<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- --- ACT OF 1934
For the quarterly period ended March 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the transition period to .
--- ---
Commission File No. 1-10160
---------
UNION PLANTERS CORPORATION
(Exact name of registrant as specified in its charter)
Tennessee 62-0859007
--------- ----------
(State of incorporation) (IRS Employer Identification No.)
7130 Goodlett Farms Parkway, Memphis, Tennessee 38018
- -----------------------------------------------------------------
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code: (901) 383-6000
------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Class Outstanding at April 30, 1995
- ------------------------- -----------------------------
Common stock $5 par value 40,415,368
<PAGE> 2
UNION PLANTERS CORPORATION AND SUBSIDIARIES
FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1995
INDEX
<TABLE>
<CAPTION>
Page
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
a) Consolidated Balance Sheet -- March 31, 1995,
March 31, 1994, and December 31, 1994 3
b) Consolidated Statement of Earnings --
Three Months Ended March 31, 1995 and 1994 4
c) Consolidated Statement of Changes in
Shareholders' Equity -- Three Months Ended
March 31, 1995 5
d) Consolidated Statement of Cash Flows --
Three Months Ended March 31, 1995 and 1994 6
e) Notes to Unaudited Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 28
Item 2. Changes in Securities 28
Item 3. Defaults Upon Senior Securities 28
Item 4. Submission of Matters to a Vote of Security Holders 28
Item 5. Other Information 28
Item 6. Exhibits and Reports on Form 8-K 28
Signatures 29
</TABLE>
-2-
<PAGE> 3
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31,
------------------------------ DECEMBER 31,
1995 1994 1994
---------- ---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 395,172 $ 434,125 $ 488,722
Interest-bearing deposits at financial institutions 33,090 16,438 10,641
Federal funds sold and securities purchased
under agreements to resell 48,558 172,824 29,953
Trading account securities 168,149 157,171 155,951
Loans held for resale 34,361 65,764 24,493
Investment securities
Available for sale (Amortized cost: $1,701,575; $2,418,402;
and $1,975,897; respectively) 1,689,739 2,418,392 1,928,984
Held to maturity (Fair value: $1,028,764; $1,085,340;
and $1,009,969; respectively) 1,022,067 1,183,117 1,033,160
Loans 6,026,374 5,136,506 5,980,581
Less: Unearned income (31,117) (27,828) (31,453)
Allowance for losses on loans (122,905) (124,688) (122,089)
---------- ---------- -----------
Net loans 5,872,352 4,983,990 5,827,039
Premises and equipment 198,295 209,578 204,136
Accrued interest receivable 83,354 79,350 87,509
Goodwill and other intangibles 48,586 46,660 50,236
Other assets 148,268 132,268 174,245
---------- ---------- -----------
TOTAL ASSETS $9,741,991 $9,899,677 $10,015,069
========== ========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing $1,199,646 $1,251,398 $ 1,380,737
Certificates of deposit of $100,000 and over 575,148 535,724 559,593
Other interest-bearing 6,443,231 6,637,824 6,477,512
---------- ---------- -----------
Total deposits 8,218,025 8,424,946 8,417,842
Short-term borrowings 199,590 263,021 415,171
Federal Home Loan Bank advances 305,859 215,791 224,103
Long-term debt 116,610 121,292 116,848
Accrued interest, expenses, and taxes 80,999 68,915 72,211
Other liabilities 43,842 41,608 38,187
---------- ---------- -----------
TOTAL LIABILITIES 8,964,925 9,135,573 9,284,362
---------- ---------- -----------
Commitments and contingent liabilities -- -- --
Shareholders' equity
Preferred stock
Convertible 87,298 87,298 87,298
Nonconvertible -- 17,250 --
Common stock, $5 par value; 100,000,000 shares authorized;
40,369,088 issued and outstanding (39,839,110 at
March 31, 1994 and 40,179,474 at December 31, 1994) 201,845 199,161 200,897
Additional paid-in capital 71,637 60,812 69,204
Net unrealized gain (loss) on available for sale securities (7,417) (175) (28,527)
Retained earnings 423,703 399,758 401,835
---------- ---------- -----------
TOTAL SHAREHOLDERS' EQUITY 777,066 764,104 730,707
---------- ---------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $9,741,991 $9,899,677 $10,015,069
========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE> 4
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------------
1995 1994
-------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $131,617 $105,513
Interest on investment securities
Taxable 35,073 35,842
Tax-exempt 7,931 8,250
Interest on deposits at financial institutions 315 215
Interest on federal funds sold and securities
purchased under agreements to resell 495 1,300
Interest on trading account securities 2,736 1,759
Interest on loans held for resale 294 581
-------- --------
Total interest income 178,461 153,460
-------- --------
INTEREST EXPENSE
Interest on deposits 69,273 55,556
Interest on short-term borrowings 4,482 2,115
Interest on Federal Home Loan Bank advances and long-term debt 6,155 4,325
-------- --------
Total interest expense 79,910 61,996
-------- --------
NET INTEREST INCOME 98,551 91,464
PROVISION FOR LOSSES ON LOANS 1,686 815
-------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOSSES ON LOANS 96,865 90,649
-------- --------
NONINTEREST INCOME
Service charges on deposit accounts 16,260 12,512
Bank card income 4,642 2,469
Mortgage servicing income 2,346 2,375
Trust service income 2,031 2,044
Profits and commissions from trading activities 1,614 1,970
Investment securities gains (losses) (21) 105
Other income 7,339 6,944
-------- --------
Total noninterest income 34,211 28,419
-------- --------
NONINTEREST EXPENSE
Salaries and employee benefits 39,272 39,446
Net occupancy expense 6,328 6,408
Equipment expense 6,881 6,416
Other expense 30,630 30,457
-------- --------
Total noninterest expense 83,111 82,727
-------- --------
EARNINGS BEFORE INCOME TAXES 47,965 36,341
Applicable income taxes 14,950 10,954
-------- --------
NET EARNINGS $ 33,015 $ 25,387
======== ========
EARNINGS PER COMMON SHARE
Primary $ 0.77 $ 0.58
Fully diluted 0.74 0.56
AVERAGE COMMON SHARES OUTSTANDING (IN THOUSANDS)
Primary 40,421 39,952
Fully diluted 44,900 44,433
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE> 5
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
NET
UNREALIZED
GAIN (LOSS)
ADDITIONAL ON AVAILABLE
PREFERRED COMMON PAID-IN FOR SALE RETAINED
STOCK STOCK CAPITAL SECURITIES EARNINGS TOTAL
--------- --------- ---------- ------------ -------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995 $87,298 $200,897 $69,204 $(28,527) $401,835 $730,707
Net earnings -- -- -- -- 33,015 33,015
Cash dividends
Common Stock, $.23 per share -- -- -- -- (9,265) (9,265)
Series B Preferred Stock, $2.00 per share -- -- -- -- (88) (88)
Series D Preferred Stock, $ .49 per share -- -- -- -- (123) (123)
Series E Preferred Stock, $ .50 per share -- -- -- -- (1,554) (1,554)
Common shares issued under employee benefit
plans and dividend reinvestment plan,
net of shares repurchased -- 948 2,433 -- (179) 3,202
Change in net unrealized gain (loss) on
available for sale securities, net of taxes -- -- -- 21,110 -- 21,110
Other -- -- -- -- 62 62
------- -------- ------- -------- -------- --------
BALANCE, MARCH 31, 1995 $87,298 $201,845 $71,637 $ (7,417) $423,703 $777,066
======= ======== ======= ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE> 6
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------------------
1995 1994
-------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings $ 33,015 $ 25,387
Reconciliation of net earnings to net cash provided by
operating activities
Provision for losses on loans and other real estate 1,855 1,028
Depreciation and amortization 5,350 4,873
Amortization and write-off of intangibles 1,860 1,904
Net amortization of investment securities 119 1,524
Net realized (gains) losses on sales of investment securities 21 (105)
Deferred income tax expense (benefit) 93 503
(Increase) decrease in assets
Trading account securities and loans held for resale (22,066) 66,474
Accrued interest receivable and other assets 17,715 6,786
Increase in accrued interest, expenses, taxes,
and other liabilities 14,480 9,457
Other, net (59) (37)
--------- ---------
Net cash provided by operating activities 52,383 117,794
--------- ---------
INVESTING ACTIVITIES
Net (increase) decrease in short-term investments (23,365) 142
Proceeds from sales of available for sale securities 181,990 22,271
Proceeds from maturities, calls and prepayments of available
for sale securities 142,542 281,853
Purchases of available for sale securities (50,506) (328,119)
Proceeds from maturities, calls and prepayments of
held to maturity securities 12,810 87,456
Purchases of held to maturity securities (1,007) (132,160)
Net (increase) decrease in loans (48,327) 5,434
Net cash received from purchases of financial institutions -- 67,588
Purchases of premises and equipment, net (674) (9,694)
--------- ---------
Net cash provided (used) by investing activities 213,463 (5,229)
--------- ---------
FINANCING ACTIVITIES
Net (decrease) increase in deposits (199,817) 46,559
Net decrease in short-term borrowings (215,581) (14,554)
Proceeds from FHLB advances and long-term debt, net 100,582 19,155
Repayment of FHLB advances and long-term debt (19,062) (10,881)
Proceeds from issuance of common stock, net 3,483 1,489
Purchase and retirement of common stock, net (281) (61)
Cash dividends paid (11,031) (8,792)
--------- ---------
Net cash (used) provided by financing activities (341,707) 32,915
--------- ---------
Net (decrease) increase in cash and cash equivalents (75,861) 145,480
Cash and cash equivalents at the beginning of the period 513,932 441,469
--------- ---------
Cash and cash equivalents at the end of the period $ 438,071 $ 586,949
========= =========
SUPPLEMENTAL DISCLOSURES
Purchases of other financial institutions:
Fair value of assets acquired $ -- $ 804,224
Liabilities assumed -- (738,001)
Common stock issued -- (64,217)
--------- ---------
Cash paid for the purchases of other financial institutions -- 2,006
Cash and cash equivalents acquired -- (69,594)
--------- ---------
Net cash received from purchases of financial institutions $ -- $ (67,588)
========= =========
Cash paid (received) for
Interest 76,443 58,113
Taxes (11,816) 1,436
Loans transferred to other real estate through foreclosure 1,328 669
Unrealized loss on available for sale securities (11,836) (10)
</TABLE>
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE> 7
UNION PLANTERS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. PRINCIPLES OF ACCOUNTING
The consolidated financial statements have been prepared in accordance
with generally accepted accounting principles. The foregoing financial
statements are unaudited, however, in the opinion of management, all
adjustments, including normal recurring adjustments, necessary for a fair
presentation of the consolidated financial statements have been included.
The accounting policies followed by Union Planters Corporation and its
subsidiaries (the Corporation) for interim financial reporting are consistent
with the accounting policies followed for annual financial reporting except as
noted below. The notes included herein should be read in conjunction with the
notes to the consolidated financial statements included in the Corporation's
1994 Annual Report to Shareholders, a copy of which is Exhibit 13 to the
Corporation's Annual Report on Form 10-K for the year ended December 31, 1994
(1994 10-K). Certain 1994 amounts have been reclassified to be consistent with
the 1995 financial reporting presentation.
NOTE 2. MERGERS AND ACQUISITIONS
There were no acquisitions completed in the three months ended March 31,
1995. Reference is made to Note 2 on pages 43 through 47 of the Corporation's
1994 Annual Report to Shareholders for information regarding acquisitions
completed in 1994 and for information on pending acquisitions.
