<PAGE> 1
Filed pursuant to Rule 424(b)(5)
Registration Statement No. 33-63791
PROSPECTUS SUPPLEMENT
(To Prospectus Dated October 30, 1995)
$100,000,000
UNION PLANTERS CORPORATION
6 3/4% SUBORDINATED NOTES DUE 2005
The Notes will mature on November 1, 2005. Interest is payable semiannually in
arrears on May 1 and November 1 of each year, beginning May 1, 1996. The Notes
may not be redeemed prior to maturity. The Notes are subordinated to all
existing and future Senior Indebtedness of Union Planters Corporation ("UPC" or
the "Company") as described in the accompanying Prospectus. Payment of the
principal of the Notes may be accelerated only in the case of certain events
involving the bankruptcy, insolvency or reorganization of UPC. There is no right
of acceleration in the case of default in performance of any covenants of UPC,
including the failure to pay principal or interest on the Notes when due. See
"Description of Notes."
All of the Notes initially will be represented by Global Securities (each a
"Global Note"), which will be deposited with The Depository Trust Company
("DTC") and will be registered in the name of its nominee. A beneficial interest
in a Global Note will be shown on, and transfers thereof will be effected only
through, records maintained by DTC or its participants. A beneficial interest in
a Global Note will be exchanged for Notes in certificated form only under the
limited circumstances described herein. See "Description of Notes-Global Notes."
The Notes will trade in DTC's Same-Day Funds Settlement System until maturity,
and secondary market activity for the Notes will, therefore, settle in
immediately available funds. All payments of principal and interest will be made
by UPC in immediately available funds. See "Description of Notes-Same-Day
Settlement and Payment."
THE NOTES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK OR
NONBANK SUBSIDIARY OF THE COMPANY AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE BANK INSURANCE FUND, THE SAVINGS ASSOCIATION
INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT COMPANY(1)(2)
<S> <C> <C> <C>
Per Note.................................... 99.408% .650% 98.758%
Total....................................... $99,408,000 $650,000 $98,758,000
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from November 7, 1995, to the date of
delivery.
(2) Before deducting expenses payable by the Company estimated at $320,000.
The Notes are offered subject to receipt and acceptance by the Underwriters, to
prior sale and to the Underwriters' right to reject any order in whole or in
part and to withdraw, cancel or modify the offer without notice. It is expected
that delivery of the Global Notes will be made through the facilities of DTC on
or about November 7, 1995.
SALOMON BROTHERS INC KEEFE, BRUYETTE & WOODS, INC.
The date of this Prospectus Supplement is November 2, 1995.
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES AT LEVELS
ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS
MAY BE EFFECTED IN THE OPEN MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED,
MAY BE DISCONTINUED AT ANY TIME.
THE COMPANY
UPC is a multi-state bank holding company and savings and loan holding
company headquartered in Memphis, Tennessee. At June 30, 1995, UPC had total
consolidated assets of approximately $9.7 billion, loans of approximately $6.1
billion, deposits of approximately $8.3 billion and shareholders' equity of
approximately $812 million. For the six months ended June 30, 1995, the Company
had net income of $66.9 million. At June 30, 1995, the Company was the
second-largest independent bank holding company headquartered in Tennessee as
measured by consolidated assets.
The Company conducts its business activities through its principal bank
subsidiary, the $2.1-billion-asset Union Planters National Bank, founded in 1869
and headquartered in Memphis, Tennessee, and 31 other bank subsidiaries and two
savings and loan subsidiaries located in Tennessee, Mississippi, Arkansas,
Louisiana, Alabama and Kentucky (collectively, the "UPC Banking Subsidiaries").
Through the UPC Banking Subsidiaries, UPC provides a diversified range of
financial services in the communities in which they operate, including
traditional banking services, consumer, commercial and corporate lending, and
retail banking and mortgage banking. UPC also is engaged in mortgage servicing,
investment management and trust services, the issuance and servicing of credit
and debit cards and the origination, packaging and securitization of the
government-guaranteed portions of Small Business Administration ("SBA") loans.
Through the UPC Banking Subsidiaries, UPC operates approximately 370
banking offices. UPC's banking offices and total assets (before consolidating
adjustments) are allocable by state, approximately as follows: 190 banking
offices and $6.1 billion in Tennessee, 119 banking offices and $2.5 billion in
Mississippi, 34 banking offices and $745 million in Arkansas, 15 banking offices
and $504 million in Louisiana, 7 banking offices and $260 million in Alabama and
5 banking offices and $108 million in Kentucky.
Acquisitions of other financial institutions have been, and are expected to
continue to be, an important part of the expansion of UPC's business. UPC
completed four acquisitions in 1992, 12 in 1993 and 13 in 1994, adding
approximately $1.6 billion in total assets in 1992, $1.3 billion in 1993 and
$3.8 billion in 1994. In addition, through September 30, 1995, UPC has completed
two acquisitions in 1995, adding approximately $170 million in assets and has
four acquisitions pending totalling $1.5 billion in assets. The Company expects
to continue to take advantage of the consolidation of the financial services
industry by further developing its franchise through the acquisition of
financial institutions. In effecting acquisitions, UPC's management's
fundamental objective is to enhance the value of the Company's franchise on a
going forward basis. Future acquisitions may at times require UPC to pay
consideration in excess of the current book or market value of the net assets
acquired, thereby resulting in dilution of the current book value per share of
the UPC common stock (the "UPC Common Stock"), or resulting in the incurrence of
additional indebtedness by UPC which may rank senior to the Notes offered
hereby. For information with respect to transactions that have been consummated
since June 30, 1995, or acquisitions which are currently pending, see "Recent
Developments."
The Company controls risk through centralized loan review and audit
functions as well as close monitoring of the financial performance of each UPC
Banking Subsidiary. UPC also implements its asset and liability management
strategy on a consolidated basis and effects all trades for the investment
portfolios of the UPC Banking Subsidiaries. UPC seeks to achieve economies in
the UPC Banking Subsidiaries through consolidation of administrative and
operational processes and has completed the conversion of the UPC Banking
Subsidiaries to a common data processing system.
S-2
<PAGE> 3
The Company's corporate office is located at 7130 Goodlett Farms Parkway,
Memphis, Tennessee 38018, and its telephone number is (901) 383-6000. Additional
information about the Company is included in the documents incorporated by
reference in the accompanying Prospectus. See "Incorporation of Certain
Documents by Reference" in the accompanying Prospectus.
RECENT DEVELOPMENTS
THIRD QUARTER 1995 OPERATING RESULTS
The Company's third quarter net earnings of $35.4 million represent a 49%
increase over the third quarter of 1994. The improvement in net earnings was
primarily due to growth in net interest income as well as noninterest income and
reduced operating expenses. Net interest income increased over the third quarter
of 1994 due primarily to loan growth, a higher yield on investment securities
and a higher net interest margin. The increase in noninterest income is
attributable to increases in fee income from service charges on deposit
accounts, bank cards and profit and commissions from SBA trading activities. The
third quarter of 1994 included investment securities losses of $8.1 million
compared to investment securities gains of $159,000 for the same period in 1995.
Noninterest expenses decreased from the third quarter of 1994 due to expense
reductions related to the Company's restructuring plan effected at the end of
1994. The provision for losses on loans increased for the third quarter of 1995
as compared to the same period in 1994 due primarily to the Company's loan
growth.
Effective September 30, 1995, the Company transferred approximately $1.0
billion of held to maturity securities to the available for sale portfolio. The
transfer was made in response to specific conditions which arose during the
third quarter and led UPC's management and Board of Directors to change its
intent to hold these securities to maturity. The transfer had no impact on
earnings and the fair value adjustment related to these securities was a net
increase in shareholders' equity of approximately $15.1 million, net of taxes.
The following table presents certain unaudited information for the
three-month and nine-month periods ended September 30, 1995 and 1994. Reference
is made to UPC's press release dated October 26, 1995, which is included in the
Company's Current Report on Form 8-K dated October 26, 1995, incorporated herein
by reference. For additional information, see "Incorporation of Certain
Documents by Reference" in the accompanying Prospectus.
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30,(1) SEPTEMBER 30,(1)
------------------ -------------------
1995 1994 1995 1994
-------- ------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Income Statement Data
Net interest income.............................. $103,698 $99,311 $303,965 $287,839
Provision for losses on loans.................... 4,844 991 8,530 2,791
Investment securities gains (losses)............. 159 (8,111) 156 (7,837)
Other noninterest income......................... 37,528 30,000 109,604 86,389
Noninterest expense.............................. 85,506 86,707 255,700 255,570
Net earnings..................................... 35,363 23,734 102,535 75,373
Profitability Ratios
Return on average assets......................... 1.42% .93% 1.39% 1.01%
Return on average common equity.................. 17.63 12.47 18.12 13.69
Net interest margin(2)........................... 4.70 4.39 4.65 4.36
</TABLE>
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(Continued on the following page)
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<PAGE> 4
<TABLE>
<CAPTION>
AT SEPTEMBER 30,(1)
------------------------
1995 1994
---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Asset Quality Data
Allowance for losses on loans................................... $ 120,087 $ 122,978
Nonperforming loans............................................. 25,328 20,113
Nonperforming assets............................................ 30,352 27,619
Loans 90 days or more past due.................................. 13,872 6,584
Nonperforming loans/loans....................................... .41% .36%
Nonperforming assets/loans and foreclosed properties............ .49 .50
Allowance/nonperforming loans................................... 474.13 611.44
Balance Sheet Data
Total assets.................................................... $9,903,684 $10,168,972
Loans, net of unearned income................................... 6,242,364 5,549,524
Investment securities
Available for sale
Amortized cost............................................. 2,396,130 2,138,677
Fair value................................................. 2,423,224 2,115,915
Held to maturity
Amortized cost............................................. -- 1,404,545
Fair value................................................. -- 1,389,420
Total deposits.................................................. 8,340,689 8,267,924
Long-term debt(3)............................................... 408,599 337,552
Total shareholders' equity...................................... 875,180 784,707
Capital Ratios
Equity/assets................................................... 8.84% 7.72%
Leverage........................................................ 8.29 7.50
</TABLE>
- ---------------
(1) Interim period ratios are annualized.
(2) Net interest income (taxable-equivalent)/average earning assets.
(3) Includes subsidiary banks' long-term debt (primarily Federal Home Loan Bank
advances) of $293.2 million and $222.8 million at September 30, 1995 and
1994, respectively.
