1995 1994 1994
---------- ---------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Tier 1 capital
Shareholders' equity $ 875,180 $ 784,707 $ 730,707
Minority interest in
consolidated subsidiaries 1,088 1,588 1,088
Less goodwill, other intangibles, and
one-half of investment in
unconsolidated subsidiaries (40,956) (41,774) (38,138)
Less deferred tax asset not qualifying
as regulatory capital (2,190) (2,491) (2,494)
Unrealized (gain) loss on available for
sale securities (16,642) 13,979 28,527
---------- ---------- ----------
Total Tier 1 capital 816,480 756,009 719,690
Tier 2 capital
Allowance for losses on loans (a) 77,458 80,192 74,204
Qualifying long-term debt 74,579 74,527 74,540
Less one-half of investment in
unconsolidated subsidiaries (22) (18) (18)
---------- ---------- ----------
Total capital $ 968,495 $ 910,710 $ 868,416
========== ========== ==========
Risk-weighted assets (b) $6,153,998 $6,328,288 $5,888,363
========== ========== ==========
Ratios as a percent of end of
period risk-weighted assets
Tier 1 capital 13.27% 11.95% 12.22%
Total capital 15.74 14.39 14.75
</TABLE>
- --------------------
(a) Limited as required by regulatory guidelines.
(b) Based on risk-weighted assets as defined by regulatory guidelines.
IMPACT OF ACCOUNTING STANDARDS
SFAS NO. 122, ACCOUNTING FOR MORTGAGE SERVICING RIGHTS
Effective July 1, 1995, the Corporation adopted prospectively the provisions
of SFAS No. 122, "Accounting for Mortgage Servicing Rights, an amendment of
SFAS No. 65." This statement requires entities to recognize as separate assets
rights to service mortgage loans for others, regardless of how the servicing
rights have been acquired. Mortgage servicing rights arising from the
Corporation's mortgage originations are now recorded contrary to the former
practice. The impact of adoption of this standard, assuming current mortgage
production levels, is estimated to increase the Corporation's net earnings for
the last half of 1995 by approximately $1.5 million.
-34-
<PAGE> 35
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
The information called for by this item is incorporated by reference to Item
3, Part I of the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1994, Note 19 to the Corporation's consolidated financial
statements on pages 68 and 69 of the 1994 Annual Report to Shareholders which
is Exhibit 13 to the 1994 10-K, Note 10 to the Corporation's unaudited
consolidated financial statements included in the quarterly reports on Form
10-Q dated March 31, 1995 and June 30, 1995, and Note 10 to the Corporation's
unaudited consolidated financial statements included herein.
ITEM 2 - CHANGES IN SECURITIES
None
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 - OTHER INFORMATION
None
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
11 - Computation of Earnings Per Common Share
27 - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K:
<TABLE>
<CAPTION>
Date of Report/Date of Earliest Event Reported Subject
---------------------------------------------- -----------
<S> <C> <C>
1. July 27, 1995/July 27, 1995 Press Release announcing second quarter
of 1995 operating results
2. August 21, 1995/August 21, 1995 Audited consolidated financial
statements for 1994 and interim
unaudited consolidated financial
statements for the six months ended
June 30, 1995 for Capital
Bancorporation, Inc., a pending probable
acquisition
3. August 22, 1995/August 22, 1995 Unaudited pro forma consolidated
financial statements dated June 30,
1995 for certain pending probable
acquisitions
4. October 26, 1995/October 26, 1995 Press Release announcing third quarter of 1995
operating results
5. November 6, 1995/November 2, 1995 Subordinated Capital Notes due 2005
</TABLE>
-35-
<PAGE> 36
SIGNATURES
Pursuant to the requirements 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.
UNION PLANTERS CORPORATION
--------------------------------
(Registrant)
Date: November 10, 1995
----------------------------
By: /s/ Benjamin W. Rawlins, Jr.
-------------------------------
Benjamin W. Rawlins, Jr.
