<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
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, 1996
- - ------------------------- -------------------------------
Common stock $5 par value 45,964,718
<PAGE> 2
UNION PLANTERS CORPORATION AND SUBSIDIARIES
FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1996
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
a) Consolidated Balance Sheet - March 31, 1996,
March 31, 1995, and December 31, 1995 3
b) Consolidated Statement of Earnings -
Three Months Ended March 31, 1996 and 1995 4
c) Consolidated Statement of Changes in
Shareholders' Equity - Three Months Ended
March 31, 1996 5
d) Consolidated Statement of Cash Flows -
Three Months Ended March 31, 1996 and 1995 6
e) Notes to Unaudited Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 29
Item 2. Changes in Securities 29
Item 3. Defaults Upon Senior Securities 29
Item 4. Submission of Matters to a Vote of Security Holders 29
Item 5. Other Information 29
Item 6. Exhibits and Reports on Form 8-K 29
Signatures 30
</TABLE>
2
<PAGE> 3
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
-------------------------------- -------------
1996 1995 1995
----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 475,211 $ 427,109 $ 432,949
Interest-bearing deposits at financial institutions 3,820 33,090 13,571
Federal funds sold and securities purchased
under agreements to resell 182,199 93,408 356,655
Trading account assets 134,926 168,149 121,927
Loans held for resale 91,007 36,472 68,819
Investment securities
Available for sale (Amortized cost: $2,919,840,
$1,725,056, and $2,740,143, respectively) 2,951,092 1,712,766 2,774,890
Held to maturity (Fair value: $1,129,936
at March 31, 1995) - 1,124,011 -
Loans 7,123,637 6,830,549 7,100,051
Less: Unearned income (31,900) (33,186) (30,198)
Allowance for losses on loans (136,277) (135,410) (133,487)
--------- ----------- -----------
Net loans 6,955,460 6,661,953 6,936,366
Premises and equipment 229,725 225,409 228,272
Accrued interest receivable 100,811 90,973 100,686
Goodwill and other intangibles 62,141 56,860 58,535
Other assets 182,290 154,132 184,446
----------- ----------- -----------
TOTAL ASSETS $11,368,682 $10,784,332 $11,277,116
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing $ 1,364,399 $ 1,307,662 $ 1,420,358
Certificates of deposit of $100,000 and over 784,327 683,592 754,434
Other interest-bearing 7,374,150 7,141,822 7,272,944
----------- ----------- -----------
Total deposits 9,522,876 9,133,076 9,447,736
Short-term borrowings 236,220 222,415 241,023
Federal Home Loan Bank advances 256,178 305,859 268,892
Long-term debt 216,288 130,018 216,366
Accrued interest, expenses, and taxes 104,846 87,410 90,754
Other liabilities 39,409 45,066 46,014
----------- ----------- -----------
TOTAL LIABILITIES 10,375,817 9,923,844 10,310,785
----------- ----------- -----------
Commitments and contingent liabilities - - -
Shareholders' equity
Preferred stock
Convertible 91,810 87,298 91,810
Nonconvertible - 13,800 -
Common stock, $5 par value; 100,000,000 shares authorized;
45,602,329 issued and outstanding (44,339,833 at
March 31, 1995 and 45,447,031 at December 31, 1995) 228,012 221,699 227,235
Additional paid-in capital 117,044 91,360 111,348
Net unrealized gain (loss) on available for sale securities 19,145 (7,825) 21,366
Retained earnings 536,854 454,156 514,572
----------- ----------- -----------
TOTAL SHAREHOLDERS' EQUITY 992,865 860,488 966,331
----------- ----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $11,368,682 $10,784,332 $11,277,116
=========== =========== ===========
</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,
-------------------------
1996 1995
--------- ---------
(Dollars in thousands,
except per share data)
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $164,033 $148,958
Interest on investment securities
Taxable 35,735 36,804
Tax-exempt 7,550 8,114
Interest on deposits at financial institutions 57 315
Interest on federal funds sold and securities