RECENTLY COMPLETED ACQUISITIONS
Since June 30, 1995, UPC has completed the acquisitions of the following
institutions (collectively, the "Recently Completed Acquisitions"). UPC's
Current Report on Form 8-K dated August 22, 1995, is incorporated herein by
reference and includes unaudited pro forma consolidated financial statements
which include the pro forma impact of the Recently Completed Acquisitions:
<TABLE>
<CAPTION>
CONSIDERATION
-------------------------------
ASSET APPROXIMATE METHOD OF
INSTITUTION SIZE VALUE TYPE ACCOUNTING
- ------------------------------------ ----- ----------- ----------------- --------------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Planters Bank & Trust Company $ 60 $ 8 348,029 shares of Pooling of Interests
Forrest City, Arkansas UPC Common Stock
First State Bancorporation and its 110 12 388,497 shares of Purchase
subsidiary, First Exchange Bank, Series E
Dyersburg, Tennessee Preferred Stock
of UPC
----- -----
Totals $ 170 $20
===== =====
</TABLE>
S-4
<PAGE> 5
PENDING ACQUISITIONS
UPC has entered into definitive agreements to acquire the following
financial institutions (collectively, the "Pending Acquisitions") which are
expected to close in the fourth quarter of 1995 or the first quarter of 1996.
<TABLE>
<CAPTION>
CONSIDERATION
-------------------------------
ASSET APPROXIMATE METHOD OF
INSTITUTION(1) SIZE VALUE TYPE ACCOUNTING
- ---------------------------------- ------ ----------- ----------------- --------------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Capital Bancorporation, Inc., Cape $1,115 $ 109.3 Approximately Pooling of Interests
Girardeau, Missouri, and its 4,192,376 shares
subsidiaries, Capital Bank of of UPC Common
Cape Girardeau County, Capital Stock(2)
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
Eastern National Bank, Miami, 266 30.4 Cash, notes and Purchase
Florida UPC Series E
Preferred
Stock(3)
------ -------
Totals $1,381 $ 139.7
====== =======
</TABLE>
- ---------------
(1) The Company has entered into definitive agreements to acquire for total
cash consideration of $19.9 million two smaller institutions (First
Bancshares of Eastern Arkansas, Inc. and First Bancshares of North Eastern
Arkansas, Inc.) with total aggregate assets of approximately $118 million.
These acquisitions are not included in the unaudited pro forma consolidated
financial statements included in the Company's Current Report on Form 8-K
dated August 22, 1995, incorporated herein by reference and are not
material thereto.
(2) Represents the maximum number of shares of UPC Common Stock estimated to be
issued.
(3) Cash in the amount of $4.5 million, UPC notes in the face amount of $14.5
million and up to 317,459 shares of Series E Preferred Stock of UPC.
In connection with the Pending Acquisitions, it is anticipated that UPC or
the acquired institutions 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 provision for loan losses and similar costs associated with
consolidation of operational activities.
Charges associated with the Pending Acquisitions have been preliminarily
estimated to be between $8 million and $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.
S-5
<PAGE> 6
If the Pending Acquisitions and the Recently Completed Acquisitions had
been consummated at June 30, 1995, UPC's consolidated total assets would have
increased by approximately $1.6 billion to approximately $11.3 billion, UPC's
consolidated total loans would have increased by approximately $1.1 billion to
approximately $7.2 billion and UPC's consolidated total deposits would have
increased by approximately $1.3 billion to approximately $9.6 billion, based
upon June 30, 1995, pro forma consolidated financial information. Assuming the
Pending Acquisitions and the Recently Completed Acquisitions had been
consummated at June 30, 1995, UPC's unaudited pro forma equity to assets, Tier 1
risk-based capital, Total risk-based capital and Leverage ratios would have been
8.05%, 11.98%, 14.30% and 7.53%, respectively. See "Summary of Consolidated
Financial Data" and the related pro forma consolidated financial information in
UPC's Current Report on Form 8-K dated August 22, 1995, incorporated herein by
reference. See "Incorporation of Certain Documents by Reference" in the
accompanying Prospectus.
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 thrift insurance fund. 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 ($0.85 to $0.90 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 presumedly would be to provide financial support to pay
interest on the FICO bonds. At September 30, 1995, UPC's subsidiaries held
approximately $1.6 billion in SAIF insured deposits, approximately $1.2 billion
of which are Oakar deposits. Should the proposed legislation be adopted at the
maximum levels indicated, UPC would be required to pay aggregate SAIF
assessments, as early as the fourth quarter of 1995, of approximately $14.6
million, pre-tax, which would more than offset the benefit of the Federal
Deposit Insurance Corporation ("FDIC") premium reduction realized in the last
half of 1995. See "Certain Regulatory Considerations" in the accompanying
Prospectus.
USE OF PROCEEDS
The net proceeds of the Notes will be approximately $98,438,000 after
deducting the underwriting discount and estimated offering expenses. The net
proceeds will be added to the general funds of the Company and will be available
for general corporate purposes, including acquisitions of other financial
institutions. Pending such use, the Company may temporarily invest the net
proceeds in investment grade securities. See "Capitalization."
S-6
<PAGE> 7
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company at June 30, 1995, and as adjusted as of such date to give effect to the
sale of the Notes offered hereby, and as further adjusted to reflect the
consummation of the Recently Completed Acquisitions and the Pending
Acquisitions. The table should be read in conjunction with the Company's Current
Reports on Form 8-K dated June 20, 1995, August 21, 1995, and August 22, 1995,
incorporated herein by reference. For additional information relating to
specific transactions within the scope of Recently Completed Acquisitions and
Pending Acquisitions, see "Recent Developments."
<TABLE>
<CAPTION>
JUNE 30, 1995
-----------------------------------------------
AS ADJUSTED FOR THE
----------------------------------
NOTE ISSUANCE,
RECENTLY COMPLETED
ACQUISITIONS AND
PENDING
ACTUAL NOTE ISSUANCE ACQUISITIONS
---------- ------------- ------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Parent Company Long-Term Debt
8 1/2% Subordinated Notes due 2002............. $ 40,250 $ 40,250 $ 40,250
6.25% Subordinated Notes due 2003.............. 74,566 74,566 74,566
6 3/4% Subordinated Notes due 2005............. -- 100,000 100,000
8.00% Unregistered, Unsecured Negotiable
Notes....................................... -- -- 13,000
---------- ------------- ------------------
Total.................................. 114,816 214,816 227,816
---------- ------------- ------------------
Subsidiary Banks' Long-Term Debt
Federal Home Loan Bank advances................ 291,630 291,630 298,614
Other.......................................... 6,977 6,977 6,977
---------- ------------- ------------------
Total.................................. 298,607 298,607 305,591
---------- ------------- ------------------
Total long-term debt................... 413,423 513,423 533,407
---------- ------------- ------------------
Shareholders' Equity
Convertible Preferred Stock
Series B, $8.00 Nonredeemable, Cumulative,
Convertible Preferred Stock(1)............ 4,400 4,400 4,400
Series D, 9.5% Redeemable, Cumulative,
Convertible Preferred Stock(2)............ 5,200 5,200 5,200
Series E, 8% Cumulative, Convertible
Preferred Stock(3)........................ 77,698 77,698 94,986
---------- ------------- ------------------
Total convertible preferred stock...... 87,298 87,298 104,586
Common Stock, $5 par value; 100,000,000 shares
authorized; 40,553,285 shares issued and
outstanding (45,100,393 shares as adjusted).... 202,766 202,766 225,502
Additional paid-in-capital....................... 74,960 74,960 99,377
Net unrealized gain on available for sale
securities..................................... 926 926 662
Retained earnings................................ 445,570 445,570 477,718
---------- ------------- ------------------
Total shareholders' equity............. 811,520 811,520 907,845
---------- ------------- ------------------
Total long-term debt and shareholders'
equity............................... $1,224,943 $ 1,324,943 $1,441,252
========== =========== ================
Capital Ratios
Equity/Assets.................................. 8.33% 8.24% 7.98%
Tier 1 risk-based capital(4)................... 12.98 12.98 11.98
Total risk-based capital(4).................... 15.49 17.17 15.72
Leverage....................................... 7.96 7.88 7.46
</TABLE>
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<PAGE> 8
- ---------------
(1) The Series B Preferred Stock has a stated liquidation value of $100 per
share plus all dividends accrued and unpaid to the date of liquidation, and
each share is convertible after November 30, 1994, at the option of the
holder into 7.722 shares (339,768 shares in total) of UPC Common Stock.
(2) The Series D Preferred Stock outstanding was converted into 253,655 shares
of UPC Common Stock effective July 1, 1995.
(3) The Series E Preferred Stock has a stated liquidation value of $25 per
share plus all dividends accrued and unpaid to the date of liquidation, and
may be redeemed by the Company with the prior approval of the Federal
Reserve Board after March 31, 1997, at $25 per share plus all dividends
accrued and unpaid to the date fixed for the redemption. Each share is
convertible at the option of the holder into 1.25 shares (3,884,903 shares
at June 30, 1995) of UPC Common Stock prior to redemption.
(4) Assumes the net proceeds from the Notes' issuance are invested in U.S.
Treasury or U.S. Government Agency securities which have a zero
risk-weighting.