Chairman of the Board and
Chief Executive Officer
By: /s/ John W. Parker
-------------------------------
John W. Parker
Executive Vice President and
Chief Financial Officer
By: /s/ M. Kirk Walters
-------------------------------
M. Kirk Walters
Senior Vice President, Treasurer,
and Chief Accounting Officer
-36-
<PAGE> 1
EXHIBIT 11
PAGE 1 OF 2
UNION PLANTERS CORPORATION AND SUBSIDIARIES
COMPUTATION OF PRIMARY EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- -----------------------
1995 1994 1995 1994
-------- -------- -------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER COMMON SHARE
Average shares outstanding 41,245 39,938 40,904 39,878
Average common share equivalents:
Assumed exercise of options outstanding 185 133 150 148
------- ------- -------- -------
Primary average shares outstanding 41,430 40,071 41,054 40,026
======= ======= ======== =======
Net earnings $35,363 $23,734 $102,535 $75,373
Less: Preferred stock dividends
Series B (88) (88) (264) (264)
Series C (redeemed October 31, 1994) - (447) - (1,342)
Series D (1) - (123) (165) (370)
Series E (1,877) (1,555) (4,986) (4,663)
------- ------- -------- -------
Net earnings applicable to common shares $33,398 $21,521 $ 97,120 $68,734
======= ======= ======== =======
Primary Earnings Per Common Share $.81 $.54 $2.37 $1.72
======= ======= ======== =======
- ------------------
</TABLE>
(1) Converted to common stock July 1, 1995
-37-
<PAGE> 2
EXHIBIT 11
PAGE 2 OF 2
UNION PLANTERS CORPORATION AND SUBSIDIARIES
COMPUTATION OF FULLY DILUTED EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- -----------------------
1995 1994 1995 1994
-------- -------- -------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
FULLY DILUTED EARNINGS PER COMMON SHARE
Average shares outstanding 41,245 39,938 40,904 39,878
Assumed exercise of options outstanding 205 133 164 151
Assumed conversion of preferred stock
outstanding:
Series B 340 340 340 340
Series D (1) - 254 168 254
Series E 4,370 3,884 4,049 3,884
------- ------- -------- -------
Fully diluted average shares outstanding 46,160 44,549 45,625 44,507
======= ======= ======== =======
Net earnings $35,363 $23,734 $102,535 $75,373
Less: Series C preferred stock
dividends (2) - (447) - (1,342)
------- ------- -------- -------
Net earnings applicable to common shares $35,363 $23,287 $102,535 $74,031
======= ======= ======== =======
Fully Diluted Earnings Per Common Share $.77 $.52 $2.25 $1.66
======= ======= ======== =======
</TABLE>
- --------------------
(1) Converted to common stock July 1, 1995.
(2) Redeemed October 31, 1994.
-38-
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF UNION PLANTERS FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 464,960
<INT-BEARING-DEPOSITS> 12,639
<FED-FUNDS-SOLD> 198,873
<TRADING-ASSETS> 141,798
<INVESTMENTS-HELD-FOR-SALE> 2,423,224
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 6,308,182
<ALLOWANCE> 120,087
<TOTAL-ASSETS> 9,903,684
<DEPOSITS> 8,340,689
<SHORT-TERM> 141,409
<LIABILITIES-OTHER> 137,807
<LONG-TERM> 408,599
<COMMON> 206,493
0
91,810
<OTHER-SE> 576,877
<TOTAL-LIABILITIES-AND-EQUITY> 9,903,684
<INTEREST-LOAN> 420,119
<INTEREST-INVEST> 122,821
<INTEREST-OTHER> 15,816
<INTEREST-TOTAL> 558,756
<INTEREST-DEPOSIT> 226,146
<INTEREST-EXPENSE> 254,791
<INTEREST-INCOME-NET> 303,965
<LOAN-LOSSES> 8,530
<SECURITIES-GAINS> 156
<EXPENSE-OTHER> 255,700
<INCOME-PRETAX> 149,495
<INCOME-PRE-EXTRAORDINARY> 149,495
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 102,535
<EPS-PRIMARY> 2.37
<EPS-DILUTED> 2.25
<YIELD-ACTUAL> 8.39
<LOANS-NON> 24,172
<LOANS-PAST> 13,872
<LOANS-TROUBLED> 1,156
<LOANS-PROBLEM> 10,819
<ALLOWANCE-OPEN> 122,089
<CHARGE-OFFS> 21,803
<RECOVERIES> 9,909
<ALLOWANCE-CLOSE> 120,087
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 120,087
</TABLE>