NOTE 3. LOANS
Loans are summarized by type as follows:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Commercial, financial, and agricultural $1,305,023 $1,364,729
Real estate -- construction 224,032 225,591
Real estate -- mortgage
Secured by 1-4 family residential 2,054,951 2,035,290
Other mortgage loans 999,140 990,779
Home equity 139,006 140,305
Consumer
Credit cards and other plans 346,194 263,927
Other consumer 915,353 919,618
Direct lease financing, net 42,675 40,342
---------- ----------
Total loans $6,026,374 $5,980,581
========== ==========
</TABLE>
Nonperforming loans and loans 90 days or more past due are summarized as
follows:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Nonaccrual loans $ 21,323 $ 17,476
Restructured loans 1,550 1,564
---------- ----------
Total nonperforming loans $ 22,873 $ 19,040
========== ==========
90 days or more past due and not
in nonaccrual status $ 7,685 $ 5,874
========== ==========
</TABLE>
-7-
<PAGE> 8
NOTE 4. ALLOWANCE FOR LOSSES ON LOANS
The changes in the allowance for losses on loans for the three months ended
March 31, 1995, are summarized as follows (dollars in thousands):
<TABLE>
<S> <C>
Balance, January 1, 1995 $122,089
Provision charged to expense 1,686
Recoveries 3,819
Amounts charged off (4,689)
--------
Balance, March 31, 1995 $122,905
========
</TABLE>
On January 1, 1995, the Corporation adopted SFAS No. 114, "Accounting by
Creditors for Impairment of a Loan," as amended by SFAS No. 118, "Accounting
by Creditors for Impairment of a Loan - Income Recognition and Disclosures." As
of March 31, 1995, the amount of the Corporation's impaired loans was not
material.
NOTE 5. INVESTMENT SECURITIES
The amortized cost and fair value of investment securities are summarized as
follows:
<TABLE>
<CAPTION>
MARCH 31, 1995
--------------------------------------------------
UNREALIZED
----------------------
AMORTIZED FAIR
COST GAINS LOSSES VALUE
---------- --------- ---------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE SECURITIES
U.S. Government obligations
U.S. Treasury $ 444,546 $ 698 $ 3,438 $ 441,806
U.S. Government agencies
Collateralized mortgage obligations 239,152 62 6,233 232,981
Mortgage-backed 747,127 5,562 6,769 745,920
Other 177,519 249 1,895 175,873
---------- ------- ------- ----------
Total U.S. Government obligations 1,608,344 6,571 18,335 1,596,580
Other stocks and securities 93,231 1,075 1,147 93,159
---------- ------- ------- ----------
TOTAL AVAILABLE FOR SALE SECURITIES $1,701,575 $ 7,646 $19,482 $1,689,739
========== ======= ======= ==========
HELD TO MATURITY SECURITIES
U.S. Government obligations
U.S. Treasury $ 452,007 $ 231 $ 3,588 $ 448,650
U.S. Government agencies 62,286 103 2,381 60,008
---------- ------- ------- ----------
Total U.S. Government obligations 514,293 334 5,969 508,658
Obligations of states and political
subdivisions 507,568 17,352 5,020 519,900
Other 206 -- -- 206
---------- -------- -------- ----------
TOTAL HELD TO MATURITY SECURITIES $1,022,067 $ 17,686 $ 10,989 $1,028,764
========== ======== ======== ==========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1994
--------------------------------------------------
UNREALIZED
-------------------
AMORTIZED FAIR
COST GAINS LOSSES VALUE
---------- ------- -------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE SECURITIES
U.S. Government obligations
U.S. Treasury $ 484,414 $ 745 $ 9,302 $ 475,857
U.S. Government agencies
Collateralized mortgage obligations 325,084 33 11,221 313,896
Mortgage-backed 816,683 1,061 22,669 795,075
Other 211,922 189 4,426 207,685
---------- ------ ------- ----------
Total U.S. Government obligations 1,838,103 2,028 47,618 1,792,513
Other stocks and securities 137,794 1,018 2,341 136,471
---------- ------ ------- ----------
TOTAL AVAILABLE FOR SALE SECURITIES $1,975,897 $3,046 $49,959 $1,928,984
========== ====== ======= ==========
HELD TO MATURITY SECURITIES
U.S. Government obligations
U.S. Treasury $ 451,897 $ 40 $13,250 $ 438,687
U.S. Government agencies 62,449 15 3,881 58,583
---------- ------ ------- ----------
Total U.S. Government obligations 514,346 55 17,131 497,270
Obligations of states and political
subdivisions 518,583 9,097 15,212 512,468
Other 231 -- -- 231
---------- ------- -------- ----------
TOTAL HELD TO MATURITY SECURITIES $1,033,160 $9,152 $32,343 $1,009,969
========== ====== ======= ==========
</TABLE>
-8-
<PAGE> 9
On January 1, 1994, and in connection with the adoption of SFAS No. 115,
$1.6 billion of securities were transferred to the available for sale category
of securities. In addition, approximately $446 million (fair value
approximately $436 million) of securities were transferred to available for
sale securities related to financial institutions acquired in 1994 in order to
maintain the Corporation's existing interest-rate-risk position and credit-risk
policies. There have been no transfers in 1995.
Investment securities having a carrying value of approximately $1.011
billion and $1.017 billion at March 31, 1995 and December 31, 1994,
respectively, were pledged to secure public and trust funds on deposit and
securities sold under agreements to repurchase.
The following table presents the gross realized gains and losses on
investment securities for the three-month periods ended March 31, 1995 and
1994. The gains on held to maturity securities for both years resulted from
calls of securities.
<TABLE>
<CAPTION>
REALIZED GAINS REALIZED LOSSES
-------------------- -------------------------
1995 1994 1995 1994
-------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Available for sale securities $1,343 $287 $(1,390) $(202)
Held to maturity securities 26 20 -- --
------ ---- ------- -----
Total $1,369 $307 $(1,390) $(202)
====== ==== ======= =====
</TABLE>
NOTE 6. OTHER NONINTEREST INCOME AND EXPENSE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1995 1994
-------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
OTHER NONINTEREST INCOME
Credit life insurance commissions $ 1,183 $ 1,047
Customer ATM usage fees 731 581
VSIBG partnership earnings 141 706
Brokerage fee income 342 376
Sale of servicing 97 236
Other 4,845 3,998
------- -------
TOTAL OTHER NONINTEREST INCOME $ 7,339 $ 6,944
======= =======
OTHER NONINTEREST EXPENSE
FDIC insurance assessments $ 4,403 $ 4,677
Advertising and promotion 2,302 2,160
Stationery and supplies 2,492 2,356
Postage and other carrier 2,568 2,136
Amortization of goodwill and other intangibles 1,589 1,507
Other contracted services 1,796 1,667
Communications 1,585 1,540
Legal fees 769 919
Other personnel services 1,191 924
Dues, subscriptions, and contributions 880 889
Merchant credit card charges 829 1,093
Audit fees 630 767
Taxes other than income taxes 905 876
Brokerage and clearing fees 865 758
Insurance 424 650
Miscellaneous charge-offs 468 352
Travel 583 532
Amortization of mortgage servicing rights 271 397
Federal Reserve fees 399 440
Consultant fees 598 302
Other real estate expense 261 265
Other 4,822 5,250
------- -------
TOTAL OTHER NONINTEREST EXPENSE $30,630 $30,457
======= =======
</TABLE>
-9-
<PAGE> 10
NOTE 7. INCOME TAXES
Applicable income taxes for the three months ended March 31, 1995, were
$14.9 million, resulting in an effective tax rate of 31.2%. Applicable income
taxes for the same period in 1994 were $10.9 million, resulting in an effective
tax rate of 30.1%. The tax expense (benefit) applicable to investment
securities gains (losses) for the three months ended March 31, 1995 and 1994
was $(8,000) and $41,000, respectively. The increase in the effective rate for
the first quarter of 1995, as compared to the same period in 1994, is due
primarily to the increase in taxable earnings for the period.
At March 31, 1995, the Corporation had a net deferred tax asset of $55.2
million compared to $69.2 million at December 31, 1994. The net deferred tax
asset for the two periods included a deferred asset related to the net
unrealized loss on available for sale securities of $4.4 million and $18.4
million, respectively, which accounted for most of the change in the net
deferred tax asset. Management continues to believe that, based upon
historical earnings, normal operations will continue to generate sufficient
taxable income to realize the portion of the deferred tax asset that is
dependent upon the generation of future taxable income.
NOTE 8. FEDERAL HOME LOAN BANK (FHLB) ADVANCES
The Corporation's subsidiaries have obtained various advances from the
Federal Home Loan Bank (FHLB) totaling $306 million at March 31, 1995, under
Blanket Agreements for Advances and Security Agreements (the Agreements). The
Agreements entitle the Corporation's subsidiaries to borrow funds from the FHLB
to fund mortgage loan programs and satisfy other funding needs. Interest rates
on the advances vary from fixed rate advances to variable rate advances. The
majority of the advances at March 31, 1995, had variable rates tied to the
three-month LIBOR rate. Maturity dates for the advances range from one month to
20 years. Collateral (mortgage loans) under the Agreements must have a value of
not less than 150% of the $306 million advances outstanding at March 31, 1995,
and at that date the Corporation had an adequate amount of loans to satisfy the
collateral requirements.
NOTE 9. SHAREHOLDERS' EQUITY
PREFERRED STOCK
The Corporation's outstanding preferred stock, all of which is convertible
into shares of the Corporation's Common Stock, is summarized as follows:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
---------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Preferred stock, without par value,
10,000,000 shares authorized
Series A Preferred Stock,
250,000 shares authorized, none issued $ -- $ --
Series B, $8 Nonredeemable,
Cumulative, Convertible
Preferred Stock (stated at
liquidation value of $100 per share),
44,000 shares issued and outstanding 4,400 4,400
Series D, 9.5% Redeemable,
Cumulative, Convertible
Preferred Stock (stated at
liquidation value of $20.50 per share),
253,655 shares issued and outstanding 5,200 5,200
Series E, 8% Cumulative,
Convertible, Preferred Stock
(stated at liquidation value
of $25 per share), 3,107,922 shares
issued and outstanding 77,698 77,698
------- -------
Total preferred stock $87,298 $87,298
======= =======
</TABLE>
Management intends to call for redemption the Series D Preferred Stock on
July 1, 1995.
-10-
<PAGE> 11
NOTE 10. CONTINGENT LIABILITIES
The Corporation and/or various subsidiaries are parties to certain pending
or threatened civil actions which are described in Item 3, Part I of the
Corporation's 1994 10-K and in Note 19 to the Corporation's consolidated
financial statements on pages 68 and 69 of the 1994 Annual Report to
Shareholders (1994 Annual Report) which is included in the 1994 10-K as Exhibit
13. Various other legal proceedings pending against the Corporation and/or its
subsidiaries have arisen in the ordinary course of business.
Based upon present information, including evaluations of certain actions by
outside counsel, management believes that neither the Corporation's financial
position, results of operations, nor liquidity will be materially affected by
the ultimate resolution of pending or threatened legal proceedings. There were
no significant developments during the first quarter of 1995 in any pending or
threatened actions which affected such opinion.
-11-
<PAGE> 12
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following provides a narrative discussion and analysis of significant
changes in results of operations and financial condition. This discussion
should be read in conjunction with the consolidated financial statements and
related financial analysis set forth in the Corporation's 1994 Annual Report,
the interim unaudited financial statements and notes for the three months ended
March 31, 1995 included in Part I hereof, and the other supplemental financial
data included in this discussion.
The following table presents selected financial highlights for the
three-month periods ended March 31, 1995 and 1994.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------------- PERCENTAGE
1995 1994 CHANGE
-------- -------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
Net earnings $33,015 $25,387 30%
Primary earnings per common share .77 .58 33
Fully diluted earnings per common share .74 .56 32
Return on average assets 1.36% 1.04%
Return on average common equity 18.59 14.21
Dividends per common share $ .23 $ .21 10
Net interest margin (FTE) 4.59% 4.31%
Interest rate spread (FTE) 3.96 3.85
Expense ratio 2.02 2.24
Efficiency ratio 60.63 66.53
Book value per common share $ 17.09 $ 16.56 3
Leverage ratio 7.62% 7.45%
</TABLE>
_______________
Net interest margin = Net interest income as a percentage of earning assets
Interest rate spread = Difference in the yield on average earning assets and
the rate on average interest-bearing liabilities
Expense ratio = Net noninterest margin [noninterest expense minus noninterest
income, excluding investment securities gains (losses)] divided by average
assets
Efficiency ratio = Noninterest expense divided by net interest income (FTE)
plus noninterest income, excluding investment securities gains (losses)
FTE = Fully taxable-equivalent basis
-12-
<PAGE> 13
OPERATING RESULTS -- THREE MONTHS ENDED MARCH 31, 1995
The table which follows presents the contributions to fully diluted earnings
per common share. A discussion of the operating results follows this table.