S-8
<PAGE> 9
SUMMARY OF CONSOLIDATED FINANCIAL DATA
The following tables present for the Company, on an historical basis,
selected unaudited consolidated financial data for the five years ended December
31, 1994, and for the six-month periods ended June 30, 1995 and 1994. The
information has been derived from the consolidated financial statements of the
Company, including the audited consolidated financial statements of the Company
incorporated in the accompanying Prospectus by reference to Exhibit 13 to the
Company's 1994 Annual Report on Form 10-K for the fiscal year ended December 31,
1994, and the unaudited interim consolidated financial statements for the three-
and six-month periods ended June 30, 1995 included in the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1995, and should be read in
conjunction therewith and with the notes thereto. See "Incorporation of Certain
Documents by Reference" in the accompanying Prospectus. Historical results are
not necessarily indicative of results to be expected for any future period. In
the opinion of the Company's management, all adjustments, consisting only of
normal recurring adjustments necessary to arrive at a fair statement of interim
results of operations of the Company, have been included.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,(1) YEARS ENDED DECEMBER 31,
------------------------- -------------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---------- ----------- ----------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data
Net Interest Income.......... $ 199,089 $ 188,528 $ 388,278 $ 343,710 $ 281,148 $ 233,790 $ 206,529
Provision for losses on
loans...................... 3,686 1,800 3,636 16,558 27,182 34,203 26,304
Investment securities gains
(losses)................... (3) 274 (20,298) 4,495 14,019 2,624 83
Other noninterest income..... 71,773 56,389 113,860 115,430 98,590 90,697 92,076
Noninterest expense.......... 169,095 168,863 398,835 319,681 279,464 238,475 231,733
---------- ----------- ----------- ---------- ---------- ---------- ----------
Earnings before income taxes,
extraordinary item, and
accounting changes......... 98,078 74,528 79,369 127,396 87,111 54,433 40,651
Applicable income taxes...... 31,197 22,889 20,761 37,420 23,861 11,537 5,408
---------- ----------- ----------- ---------- ---------- ---------- ----------
Earnings before extraordinary
item and accounting
changes.................... 66,881 51,639 58,608 89,976 63,250 42,896 35,243
Extraordinary
item -- defeasance of debt,
net of taxes............... -- -- -- (3,206) -- -- --
Accounting changes, net of
taxes...................... -- -- -- 5,782 -- -- --
---------- ----------- ----------- ---------- ---------- ---------- ----------
Net earnings................. $ 66,881 $ 51,639 $ 58,608 $ 92,552 $ 63,250 $ 42,896 $ 35,243
========== =========== =========== ========== ========== ========== ==========
Per Common Share Data(2)
Primary
Earnings before
extraordinary item and
accounting
changes.................. $ 1.56 $ 1.18 $ 1.25 $ 2.31 $ 1.79 $ 1.32 $ 1.03
Extraordinary
item -- defeasance of
debt, net of taxes....... -- -- -- (.09) -- -- --
Accounting changes, net of
taxes.................... -- -- -- .16 -- -- --
Net earnings............... 1.56 1.18 1.25 2.38 1.79 1.32 1.03
Fully diluted
Earnings before
extraordinary item and
accounting
changes.................. 1.49 1.14 1.25 2.23 1.77 1.32 1.03
Extraordinary
item -- defeasance of
debt, net of taxes....... -- -- -- (.08) -- -- --
Accounting changes, net of
taxes.................... -- -- -- .15 -- -- --
Net earnings............... 1.49 1.14 1.25 2.30 1.77 1.32 1.03
Cash dividends............... .48 .42 .88 .72 .60 .48 .48
Book value................... 17.86 16.64 16.01 16.29 14.02 12.77 11.77
- ---------------
(Continued on the following page)
</TABLE>
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<PAGE> 10
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,(1) YEARS ENDED DECEMBER 31,
------------------------- -------------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---------- ----------- ----------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data (at period
end)
Total assets................. $9,745,439 $10,090,999 $10,015,069 $9,029,893 $7,493,004 $5,928,496 $6,095,531
Loans, net of unearned
income..................... 6,085,087 5,388,459 5,949,128 4,653,368 3,585,769 3,132,924 3,376,435
Allowance for losses on
loans...................... 118,675 122,823 122,089 114,353 89,827 67,989 67,505
Investment securities........ 2,506,948 3,672,357 2,962,144 3,295,644 2,793,950 1,777,754 1,773,508
Deposits..................... 8,263,263 8,341,007 8,417,842 7,671,621 6,441,991 5,145,181 5,182,379
Short-term borrowings........ 140,434 534,101 415,171 275,537 321,976 222,510 362,364
Long-term debt(3)............
Parent company............. 114,816 114,764 114,790 114,729 74,292 38,163 44,662
Subsidiary banks........... 298,607 226,873 226,161 195,442 21,756 10,083 4,469
Total shareholders' equity... 811,520 768,747 730,707 682,002 529,496 425,970 383,349
Average assets................ 9,787,388 9,961,386 10,025,383 8,857,216 6,934,718 5,928,927 6,096,808
Average shareholders'
equity....................... 779,517 769,170 778,232 639,874 494,529 398,651 386,800
Average shares outstanding (in
thousands)
Primary...................... 40,514 40,004 40,055 35,311 31,910 31,752 33,738
Fully diluted................ 45,005 44,486 40,397 39,541 34,754 32,105 34,078
Profitability and Capital
Ratios
Before extraordinary item and
accounting changes
Return on average assets... 1.38% 1.05% .58% 1.02% .91% .72% .58%
Return on average common
equity................... 18.48 14.33 7.40 15.08 13.48 10.80 9.12
Net earnings
Return on average assets... 1.38 1.05 .58 1.04 .91 .72 .58
Return on average common
equity................... 18.48 14.33 7.40 15.55 13.48 10.80 9.12
Net interest income (taxable-
equivalent) to average
earning assets(4).......... 4.62 4.35 4.39 4.44 4.62 4.54 4.02
Loans/deposits............... 73.64 64.60 70.67 60.66 55.66 60.89 65.15
Common and preferred dividend
payout ratio............... 34.14 35.45 64.68 31.81 35.72 35.66 43.08
Equity/assets (period end)... 8.33 7.62 7.30 7.55 7.07 7.19 6.29
Average shareholders'
equity/average total
assets..................... 7.96 7.72 7.76 7.22 7.13 6.72 6.34
Tier 1 capital to
risk-weighted assets(5).... 12.98 13.68 12.22 13.58 13.35 11.91 9.98
Total capital to
risk-weighted assets(5).... 15.49 16.29 14.75 16.40 15.44 14.13 12.09
Leverage ratio(5)............ 7.96 7.43 7.18 7.23 7.11 7.10 6.18
Asset Quality Ratios
Allowance/period end loans... 1.95% 2.28% 2.05% 2.46% 2.51% 2.17% 2.00%
Nonperforming loans/total
loans...................... .41 .47 .32 .59 1.32 1.09 1.07
Allowance/nonperforming
loans...................... 475 487 641 414 190 200 187
Nonperforming assets/loans
and foreclosed
properties................. .51 .63 .42 .78 1.69 1.74 1.81
Provision/average loans...... .12 .07 .07 .37 .77 1.04 .78
Net charge-offs/average
loans...................... .24 .10 .09 .30 .60 1.02 .85
Ratio of Earnings to Fixed
Charges(6)
Excluding interest on
deposits................... 5.49x 5.37x 2.85x 6.37x 6.42x 3.36x 2.03x
Including interest on
deposits................... 1.59 1.58 1.28 1.54 1.39 1.19 1.12
</TABLE>
- ---------------
(1) Interim period ratios have been annualized.
(2) Share and per share amounts have been retroactively restated for material
acquisitions accounted for as poolings of interests.
(3) Long-term debt includes subordinated notes and debentures, obligations under
capital leases, mortgage indebtedness and notes payable with maturities
greater than one year. Subsidiary banks' long-term debt is primarily FHLB
advances.
(4) Calculation does not include the impact of the unrealized gain or loss on
available for sale investment securities.
(5) The risk-based capital ratios are based upon capital guidelines prescribed
by federal bank regulatory authorities. Under those guidelines, the required
minimum Tier 1 and Total capital to risk-weighted assets ratios are 4.0% and
8.0%, respectively. The required minimum leverage ratio of Tier 1 capital to
total adjusted assets is 3.0% to 5.0% (5.0% for bank holding companies
effecting acquisitions).
(6) For purposes of computing these ratios, earnings represent earnings before
income taxes, extraordinary item, accounting changes and fixed charges.
Fixed charges represent interest expense (exclusive of interest on deposits
in one case and inclusive of such interest in the other), capitalized
interest expense, amortization of debt issuance costs and one-third (the
portion deemed representative of the interest factor) of all operating
rents.
S-10
<PAGE> 11
DESCRIPTION OF NOTES
The following is a brief description of the terms of the Notes. This
description does not purport to be complete, should be read in conjunction with
the statements under "Description of Securities" in the accompanying Prospectus
and is subject to, and qualified in its entirety by, such description and the
Subordinated Indenture, dated as of October 15, 1993 (the "Indenture"), between
the Company and The First National Bank of Chicago, as Trustee (the "Trustee").
The Indenture is an exhibit to the Registration Statement of which the
accompanying Prospectus and this Prospectus Supplement form a part.
GENERAL
The Notes will mature on November 1, 2005, and are limited to $100 million
aggregate principal amount. The Notes will bear interest at the rate of 6 3/4%
per annum, beginning on November 7, 1995. Interest is payable semiannually in
arrears on May 1 and November 1 of each year, beginning May 1, 1996, to the
persons in whose names the Notes are registered at the close of business 15
calendar days prior to the applicable interest payment date, and at maturity to
the persons to whom principal is payable. The Notes may not be redeemed prior to
maturity. No sinking fund is provided for the Notes.
The Notes will be unsecured and subordinate in right of payment to the
prior payment in full of all existing and future Senior Indebtedness of the
Company as described under "Description of Securities -- Subordination of
Securities" in the accompanying Prospectus. As of June 30, 1995, the Company had
approximately $43 million principal amount of Senior Indebtedness outstanding,
excluding trade payables and guarantees and other contingent obligations of the
Company.
Payment of the principal of the Notes may be accelerated only in the case
of certain events involving the bankruptcy, insolvency or reorganization of the
Company. There is no right of acceleration of the payment of principal of the
Notes upon a default in the payment of interest on the Notes or in the
performance of any covenant of the Company contained in the Notes or the
Indenture.
GLOBAL NOTES
DTC, New York, New York will act as securities depository for the Notes.
The Notes will be issued in the form of one or more Global Notes registered in
the name of Cede & Co. (DTC's partnership nominee). The Global Note(s) will be
issued in the aggregate principal amount of the Notes to be held by DTC and will
be deposited with DTC. DTC is a limited-purpose trust company organized under
the New York Banking Law, a "banking organization" within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the Securities Exchange Act of 1934.
DTC is owned by certain of the securities brokers and dealers, banks, trust
companies, clearing corporations and other organizations that maintain accounts
with DTC (the "Participants") and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. The rules applicable to DTC and its Participants are on file with
the Securities and Exchange Commission.
Upon the issuance of a Global Note, DTC will credit, to the accounts of the
Participants on its book-entry registration and transfer system the respective
principal amounts of the Notes represented by such Global Note. The accounts to
be credited will be designated by the Underwriters. Ownership of beneficial
interests in a Global Note will be limited to Participants or persons that may
indirectly hold beneficial interests through Participants. Ownership of
beneficial interests in such Global Note will be shown on, and the transfer of
that ownership will be effected only through, records maintained by DTC for such
Global Note (with respect to interests of Participants) and the records of
Participants (with respect to persons other than Participants). Beneficial
owners will not receive certificates representing their ownership interests in
the Notes unless the use of the book-entry system for the Notes should be
discontinued. The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form which
will not be possible with the Notes.
S-11
<PAGE> 12
So long as DTC is the holder of a Global Note, DTC or its nominee, as the
case may be, will be considered the sole owner or holder of the Notes
represented by such Global Note for all purposes under the Indenture. Payment of
the principal of, premium, if any, and interest, if any, on the Notes held by
DTC will be made to DTC's nominee as the registered holder of the Global Note.
Neither UPC, the Trustee, any paying agent nor the registrar for such Notes will
have any responsibility or liability for any aspect of the records relating to,
or payments made on account of, beneficial interests in a Global Note or for
maintaining, supervising or reviewing any records relating to such beneficial
interests. The Participants are solely responsible for keeping account of their
holdings on behalf of their customers.
If DTC should at any time become unwilling, unable or ineligible to
continue as the depository for the Notes and a successor depository should not
be appointed by UPC within 90 days, UPC will issue Notes in definitive form in
exchange for the Global Note(s).