purchased under agreements to resell 4,818 843
Interest on trading account assets 2,387 2,736
Interest on loans held for resale 1,427 322
-------- --------
Total interest income 216,007 198,092
-------- --------
INTEREST EXPENSE
Interest on deposits 89,994 77,946
Interest on short-term borrowings 2,934 4,821
Interest on Federal Home Loan Bank advances and long-term debt 7,606 6,486
-------- --------
Total interest expense 100,534 89,253
-------- --------
NET INTEREST INCOME 115,473 108,839
PROVISION FOR LOSSES ON LOANS 7,981 2,222
-------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOSSES ON LOANS 107,492 106,617
-------- --------
NONINTEREST INCOME
Service charges on deposit accounts 16,641 17,198
Bank card income 5,159 4,756
Mortgage servicing income 2,443 2,313
Trust service income 2,290 2,074
Profits and commissions from trading activities 2,207 1,614
Investment securities gains (losses) 60 (21)
Other income 11,397 8,145
-------- --------
Total noninterest income 40,197 36,079
-------- --------
NONINTEREST EXPENSE
Salaries and employee benefits 43,428 43,257
Net occupancy expense 6,816 6,934
Equipment expense 7,260 7,533
Other expense 31,648 32,941
-------- --------
Total noninterest expense 89,152 90,665
-------- --------
EARNINGS BEFORE INCOME TAXES 58,537 52,031
Applicable income taxes 19,393 16,374
-------- --------
NET EARNINGS $ 39,144 $ 35,657
======== ========
NET EARNINGS APPLICABLE TO COMMON SHARES $ 37,308 $ 33,555
======== ========
EARNINGS PER COMMON SHARE
Primary $ .82 $ .75
Fully diluted .78 .72
AVERAGE COMMON SHARES OUTSTANDING (IN THOUSANDS)
Primary 45,752 44,515
Fully diluted 50,463 48,995
</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, 1996
(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, 1996 $91,810 $227,235 $111,348 $21,366 $514,572 $966,331
Net earnings - - - - 39,144 39,144
Cash dividends
Common Stock, $.27 per share - - - - (12,283) (12,283)
Series B Preferred Stock, $2.00 per share - - - - (88) (88)
Series E Preferred Stock, $.50 per share - - - - (1,748) (1,748)
Common shares issued under employee benefit
plans and dividend reinvestment plan,
net of shares repurchased - 779 5,694 - (2,728) 3,745
Change in net unrealized gain (loss) on
available for sale securities,
net of taxes - - - (2,221) - (2,221)
Other - (2) 2 - (15) (15)
------- -------- -------- ------- -------- --------
BALANCE, MARCH 31, 1996 $91,810 $228,012 $117,044 $19,145 $536,854 $992,865
======= ======== ======== ======= ======== ========
</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,
--------------------------------
1996 1995
------------ -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings $ 39,144 $ 35,657
Reconciliation of net earnings to net cash provided by
operating activities:
Provision for losses on loans and other real estate 8,060 2,391
Depreciation and amortization 5,733 5,978
Amortization and write-off of intangibles 2,421 2,048
Net (accretion) amortization of investment securities (2,293) 201
Net realized (gains) losses on sales of investment securities (60) 1,706
Deferred income tax expense 350 83
(Increase) decrease in assets
Trading account assets and loans held for resale (35,187) (22,789)
Accrued interest receivable and other assets 6,476 16,694
Increase in accrued interest, expenses, taxes, and
other liabilities 4,426 16,615
Other, net 88 (57)
-------- --------
Net cash provided by operating activities 29,158 58,527
-------- --------
INVESTING ACTIVITIES
Net decrease (increase) in short-term investments 9,751 (23,033)
Proceeds from sales of available for sale securities 11,965 180,305
Proceeds from maturities, calls and prepayments of available
for sale securities 506,820 144,977
Purchases of available for sale securities (655,728) (50,584)
Proceeds from maturities, calls and prepayments of
held to maturity securities - 58,447
Purchases of held to maturity securities - (30,577)
Net decrease (increase) in loans 17,978 (52,614)
Net cash received from purchases of financial institutions 11,297 10,061
Purchases of premises and equipment, net (4,291) (1,217)