UNION PLANTERS CORPORATION
CONTRIBUTIONS TO FULLY DILUTED EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, EPS
------------------------ INCREASE
1995 1994 (DECREASE)
-------- -------- ----------
<S> <C> <C> <C>
Net interest income--FTE $2.29 $2.16 $ .13
Provision for losses on loans (.04) (.02) (.02)
----- ----- -----
Net interest income after provision
for losses on loans--FTE 2.25 2.14 .11
----- ----- -----
Noninterest income
Service charges on deposits .36 .28 .08
Bank card income .10 .06 .04
Mortgage servicing income .05 .05 --
Trust service income .05 .05 --
Profits and commissions from
trading activities .04 .04 --
Investment securities gains (losses) -- -- --
Other income .16 .16 --
----- ----- -----
Total noninterest income .76 .64 .12
----- ----- -----
Noninterest expense
Salaries and employee benefits .88 .89 .01
Net occupancy expense .14 .14 --
Equipment expense .15 .14 (.01)
Other expense .68 .69 .01
----- ----- -----
Total noninterest expense 1.85 1.86 .01
----- ----- -----
Earnings before income taxes--FTE 1.16 .92 .24
Applicable income taxes--FTE .42 .35 (.07)
----- ----- -----
Net earnings .74 .57 17
Less preferred stock dividends -- .01 .01
----- ----- -----
Fully diluted earnings per share $ .74 $ .56 $ .18
===== ===== =====
Change in net earnings applicable
to common shares using previous
year average shares outstanding $ .17
Change in average shares outstanding .01
-----
Change in net earnings $ .18
=====
</TABLE>
____________
FTE = Fully taxable-equivalent
-13-
<PAGE> 14
FIRST QUARTER EARNINGS OVERVIEW
For the first quarter of 1995, the Corporation reported record earnings of
$33.0 million, or $.74 per fully diluted common share. This compares to net
earnings for the same period in 1994 of $25.4 million, or $.56 per fully
diluted common share. Return on average assets and average common equity for
the first quarter of 1995 were 1.36% and 18.59%, respectively, which compares
to 1.04% and 14.21% for the same period in 1994.
The improvement in net earnings in 1995 is attributable to increases in net
interest income of $7.1 million and noninterest income of $5.8 million, while
the growth of noninterest expense was limited to $384,000. The following is a
more complete discussion and analysis of the first quarter of 1995 operating
results compared to the same period in 1994.
EARNINGS ANALYSIS
NET INTEREST INCOME
Net interest income (FTE) for the first quarter of 1995 was $102.8 million,
a 7% increase over the first quarter of 1994 which was $96.0 million, and down
2% from the fourth quarter of 1994 which was $104.8 million. The improvement
for the first quarter of 1995 compared to 1994 resulted from slightly higher
average earning assets, growth in loans outstanding, and higher yields from the
investment securities portfolio. The decline from the fourth quarter of 1994
relates primarily to the decline in earning assets of approximately $205
million and an increase in the rates paid on interest-bearing liabilities of
approximately 36 basis points. Reference is made to the Corporation's average
balance sheet and analysis of volume and rate changes which follow this
discussion for additional information regarding the changes in net interest
income.
The net interest margin for the first quarter of 1995 was 4.59% which
compares to 4.31% for the same quarter last year and 4.47% in the fourth
quarter of 1994. The interest rate spread increased to 3.96% for the first
quarter of 1995 from 3.85% for the same period a year ago and compares to 3.90%
for the fourth quarter of 1994. The improvement in these ratios is due
primarily to loan growth and the higher yields in the investment securities
portfolio.
INTEREST INCOME
The following table presents a breakdown of average earning assets for the
first quarter of 1995 and 1994.
<TABLE>
<CAPTION>
1995 1994
------ ------
<S> <C> <C>
Average earning assets (Dollars in billions) $9.1 $9.0
Comprised of:
Loans 66% 57%
Investment securities 32 39
Other earning assets 2 4
- -----------
Fully taxable-equivalent yield on average earning assets 8.15% 7.08%
</TABLE>
Fully taxable-equivalent interest income increased 16% for the first quarter
of 1995 compared to the first quarter of 1994. The increase is attributable to
a $46 million increase in average earning assets, loan growth of 16%, and a 107
basis-point increase in the yield on average investment securities. The yield
on total average earning assets also increased 107 basis points. Consumer loans
have increased approximately $240 million as a result of the consumer loan
marketing program implemented in the last half of 1994. Interest income related
to investment securities declined in total as the volume of investment
securities declined due to increased loan demand and growth. Reference is made
to the average balance sheet and
-14-
<PAGE> 15
the analysis of volume and rate changes for additional information regarding the
components of interest income.
INTEREST EXPENSE
The following table presents a breakdown of average interest-bearing
liabilities for the first quarter of 1995 and 1994.
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Average interest-bearing liabilities (Dollars in billions) $7.7 $7.8
Comprised of:
Deposits 91% 92%
Short-term borrowings 4 4
FHLB advances and long-term debt 5 4
- ------------
Rate paid on average interest-bearing liabilities 4.19% 3.23%
</TABLE>
Interest expense increased 29% in the first quarter of 1995 compared to the
same period in 1994. The increase is due to increased rates in almost all
categories of interest-bearing liabilities. Most of the increase relates to
deposits, the largest category of interest-bearing liabilities. Average
interest-bearing liabilities decreased slightly between the two quarters due to
a $135 million decline in average interest-bearing deposits which were
partially offset by an increase in short-term borrowings and FHLB advances.
Reference is made to the average balance sheet and analysis of volume and rate
changes for additional information regarding the components of interest
expense.
The Corporation's interest-rate swaps decreased net interest income by
approximately $600,000 in the first quarter of 1995 and increased interest
income by approximately $1.1 million in the first quarter of 1994. The change
in the impact is reflective of the increase in interest rates over the
twelve-month period. The impact of the interest-rate swaps has been
substantially offset by corresponding changes in interest related to the
underlying assets and liabilities.
PROVISION FOR LOSSES ON LOANS
The provision for losses on loans for the first quarter of 1995 was $1.7
million, or .11% of average loans on an annualized basis, compared to $815,000,
or .06% of average loans, for the same period in 1994. The low level of
provisions reflects the good asset quality the Corporation had over the last
two years. The increased provision in 1995 relates primarily to consumer loan
growth.
NONINTEREST INCOME
Noninterest income for the first quarter of 1995 was $34.2 million, an
increase of 20% over the same period in 1994, and an increase of 25% compared
to the fourth quarter of 1994 (excluding the investment securities losses
incurred in the fourth quarter of 1994). The improvement is attributable to the
Corporation's restructuring plan implemented in the fourth quarter of 1994 and
to an increase in the consumer loans as a result of the consumer loan marketing
program implemented in the fourth quarter of 1994.
The restructuring plan included an evaluation of the Corporation's banking
services with a goal of implementing "best practices" in all areas. As a
result, the Corporation's banking subsidiaries evaluated their practices
related to service charges on deposits accounts and increased certain fees
(primarily overdraft fees), implemented new fees, and reduced the number of
fees that were being waived. The result was a $3.7 million increase in service
charges on deposit accounts to $16.3 million for the first quarter of 1995
compared to the
-15-
<PAGE> 16
same period in 1994. The other significant increase in noninterest income
related to bank card income which increased $2.2 million.
NONINTEREST EXPENSE
Noninterest expense for the first quarter of 1995 increased only $384,000 to
$83.1 million which compares to $82.7 million for the first quarter of 1994.
The minimal increase in expenses relates primarily to management's efforts to
increase productivity and improve profitability in connection with the
restructuring plan mentioned previously. This plan provides for a reduction of
approximately 1,000 employees through voluntary and involuntary separation
plans, the consolidation or divestiture of approximately 38 branches, and the
consolidation of certain of the Corporation's subsidiary banks and branches
operating in the same or adjacent geographic locations. The implementation of
the plan began at the end of 1994 and is expected to be fully implemented in
1995 or the early part of 1996.
Salaries and employee benefits decreased $174,000 between the first quarter
of 1995 and 1994. Compared to the fourth quarter of 1994, salaries and employee
benefits decreased approximately $2.0 million. The reduction in expense relates
primarily to the Corporation's voluntary separation plan which is discussed in
the 1994 Annual Report, Note 13 to the financial statements. Of the 388
employees who elected voluntary separation, approximately 304 employees have
already terminated and approximately 84 employees will terminate later in 1995.
Due to the nature of certain positions affected by employees electing the
voluntary separation, there were approximately 70 employees replaced. During
the first quarter of 1995, the Corporation paid $7.7 million of employee
severance reserves, leaving a reserve balance of $4.7 million at March 31,
1995.
Full-time-equivalent employees at March 31, 1995 were 4,879 compared to
5,029 at December 31, 1994 and 5,233 (restated for acquisitions accounted for
as poolings of interests) at March 31, 1994. The decline in the number of
employees since December 31, 1994 has achieved approximately 20% of the
Corporation's restructuring plan goal. The decrease in employees from December
31, 1994 was partially offset by an increase of approximately 40 employees in
the consumer-loan area due to the significant increase in loans outstanding.
There were no other significant changes in noninterest expense between the
first quarters of 1995 and 1994.
The Corporation has begun implementation of plans to consolidate or divest
38 branch locations. Notifications to regulatory agencies are expected to be
made during the second quarter of 1995. The consolidations or divestitures are
not expected until the second half of 1995 or possibly the first quarter of
1996, depending on the timing of regulatory approvals. Plans to consolidate
certain subsidiary banks have begun and are scheduled to be implemented during
1995. The number of subsidiary banks has been reduced from 47 at December 31,
1994 to 35 as of May 1, 1995. The consolidation of these subsidiaries is
expected to produce operating efficiencies that should improve the
profitability of the Corporation, although quantification of the savings
cannot be accurately estimated.
At year end management estimated that savings from its restructuring plan
would be approximately $25 million to $30 million annually from the staff
reductions and $1 million to $3 million from branch consolidation and
divestitures. Management is of the opinion that these estimates of annual
savings are likely to be achieved, however, the full impact of the savings may
not be realized until 1996. At March 31, 1995, the Corporation had reserves
related to the restructuring plan of $14.0 million (including the reserve
related to employee severance discussed above), which management considers
adequate.
-16-
<PAGE> 17
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED DAILY AVERAGE BALANCE SHEET AND INTEREST RATES
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
---------------------------------------------------------------------------
1995 1994
----------------------------------- -----------------------------------
INTEREST INTEREST
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE
---------- --------- ------ --------- --------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-bearing deposits at
financial institutions $ 19,237 $ 315 6.64% $ 17,385 $ 215 5.02%
Federal funds sold and securities
purchased under agreements to resell 35,907 495 5.59 160,887 1,300 3.28
Trading account securities 164,390 2,736 6.75 152,753 1,759 4.67
Investment securities (1) and (2) 2,870,662 46,857 6.62 3,529,843 48,322 5.55
Loans, net of unearned income (1) 6,001,424 132,345 8.94 5,185,160 106,425 8.32
---------- -------- ---------- --------
TOTAL EARNING ASSETS (1) AND (2) 9,091,620 182,748 8.15 9,046,028 158,021 7.08
-------- --------
Cash and due from banks 400,393 433,839
Premises and equipment 202,063 206,892
Allowance for losses on loans (124,591) (124,549)
Other assets 256,358 297,746
---------- ----------
TOTAL ASSETS $9,825,843 $9,859,956
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Money market accounts $1,345,094 10,405 3.14% $1,593,972 9,116 2.32%
Savings deposits 1,732,989 11,193 2.62 1,700,339 9,462 2.26
Certificates of deposit of
$100,000 and over 559,160 6,735 4.88 543,181 4,964 3.71
Other time deposits 3,384,990 40,940 4.91 3,319,275 32,014 3.91
Short-term borrowings
Federal funds purchased and securities
sold under agreements to repurchase 331,162 4,461 5.46 286,011 2,009 2.85
Other 1,213 21 7.02 7,673 106 5.60
Federal Home Loan Bank advances 255,412 3,811 6.05 213,007 2,188 4.17
Long-term debt
Subordinated capital notes and debentures 114,793 2,302 8.13 116,408 2,004 6.98
Other 1,982 42 8.59 5,857 133 9.21
---------- -------- ---------- --------
TOTAL INTEREST-BEARING LIABILITIES 7,726,795 79,910 4.19 7,785,723 61,996 3.23
Noninterest-bearing demand deposits 1,228,593 1,204,021
---------- -------- ---------- --------
TOTAL SOURCES OF FUNDS 8,955,388 79,910 8,989,744 61,996
-------- --------
Other liabilities 101,292 104,586
Shareholders' equity 769,163 765,626
---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $9,825,843 $9,859,956
========== ==========
NET INTEREST INCOME $102,838 $ 96,025
======== ========
INTEREST RATE SPREAD 3.96% 3.85%
==== ====
NET INTEREST MARGIN 4.59% 4.31%
==== ====
_________________
(1) Taxable-equivalent adjustments:
Loans $ 434 $ 331
Investment securities 3,853 4,230
-------- --------
$ 4,287 $ 4,561
======== ========
(2) Yields are calculated on historical cost and exclude the impact of the
net unrealized loss on available for sale securities.