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest will be made by UPC in
immediately available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, the Notes
will trade in the Same-Day Funds Settlement System maintained by DTC until
maturity, and secondary market trading activity in the Notes will therefore be
required by DTC to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds on
trading activity in the Notes.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Company has agreed to sell to the Underwriters named below (the
"Underwriters") and the Underwriters have agreed to purchase from UPC, the
amount of Notes set forth opposite their names below.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
--------------------------------------------------------------------- ------------
<S> <C>
Salomon Brothers Inc................................................. $ 50,000,000
Keefe, Bruyette & Woods, Inc......................................... 50,000,000
------------
Total...................................................... $100,000,000
=============
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all of the Notes offered
hereby if any Notes are purchased. The Underwriters have advised the Company
that they propose initially to offer the Notes to the public at the public
offering price set forth on the cover page of this Prospectus Supplement and to
certain dealers at such price less a concession not in excess of .400% of the
principal amount of the Notes. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of .250% of such principal amount to certain
other dealers. After the initial public offering, the public offering price and
such concessions may be changed.
The Underwriting Agreement provides that the Company will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, or contribute to payments the Underwriters
may be required to make in respect thereof.
The Notes are a new issue of securities with no established trading market.
The Company has been advised by the Underwriters that they may make a market in
the Notes; however, the Company cannot provide any assurance that a secondary
market for the Notes will develop.
LEGAL MATTERS
Certain legal matters will be passed upon for the Underwriters by Alston &
Bird, Washington, D.C. From time to time, Alston & Bird has provided and may in
the future provide legal services to the Company and its subsidiaries. As to
matters of Tennessee law, Alston & Bird will rely on the opinion of Wyatt,
Tarrant & Combs, Memphis, Tennessee, counsel to the Company.
S-12
<PAGE> 13
PROSPECTUS
$100,000,000
UNION PLANTERS CORPORATION
SUBORDINATED DEBT SECURITIES
---------------------
Union Planters Corporation ("UPC" or the "Company") may offer from time to
time up to $100,000,000 aggregate principal amount of its subordinated debt
securities (the "Securities") at prices and on terms to be determined at the
time of sale. The specific designation, aggregate principal amount, maturity,
authorized denominations, any premium, any interest rate (which may be fixed or
variable), any interest payment dates, any optional or mandatory redemption
terms, the initial public offering price and any other terms of the offering of
the Securities in respect of which this Prospectus is being delivered ("Offered
Securities") are set forth in the accompanying Prospectus Supplement (the
"Prospectus Supplement").
The Securities will be unsecured and will be subordinated in right of
payment to the prior payment in full of all existing and future Senior
Indebtedness of the Company, as described in "Description of Securities --
Subordination of Securities." The Securities will be subject to acceleration of
maturity only in the event of certain events of bankruptcy, insolvency or
reorganization of the Company. There is no right of acceleration in the case of
a default in the payment of the principal of, or any premium or interest on, the
Securities or in the performance of any covenant or agreement of the Company.
The Securities may be sold (i) directly by the Company to the public or
through agents designated by it from time to time, (ii) through underwriting
syndicates led by one or more managing underwriters, or (iii) through one or
more underwriters acting alone. If any agent of the Company or any underwriter
is involved in the sale of the Securities offered hereby, the name of such agent
or underwriter and any applicable commissions or discounts are set forth in, or
may be calculated from, the Prospectus Supplement, and the net proceeds to the
Company from such sale will be the purchase price of such Securities less such
commissions or discounts and the other attributable issuance and distribution
expenses. See "Plan of Distribution" for possible indemnification arrangements
for agents or underwriters.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement or a term sheet setting forth the terms
of the Securities.
---------------------
THE SECURITIES WILL NOT BE SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF
ANY BANK OR NONBANK SUBSIDIARY OF THE COMPANY AND WILL NOT BE INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND,
THE SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENT
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
---------------------
The date of this Prospectus is October 30, 1995.
<PAGE> 14
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at regional offices of the
Commission located at Seven World Trade Center, 13th Floor, New York, New York
10048 and 500 West Madison Street, Chicago, Illinois 60661-2511. Copies of such
material can be obtained by mail from the Public Reference Section of the
Commission, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, such reports, proxy statements and other
information concerning UPC can be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005. UPC has filed with
the Commission a Registration Statement on Form S-3 (together with any
amendments thereto, the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Securities to be
issued pursuant to the Prospectus Supplement. This Prospectus does not contain
all of the information set forth in the Registration Statement and the Exhibits
thereto. Certain items have been omitted as permitted by the rules and
regulations of the Commission.
For further information regarding UPC and the Securities offered by this
Prospectus, reference is made to the complete Registration Statement, including
all amendments thereto and the schedules and exhibits filed as a part thereof.
Statements contained herein concerning provisions of documents are necessarily
summaries of the documents and each statement is qualified in its entirety by
reference to the copy of the applicable document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by UPC with the Commission (except
as otherwise indicated, under Commission File Number 1-10160) pursuant to the
Exchange Act are hereby incorporated by reference in this Prospectus:
1. UPC's Annual Report on Form 10-K for the year ended December 31,
1994;
2. UPC's Quarterly Reports on Form 10-Q for the three-month period
ended March 31, 1995, and for the three- and six-month periods ended June
30, 1995; and
3. UPC's Current Reports on Form 8-K dated December 31, 1994 (as
amended on January 31, 1995), April 27, 1995, June 20, 1995, July 27, 1995,
August 21, 1995, August 22, 1995 and October 26, 1995.
The fact that a report has been listed above does not mean that it has not
been superseded or amended, in whole or in part, by a subsequent report.
UPC's Annual Report on Form 10-K for the year ended December 31, 1994,
incorporates by reference specific portions of UPC's Annual Report to
Shareholders for that year (UPC's "Annual Report to Shareholders" which is
Exhibit 13 to said Form 10-K) but does not incorporate other portions of UPC's
Annual Report to Shareholders. The portion of UPC's Annual Report to
Shareholders captioned "Letter to Shareholders" and other portions of UPC's
Annual Report to Shareholders not specifically incorporated into UPC's Annual
Report on Form 10-K are not incorporated herein and are not a part of the
Registration Statement.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities
offered hereby shall likewise be incorporated herein by reference and shall
become a part hereof from and after the time such documents are filed. Any
statement contained herein or in a document incorporated herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently-filed document which
also is
2
<PAGE> 15
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS (OTHER THAN EXHIBITS TO SUCH
DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE) ARE
AVAILABLE, WITHOUT CHARGE, TO ANY PERSON, INCLUDING ANY BENEFICIAL OWNER, TO
WHOM THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST, IN THE CASE OF
DOCUMENTS RELATING TO THE COMPANY, TO UNION PLANTERS CORPORATION, POST OFFICE
BOX 387, MEMPHIS, TENNESSEE 38147 (TELEPHONE NUMBER (901) 383-6584), ATTENTION:
E. JAMES HOUSE, SECRETARY.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED HEREIN AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR
TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS DOCUMENT NOR ANY DISTRIBUTION OF SECURITIES MADE HEREUNDER
SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
3
<PAGE> 16
THE COMPANY
UPC is a multi-state bank holding company and savings and loan holding
company headquartered in Memphis, Tennessee. At June 30, 1995, UPC had total
consolidated assets of approximately $9.7 billion, loans of approximately $6.1
billion, deposits of approximately $8.3 billion and shareholders' equity of
approximately $812 million. As of that date, the Company was the second-largest
independent bank holding company headquartered in Tennessee as measured by
consolidated assets. The Company conducts its business activities through its
lead bank subsidiary, Union Planters National Bank ("UPNB"), and 31 other bank
subsidiaries and two savings and loan subsidiaries located in Tennessee,
Mississippi, Arkansas, Louisiana, Alabama and Kentucky (collectively, the "UPC
Banking Subsidiaries").
The Company's corporate office is located at 7130 Goodlett Farms Parkway,
Memphis, Tennessee 38018, and its telephone number is (901) 383-6000. Additional
information about the Company is included in documents incorporated herein by
reference. See "Incorporation of Certain Documents by Reference."
CERTAIN REGULATORY CONSIDERATIONS
GENERAL
As a bank holding company, the Company is subject to the regulation and
supervision of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board") under the Bank Holding Company Act of 1956, as amended
("BHCA"). In addition, as a savings and loan holding company, the Company is
registered with the Office of Thrift Supervision (the "OTS") and is subject to
OTS regulations, supervision and reporting requirements. Each of the UPC Banking
Subsidiaries is a member of the Federal Deposit Insurance Corporation ("FDIC"),
and as such, its deposits are insured by the FDIC to the maximum extent provided
by law.
The UPC Banking Subsidiaries that are national banking associations,
including UPNB, are subject to supervision and examination by the Office of the
Comptroller of the Currency (the "Comptroller") and the FDIC. State-chartered
UPC Banking Subsidiaries which are members of the Federal Reserve System are
subject to supervision and examination by the Federal Reserve Board and the
state banking authorities of the states in which they are located.
State-chartered UPC Banking Subsidiaries which are not members of the Federal
Reserve System are subject to supervision and examination by the FDIC and the
state banking authorities of the states in which they are located. The Company's
savings bank subsidiaries are subject to supervision and examination by the OTS.
The UPC Banking Subsidiaries are subject to various requirements and
restrictions, including requirements to maintain reserves against deposits,
restrictions on the types and amounts of loans and other extensions of credit
that may be granted and the interest that may be charged thereon and limitations
on the types of investments that may be made and the types of services that may
be offered. Various consumer laws and regulations also affect the operations of
the banks. In addition to the impact of regulation, the UPC Banking Subsidiaries
are affected significantly by the actions of the Federal Reserve Board as it
attempts to control the money supply and credit availability in order to
influence the economy.
The BHCA requires every bank holding company to obtain the prior approval
of the Federal Reserve Board before (i) it may acquire direct or indirect
ownership or control of any voting shares of any bank if, after such
acquisition, the bank holding company will directly or indirectly own or control
more than 5.0% of the voting shares of the bank, (ii) it or any of its
subsidiaries, other than a bank, may acquire all or substantially all of the
assets of the bank, or (iii) it may merge or consolidate with any other bank
holding company.
The BHCA further provides that the Federal Reserve Board may not approve
any transaction that would result in a monopoly or would be in furtherance of
any combination or conspiracy to monopolize or attempt to monopolize the
business of banking in any section of the United States, or the effect of which
may be substantially to lessen competition or to tend to create a monopoly in
any section of the country, or that in any other manner would be in restraint of
trade, unless the anticompetitive effects of the proposed transaction are
clearly outweighed by the public interest in meeting the convenience and needs
of the community to be served.
4
<PAGE> 17
The Federal Reserve Board is also required to consider the financial and
managerial resources and future prospects of the bank holding companies and
banks concerned and the convenience and needs of the community to be served.