-------- --------
Net cash (used) provided by investing activities (102,208) 235,765
-------- --------
FINANCING ACTIVITIES
Net decrease in deposits (31,147) (172,278)
Net decrease in short-term borrowings (10,803) (232,595)
Proceeds from FHLB advances and long-term debt, net 31,241 100,582
Repayment of FHLB advances and long-term debt (38,061) (20,712)
Proceeds from issuance of common stock, net 7,383 3,873
Purchase and retirement of common stock, net (3,638) (281)
Cash dividends paid (14,119) (11,916)
------- ---------
Net cash used by financing activities (59,144) (333,327)
-------- --------
Net decrease in cash and cash equivalents (132,194) (39,035)
Cash and cash equivalents at the beginning of the period 789,604 553,893
-------- --------
Cash and cash equivalents at the end of the period $657,410 $514,858
======== ========
SUPPLEMENTAL DISCLOSURES
Purchases of other financial institutions:
Fair value of assets acquired $129,526 $59,046
Liabilities assumed (109,476) (52,397)
Common stock issued - (6,649)
-------- --------
Cash paid for the purchases of other financial institutions 20,050 -
Cash and cash equivalents acquired (31,347) (10,061)
-------- ---------
Net cash received from purchases of financial institutions $(11,297) $(10,061)
======== =========
Cash paid (received) for:
Interest $102,085 $ 85,198
Taxes 2,519 (9,113)
Unrealized gain (loss) on available for sale securities 31,252 (12,290)
</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
1995 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, 1995
(1995 10-K). Certain 1995 amounts have been reclassified to be consistent with
the 1996 financial reporting presentation.
NOTE 2. ACQUISITIONS
CONSUMMATED ACQUISITIONS
The Corporation acquired on January 2, 1996, First Bancshares of Eastern
Arkansas, Inc., and First Bancshares of N.E. Arkansas, Inc., for a total cash
consideration of $20.1 million, resulting in total intangibles of $5.6 million.
Total assets of the institutions at the date of acquisition were $122 million.
Reference is made to Note 2 of the consolidated financial statements on
pages 41 through 43 of the Corporation's Annual Report to Shareholders for
information regarding acquisitions completed in 1995.
7
<PAGE> 8
PENDING ACQUISITIONS
The Corporation has signed definitive agreements pursuant to which it
would acquire the following institutions. Consideration and method of
accounting are based on currently available information and are subject to
change based on the terms of the definitive agreements. The closing of each of
these transactions is subject to obtaining shareholder and regulatory approvals
and the satisfaction of a number of other contractual conditions. Reference is
made to the Corporation's Current Reports on Form 8-K dated March 8, 1996,
April 1, 1996, and April 2, 1996 for additional information regarding these
acquisitions.
<TABLE>
<CAPTION>
ANTICIPATED
TYPE OF METHOD OF APPROXIMATE
INSTITUTION CONSIDERATION ACCOUNTING TOTAL ASSETS
- - -------------------------- ----------------- -------------- ----------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Eastern National Bank, in Cash, Notes, and Purchase $ 286
Miami, Florida Stock (1)
Valley Federal Savings Bank in 435,000 shares of Pooling of Interests 122
Sheffield, Alabama Common Stock
Franklin Financial Group, Inc. 670,000 shares of Pooling of Interests 137
in Morristown, Tennessee and Common Stock
its subsidiary, Franklin Federal
Savings Bank
Leader Financial Corporation Approximately Pooling of Interests 3,178
in Memphis, Tennessee and its 16,600,000 shares
subsidiary Leader Federal Bank of Common Stock
for Savings
BancAlabama, Inc. in Huntsville, Approximately Pooling of Interests 98
------
Alabama and its subsidiary 415,000 shares
BankAlabama-Huntsville of Common Stock
Total $3,821
======
____________________
</TABLE>
(1) Includes cash in the amount of $4.5 million, UPC Promissory Notes in the
face amount of $14.5 million, and up to 317,458 shares of Series E
Preferred Stock.