</TABLE>
-17-
<PAGE> 18
UNION PLANTERS CORPORATION AND SUBSIDIARIES
ANALYSIS OF VOLUME AND RATE CHANGES
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1995 VERSUS 1994
-----------------------------------
INCREASE
(DECREASE)
DUE TO CHANGE IN: (1)
---------------------- TOTAL
AVERAGE AVERAGE INCREASE
VOLUME RATE (DECREASE)
------- ------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
INTEREST INCOME
Interest-bearing deposits at
financial institutions $ 25 $ 75 $ 100
Federal funds sold and securities
purchased under agreements to resell (1,384) 579 (805)
Trading account securities 143 834 977
Investment securities (FTE) (9,879) 8,414 (1,465)
Loans, net of unearned income (FTE) 17,600 8,320 25,920
-------- ------- -------
TOTAL INTEREST INCOME 6,505 18,222 24,727
-------- ------- -------
INTEREST EXPENSE
Money market accounts (1,577) 2,866 1,289
Savings deposits 185 1,546 1,731
Certificates of deposit of
$100,000 and over 150 1,621 1,771
Other time deposits 645 8,281 8,926
Federal funds purchased and
securities sold under agreements to repurchase 360 2,092 2,452
Other short-term borrowings (107) 22 (85)
Federal Home Loan Bank advances 496 1,127 1,623
Subordinated capital notes and debentures (28) 326 298
Other long-term debt (83) (8) (91)
-------- ------- -------
TOTAL INTEREST EXPENSE 41 17,873 17,914
-------- ------- -------
CHANGE IN NET INTEREST INCOME $ 6,464 $ 349 $ 6,813
======== ======= =======
PERCENTAGE INCREASE IN NET INTEREST
INCOME OVER PRIOR PERIOD 7.10%
=======
</TABLE>
_________________
(1) The change due to both rate and volume has been allocated to change due
to volume and change due to rate in proportion to the relationship of
the absolute dollar amounts of the change in each.
-18-
<PAGE> 19
FINANCIAL CONDITION
The Corporation's total assets were $9.7 billion at March 31, 1995
compared to $9.9 billion at March 31, 1994, and $10.0 billion at December 31,
1994. Average assets were $9.8 billion for the first quarter of 1995 compared
to $9.9 billion for the first quarter of 1994.
INVESTMENT SECURITIES
The Corporation's investment portfolio of $2.7 billion at March 31,
1995 consisted of available for sale securities which are carried on the
balance sheet at fair value and securities held to maturity which are carried
at amortized cost. Reference is made to Note 5 to the interim financial
statements which provides the composition of the investment portfolio at March
31, 1995 and December 31, 1994.
U.S. Treasury and government agency obligations represent approximately
77.5% of the investment securities portfolio at March 31, 1995. The Corporation
has some credit risk in the investment portfolio, however management does not
consider that risk to be significant.
The REMIC and CMO issues in the investment portfolio are 86.7% U. S.
government agencies issues; the remaining 13.3% are readily marketable,
nonagency collateralized mortgage obligations backed by agency-pooled
collateral or whole-loan collateral. All nonagency issues currently held are
rated "AAA" by either Standard & Poors or Moodys. The REMIC and CMO portions of
the investment securities portfolio include approximately 22.6% in
floating-rate issues, the majority being indexed to LIBOR or PRIME. Normal
practice is to purchase investment securities at or near par value to reduce
risk of premium write-offs on unexpected prepayments. The limited credit risk
in the investment portfolio consists of the holdings of nonagency CMOs,
municipal obligations and corporate stocks, and notes and debentures which
accounted for 1.3%, 18.5%, and 2.6%, respectively, of the investment securities
portfolio at March 31, 1995.
At March 31, 1995, the Corporation had approximately $26.3 million of
structured notes, which constitutes approximately .94% of the investment
securities portfolio. Structured notes have uncertain cash flows which are
driven by interest-rate movements and may expose a company to greater market
risk than traditional medium-term notes. All of the Corporation's investments
of this type are government agency issues (primarily Federal Home Loan Bank and
Federal National Mortgage Association). The structured notes vary in type but
primarily include step-up bonds and index-amortizing notes. These securities
are carried in the Corporation's available for sale securities portfolio and
the unrealized loss in these securities at March 31, 1995 was approximately
$1.0 million. The market risk associated with the structured notes is not
considered material to the Corporation's financial position, results of
operations, or liquidity and involves no credit risk.
AVAILABLE FOR SALE SECURITIES
Available for sale securities at March 31, 1995 were $1.7 billion and
had unrealized gains of $7.6 million and unrealized losses of $19.5 million,
which resulted in an adjustment to the carrying value of available for sale
securities of $11.9 million ($7.4 million, net of taxes). At December 31, 1994,
these securities totaled $1.9 billion and had unrealized gains of $3.0 million
and unrealized losses of $50.0 million. Holdings of these securities declined
approximately $239 million from December 31, 1994, primarily as a result of
loan funding needs.
HELD TO MATURITY SECURITIES
Held to maturity securities at March 31, 1995 were $1.0 billion,
consisting primarily of U. S. Government obligations and obligations of states
and political subdivisions. The held to maturity portfolio as of March 31, 1995
had unrealized gains of $17.7 million and unrealized losses of $11.0 million.
At December 31, 1994, these securities totaled $1.0 billion and had unrealized
gains and losses of $9.2 million and $32.3 million, respectively. The change
in the unrealized gains and losses reflects the changes in interest rates and
financial markets since year end.
-19-
<PAGE> 20
LOANS
Loans at March 31, 1995 were $6.0 billion compared to $5.1 billion and
$5.9 billion at March 31, 1994 and December 31, 1994, respectively. Average
loans for the first quarter of 1995 were $6.0 billion, a 16% increase over $5.2
billion for the first quarter of 1994. Note 3 to the interim financial
statements presents the composition of the loan portfolio. The primary area of
growth since year end has been in the consumer loan portfolio, which relates to
the consumer loan marketing program implemented in the fourth quarter of 1994.
The growth in loans from the first quarter of 1994 to the first quarter of 1995
has been in almost all categories of loans, the largest growth occurring in
consumer loans and loans secured by 1-4 residential mortgages. The
Corporation's loan-to-deposit ratio was 73% at March 31, 1995 compared to 61%
and 71%, respectively, at March 31, 1994, and December 31, 1994.
ALLOWANCE FOR LOSSES ON LOANS
The following table provides a reconciliation of the allowance for
losses on loans (the allowance) at the dates indicated and certain key ratios
for the three-month periods ended March 31, 1995 and 1994 and for the year
ended December 31, 1994.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------------- FOR THE YEAR ENDED
1995 1994 DECEMBER 31, 1994
--------- ---------- ------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Balance at the beginning
of the period $ 122,089 $ 114,353 $ 114,353
Provision charged to expense 1,686 815 3,636
Allowances of banks acquired (a) -- 8,834 9,252
Recoveries 3,819 2,977 13,287
Charge-offs (4,689) (2,291) $ (18,439)
---------- ---------- ----------
Balance at the end of the period $ 122,905 $ 124,688 $ 122,089
========== ========== ==========
Loans outstanding at period end $5,995,257 $5,108,678 $5,949,128
========== ========== ==========
Average loans during the period $6,001,424 $5,185,160 $5,426,880
========== ========== ==========
Ratios:
Allowance/period-end loans 2.05% 2.44% 2.05%
Charge-offs/average loans (b) .32 .18 .34
Recoveries/average loans (b) .26 .23 .25
Net charge-offs (recoveries)/
average loans (b) .06 (.05) .09
Provision/average loans (b) .11 .06 .07
</TABLE>
_______________
(a) At date of acquisition for acquisitions accounted for using the
purchase method of accounting and as of January 1 for acquisitions
accounted for using the pooling of interests method of accounting.
(b) Amounts annualized for March 31, 1995 and 1994
(NM) Not meaningful
The allowance at March 31, 1995, was $122.9 million, an increase of
$816,000 over December 31, 1994, and compared to $124.7 million at March 31,
1994. The allowance is essentially unchanged from year end. The provision for
losses on loans exceeded net charge-offs for the first quarter by $816,000
which accounts for the increase. An increase in the level of charge-offs is
expected in 1995 related to the increase in the consumer loans. Management
believes that the allowance is sufficient to absorb estimated losses inherent
in the loan portfolio at quarter end.
-20-
<PAGE> 21
NONPERFORMING ASSETS
NONACCRUAL, RESTRUCTURED, AND PAST DUE LOANS AND FORECLOSED PROPERTIES
<TABLE>
<CAPTION>
MARCH 31,
--------------------------- DECEMBER 31,
1995 1994 1994
-------- -------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Nonaccrual loans $21,323 $22,065 $17,476
Restructured loans 1,550 7,816 1,564
------- ------- -------
Total nonperforming loans 22,873 29,881 19,040
------- ------- -------
Foreclosed property
Other real estate owned,
net of reserve for losses 5,300 9,742 5,434
Other foreclosed properties 426 492 559
------- ------- -------
Total foreclosed properties 5,726 10,234 5,993
------- ------- -------
Total nonperforming assets $28,599 $40,115 $25,033
======= ======= =======
Loans 90 days or more past due
and not on nonaccrual status $ 7,685 $ 8,434 $ 5,874
======= ======= =======
- ------------
Nonperforming loans as a
percentage of loans .38% .58% .32%
Nonperforming assets as a
percentage of loans and
foreclosed properties .48 .78 .42
Allowance for losses on loans
as a percentage of
nonperforming loans 537 417 641
Loans 90 days or more past
due and not on nonaccrual
status as a percentage of loans .13 .17 .10
</TABLE>
The Corporation's asset quality measures continue to be outstanding as
shown above. During the first quarter of 1995, nonperforming assets (primarily
nonaccrual loans) increased $3.6 million from year end but continues to be at
historically low levels. Management does not expect any significant increases
in the levels of nonperforming assets in the second quarter of 1995 but does
expect some increase from the current levels. Emphasis on asset quality
continues to be stressed as the loan portfolio grows.
POTENTIAL PROBLEM ASSETS
Potential problem assets consist of assets which are generally secured
and not currently considered nonperforming, but where information about
possible credit problems has caused management to have serious doubts as to the
ability of such borrowers to comply in the future with present repayment terms.
Historically, these assets have been loans which have become nonperforming. At
March 31, 1995, the Corporation had potential problem assets (all of which were
loans) of $9.8 million.
-21-
<PAGE> 22
OFF-BALANCE-SHEET INSTRUMENTS
The Corporation, on a limited basis, uses off-balance-sheet financial
instruments to manage interest-rate risk. Since December 31, 1994, there has
been no significant change in off-balance-sheet instruments. Reference is made
to Note 17 to the audited financial statements in the Corporation's 1994 Annual
Report to Shareholders for additional information regarding these instruments.
A summary of the Corporation's interest-rate swaps at March 31, 1995 follows.