Consideration of financial resources generally focuses on capital adequacy, and
consideration of convenience and needs issues includes the parties' performance
under the Community Reinvestment Act of 1977, as amended.
The BHCA, as amended by the interstate banking provisions of the
Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the
"Interstate Banking Act"), which became effective on September 29, 1995,
repealed the prior statutory restrictions on interstate acquisitions of banks by
bank holding companies, such that the Company and any other bank holding company
located in Tennessee may now acquire a bank located in any other state, and a
bank holding company located outside Tennessee may lawfully acquire any
Tennessee-based bank, regardless of state law to the contrary, in either case
subject to certain deposit-percentage and other restrictions. The Interstate
Banking Act also generally provides that, after June 1, 1997, national and
state-chartered banks may branch interstate through acquisitions of banks in
other states. By adopting legislation prior to that date, a state has the
ability either to "opt in" and accelerate the date after which interstate
branching is permissible or "opt out" and prohibit interstate branching
altogether. As of the date of this Prospectus, Tennessee has neither "opted in"
nor "opted out."
The BHCA generally prohibits the Company from engaging in activities other
than banking or managing or controlling banks or other permissible subsidiaries
and from acquiring or retaining direct or indirect control of any company
engaged in any activities other than those activities determined by the Federal
Reserve Board to be so closely related to banking or managing or controlling
banks as to be a proper incident thereto. In determining whether a particular
activity is permissible, the Federal Reserve Board must consider whether the
performance of such an activity reasonably can be expected to produce benefits
to the public, such as greater convenience, increased competition or gains in
efficiency that outweigh possible adverse effects such as undue concentration of
resources, decreased or unfair competition, conflicts of interest or unsound
banking practices. For example, factoring accounts receivable, acquiring or
servicing loans, leasing personal property, conducting discount securities
brokerage activities, performing certain data processing services, acting as
agent or broker in selling credit life insurance and certain other types of
insurance in connection with credit transactions and performing certain
insurance underwriting activities all have been determined by the Federal
Reserve Board to be permissible activities of bank holding companies. The BHCA
does not place territorial limitations on permissible nonbanking activities of
bank holding companies. Despite prior approval, the Federal Reserve Board has
the power to order a bank holding company or its subsidiaries to terminate any
activity or to terminate its ownership or control of any subsidiaries when it
has reasonable cause to believe that continuation of such activity or such
ownership or control constitutes a serious risk to the financial safety,
soundness or stability of any bank subsidiary of that bank holding company.
CAPITAL
The Federal Reserve Board has adopted risk-based capital guidelines for
bank holding companies. The minimum guideline for the ratio ("Risk-Based Capital
Ratio") of total capital ("Total Capital") to risk-weighted assets (including
certain off-balance-sheet activities such as standby letters of credit) is 8.0%.
At least half of the Total Capital must be comprised of "Tier 1 Capital," which
consists of common shareholders' equity, minority interests in the equity
accounts of consolidated subsidiaries, non-cumulative perpetual preferred stock
and a limited amount of cumulative perpetual preferred stock, less goodwill. The
remainder, which is "Tier 2 Capital," may consist of limited amounts of
subordinated debt (or certain other qualifying debt issued prior to March 12,
1988), other preferred stock and a limited amount of loan loss reserves. It is
the intent of the Company that the Securities qualify as Tier 2 Capital.
In addition, the Federal Reserve Board has established minimum leverage
ratio guidelines for bank holding companies. These guidelines provide for a
minimum ratio (the "Leverage Ratio") of Tier 1 Capital to average total assets,
less goodwill of 3.0% for bank holding companies that meet certain specified
criteria, including those having the highest regulatory rating. All other bank
holding companies generally are required to maintain a Leverage Ratio of at
least 3.0% plus an additional cushion of 100 to 200 basis points. The guidelines
also provide that bank holding companies experiencing internal growth or making
acquisitions are
5
<PAGE> 18
expected to maintain strong capital positions substantially above the minimum
supervisory levels without significant reliance on intangible assets.
Furthermore, the Federal Reserve Board has indicated that it will consider a
"tangible Tier 1 Capital Leverage Ratio" (deducting all intangibles) and other
indicia of capital strength in evaluating proposals for expansion or new
activities. The Federal Reserve Board has not advised the Company of any
specific minimum Leverage Ratio applicable to the Company.
The federal bank regulatory agencies have issued various proposals to amend
the Risk Based Capital guidelines for banks and bank holding companies. Under
one proposal, banks would be required to give explicit consideration to
interest-rate risk as an element of capital adequacy by maintaining capital to
compensate for such risk in an amount measured by the bank's exposure to
interest rate risk in excess of a regulatory threshold. The OTS has already
included an interest rate risk component in its Risk-Based Capital guidelines
for savings associations that it regulates, including the Company's savings and
loan subsidiaries. A proposal recently issued by the Federal Reserve Board and
expected to be joined in by the other bank regulatory agencies increases the
amount of capital required to be carried against certain long-term derivative
contracts; in addition, the proposal recognizes the effect of certain bilateral
netting arrangements in reducing potential future exposure under these
contracts. The Company's management believes that these changes will not, if
adopted, have a material effect on the Company's compliance with the capital
adequacy requirements.
Failure to meet capital requirements can subject an institution to a
variety of enforcement remedies, including issuance of a capital directive, the
termination of deposit insurance by the FDIC and a prohibition on the taking of
brokered deposits. As described below, substantial additional restrictions can
be imposed upon FDIC-insured institutions that fail to meet applicable capital
requirements. See "-- Prompt Corrective Action."
At June 30, 1995, the Company's total Risk-Based Capital Ratio was 15.49%,
its Tier 1 Risk-Based Capital Ratio (i.e., its ratio of Tier 1 Capital to
risk-weighted assets) was 12.98% and its Leverage Ratio was 7.96%. Each of the
UPC Banking Subsidiaries is subject to Risk-Based and Leverage Capital Ratio
requirements adopted by their respective federal regulators which are
substantially similar to those adopted by the Federal Reserve Board. At June 30,
1995, UPNB's total Risk-Based Capital Ratio was 15.64%, its Tier 1 Risk-Based
Capital Ratio was 14.37% and its Leverage Ratio was 8.90%, respectively. Neither
the Company nor any of the UPC Banking Subsidiaries has been advised by any
federal banking agency of any specific minimum capital ratio requirement
applicable to it. In addition, each of the UPC Banking Subsidiaries satisfied
the minimum capital requirements applicable to it and had the requisite capital
levels to qualify as a "well-capitalized" institution under the prompt
corrective action provisions discussed below.
PROMPT CORRECTIVE ACTION
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), and the joint regulations thereunder adopted by the federal banking
agencies, require the banking regulators to take prompt corrective action in
respect of depository institutions that do not meet their minimum capital
requirements. FDICIA establishes five capital tiers: "well capitalized,"
"adequately capitalized," "undercapitalized," "significantly undercapitalized"
and "critically undercapitalized." Under the prompt corrective action
regulations, a bank is defined to be well capitalized if it maintains a Leverage
Ratio of at least 5.0%, a Tier 1 Risk-Based Capital Ratio of at least 6.0% and a
total Risk-Based Capital Ratio of at least 10.0% and is not otherwise in a
"troubled condition" as determined by its appropriate federal regulatory agency.
A bank is defined to be adequately capitalized if it meets all of its minimum
capital requirements as described above under "-- Capital" and has a Tier 1
Risk-Based Capital Ratio of at least 4.0%. In addition, a bank will be
considered "undercapitalized" if it fails to meet any minimum required measure,
"significantly undercapitalized" if it is significantly below such measure and
"critically undercapitalized" if it fails to maintain a level of tangible equity
equal to not less than 2.0% of total assets. A bank may be deemed to be in a
capitalization category that is lower than is indicated by its actual capital
position if it receives an unsatisfactory examination rating.
Regardless of their capital levels, all institutions are restricted from
making any capital distribution or paying any management fees that would cause
the institution to fail to satisfy the minimum levels required to
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be considered adequately capitalized. An undercapitalized institution is: (i)
subject to increased monitoring by the appropriate federal banking regulator;
(ii) required to submit an acceptable capital restoration plan within 45 days;
(iii) subject to asset growth limits; and (iv) required to obtain prior
regulatory approval for acquisitions, branching and new lines of business. Such
capital restoration plan must include a guarantee by the institution's holding
company that the institution will comply with the plan until it has been
adequately capitalized on average for four consecutive quarters. Pursuant to the
guarantee, the institution's holding company would be liable up to the lesser of
5.0% of the institution's total assets or the amount necessary to bring the
institution into capital compliance as of the date it failed to comply with its
capital restoration plan. If the controlling bank holding company fails to
fulfill its obligations under the guarantee and should file (or should have
filed against it) a petition under the Federal Bankruptcy Code, the appropriate
federal banking regulator could have a claim as a general creditor of the bank
holding company and, if the guarantee were deemed to be a commitment to maintain
capital under the Federal Bankruptcy Code, the claim would be entitled to a
priority in such bankruptcy proceeding over third-party creditors of the bank
holding company, including holders of the Securities.
The regulatory agencies have discretionary authority to reclassify well
capitalized institutions as adequately capitalized, or to impose on adequately
capitalized institutions requirements or actions specified for undercapitalized
institutions, if the agency should determine after notice and an opportunity for
hearing that the institution is in an unsafe or unsound condition or is engaging
in an unsafe or unsound practice, which can consist of the receipt of an
unsatisfactory examination rating if the deficiencies cited are not corrected. A
significantly undercapitalized institution, as well as any undercapitalized
institution which should fail to submit an acceptable capital restoration plan,
may be subject to regulatory demands for recapitalization, broader application
of restrictions on transactions with affiliates, limitations on interest rates
paid on deposits, asset growth and other activities, possible replacement of
directors and officers, and restrictions on capital distributions by any bank
holding company controlling the institution. Any company controlling the
institution could also be required to divest the institution or the institution
could be required to divest subsidiaries. The senior executive officers of a
significantly undercapitalized institution may not receive bonuses or increases
in compensation without prior regulatory approval and the institution is
prohibited from making payments of principal or interest on its subordinated
debt, such as the Securities. If an institution should become critically
undercapitalized, the institution would be subject to conservatorship or
receivership within 90 days unless periodic determinations are made that
forbearance from such action would better protect the deposit insurance fund.
Unless appropriate findings and certifications are made by the appropriate
federal bank regulatory agencies, a critically undercapitalized institution must
be placed in receivership if it should remain critically undercapitalized on
average during the calendar quarter beginning 270 days after the date it became
critically undercapitalized.