NOTE 3. LOANS
Loans are summarized by type as follows:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
-------------------------
1996 1995 1995
--------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Commercial, financial, and agricultural $1,421,679 $1,445,765 $1,450,050
Real estate - construction 333,315 299,820 322,701
Real estate - mortgage
Secured by 1-4 family residential 2,319,937 2,265,118 2,320,168
Other mortgage loans 1,316,098 1,276,965 1,283,937
Home equity 165,469 149,678 167,223
Consumer
Credit cards and related plans 376,489 346,858 387,445
Other consumer 1,130,573 1,003,057 1,108,127
Direct lease financing 60,077 43,288 60,400
---------- ---------- ----------
Total loans $7,123,637 $6,830,549 $7,100,051
========== ========== ==========
</TABLE>
8
<PAGE> 9
<TABLE>
<CAPTION>
Nonperforming loans are summarized as follows:
MARCH 31, DECEMBER 31,
1996 1995
--------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Nonaccrual loans $33,759 $32,847
Restructured loans 1,495 1,330
------- -------
Total nonperforming loans $35,254 $34,177
======= =======
</TABLE>
NOTE 4. ALLOWANCE FOR LOSSES ON LOANS
The changes in the allowance for losses on loans for the three months ended
March 31, 1996, are summarized as follows (dollars in thousands):
<TABLE>
<S> <C>
Balance, January 1, 1996 $133,487
Increases due to acquisitions 615
Provision for losses on loans 7,981
Recoveries of loans previously charged off 3,477
Loans charged off (9,283)
--------
Balance, March 31, 1996 $136,277
========
</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, 1996, the amount of the Corporation's impaired loans and the
disclosures related thereto were not significant.
9
<PAGE> 10
NOTE 5. INVESTMENT SECURITIES
The amortized cost and fair value of investment securities are summarized as
follows:
<TABLE>
<CAPTION>
MARCH 31, 1996
------------------------------------------------------------------
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 $ 909,145 $ 5,534 $ 1,531 $ 913,148
U.S. Government agencies
Collateralized mortgage obligations 173,512 788 945 173,355
Mortgage-backed 607,525 7,791 1,817 613,499
Other 634,620 1,509 1,597 634,532
------------- ------------- ----------- ------------
Total U.S. Government obligations 2,324,802 15,622 5,890 2,334,534
Obligations of states and political subdivisions 488,936 23,819 2,386 510,369
Other stocks and securities 106,102 152 65 106,189
------------- -------------- ----------- ------------
TOTAL AVAILABLE FOR SALE SECURITIES $ 2,919,840 $ 39,593 $ 8,341 $ 2,951,092
============= ============= =========== ============
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 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 $ 825,107 $ 8,300 $ 346 $ 833,061
U.S. Government agencies
Collateralized mortgage obligations 166,109 578 782 165,905
Mortgage-backed 582,310 6,746 1,436 587,620
Other 573,250 2,159 960 574,449
-------------- ------------- ------------- ------------
Total U.S. Government obligations 2,146,776 17,783 3,524 2,161,035
Obligations of states and political subdivisions 490,676 22,833 2,481 511,028
Other stocks and securities 102,691 225 89 102,827
-------------- ------------ ------------ ------------
TOTAL AVAILABLE FOR SALE SECURITIES $ 2,740,143 $ 40,841 $6,094 $ 2,774,890
============== ============= ============ ============
</TABLE>
Investment securities having a carrying value of approximately $1.1
billion at both March 31, 1996 and December 31, 1995 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, 1996 and
1995. The gains on held to maturity securities resulted from calls of
securities.