<TABLE>
<CAPTION>
CURRENT RATES (A) 1995
---------------------- YEAR-TO-DATE
VARIABLE FIXED NET INTEREST UNREALIZED
NOTIONAL RATE RATE MATURITY INCOME GAIN
BALANCE SHEET INSTRUMENTS AMOUNT PAID RECEIVED DATE IMPACT (LOSS)
- --------------------------- -------- -------- -------- -------- ------------ ----------
(IN MILLIONS) (IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Loans (b) $150 6.50% 5.22% 1/96-99 (c) $(.5) $(8.2)
Securities 100 6.56 4.44 6/95 -- -- (d)
Long-term debt debentures 50 6.04 4.46 5/96 (.2) (1.6)
Long-term FHLB advances 10 6.25 9.13 3/98 .1 .5
---- ---- -----
Total $310 $(.6) $(9.3)
==== ==== =====
</TABLE>
________________
(a) The variable rates paid are tied to the three-month LIBOR rate for the
loans and the FHLB advance swaps and the six-month LIBOR rate for the
investment securities and the debentures swaps. The next repricing
dates for the variable rates paid for the loans, long-term debt
debentures, and long-term debt FHLB advances are April 1995, May 1995,
and June 1995, respectively. The securities swap will not reprice prior
to maturity. These variable rates may change significantly in the
future due to changes in the financial markets and interest rates.
(b) This swap was entered into to reduce the volatility of net interest
income. At the time the swap was executed, management reduced the risk
associated with stable or further declining interest rates and the
resultant impact on net interest income.
(c) This interest-rate swap's amortization period may change quarterly
based on changes in the underlying index rate. If the index rate should
be less than or equal to 5.3125% on January 5, 1996, the swap would
terminate on that date. If the index rate should remain at the current
rate (6.13% as of April 27, 1995) through January 5, 1996 and
thereafter, the swap would mature at a rate of $42 million each quarter
beginning April 5, 1996 through January 6, 1997. The swap maturity has
the potential to extend to January 1999 in the event the index rate
should be equal to or exceed 8.3125% on January 5, 1996 and for the
remainder of the term of the swap.
(d) Management sold the securities related to this interest-rate swap in
January 1995. At December 31, 1994, the Corporation recognized a $1.1
million loss on this interest-rate swap.
-22-
<PAGE> 23
ASSET LIABILITY MANAGEMENT
The following table presents the Corporation's interest-rate
sensitivity analysis at March 31, 1995. The analysis is at a point-in-time and
could change significantly on a daily basis. This analysis alone cannot be
relied upon to predict how the Corporation is positioned to react to changing
interest rates. Other factors such as the mix of earning assets and
interest-bearing liabilities, interest-rate spreads, and the level of
interest-rate impact the Corporation's net interest income.
Balance sheet simulation analysis is conducted to determine the impact
on net interest income for the next twelve months under several interest-rate
scenarios. One such scenario uses current rates at March 31, 1995 and holds the
rates and volumes constant for the simulation. When this projection is
subjected to immediate and parallel shifts in interest rates ("rate shocks") of
200 basis points, first rising and then falling, the annual impact of the "rate
shock" at March 31, 1995 on the Corporation's projected net interest income was
a positive $5.8 and a negative $15.0 million pretax, respectively, which is
within the Corporation's policy limits.
-23-
<PAGE> 24
UNION PLANTERS CORPORATION AND SUBSIDIARIES
RATE SENSITIVITY ANALYSIS AT MARCH 31, 1995
<TABLE>
<CAPTION>
INTEREST-SENSITIVE WITHIN
-----------------------------------------------------------------------------------------
NON-
0-30 31-90 91-180 181-365 1-2 2-5 OVER INTEREST-
DAYS DAYS DAYS DAYS YEARS YEARS 5 YEARS BEARING TOTAL
------ ------ ------ ------- ------- ------- ------- --------- ------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Loans $ 1,578 $ 592 $ 488 $ 791 $ 472 $ 1,440 $ 642 $ 23 $6,026
Investment securities 335 169 203 556 554 555 340 -- 2,712
Other earning assets 146 115 23 -- -- -- -- -- 284
Other assets -- -- -- -- -- -- -- 720 720
------- ------- ----- ------- ------- ------- ------ ------- ------
Total assets $ 2,059 $ 876 $ 714 $ 1,347 $ 1,026 $ 1,995 $ 982 $ 743 $9,742
======= ======= ===== ======= ======= ======= ====== ======= ======
SOURCES OF FUNDS
Money market deposits $ 58 $ 357 $ -- $ 357 $ -- $ 511 $ -- $ -- $1,283
Other savings and time deposits 557 1,058 771 668 478 1,612 16 -- 5,160
Time deposits over $100,000 104 107 118 93 97 54 2 -- 575
Short-term borrowings 197 2 1 -- -- -- -- -- 200
Federal Home Loan Bank
advances 116 96 11 14 16 33 20 -- 306
Long-term debt -- -- -- -- -- -- 117 -- 117
Noninterest-bearing deposits -- -- -- -- -- -- -- 1,200 1,200
Other liabilities -- -- -- -- -- -- -- 124 124
Shareholders' equity -- -- -- -- -- -- -- 777 777
------- ------- ----- ------- ------- ------- ------ ------- ------
Total sources of funds $ 1,032 $ 1,620 $ 901 $ 1,132 $ 591 $ 2,210 $ 155 $ 2,101 $9,742
======= ======= ===== ======= ======= ======= ====== ======= ======
Interest rate swaps $ (150) $ (60) $ -- $ -- $ 50 $ 160 $ -- $ -- $ --
Interest rate sensitivity gap $ 877 $ (804) $(187) $ 215 $ 485 $ (55) $ 827 $(1,358) $ --
Cumulative interest rate
sensitivity gap $ 877 $ 73 $(114) $ 101 $ 586 $ 531 $1,358 $ -- $ --
Cumulative gap as a percentage
of total assets 9% 1% (1%) 1% 6% 5% 14%
</TABLE>
- ----------------
Management has made the following assumptions in the above analysis:
(a) Assets and liabilities are generally scheduled according to their
earliest repricing period when the repricing is less than the
contractual maturity.
(b) Nonaccrual loans are included in the noninterest-bearing category.
(c) Fixed-rate mortgage loan maturities are based on the principal
prepayment patterns of comparable mortgage-backed securities.
(d) The scheduled maturities of mortgage-backed securities and CMOs
incorporate principal prepayment of these securities using current
and consensus interest rate forecasts in conjunction with the latest
three month historical prepayment speeds.
(e) Investment securities available for sale are currently treated in
the same manner as comparable securities in the investment
securities held to maturity portfolio in that they are scheduled
according to their contractual maturities or earliest repricing
date, however the maturities of callable agencies are scheduled
according to their call dates when valued at a premium or par.
(f) Money market deposits and savings deposits that have no contractual
maturities are scheduled according to the Corporation's best
estimate of their repricing to changes in market rates. This varies
by product type and market.
(g) If all money market, NOW, and savings deposits had been included in
the 0-30 Days category above, the cumulative gap as a percentage of
total assets would have been negative (21%), (20%), (22%), (16%),
and (11%), and positive 5% and 14%, respectively, for the 0-30 Days,
31-90 Days, 91-180 Days, 181-365 Days, 1-2 Years, 2-5 Years and over
5 years categories at March 31, 1995.
-24-
<PAGE> 25
LIQUIDITY
The Corporation's core deposit base is its most important and stable
funding source. Core deposits, along with available for sale securities and
money market investments, provide liquidity for the Corporation. The
Corporation's deposit base is comprised of "in-market" deposits, as the
Corporation has no brokered deposits. Certificates of deposits of $100,000 or
more represent only 7% of total deposits at March 31, 1995. The following table
presents an analysis of the Corporation's average deposits.
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
MARCH 31, DECEMBER 31,
1995 1994 1994
---------- ---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Demand deposits $1,228,593 $1,204,021 $1,226,289
Money market accounts (a) 1,345,094 1,593,972 1,471,733
Savings deposits (b) 1,732,989 1,700,339 1,762,406
Other time deposits (c) 3,384,990 3,319,275 3,317,570
---------- ---------- ----------
Total core deposits 7,691,666 7,817,607 7,777,998
Certificates of deposit
of $100,000 and over 559,160 543,181 551,615
---------- ---------- ----------
Total deposits $8,250,826 $8,360,788 $8,329,613
========== ========== ==========
</TABLE>
- -------------------
(a) Includes money market savings accounts, High Yield accounts, and
super NOW accounts.
(b) Includes regular and premium savings accounts and NOW accounts.
(c) Includes certificates of deposit under $100,000, investment savings
accounts, and other time deposits.
Average deposits for the first quarter of 1995 were $8.3 billion, a
decrease of $79 million from the average for 1994. The decrease relates
primarily to money market and savings deposits with a portion of the decline
being offset by growth in certificates of deposit. Also, approximately $90
million of the decline relates to the sale of certain branches required as a
result the acquisition of Grenada Sunburst System Corporation at year end.
The parent company's source of liquidity is management fees and dividends
received from subsidiaries. The number of financial institutions owned by the
Corporation provides a diversified base for the payment of dividends should one
or more of the subsidiaries have capital needs and be unable to pay dividends
to the parent company. At March 31, 1995, the parent company had cash and cash
equivalents totaling $47.9 million and short-term investments totaling $45.4
million. The parent company's net working capital at March 31, 1995 was $90.7
million. The parent company expects to receive dividends from its subsidiary
banks totaling $41 million during the second quarter of 1995. Additional
dividends will be dependent on the future earnings of the subsidiary banks.
SHAREHOLDERS' EQUITY
The Corporation's total shareholders' equity increased by $46.3 million
from December 31, 1994 to $777 million at March 31, 1995. The increase was due
to retained net earnings of $22.0 million, a reduction in the net unrealized
loss on available for sale securities of $21.1 million, and Common Stock issued
in connection with benefit plans of $3.2 million. At March 31, 1995, the ratio
of shareholders' equity to assets was 7.98% compared to 7.30% at December 31,
1994.
-25-
<PAGE> 26
CAPITAL ADEQUACY
The following tables presents capital adequacy information regarding the
Corporation and the table on the following page presents the calculation of the
Corporation's risk-based capital.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------- DECEMBER 31,
1995 1994 1994
-------- -------- -----------
<S> <C> <C> <C>
CAPITAL ADEQUACY DATA
- ---------------------
Total shareholders' equity/
total assets (at period end) 7.98% 7.72% 7.30%
Average shareholders' equity/
average total assets 7.83 7.77 7.76
Tier 1 capital/unweighted
assets (leverage ratio) (a) 7.62 7.45 7.18
Parent company long-term
debt/equity 14.77 15.24 15.71
Dividend payout ratio 33.41 34.64 64.68
</TABLE>
- -------------------
(a) Based on period-end capital and quarterly adjusted average assets.
At March 31, 1995, total shareholders' equity was 7.98% of total assets
and the leverage ratio was 7.62% compared to 7.30% and 7.18%, respectively, at
December 31, 1994. The improvement in these ratios relates primarily to the
Corporation's retained net earnings. The shareholders' equity to total assets
ratio improved more than the leverage ratio because the adjustment for the
unrealized loss on available for sale securities decreased $21 million from
year end to $7.4 million. This adjustment is not included in the leverage ratio
calculation.
-26-
<PAGE> 27
The following table presents the Corporation's risk-based capital and
capital adequacy ratios. The Corporation's regulatory capital ratios qualify
the Corporation for the "well-capitalized" regulatory classification. The
Corporation's risk-based capital increased from year end due primarily to
retained net earnings. Risk-weighted assets increased during the quarter as
loan growth occurred, since loans are typically 100% risk-weighted. The
increase was partially offset by a decline in total assets.
RISK-BASED CAPITAL
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------------- DECEMBER 31,
1995 1994 1994
---------- ---------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Tier 1 capital
Shareholders' equity $ 777,066 $ 764,104 $ 730,707
Minority interest in
consolidated subsidiaries 1,088 1,588 1,088
Less goodwill, other
intangibles, and one-half
of investment in
unconsolidated subsidiaries (36,960) (32,774) (38,138)
Less deferred tax asset not
qualifying for
regulatory capital (2,384) (1,803) (2,494)
Unrealized loss on available for
sale securities 7,417 175 28,527
----------- ----------- -----------
Total Tier 1 capital 746,227 731,290 719,690
Tier 2 capital
Allowance for losses on loans (a) 73,716 66,792 74,204
Qualifying long-term debt 74,553 74,500 74,540
Less one-half of investment
in unconsolidated subsidiaries (21) (20) (18)
----------- ----------- -----------
Total capital $ 894,475 $ 872,562 $ 868,416
=========== =========== ===========
Risk-weighted assets (b) $ 5,848,067 $ 5,250,970 $ 5,888,361
=========== =========== ===========
Ratios as a percent of end of
period risk-weighted assets
Tier 1 capital 12.76% 13.93% 12.22%
Total capital 15.30 16.62 14.75
</TABLE>
- ----------------------
(a) Limited as required by regulatory guidelines.