DIVIDEND RESTRICTIONS
The Company is a legal entity separate and distinct from the UPC Banking
Subsidiaries and its nonbank subsidiaries. The Company's revenues (on a parent
company only basis) result, in significant part, from dividends paid to the
Company by its subsidiaries. The right of the Company, and consequently the
rights of creditors and shareholders of the Company, to participate in any
distribution of the assets or earnings of any subsidiary through the payment of
such dividends or otherwise is necessarily subject to the prior claims of
creditors of the subsidiary (including depositors, in the case of the UPC
Banking Subsidiaries) except to the extent that claims of the Company in its
capacity as a creditor may be recognized.
There are statutory and regulatory requirements applicable to the payment
of dividends by the UPC Banking Subsidiaries to the Company. Each national
banking association subsidiary of the Company is required by federal law to
obtain the prior approval of the Comptroller for the payment of dividends if the
total of all dividends declared by the board of directors of such bank in any
year would exceed the total of (i) such bank's net profits (as defined and
interpreted by regulation) for that year, plus (ii) the retained net profits (as
defined and interpreted by regulation) for the preceding two years, less any
required transfers to surplus. In addition, national banks may only pay
dividends to the extent that their retained net profits (including the portion
transferred to surplus) exceed statutory bad debts (as defined by regulation).
The Company's state-
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chartered bank subsidiaries are subject to similar restrictions on the payment
of dividends by the respective state laws under which they are organized.
Furthermore, as described above under "-- Prompt Corrective Action," all
depository institutions are prohibited from paying any dividends, making other
distributions or paying any management fees if, after such payment, the
depository institution would fail to satisfy its minimum capital requirements.
In accordance with the specified calculations, at July 1, 1995, approximately
$31 million was available for distribution to the Company without obtaining
prior regulatory approval. Future dividends will depend upon the level of
earnings of the UPC Banking Subsidiaries. It is the policy of the Federal
Reserve Board that bank holding companies should pay dividends only out of
current earnings. Federal banking regulators also have the authority to prohibit
banks and bank holding companies from paying a dividend if they should deem such
payment to be an unsafe or unsound practice. In addition, it is the position of
the Federal Reserve Board that as a bank holding company the Company is expected
to act as a source of financial strength to each of its subsidiary banks. See
"-- Support of Subsidiary Banks."
SUPPORT OF SUBSIDIARY BANKS
Under Federal Reserve Board policy, the Company is expected to act as a
source of financial strength to the UPC Banking Subsidiaries and, where
required, to commit resources to support each of such subsidiaries. This support
may be required at times when, absent such Federal Reserve Board policy, the
Company may not be inclined to provide it. Moreover, if one of the UPC Banking
Subsidiaries should become undercapitalized, under FDICIA the Company would be
required to guarantee the subsidiary bank's compliance with its capital plan in
order for such plan to be accepted by the federal regulatory authority. See
"-- Prompt Corrective Action."
Under the "cross guarantee" provisions of the Federal Deposit Insurance Act
("FDI Act"), any UPC Banking Subsidiary may be held liable for any loss incurred
by, or reasonably expected to be incurred by, the FDIC in connection with (i)
the "default" of any other UPC Banking Subsidiary or (ii) any assistance
provided by the FDIC to any UPC Banking Subsidiary "in danger of default."
"Default" is defined generally as the appointment of a conservator or receiver
and "in danger of default" is defined generally as the existence of certain
conditions indicating that a default is likely to occur in the absence of
regulatory assistance.
Because it is a bank holding company, any capital loans made by the Company
to the UPC Banking Subsidiaries are subordinate in right of payment to deposits
and to certain other indebtedness of such subsidiary bank. In the event of a
bank holding company's bankruptcy, any commitment by the bank holding company to
a federal bank regulatory agency to maintain the capital of a subsidiary bank
will be assumed by the bankruptcy trustee and entitled to a priority of payment
over certain other creditors of the bank holding company, including the holders
of subordinated debt, such as the Securities.
FDIC INSURANCE ASSESSMENTS
In July 1993, the FDIC adopted a new risk-based assessment system for
insured depository institutions that takes into account the risks attributable
to different categories and concentrations of assets and liabilities. The new
system, which went into effect on January 1, 1994, and replaces a transitional
system that the FDIC had utilized for the 1993 calendar year, assigns an
institution to one of three capital categories: (i) well capitalized; (ii)
adequately capitalized; and (iii) undercapitalized. These three categories are
substantially similar to the prompt corrective action categories described above
with the undercapitalized category including institutions that are
undercapitalized, significantly undercapitalized and critically undercapitalized
for prompt corrective action purposes. An institution is also assigned by the
FDIC to one of three supervisory subgroups within each capital group. The
supervisory subgroup to which an institution is assigned is based on a
supervisory evaluation provided to the FDIC by the institution's primary federal
regulator and information which the FDIC determines to be relevant to the
institution's financial condition and the risk posed to the deposit insurance
funds (which may include, if applicable, information provided by the
institution's state supervisor). An institution's insurance assessment rate is
then determined based on the capital category and supervisory category to which
it is assigned. Under the final risk-based assessment system, as well as the
prior transitional system, there are nine assessment risk classifications (i.e.,
combinations of capital groups and supervisory subgroups) to which different
assessment rates are applied. Assessment rates for members of both
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<PAGE> 21
the Bank Insurance Fund ("BIF") and the Savings Association Insurance Fund
("SAIF") for the first half of 1995, as they had been during 1994, ranged from
23 basis points (0.23% of deposits) per year for an institution in the highest
category (i.e., "well capitalized" and "healthy") to 31 basis points (0.31% of
deposits) for an institution in the lowest category (i.e., "undercapitalized"
and "substantial supervisory concern"). These rates were established for both
funds to achieve a designated ratio of reserves to insured deposits (i.e.,
1.25%) within a specified period of time.
Once the designated reserve ratio for the BIF was reached, which appears to
have occurred some time during May 1995, the FDIC was authorized to reduce the
minimum assessment rate below 23 basis points and to set future assessment rates
at such levels that would maintain the fund's reserve ratio at the designated
level. In August 1995, the FDIC adopted final regulations reducing the
assessment rates for BIF-member banks. Under the revised schedule, BIF-member
banks, starting with the second half of 1995, will now pay assessments ranging
from 4 basis points to 31 basis points, with an average assessment rate of 4.5
basis points. Refunds, with interest, will be paid for assessments for the
month(s) after the month in which the designated reserve ratio for the BIF was
reached, as well as for the quarterly payment made on September 30, 1995,
assuming that the designated reserve ratio was achieved prior to June 30, 1995.
At the same time, the FDIC elected to retain the existing assessment rate of 23
to 31 basis points for SAIF members for the foreseeable future given the
undercapitalized nature of that insurance fund.
On July 28, 1995, the FDIC, the Treasury Department and the OTS released
statements outlining a proposed plan ("Proposed Plan") to recapitalize the SAIF.
The Proposed Plan, which is pending both as a stand-alone measure and as a part
of the proposed budget reconciliation legislation, would require all SAIF-member
institutions to pay a special assessment of from 85 to 90 basis points based on
the amount of SAIF-assessable deposits on March 31, 1995; provided, however,
that the special assessment may be less for SAIF-insured deposits held by banks
("Oaker Deposits"). The special assessment would be payable on January 1, 1996,
and would result in a significant recapitalization of the SAIF so as to enable
the fund to reach its designated reserve ratio. The Proposed Plan would make
other statutory changes that would strengthen the SAIF fund and provide for
interest payments on the Financing Corporation ("FICO") bonds issued in
connection with earlier efforts to support the failing thrift industry: the
assessment base for the payments on the FICO bonds would be expanded to include
the deposits of both BIF- and SAIF-insured institutions; the unspent funds of
the RTC would be made available to cover any extraordinary and unanticipated
SAIF losses until the BIF and SAIF were merged (a part of the Proposed Plan not
supported by the Treasury Department); and the BIF and SAIF would be merged as
soon as possible but no later than the beginning of 1998. The Proposed Plan
would also reduce the minimum average assessment rate required under the FDI Act
for a fund that is undercapitalized or has outstanding borrowings from the
Treasury or the Federal Financing Bank from 23 basis points to 8 basis points.
The Proposed Plan also includes special rules for undercapitalized institutions
that could not pay the special assessment without increasing the risk of losses
to the SAIF. Other legislative proposals made in connection with the Proposed
Plan have included combining the thrift and bank charters into a single unified
charter and requiring all thrifts to become banks or state-chartered savings
banks.
BROKERED DEPOSITS
The FDIC has adopted regulations governing the receipt of brokered
deposits. Under the regulations, a bank may not lawfully accept, roll over or
renew brokered deposits unless (i) it is well capitalized or (ii) it is
adequately capitalized and receives a waiver from the FDIC. A bank that may not
receive brokered deposits also may not offer "pass-through" insurance on certain
employee benefit accounts. Whether or not it has obtained such a waiver, an
adequately capitalized bank may not pay an interest rate on any deposits in
excess of 75 basis points over certain prevailing market rates specified by
regulation. There are no such restrictions on a bank that is well capitalized.
Because each of the UPC Banking Subsidiaries at June 30, 1995, had the requisite
capital levels to qualify as a well capitalized institution, the Company
believes the brokered deposits regulation will have no material effect on the
funding or liquidity of any of these subsidiaries.
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SAFETY AND SOUNDNESS STANDARDS
The FDI Act, as amended by the FDICIA and the Riegle Community Development
and Regulatory Improvement Act of 1994, requires the federal bank regulatory
agencies to prescribe standards, by regulations or guidelines, relating to the
internal controls, information systems and internal audit systems, loan
documentation, credit underwriting, interest rate risk exposure, asset growth,
asset quality, earnings, stock valuation and compensation, fees and benefits and
such other operational and managerial standards as the agencies deem
appropriate. The federal bank regulatory agencies have adopted, effective August
9, 1995, a set of guidelines prescribing safety and soundness standards pursuant
to FDICIA, as amended. The guidelines establish general standards relating to
internal controls and information systems, internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset growth and
compensation, fees and benefits. In general, the guidelines require, among other
things, appropriate systems and practices to identify and manage the risks and
exposures specified in the guidelines. The guidelines prohibit excessive
compensation as an unsafe and unsound practice and describe compensation as
excessive when the amounts paid are unreasonable or disproportionate to the
services performed by an executive officer, employee, director or principal
shareholder. The federal banking agencies determined that stock valuation
standards were not appropriate. In addition, the agencies adopted regulations
that authorize, but do not require, an agency to order an institution that has
been given notice by an agency that it is not satisfying any one or more of such
safety and soundness standards to submit a compliance plan. If, after being so
notified, an institution fails to submit an acceptable compliance plan or fails
in any material respect to implement an accepted compliance plan, the agency
must issue an order directing action to correct the deficiency and may issue an
order directing other actions of the types to which an undercapitalized
association is subject under the "prompt correction action" provisions of
FDICIA. See "-- Prompt Corrective Action." If an institution fails to comply
with such an order, the agency may seek to enforce such order in judicial
proceedings and to impose civil money penalties. The federal bank regulatory
agencies also proposed guidelines for asset quality earning standards.