(b) Based on "risk-weighted assets" as defined by regulatory guidelines.
-27-
<PAGE> 28
PART II -- OTHER INFORMATION
ITEM 1 -- LEGAL PROCEEDINGS
The information called for by this item is incorporated by reference to
Item 3, Part I of the Corporation's 1994 Form 10-K , Note 19 to the
Corporation's consolidated financial statements on pages 68 and 69 of the 1994
Annual Report, and Note 10 to the Corporation's unaudited financial statements
included herein.
ITEM 2 -- CHANGES IN SECURITIES
None.
ITEM 3 -- DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 -- OTHER INFORMATION
None
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
10 - Supplemental Executive Retirement Plan of Executive Officers
11 - Computation of Per Share Earnings
27 - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K:
<TABLE>
<CAPTION>
Date of Current
Report Subject
--------------- -------------------------------
<S> <C>
January 13, 1995 Acquisition of Grenada Sunburst
System Corporation (GSSC) on
December 31, 1994
January 31, 1995 Amendment to January 13, 1995
Current Report on Form 8-K for
the GSSC acquisition to file
certain unaudited pro forma
financial information
</TABLE>
-28-
<PAGE> 29
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNION PLANTERS CORPORATION
------------------------------
(Registrant)
Date: May 10, 1995
-----------------
By: /s/ Benjamin W. Rawlins, Jr.
--------------------------------
Benjamin W. Rawlins, Jr.
Chairman of the Board and
Chief Executive Officer
By: /s/ John W. Parker
--------------------------------
John W. Parker
Executive Vice President and
Chief Financial Officer
By: /s/ M. Kirk Walters
--------------------------------
M. Kirk Walters
Senior Vice President, Treasurer
and Chief Accounting Officer
-29-
<PAGE> 1
EXHIBIT 10
UNION PLANTERS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Effective February 23, 1995, Union Planters Corporation's Board of
Directors adopted a Supplemental Executive Retirement Plan (the Plan) covering
the following currently designated executive officers of the Corporation:
<TABLE>
<CAPTION>
Covered
Executive Officers Position with the Corporation
- ----------------------- ------------------------------------------------
<S> <C>
Benjamin W. Rawlins, Jr. Chairman and Chief Executive Officer
Jackson W. Moore President and Chief Operating Officer
Jack W. Parker Executive Vice President and Chief Financial Officer
James A. Gurley Executive Vice President
M. Kirk Walters Senior Vice President, Treasurer and Chief Accounting Officer
</TABLE>
Under the Plan separate agreements have been executed by Mr. Rawlins,
Mr. Moore, Mr. Gurley, and Mr. Walters to replace certain deferred
compensation agreements previously entered into. An agreement was also
executed with Mr. Parker who previously had no deferred compensation
agreement.
Attached hereto is a copy of the resolution of the Board of Directors
adopting the Plan and an agreement form which sets forth the terms and
provisions of the Plan. This form is representative of the separate agreements;
however, each agreement as may be executed from time to time under the Plan may
vary, in the discretion of the Board of Directors, with respect to specific
terms and conditions.
Reference is made to the Corporation's Definitive Proxy Statement for the
Annual Meeting held on April 27, 1995 for information regarding the
Corporation's other compensation arrangements with each of the designated
executive officers.
<PAGE> 2
UNION PLANTERS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
This Supplemental Executive Retirement Plan ("Plan") has been adopted by Union
Planters Corporation ("Employer") effective the 23rd day of February, 1995.
RECITALS
WHEREAS, Employer previously entered into separate Deferred Compensation
Agreements ("Previous Agreements") with various executive officers of the
Employer;
WHEREAS, the Previous Agreements were amended from time to time to provide
additional benefits to the participating executive officers and/or to clarify
certain provisions of the Previous Agreements; and
WHEREAS, the Board at its regular monthly meeting in February, 1995, approved
the amendment and restatement of certain Previous Agreements for selected
executive officers of Employer and approved the participation of certain other
executive officers (not covered by any Previous Agreement) in this Plan; and
WHEREAS, in consideration of the Employer's desire to change the terms of the
Previous Agreements for certain executive officers and the desire by such
executive officers to participate in this Plan, Employer and certain executive
officers participating in Previous Agreements agree to terminate any Previous
Agreement covering such executive officer and agree to abide by the terms and
conditions of this Plan; and
WHEREAS, in consideration of the Employers desire to have other executive
officers continue in the employment of the Employer and the desire by such
other executive officers to receive an additional retirement benefit, Employer
and such other executive officers agree to abide by the terms and conditions of
the Plan.
NOW THEREFORE, Employer hereby adopts this Plan pursuant to the terms and
provisions set forth below.
PLAN
The terms and provisions of the Plan shall be set forth in separate
Supplemental Executive Retirement Agreements ("Agreements") which shall be
entered into by every Employer executive officer who participates in the Plan.
Each Agreement may vary, in the sole discretion of the Employer's board of
directors, with respect to its terms and conditions.
UNION PLANTERS CORPORATION
BY: /s/ Benjamin W. Rawlins, Jr.
----------------------------
Benjamin W. Rawlins, Jr.
Chairman and CEO
BY: /s/ Marvin E. Bruce
----------------------------
Marvin E. Bruce
Chairman UPC Salary and
Benefits Committee
<PAGE> 3
UNION PLANTERS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
This Supplemental Executive Retirement Agreement ("Agreement") has been adopted
by Union Planters Corporation ("Employer") and __________- ("Participant")
effective the _____ day of February, 1995.
RECITALS
WHEREAS, Union Planters Corporation ("Employer") previously entered into a
Deferred Compensation Agreement ("Previous Agreement") with the Participant on
______________________, 19____;
WHEREAS, the Previous Agreement was amended from time to time to provide
additional benefits to the Participant and/or to clarify certain provisions of
the Previous Agreement; and
WHEREAS, the Board at its regular monthly meeting in February, 1995, approved
the adoption of the Union Planters Corporation Supplemental Executive
Retirement Plan ("Plan");
WHEREAS, in consideration of the Employer's desire to change the terms of the
Previous Agreement and the Participant's desire to participate in the Plan,
Employer and the Participant agree to terminate the Previous Agreement; and
WHEREAS, as consideration for the termination of the Previous Agreement, both
Employer and Participant agree to abide by the terms and conditions of the
Plan, which are evidenced through this Agreement.
NOW THEREFORE, Employer and Participant hereby adopt this Agreement pursuant to
the terms and provisions set forth below.
ARTICLE I
DEFINITIONS
Whenever used herein the following terms shall have the meanings hereinafter
set forth. Words in the masculine gender shall include the feminine and the
singular
1
<PAGE> 4
shall include the plural, and vice versa, unless qualified by the context. Any
headings used herein are included for ease of reference only, and are not to be
construed so as to alter the terms hereof.
1.1. "AGREEMENT" shall mean the Union Planters Corporation Supplemental
Executive Retirement Agreement.
1.2. "APPLICABLE FEDERAL RATE" shall mean 120% of the applicable federal
rate (as calculated on a mid-term, monthly basis) pursuant to Code Section
1274, as amended.
1.3. "AVERAGE BASE SALARY INCREASE RATE" shall mean the greater of the
following: (i) the average annual increase in base salary and bonus (calculated
using four (4) decimal places) received by the Participant or Eligible
Participant during the three complete calendar years preceding termination of
employment (for whatever reason), or (ii) Five Percent (5%).
1.4. "BENEFICIARY" shall mean the person or persons Participant has
designated in writing to Employer to receive benefits under the Agreement in
the event of the Participant's death. If the Participant has not specifically
designated any Beneficiary for purposes of the Agreement , then the Beneficiary
shall become the Participant's estate. In the case of the death of the
Beneficiary before completion of payments under the Agreement to the
Beneficiary, then the Beneficiary's estate shall become entitled to any
remaining payments. In either case, any remaining payments under the terms of
the Agreement shall be made in the form of a lump sum payment as follow: an
amount equal to the present value of any remaining payments to be made under
the Agreement shall be paid on the first business day of the second month
following the Participant's (or if appropriate, Beneficiary's) date of death,
and for purposes of determining the present value of the payments, the Discount
Rate which exists on the Participant's (or, if appropriate, Beneficiary's) date
of the death shall be used.
1.5. "BOARD" shall mean the Board of Directors of Union Planters
Corporation.
1.6. "CHANGE IN CONTROL" shall mean the occurrence of the earliest of any
of the following events:
(a) the acquisition by any entity, person, or group (excluding any
entity, person or group owning Voting Stock at the effective date of
this Agreement) of beneficial ownership, as that term is defined in
Rule 13d-3 of the Securities Exchange Act of 1934, of Twenty Five
percent (25%) or more of the Voting Stock of Employer;
2
<PAGE> 5
(b) The commencement and consummation by any entity, person or
group (other than Employer) of a tender offer or an exchange offer for
more than Twenty Five percent (25%) or more of the Voting Stock of
Employer; or
(c) the effective date of a (i) merger or consolidation of
Employer with one or more other corporations as a result of which the
holders of the Voting Stock of Employer immediately prior to such
merger or consolidation hold less than Eighty Percent (80%) of the
Voting Stock of the surviving or resulting corporation, or (ii) a sale
or transfer of a majority of the property of Employer, other than to
an entity of which Employer controls 80% or more of the Voting Stock.
1.7. "CODE" shall mean the Internal Revenue Code of 1986, as amended.
1.8. "DISABILITY" shall mean a physical or mental condition of the
Participant, determined in the sole discretion of the Board, which prohibits
Participant from carrying out his normal duties and responsibilities as an
employee of Employer.
1.9. "DISCOUNT RATE" shall mean that immediate annuity interest rate used
by the Pension Benefit Guaranty Corporation ("PBGC") under Section 4062,
Appendix B to Part 2619, of the Employee Retirement Income Security Act
("ERISA").
1.10. "ELIGIBLE PARTICIPANT" shall mean the Participant once he earns at
least 10 Years of Service with the Employer and attains the following indicated
ages, based on the Participant's actual age as of January 1, 1995.
<TABLE>
<CAPTION>
Age Participant Can
Participant's Age as of January 1, 1995 Qualify as Eligible Participant
--------------------------------------- -------------------------------
<S> <C>
Less than Age 50 55
Age 50 through 54 57
Age 55 through 60 59
Age 61 or over 64
</TABLE>
For purposes of the Agreement (where appropriate), the term "Participant" shall
include a reference to an Eligible Participant.
1.11. "EMPLOYER" shall mean the Union Planters Corporation, or to the extent
provided in Section 5.9, any successor corporation or other entity resulting
from a merger or consolidation into or with Employer or a transfer or sale of a
majority of the assets of Employer.
3
<PAGE> 6
1.12. "FINAL AVERAGE EARNINGS" shall mean the average base salary plus bonus
earned by the Participant or Eligible Participant during the three complete
calendar years preceding termination of employment (for whatever reason).
1.13. "FORMER ELIGIBLE PARTICIPANT" shall mean Participant who, after
becoming an Eligible Participant, terminates service with the Employer and who,
under the terms of the Agreement, is then entitled to payment of a benefit.
For purposes of the Agreement (where appropriate), the term "Participant" shall
include a reference to a Former Eligible Participant.
1.14. "GOOD REASON" shall mean a termination of employment with the Employer
if, without the Participant's express written consent:
(i) Employer shall assign to Participant duties of a nonexecutive
nature or for which Participant is not reasonably equipped by his
skills and experience; or
(ii) Employer shall reduce the salary of the Participant, or
materially reduce the amount of paid vacations to which he is
entitled, or reduce his fringe benefits and perquisites; or
(iii) Employer shall fail to provide office facilities, secretarial
services, and other administrative services to the Participant which
are substantially equivalent to the facilities and services provided
to the Participant at the initial date of the Participant's
participation in the Agreement; or
(iv) Employer shall terminate incentive and benefit plans or
arrangements, or reduce or limit the Participant's participation
therein, relative to the level of participation of other executives of
similar rank, to such an extent as to materially reduce the aggregate
value of the Participant's incentive compensation and benefits below
their aggregate value as of the initial date of the Participant's
participation in the Agreement.
1.15. "INSTALLMENT PAYMENT ACCOUNT" shall mean that account created pursuant
to the terms of Article II of the Agreement to facilitate payment of benefits
under the Agreement to the Participant in the form of installment payments.
4
<PAGE> 7
1.16. "NORMAL RETIREMENT AGE" shall mean the following indicated ages based
on the Participant's actual age as of January 1, 1995:
<TABLE>
<CAPTION>
Participant's
Participant's Age as of January 1, 1995 Normal Retirement Age
--------------------------------------- ---------------------
<S> <C>
Less than Age 60 62
Age 60 or over 65
</TABLE>
1.17. "NORMAL RETIREMENT BENEFIT" shall mean an annual sum equal to 65% of
the Participant's Final Average Earnings, payable each year for the remaining
actuarially-determined life of the Participant in accordance with the
provisions of Article II of the Agreement. For purposes of determining the
Participant's remaining actuarially-determined life, Table V ("Ordinary Life
Annuities, One Life -Expected Return") of Code Regulation 1.72-9, as amended,
shall be used, with the assumption that the Participant terminated employment
on the first day of the first year of the Participant's Normal Retirement Age
(regardless of the Participant's actual age at termination of employment).
1.18. "PARTICIPANT" shall mean ________________, who is an employee of
Employer and to whom or with respect to whom a benefit may be payable under the
Agreement. For purposes of the Agreement, the term "Participant" shall include
a reference to the Participant once he becomes an Eligible Participant or
Former Eligible Participant.
1.19. "REDUCED RETIREMENT BENEFIT" shall mean the following percentages of
the Participant's Normal Retirement Benefit, payable to an Eligible Participant
in accordance with the provisions of Section 2.3 of the Agreement if the
Eligible Participant terminates employment before attaining Normal Retirement
Age ("NRA").
<TABLE>
<CAPTION>
Years Employment
Terminates Prior to NRA Reduced Retirement Benefit
----------------------- --------------------------
<S> <C>
More than 7 Years 0% of Normal Retirement Benefit
From 6 to 7 Years 58% of Normal Retirement Benefit
From 5 to 6 Years 64% of Normal Retirement Benefit
From 4 to 5 Years 70% of Normal Retirement Benefit
From 3 to 4 Years 76% of Normal Retirement Benefit
From 2 to 3 Years 82% of Normal Retirement Benefit
From 1 to 2 Years 88% of Normal Retirement Benefit
Up to 1 Year 94% of Normal Retirement Benefit
</TABLE>
1.20. "VOTING STOCK" shall mean that class (or classes) of common stock of
the Employer entitled to vote in the election of the Employer's directors.
5
<PAGE> 8
1.21. "YEAR OF SERVICE" shall mean any calendar year of employment by the
Participant with Employer in which the Participant accumulates at least 1000
hours of service. For these purposes, the provisions of Department of Labor
Regulations 2530.200-2(b) and (c) are incorporated herein by reference as they
relate to the determination of "hour of service."
ARTICLE II
BENEFITS UNDER THE AGREEMENT
2.1. BENEFITS. Either a Normal Retirement Benefit or Reduced Retirement
Benefit shall be paid under the terms of the Agreement, as set forth in this
Article II.
2.2. VOLUNTARY TERMINATION OF EMPLOYMENT BEFORE BECOMING ELIGIBLE
PARTICIPANT. Should Participant voluntarily terminate employment with the
Employer before becoming an Eligible Participant, then the Participant (and any
person claiming benefits for or on behalf of the Participant) will forfeit all
rights to benefits under this Agreement; provided, however, that a termination
of employment for Good Reason or in accordance with Sections 2.4, 2.5, or 2.6
of the Agreement will not be considered a voluntary termination of employment
subject to this Section 2.2 of the Agreement.
2.3. VOLUNTARY TERMINATION OF EMPLOYMENT AFTER BECOMING AN ELIGIBLE
PARTICIPANT BUT BEFORE NORMAL RETIREMENT AGE. Should the Participant, once
becoming an Eligible Participant, voluntarily terminate service with the
Employer before Normal Retirement Age (i.e., for reasons other than Good Reason
or those described in Sections 2.4, 2.5 or 2.6 of the Agreement), he will be
entitled to the Reduced Retirement Benefit, payable at his election in either
of the following forms. Should Participant fail to specifically elect a form
of benefit payment, a Lump Sum Distribution will be made to the Participant.
(a) LUMP SUM DISTRIBUTION. An amount equal to the present value
of the Participant's total Reduced Retirement Benefit shall be paid to
the Participant in one lump sum distribution on the first business day
of the second month following the Participant's termination of
employment. For purposes of determining the present value of the
Participant's total Reduced Retirement Benefit, the Discount Rate
which exists on the date of the Participant's termination of
employment shall be used.
(b) PERIODIC DISTRIBUTION. An amount equal to the present value
of the Participant's total Reduced Retirement Benefit shall be
credited to an Installment Payment Account and shall be payable in up
to 180 successive monthly installments. The first payment shall
commence on the first
6
<PAGE> 9
business day of the second month following the date of termination of
employment, and each successive payment shall occur monthly in
succeeding months on the first business day of such months.
In order for Participant to elect a Periodic Distribution under the
terms of this Section 2.3 (b), the Participant must elect, in the
taxable year (or years) prior to the Participant's termination of
employment with the Employer, both the Periodic Distribution option
and the number of monthly installments to be made (up to a maximum of
180).
For purposes of determining the present value of the Participant's
total Reduced Retirement Benefit, the Discount Rate which exists on
the date of the Participant's termination of employment shall be used.
To determine the amount of each installment payment, a fraction shall
be applied to the Participant's Installment Payment Account on each
payment date. The numerator shall consist of one (1) and the
denominator shall consist of the total number of installment payments
remaining (including the current payment). During the installment
payment period, interest shall be credited to the Participant's
Installment Payment Account on a monthly basis using the Applicable
Federal Rate in existence on the first business day of each month
during which payments are made.
2.4. TERMINATION OF EMPLOYMENT PRIOR TO NORMAL RETIREMENT AGE DUE TO DEATH
OR DISABILITY. Should Participant, before or after becoming an Eligible
Participant, terminate service with the Employer prior to Normal Retirement Age
because of death or Disability, he will be entitled to the Normal Retirement
Benefit following termination of employment, payable in one of the distribution
forms described in Sections 2.7 (a) and (b) of the Agreement.
2.5. INVOLUNTARY TERMINATION OF EMPLOYMENT PRIOR TO NORMAL RETIREMENT AGE.
Should Participant, before or after becoming an Eligible Participant,
involuntarily terminate service with the Employer (or voluntarily terminate
service with Good Reason) prior to Normal Retirement Age (for reasons other
than those described in Section 2.4 and 2.6), he will be entitled to the Normal
Retirement Benefit, without regard to the Participant's age or years of service
at the time of involuntary termination of employment. The Normal Retirement
Benefit will be payable in one of the distribution forms described in Sections
2.3 (a) and (b) of the Agreement.
For purposes of calculating the Normal Retirement Benefit under this Section
2.5, Participant's Final Average Earnings shall be that amount at the date of
termination of employment increased at the Average Base Salary Increase Rate,
compounded
7
<PAGE> 10
annually, for the number of years (carried to two (2) decimal places) needed to
reach the Participant's age 65 birthday.
2.6. INVOLUNTARY TERMINATION OF EMPLOYMENT FOLLOWING A CHANGE IN CONTROL.
Should a Change in Control occur, Participant will be entitled to the Normal
Retirement Benefit following termination of employment (for whatever reason),
without regard to the Participant's age or years of service at the time of
involuntary termination of employment and without regard to whether the
Participant has become an Eligible Participant. The Normal Retirement Benefit
will be payable in accordance with the distribution forms described in Sections
2.7 (a) and (b) of the Agreement.
For purposes of calculating the Normal Retirement Benefit under this Section
2.6, Participant's Final Average Earnings shall be that amount at the date of
termination of employment increased at the Average Base Salary Increase Rate,
compounded annually, for the number of years (carried to two (2) decimal
places) needed to reach the Participant's age 65 birthday.
2.7. TERMINATION OF EMPLOYMENT AT OR AFTER NORMAL RETIREMENT AGE. Should
Participant become an Eligible Participant and subsequently terminate service
with the Employer (for whatever reason) at or after Normal Retirement Age, he
(or, if appropriate, his Beneficiary) will be entitled to the Normal Retirement
Benefit, payable at his election in either of the following forms. Should
Participant fail to specifically elect a form of benefit payment, a Lump Sum
Distribution will be made to the Participant (or, if appropriate, to his
Beneficiary).
(a) LUMP SUM DISTRIBUTION. An amount equal to the present value
of the Participant's total Normal Retirement Benefit shall be paid to
the Participant in one lump sum distribution on the first business day
of the second month following the Participant's termination of
employment. For purposes of determining the present value of the
Participant's total Normal Retirement Benefit, the Discount Rate which
exists on the date of the Participant's termination of employment
shall be used.
(b) PERIODIC DISTRIBUTION. An amount equal to the present value
of the Participant's total Normal Retirement Benefit shall be credited
to an Installment Payment Account and shall be payable in up to 180
successive monthly installments. The first payment shall commence on
the first business day of the second month following the date of
termination of employment, and each successive payment shall occur
monthly in succeeding months on the first business day of such months.
8
<PAGE> 11
In order for Participant to elect a Periodic Distribution under the
terms of this Section 2.7 (b), the Participant must elect, in the
taxable year (or years) prior to the Participant's termination of
employment with the Employer, both the Periodic Distribution option
and the number of monthly installments to be made (up to a maximum of
180).
For purposes of determining the present value of the Participant's
total Normal Retirement Benefit, the Discount Rate which exists on the
date of the Participant's termination of employment shall be used. To
determine the amount of each installment payment, a fraction shall be
applied to the Participant's Installment Payment Account on each
payment date. The numerator shall consist of one (1) and the
denominator shall consist of the total number of installment payments
remaining (including the current payment). During the installment
payment period, interest shall be credited to the Participant's
Installment Payment Account on a monthly basis using the Applicable
Federal Rate in existence on the first business day of each month
during which payments are made.
2.8. DEATH WHILE BENEFIT PAYMENTS BEING MADE. Should Participant die after
becoming a Former Eligible Participant and after the commencement of Normal
Retirement or Reduced Retirement Benefit payments to the Participant, then any
remaining payments will be made to the Participant's Beneficiary in the same
form being made to the Participant at the date of his death. Alternatively, at
the Beneficiaries election (with the consent of the Employer), payment may be
made in a lump sum payment as follows: an amount equal to the present value of
the remaining payments shall be paid on the first business day of the second
month following the Participant's date of death, and for purposes of
determining the present value of the remaining payments, the Discount Rate
which exists on the date of the Participant's date of death shall be used.
ARTICLE III
ADMINISTRATION OF THE AGREEMENT
3.1. ADMINISTRATION BY EMPLOYER. Employer shall be responsible for the
general operation and administration of the Agreement and for carrying out the
provisions thereof. The Board or Employer may engage the services of outside
counsel, accountants, financial advisors and other such professional to assist
it in its administrative duties.
3.2. GENERAL POWERS OF ADMINISTRATION. Employer is hereby designated as a
fiduciary under the Agreement. Employer, as fiduciary, shall have authority to
control, interpret and manage the operation and administration of the
Agreement.
9
<PAGE> 12
Any decision by Employer or the Board denying a claim by Participant or a
Beneficiary for benefits under the Agreement shall be stated in writing and
shall be delivered or mailed to the Participant or Beneficiary. Such statement
shall set forth the specific reasons for the denial, written to the best of the
Employer's ability in a manner that may be understood without legal counsel.
In addition, Employer shall afford a reasonable opportunity to the Participant
or Beneficiary for a full and fair review of the decision denying such claim.
Notwithstanding the above provisions of Section 3.2, to the extent that the
Employee Retirement Income Security Act ("ERISA") may require specific
procedures to be followed in the event of a denial of a claim, such provisions
of ERISA will be followed.