DEPOSITOR PREFERENCE
Legislation recently enacted by Congress establishes a nationwide
depositor-preference rule in the event of a bank failure. Under this arrangement
all deposits and certain other claims against a bank, including the claim of the
FDIC, as subrogee of insured depositors, would receive payment in full before
any general creditor of the bank, including holders of the Securities, would be
entitled to any payment in the event of an insolvency or liquidation of the
bank.
PROPOSED LEGISLATION
Because of concerns relating to the competitiveness and the safety and
soundness of the industry, Congress continues to consider a number of
wide-ranging proposals for altering the structure, regulation and competitive
relationships of the nation's financial institutions. Among such bills are
proposals to combine banks and thrifts into a unified charter, to alter the
statutory separation of commercial and investment banking, and to further expand
the powers of depository institutions, bank holding companies and competitors of
depository institutions. It cannot be predicted whether or in what form any of
these proposals will be adopted or the extent to which the business of the
Company may be affected thereby.
USE OF PROCEEDS
The net proceeds from the sale of the Securities will be used for general
corporate purposes, including the Company's working capital needs, possible
additional contributions to the capital of the Company's subsidiaries, possible
acquisitions of other financial institutions or their assets, possible
acquisitions of, or investments in, other businesses of a type eligible for bank
holding companies and possible reduction of outstanding indebtedness of the
Company. Pending such use, the Company may temporarily invest the net proceeds
in investment-grade securities. The Company, from time to time, may engage in
additional capital financings of a character and in amounts to be determined by
the Company in light of its needs at such time or times and in light of
prevailing market conditions. If the Company elects at the time of issuance of
the
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<PAGE> 23
Securities to make a different or more specific use of the proceeds other than
that set forth herein, such use will be described in the applicable Prospectus
Supplement.
DESCRIPTION OF SECURITIES
The following sets forth certain general terms and provisions of the
Securities to which any Prospectus Supplement may relate. The particular terms
of the Securities offered by any Prospectus Supplement will be described in the
Prospectus Supplement relating to such Offered Securities.
The Securities will be issued under a Subordinated Indenture dated as of
October 15, 1993 (the "Indenture"), between the Company and The First National
Bank of Chicago, as Trustee for the Securities (the "Trustee"). A copy of the
Indenture has been filed as an exhibit to the Registration Statement of which
this Prospectus forms a part. The following summaries of certain provisions of
the Indenture do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all of the provisions of the
Indenture, including the definitions therein of certain terms. Whenever
particular Sections, Articles or defined terms of the Indenture are referred to,
it is intended that such Sections, Articles or definitions of the defined terms
be incorporated herein by reference. The particular terms of the Offered
Securities and the extent, if any, to which the general provisions may apply to
the Offered Securities will be described in the Prospectus Supplement relating
to such Offered Securities. Unless otherwise indicated, Section references
contained herein refer to the Sections of the Indenture. As of June 30, 1995,
the Company had approximately $74.6 million principal amount of its 6.25%
Subordinated Notes due 2003 previously issued under the Indenture, which rank on
a parity with the Offered Securities.
Since the Company is a holding company, the right of the Company, and hence
the right of creditors and shareholders of the Company, including Holders of the
Securities, to participate in any distribution of assets of any subsidiary of
the Company upon its liquidation, reorganization or otherwise is necessarily
subject to the prior claims of creditors of the subsidiary, except to the extent
that the claims of the Company itself as a creditor of the subsidiary may be
recognized.
GENERAL
The Securities will be unsecured obligations of the Company. The Indenture
does not limit the amount of the Securities which may be issued thereunder and
provides that the Securities of any series may be issued thereunder up to the
aggregate principal amount which may be authorized from time to time by the
Company. All Securities issued under the Indenture will rank equally and ratably
with any additional Securities issued under the Indenture. The Securities will
be subordinated to all existing and future Senior Indebtedness of the Company as
described below under "Subordination of Securities." Neither the Indenture nor
the Securities to be issued thereunder will limit or otherwise restrict the
amount of other indebtedness which may be incurred or other securities which may
be issued by the Company. THE SECURITIES WILL NOT BE SAVINGS ACCOUNTS, DEPOSITS
OR OTHER OBLIGATIONS OF A BANK OR A SAVINGS ASSOCIATION AND WILL NOT BE INSURED
BY THE FDIC, THE BIF, THE SAIF OR ANY OTHER GOVERNMENT AGENCY.
Any Prospectus Supplement will, among others matters, set forth the
following specific terms relating to the Offered Securities: (i) title; (ii) any
limit on the aggregate principal amount or price; (iii) maturity date or dates;
(iv) interest rate or rates per annum or method of determining the interest rate
or rates per annum; (v) dates from and on which such interest will accrue and be
payable and designated record dates for such interest payments; (vi) place or
places, if any, in addition to or other than the Borough of Manhattan, City of
New York, where principal (and premium, if any) and interest will be payable;
(vii) any optional redemption terms; (viii) any mandatory or optional sinking
fund or analogous provisions; and (ix) any other terms of the Offered Securities
not inconsistent with the Indenture (Section 301).
Interest on the Securities of any series will be payable to the persons in
whose names the Securities are registered at the close of business on the record
date designated for an interest payment date (Section 307). The certificated
Securities may be presented for the payment of principal and interest, if any,
transfer and exchange at the principal corporate trust offices of the Trustee or
at such other places as may be designated
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pursuant to the Indenture. At the option of the Company, interest may be paid by
mailing a check to the addresses of the persons entitled thereto as they appear
on the register for the Securities (Section 307). Unless otherwise indicated in
the Prospectus Supplement, the Securities will be issued only in fully
registered form without coupons in denominations of $1,000 and any integral
multiple of $1,000 (Section 302). No service charge will be made for any
exchange, registration of transfer or redemption of a Security, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge thereon (Section 305) other than exchanges not involving any transfer
(Sections 304, 906 and 1107).
SUBORDINATION OF SECURITIES
The obligation of the Company to make payment on account of the principal
of (and premium, if any) and interest on the Securities of any series will be
subordinated and junior in right of payment to the Company's obligations to the
holders of Senior Indebtedness of the Company to the extent described in the
following paragraph. Senior Indebtedness of the Company means all indebtedness
and other obligations of the Company, whether outstanding on the date of
execution of the Indenture or thereafter incurred, except indebtedness or
obligations expressly subordinated in right of payment to the Securities or
ranking on a parity with the Securities (Section 101).
In the event of any insolvency, bankruptcy, receivership, liquidation,
reorganization or other similar proceedings with respect to the Company or any
liquidation, dissolution or winding-up of the affairs of or relating to the
Company as a whole, whether voluntary or involuntary, all obligations of the
Company to the holders of Senior Indebtedness of the Company will be entitled to
be paid in full (or provision will be made for such payment) before any payment
will be made on account of the principal of (and premium, if any) and interest
on the Securities. In the event of any such proceeding, after payment in full
(or provision has been made for such payment) of the principal of (and premium,
if any) and interest on Senior Indebtedness of the Company, the Holders of the
Securities, together with the holders of any obligations of the Company ranking
on a parity with the Securities, will be entitled to be paid from the remaining
assets of the Company the amounts at the time due and owing on account of unpaid
principal of (and premium, if any) and interest on the Securities and such
obligations ranking on a parity therewith before any payment or other
distribution, whether in cash, property or otherwise, will be made on account of
any capital stock or any obligations of the Company ranking junior to the
Securities (Sections 1401 and 1402). By reason of such subordination, in the
event of the insolvency of the Company, the holders of Senior Indebtedness of
the Company may receive more, ratably, and the Holders of the Securities having
a claim pursuant to the Securities may receive less, ratably, than the other
creditors of the Company. As of June 30, 1995, the Company had approximately $43
million principal amount of Senior Indebtedness outstanding, excluding trade
payables and guarantees and other contingent obligations of the Company.
GLOBAL SECURITIES
In order to facilitate the holding of the Securities in "book-entry" form,
the Securities of a series may be issued in whole or in part in the form of one
or more global securities (the "Global Securities") that will be deposited with,
or on behalf of, a depository identified in the Prospectus Supplement relating
to such series. Global Securities may be issued in either temporary or permanent
form. A Global Security may not be transferred except as a whole by the
depository for such Global Security to a nominee of such depository or by a
nominee of such depository to such depository or another nominee of such
depository or by such depository or any such nominee to a successor of such
depository or a nominee of such successor. Thus, the holder of a beneficial
interest in a Global Security will not have the right to convert such holder's
"book-entry" Securities into definitive Securities in certificated form.
The specific terms of the depository arrangement, if any, with respect to a
series of Securities issued in whole as "Global Securities" will be described in
the Prospectus Supplement relating to such series.
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EVENTS OF DEFAULT AND LIMITED RIGHTS OF ACCELERATION
An Event of Default is defined under the Indenture with respect to the
Securities of any series issued thereunder only as certain events of bankruptcy,
insolvency or reorganization of the Company (Section 501).
The Indenture does not provide for any right of acceleration of the payment
of the principal of a series of the Securities upon a default in the payment of
an installment of principal or interest or a default in the performance of any
covenant or agreement in the Offered Securities of a particular series or in the
Indenture. In the event of a default in the payment of an installment of
principal or interest, the Holder of a Security (or the Trustee under the
Indenture on behalf of the Holders of all of the series of the Securities so
affected) may seek to enforce payment of such installment of principal or
interest.
The Indenture provides that if an Event of Default shall have occurred and
be continuing, either the Trustee or the Holders of not less than 25% in
principal amount of the then outstanding Securities of the series as to which
the Event of Default has occurred (or such lesser amount as may be provided for
in the Securities of such series) may declare the principal of all of the
Securities of such series to be due and payable immediately by a notice in
writing to the Company (and to the Trustee if given by the Holders), and upon
any such declaration, all such principal or such lesser amount shall become
immediately due and payable. However, at any time after such a declaration of
acceleration with respect to the Securities of any series has been made and
before a judgment or decree based on such acceleration has been obtained by the
Trustee, the Holders of not less than a majority in principal amount of the
Outstanding Securities of such series may, under certain circumstances, rescind
and annul such acceleration and its consequences, if, among other things, all
Events of Default have been cured or waived as provided in the Indenture
(Section 502).