ARTICLE IV
AMENDMENT OR TERMINATION OF AGREEMENT
4.1. AMENDMENT OR TERMINATION OF AGREEMENT. Any amendment to this
Agreement shall be made pursuant to a resolution of the Board and, if such
amendment directly or indirectly affects the benefits payable under the
Agreement, such amendment must be mutually agreed to in writing by Participant
(or, in the event that the Participant is deceased at the date of amendment,
the Participant's Beneficiary).
ARTICLE V
GENERAL PROVISIONS
5.1. PARTICIPANT'S RIGHTS UNSECURED. The Agreement at all times shall be
unfunded as defined under provisions of the Code. The right of Participant or
any Beneficiary to receive a distribution hereunder shall be an uninsured claim
against the general assets of Employer in the event of the Employer's
insolvency or bankruptcy.
Employer shall implement a form of trust arrangement (known generally as a
"rabbi trust") to hold employer assets which will be used to make payments to
the Participant (or the Participant's Beneficiary) under the terms of the
Agreement. Such trust arrangement will not be a "funded" arrangement under the
provisions of the Code, and a copy of such trust arrangement shall be included
with this Agreement as Exhibit A.
5.2. INDEPENDENCE OF OTHER BENEFIT AGREEMENTS. Participation in the
Agreement shall in no way restrict or otherwise impact Participant's
participation
10
<PAGE> 13
in any other welfare benefit plan, employment or other contract, deferred
compensation agreement, equity participation plan or any other form of
retirement benefit plan sponsored by Employer.
5.3. NO SECURED GUARANTEE OF BENEFITS. In the event of the insolvency or
bankruptcy of Employer, Participant shall remain a general creditor of the
Employer with respect to any benefits payable under the Agreement and nothing
contained in the Agreement shall constitute a secured guaranty by Employer or
any other person or entity that the assets of Employer will be sufficient to
pay any benefit hereunder in the event of the Employer's insolvency or
bankruptcy.
5.4. NO ENLARGEMENT OF EMPLOYEE RIGHTS. No Participant shall have any
right to receive a distribution of any benefits under the Agreement except in
accordance with the terms of the Agreement. Establishment of the Agreement
shall not be construed to give any Participant the right to be retained in the
service of Employer.
5.5. SPENDTHRIFT PROVISION. No interest of any person or entity in, or
right to receive a distribution under, the Agreement shall be subject in any
manner to sale, transfer, assignment, pledge, attachment, garnishment, or other
alienation or encumbrance of any kind; nor may such interest or right to
receive a distribution be taken, either voluntarily or involuntarily for the
satisfaction of the debts of, or other obligations or claims against, such
person or entity, including claims for alimony, support, separate maintenance
and claims in bankruptcy proceedings.
5.6. APPLICABLE LAW. The Agreement shall be construed and administered
under the laws of the State of Tennessee.
5.7. SEVERABILITY. In the event that any of the provisions of the
Agreement are held to be inoperative or invalid by any court of competent
jurisdiction, then: (i) insofar as is reasonable, effect will be given to the
intent manifested in the provision held invalid or inoperative, and (ii) the
validity and enforceability of the remaining provisions of the Agreement will
not be affected thereby.
5.8. INCAPACITY OF RECIPIENT. If any person entitled to a distribution
under the Agreement is deemed by Employer to be incapable (physically or
mentally) of personally receiving and giving a valid receipt for any payment
pursuant to the Agreement, then, unless and until claim therefore shall have
been made by a duly appointed guardian or other legal representative of such
person, Employer may provide for such payment or any part thereof to be made to
any other person or institution then contributing toward or providing for the
care and maintenance of such person. Any such payment shall be a payment for
the account of such
11
<PAGE> 14
person and a complete discharge of any liability of Employer and the Agreement
with respect to such payment.
5.9. SUCCESSORS. The terms and conditions of the Agreement will be binding
on the Employer's and Participant's successors, heirs and assigns (herein,
"Participant Successors" and "Employer Successors").
5.10. UNCLAIMED BENEFITS. Participant shall keep Employer informed of his
or her current address and the current address of his or her Beneficiary.
Employer shall not be obligated to search for the whereabouts of any person.
If the location of Participant is not made known to Employer within a one (1)
year period after the date on which payment of the Participant's Normal
Retirement or Reduced Retirement Benefit is first to be made, then payment may
be made by the Employer to the Beneficiary instead. If, within one (1)
additional year after such initial one (1) year period, Employer is unable to
locate any designated Beneficiary of the Participant, then Employer shall have
no further obligation to pay any benefit under the Agreement to such
Participant or designated Beneficiary and any such benefit shall be irrevocably
forfeited.
5.11. LIMITATIONS ON LIABILITY. Participant and any other person claiming
benefits under the Agreement shall be entitled under this Agreement only to
those payments provided in accordance with the provisions of the Agreement
("Payment Claims"). With the exception of the provisions of Section 5.13 of
the Agreement, neither Employer, Employer Successor nor any individual acting
as employee or agent of Employer or Employer Successor shall be liable to
Participant or any other person for any other claim, loss, liability or expense
under this Agreement not directly related to a Payment Claim.
5.12. FORFEITURE OF BENEFITS. Notwithstanding any other provision of the
Agreement, should Participant engage in theft, fraud, embezzlement or willful
misconduct causing significant property damage to Employer, then any benefits
payable to such Participant under the Agreement will automatically be
forfeited. The determination of theft, embezzlement or willful misconduct will
be made by the Board in good faith, but such determination does not require an
actual criminal indictment or conviction prior to or after such decision. In
any determination of forfeiture pursuant to this Section 5.12, Participant will
be given the opportunity to refute any such decision by the Board, but the
Board's decision on the matter will be considered final and binding on
Participant and all other parties.
5.13. PAYMENT OF ATTORNEY'S FEES, COURT COSTS, AND LOSS OF BENEFITS. Should
either the Employer or Employer Successor (for these purposes, "Employer) or
Participant bring an action at law (or through arbitration) in order that the
Agreement's terms be enforced, then the party prevailing in the action at law
(or
12
<PAGE> 15
through arbitration) shall be entitled to reimbursement from the losing party
for reasonable attorney's fees, court costs and other similar amounts expended
in the enforcement of the Agreement. In addition, should the prevailing party
be Participant, he shall also be entitled to interest on any delayed payments,
with such interest computed at the Applicable Rate.
5.14. PAYMENT OF TAXES. Should the payment of any benefits under this
Agreement be classified as payment of an excess parachute payment under the
provisions of Code Sections 280G and 4999, then an additional payment will be
made to the Participant based on the amount of excise tax or penalty payable by
the Participant because of such classification. Such payment will be made
within two (2) months following Participant's termination of employment, once a
good faith determination is made by either Employer or Participant that the
payment of any benefit under the Agreement will constitute an excess parachute
payment. The amount payable to the Participant will be calculated as follows:
(amount of excise tax or penalty payable by Participant) divided by (one (1)
minus the highest marginal income tax rate under the Code for individuals).
ARTICLE VI
CONTINUATION OF MEDICAL PLAN COVERAGE
6.1. CONTINUATION OF MEDICAL COVERAGE. Following termination of employment
with the Employer, if Participant is entitled to payment of the Normal or
Reduced Retirement Benefit under the terms of the Agreement, then Participant,
his spouse and dependents will continue to be covered under the Employer's
health insurance program ("Health Plan") to the same extent as was present
immediately prior to the date of termination of employment. Employer shall
continue to pay Health Plan coverage costs of the Participant, his spouse and
other dependents under the Health Plan on the same basis as was applicable to
active Employer employees covered at the time of termination of employment.
6.2. PERIOD OF CONTINUED COVERAGE. Such coverage will continue for the
period equal to the shortest of the following: (1) for the number of years
required for the Participant to reach age 65, (2) until the Participant obtains
employment with another employer (who provides substantially similar coverage
under its health plan as was provided by Employer), or (3) until the death of
the Participant.
6.3. ALTERNATIVE COVERAGE. If continued participation in the Health Plan
by Participant, his spouse and any dependents is not possible under the terms
of the Health Plan, Employer will either: (1) provide substantially identical
benefits through another health insurance plan, or will (2) provide an annual
cash payment to Participant sufficient to permit Participant to obtain
substantially equivalent
13
<PAGE> 16
individual, spouse and dependent coverage under a health insurance plan of his
choosing. If any cash payment is made to Participant, the amount of cash
payment will be "grossed up" for income tax purposes (using the maximum
individual income tax rate under the Code at the time of payment) to insure no
net out of pocket costs to the Participant in obtaining such additional
coverage.
IN WITNESSES WHEREOF, the undersigned Employer and Participant do hereby
execute this Agreement effective the date first stated above.
UNION PLANTERS CORPORATION
By: ___________________________ ________________________
Name: ___________________________
Title: ___________________________
14
<PAGE> 1
EXHIBIT 11
PAGE 1 OF 2
UNION PLANTERS CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1995 1994
------------ -------------
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)
<S> <C> <C>
PRIMARY EARNINGS PER COMMON SHARE
Average shares outstanding 40,293,099 39,808,015
Average common share equivalents:
Assumed exercise of options outstanding 127,492 144,021
------------ ------------
Primary average shares outstanding 40,420,591 39,952,036
============ ============
Net earnings $ 33,015 $ 25,387
Less: Preferred stock dividends
Series B (88) (88)
Series C (redeemed October 31, 1994) -- (451)
Series D (123) (123)
Series E (1,554) (1,554)
------------ ------------
Net earnings applicable to common shares $ 31,250 $ 23,171
============ ============
Primary net earnings per common share $ .77 $ .58
</TABLE>
<PAGE> 2
EXHIBIT 11
PAGE 2 OF 2
UNION PLANTERS CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1995 1994
------------ ------------
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)
<S> <C> <C>
FULLY DILUTED EARNINGS PER COMMON SHARE
Average shares outstanding 40,293,099 39,808,015
Assumed exercise of options outstanding 128,793 146,609
Assumed conversion of preferred stock outstanding:
Series B 339,768 339,768
Series D 253,655 253,655
Series E 3,884,902 3,884,902
------------ ------------
Fully diluted average shares outstanding 44,900,217 44,432,949
============ ============
Net earnings $ 33,015 $ 25,387
Less: Series C Preferred Stock dividends (1) -- (451)
------------ ------------
Net earnings applicable to common shares $ 33,015 $ 24,936
============ ============
Fully diluted net earnings per common share: $ .74 $ .56
</TABLE>
- -----------------
(1) Redeemed October 31, 1994
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF UNION PLANTERS FOR THE THREE MONTHS ENDED MARCH 31,
1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 395,172
<INT-BEARING-DEPOSITS> 33,090
<FED-FUNDS-SOLD> 48,558
<TRADING-ASSETS> 168,149
<INVESTMENTS-HELD-FOR-SALE> 1,689,739
<INVESTMENTS-CARRYING> 1,022,067
<INVESTMENTS-MARKET> 1,028,764
<LOANS> 5,995,257
<ALLOWANCE> 122,905
<TOTAL-ASSETS> 9,741,991
<DEPOSITS> 8,218,025
<SHORT-TERM> 199,590
<LIABILITIES-OTHER> 124,841
<LONG-TERM> 422,469
<COMMON> 201,845
0
87,298
<OTHER-SE> 487,923
<TOTAL-LIABILITIES-AND-EQUITY> 9,741,991
<INTEREST-LOAN> 131,911
<INTEREST-INVEST> 43,004
<INTEREST-OTHER> 3,546
<INTEREST-TOTAL> 178,461
<INTEREST-DEPOSIT> 69,273
<INTEREST-EXPENSE> 79,910
<INTEREST-INCOME-NET> 98,551
<LOAN-LOSSES> 1,686
<SECURITIES-GAINS> (21)
<EXPENSE-OTHER> 83,111
<INCOME-PRETAX> 47,965
<INCOME-PRE-EXTRAORDINARY> 33,015
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33,015
<EPS-PRIMARY> .77
<EPS-DILUTED> .74
<YIELD-ACTUAL> 4.59
<LOANS-NON> 21,323
<LOANS-PAST> 7,685
<LOANS-TROUBLED> 1,550
<LOANS-PROBLEM> 9,800
<ALLOWANCE-OPEN> 122,089
<CHARGE-OFFS> 4,689
<RECOVERIES> 3,819
<ALLOWANCE-CLOSE> 122,905
<ALLOWANCE-DOMESTIC> 122,905
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