MODIFICATION OF THE INDENTURE AND WAIVER
The Indenture provides that modifications and amendments may be made by the
Company and the Trustee with the consent of the Holders of not less than a
majority in principal amount of the Outstanding Securities of each series
affected thereby; provided, however, that no such modification or amendment may,
without the consent of the Holder of each Outstanding Security affected thereby:
(i) change the stated maturity date of the principal of, or any installment of
interest on, any Security; (ii) reduce the principal amount, or the rate of
interest on, or any premium payable upon, the redemption of any Security; (iii)
change the place of payment or the currency in which a Security is payable; (iv)
impair the right to institute suit for the enforcement of any payment on or
after the stated maturity date thereof or, in the case of redemption, on or
after the redemption date; (v) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of the Holders of which is
required to modify or amend the Indenture; (vi) reduce the percentage in
principal amount of the Outstanding Securities of any series, the consent of the
Holders of which is required for waiver of compliance with certain provisions of
the Indenture or for waiver of certain defaults; (vii) modify any provision of
the Indenture relating to modification and amendment of the Indenture or waiver
of compliance with conditions or defaults thereunder, except to increase the
percentage in principal amount of the Outstanding Securities of any series the
consent of the Holders of which is required for such modification or waiver; or
(viii) alter in any respect the provisions regarding subordination of the
Securities issued thereunder in a manner adverse to the Holders thereof (Section
902).
Modification and amendment of the Indenture may be made by the Company and
the Trustee without the consent of any Holder for any of the following purposes:
(i) to evidence the succession of another Person to the Company; (ii) to add to
the covenants of the Company for the benefit of the Holders of all or any series
of the Securities; (iii) to add Events of Default; (iv) to add to, delete from
or revise the conditions, limitations and restrictions on the authorized amount,
terms or purposes of issue, authentication and delivery of the Securities, as
set forth in the Indenture; (v) to establish the form or terms of the Securities
of any series; (vi) to provide for the acceptance of appointment by a successor
Trustee; (vii) to cure any ambiguity, defect or inconsistency in the Indenture,
provided such action is not inconsistent with the provisions of the Indenture
and does not adversely affect the interests of the Holders of the Securities of
any series in any material respect; (viii) to add to or change any of the
provisions to provide that Bearer Securities may be registrable as to principal,
to change or eliminate restrictions on the payment of principal or interest, to
permit Registered
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<PAGE> 26
Securities to be exchanged for Bearer Securities or to permit or facilitate the
issuance of Securities in uncertificated form, provided such action does not
adversely affect the interests of the Holders of Securities of any series in any
material respect; and (ix) to modify, eliminate or add to the provisions of the
Indenture to such extent as may be necessary to conform the obligations of the
Company and the Trustee under the Indenture to the Trust Indenture Act (Section
901).
The Holders of a majority in principal amount of the Outstanding Securities
of any series may on behalf of the Holders of all the Securities of such series
waive, insofar as such series is concerned, compliance by the Company with
certain restrictive provisions of the Indenture (Section 1008). The Holders of a
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series waive any past
default under the Indenture with respect to such series, except a default in the
payment of the principal of (and premium, if any) or interest on, any Security
of such series or in respect of a covenant or provision which under the terms of
the Indenture cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected (Section 513).
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge into any other corporation or
sell, lease or convey all or substantially all of its assets to any other
corporation, unless (i) either (a) the Company shall be the continuing
corporation or (b) any successor or purchaser is a corporation organized under
the laws of the United States or any State thereof and any such successor or
purchaser expressly assumes the Company's obligations on the Securities and
under the Indenture and certain other conditions are met; and (ii) immediately
after giving effect to such transaction, the Company or such successor
corporation shall not be in default in the performance of any covenant or
condition of the Indenture to be performed by the Company (Section 801).
SATISFACTION AND DISCHARGE
The Indenture will cease to be of further effect with respect to any series
of Securities (except as to surviving rights of registration of transfer or
exchange of any series of Securities, as expressly provided for in the
Indenture) as to all outstanding Securities of such series when (i) either (a)
all the Securities of such series theretofore authenticated and Coupons
appertaining thereto (except (1) Coupons appertaining to Bearer Securities of
such series surrendered for exchange for Registered Securities of such series
and maturing after such exchange, whose surrender is not required or has been
waived as provided in the Indenture, (2) lost, stolen or destroyed Securities or
Coupons which have been replaced or paid, (3) Coupons appertaining to Securities
of such series called for redemption and maturing after the redemption date,
whose surrender has been waived as provided in the Indenture, and (4) Securities
and Coupons of such series for whose payment money has been deposited in trust
or segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in the Indenture) have been
delivered to the Trustee for cancellation or (b) all Securities of such series
and, in the case of clauses (1) and (2) below, any such Coupons appertaining
thereto, not theretofore delivered to the Trustee for cancellation (1) have
become due and payable, (2) by their terms are to become due within one year, or
(3) if redeemable, are to be called for redemption within one year, and the
Company in the case of clauses (1), (2), or (3) above has deposited or caused to
be deposited with the Trustee funds in an amount sufficient to pay and discharge
the entire indebtedness on such Securities and Coupons not theretofore delivered
to the Trustee for cancellation, for principal of and interest to the date of
maturity or redemption; (ii) the Company has paid all other sums payable by the
Company under the Indenture; and (iii) the Company has delivered to the Trustee
an officers' certificate and an opinion of counsel, each stating that all
conditions precedent under the Indenture relating to the satisfaction and
discharge of the Indenture have been complied with (Section 401).
ADDITIONAL PROVISIONS
No Holder of any Security of any series will have the right to institute
any proceeding, judicial or otherwise, with respect to the Indenture for any
remedy thereunder, unless: (i) such Holder shall have previously given to the
Trustee, written notice of a continuing Event of Default with respect to the
Securities
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<PAGE> 27
of such series; (ii) the Holders of not less than 25% in principal amount of the
Outstanding Securities of such series shall have made written request, and
offered reasonable indemnity, to the Trustee to institute such proceeding as
Trustee; (iii) the Trustee shall not have received for 60 days after its receipt
of such request from the Holders of a majority in principal amount of the
Outstanding Securities of such series a direction inconsistent with such
request; and (iv) the Trustee shall have failed to institute such proceeding
within 60 days after its receipt of such notice, request and offer of indemnity
(Section 507). However, the Holder of any Security will have an absolute and
unconditional right to receive payment of the principal of (and premium, if any)
and interest on or any Additional Amounts, in respect of such Security or
payment of such Coupon on or after the due dates expressed in such Security or
Coupon and to institute suit for the enforcement of any such payment (Section
508).
CONCERNING THE TRUSTEE
The First National Bank of Chicago is Trustee under the Indenture. Notices
by U.S. Mail to the Trustee should be directed to the Trustee at One First
National Plaza, Suite 0126, Chicago, Illinois 60670-0126. Deliveries by other
carriers and hand deliveries should be made to the Trustee's Corporate Trust
Services Division, One North State Street, 9th Floor, Chicago, Illinois 60602.
Subject to the duty of the Trustee during default to act with the required
standard of care, the Indenture provides that the Trustee will be under no
obligation to exercise any right or power under the Indenture at the request of
the Holders of the Securities unless said Holders shall have offered the Trustee
reasonable indemnity (Section 602). The Indenture also provides that, subject to
the provisions for indemnification described above and subject to certain other
conditions, the Holders of a majority in principal amount of the Outstanding
Securities of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred upon the Trustee with respect to the Securities of such series
(Section 512).
The Indenture contains a covenant requiring the Company to file annually
with the Trustee a certificate as to the absence of any default or specifying
any default that may exist (Section 1005).
In addition to serving as Trustee under the Indenture, The First National
Bank of Chicago provides ordinary correspondent banking products and services to
the Company and certain of its subsidiaries, including deposit accounts. The
Trustee is also currently serving as Trustee under the Indenture under which the
Company's 6.25% Subordinated Notes due 2003 were issued and under the indenture
under which the Company's 8 1/2% Notes due 2002 were issued. Should a conflict
of interest arise by reason of such service, the Trustee may be required, or
deem it necessary, to resign as Trustee under the Indenture and be replaced by a
successor Trustee.
PLAN OF DISTRIBUTION
The Company may offer and sell Securities to or through underwriters,
acting as principals for their own accounts or as agents, and also may offer and
sell Securities directly to other purchasers. Any underwriters or agents in
connection with Offered Securities will be named in the related Prospectus
Supplement and any underwriting compensation paid to such underwriters or agents
will be set forth therein. Such underwriters may include a single firm or may be
a group of underwriters represented by such firm. Unless otherwise indicated in
the Prospectus Supplement, any underwriters will be required to purchase all of
the Offered Securities if any are purchased.
The distribution of Securities may be effected from time to time in one or
more transactions at a fixed price or prices, which may be changed, or at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Company and from purchasers of Securities for whom they
may act as agents, in the form of discounts, concessions or commissions.
Underwriters, dealers and agents that participate in the distribution of
Securities may be
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<PAGE> 28
deemed to be underwriters and any discounts or commissions received by them and
any profit on the resale of Securities by them may be deemed to be underwriting
discounts and commissions under the Securities Act.
Under agreements which may be entered into with the Company, underwriters,
dealers and agents who participate in the distribution of the Offered Securities
may be entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act, or contribution with respect to
payments which the underwriters, dealers or agents may be required to make in
respect thereof. Underwriters, dealers and agents may be customers of, engage in
transactions with, or perform services for the Company and its subsidiaries in
the ordinary course of business.
LEGAL MATTERS
The validity of the Securities will be passed upon for the Company by
Wyatt, Tarrant & Combs, Memphis, Tennessee. Attorneys of that firm beneficially
own, directly or indirectly, an aggregate of approximately 18,866 shares of UPC
common stock.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of Union Planters Corporation for
the year ended December 31, 1994, have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
The consolidated balance sheets of Capital Bancorporation, Inc. and its
subsidiaries as of December 31, 1994 and 1993, and the related consolidated
statements of income, changes in stockholders' equity and cash flows for each of
the years in the three-year period ended December 31, 1994, incorporated in this
Prospectus by reference to the Current Report on Form 8-K, dated August 21, 1995
of Union Planters Corporation have been audited by KPMG Peat Marwick LLP,
independent certified public accountants, as stated in their report which is
incorporated herein by reference and in reliance on the report on such firm
given upon their authority as experts in accounting and auditing.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED
IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR BY ANY OF THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND
THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF THIS PROSPECTUS
SUPPLEMENT. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN
OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS
NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
The Company........................... S-2
Recent Developments................... S-3
Use of Proceeds....................... S-6
Capitalization........................ S-7
Summary of Consolidated Financial
Data................................ S-9
Description of Notes.................. S-11
Underwriting.......................... S-12
Legal Matters......................... S-12
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
The Company........................... 4
Certain Regulatory Considerations..... 4
Use of Proceeds....................... 10
Description of Securities............. 11
Plan of Distribution.................. 15
Legal Matters......................... 16
Experts............................... 16
</TABLE>
$100,000,000
UNION PLANTERS
CORPORATION
6 3/4% SUBORDINATED NOTES
DUE 2005
SALOMON BROTHERS INC
KEEFE, BRUYETTE & WOODS, INC.
PROSPECTUS SUPPLEMENT
DATED NOVEMBER 2, 1995