<TABLE>
<CAPTION>
REALIZED GAINS REALIZED LOSSES
-------------------- ---------------------
1996 1995 1996 1995
------- -------- -------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Available for sale securities $ 66 $ 1,343 $ (6) $ (3,075)
Held to maturity securities - 26 - -
------- -------- -------- ---------
Total $ 66 $ 1,369 $ (6) $ (3,075)
======= ========= ======== =========
</TABLE>
10
<PAGE> 11
NOTE 6. OTHER NONINTEREST INCOME AND EXPENSE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------
1996 1995
---------- ---------
<S> <C> <C>
(DOLLARS IN THOUSANDS)
OTHER NONINTEREST INCOME
Credit life insurance commissions $ 1,188 $ 1,213
Customer ATM usage fees 776 765
Sale of servicing 362 97
VSIBG partnership earnings 1,163 141
Brokerage fee income 633 358
Other 7,275 5,571
--------- ---------
TOTAL OTHER NONINTEREST INCOME $ 11,397 $ 8,145
========= =========
OTHER NONINTEREST EXPENSE
FDIC insurance assessments $ 1,079 $ 4,902
Stationery and supplies 3,247 2,683
Advertising and promotion 2,553 2,459
Postage and other carrier 2,817 2,763
Other contracted services 2,333 1,843
Communications 2,312 1,698
Amortization of goodwill and other intangibles 2,064 1,825
Brokerage and clearing fees 1,277 865
Other personnel services 1,620 1,226
Miscellaneous charge-offs 1,383 491
Merchant credit card charges 1,058 899
Legal fees 838 869
Dues, subscriptions, and contributions 792 979
Taxes other than income taxes 906 952
Travel 739 678
Audit fees 465 775
Insurance 491 501
Consultant fees 406 598
Federal Reserve fees 569 399
Amortization of mortgage servicing rights 356 272
Other real estate expense 144 287
Other 4,199 4,977
-------- ---------
TOTAL OTHER NONINTEREST EXPENSE $ 31,648 $ 32,941
======== =========
</TABLE>
NOTE 7. INCOME TAXES
Applicable income taxes for the three months ended March 31, 1996, were
$19.4 million, resulting in an effective tax rate of 33.1%. Applicable income
taxes for the same period in 1995 were $16.4 million, resulting in an effective
tax rate of 31.5%. The tax expense (benefit) applicable to investment
securities gains (losses) for the three months ended March 31, 1996 and 1995
was $23,000 and $(642,000), respectively.
At March 31, 1996, the Corporation had a net deferred tax asset of $40.1
million compared to $39.1 million at December 31, 1995. The net deferred tax
asset for the two periods included a deferred liability related to the net
unrealized gain on available for sale securities of $12.1 million and $13.4
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.
11
<PAGE> 12
NOTE 8. FEDERAL HOME LOAN BANK ADVANCES AND LONG-TERM DEBT
FEDERAL HOME LOAN BANK (FHLB) ADVANCES
Certain of the Corporation's banking and thrift subsidiaries had
outstanding obligations to the FHLB aggregating $256.2 million at March 31,
1996 under Blanket Agreements for Advances and Security Agreements (the
"Agreements"). The Agreements entitle these subsidiaries to borrow funds from
the FHLB to fund mortgage loan programs and to satisfy certain other funding
needs. Of the amounts outstanding at March 31, 1996, $189.0 million were at
variable rates and $67.2 million were at fixed rates with interest rates
ranging from 3.25% to 9.0% and maturities ranging from 1996 to 2025. At March
31, 1996, FHLB advances that have remaining maturities within one year, one to
five years, and after five years were $51.4 million, $172.1 million, and $32.7
million, respectively. The value of the mortgage-backed securities and mortgage
loans pledged under the Agreements generally must be maintained at not less
than 115% and 150%, respectively, of the advances outstanding. At March 31,
1996, the Corporation had an adequate amount of mortgage-backed securities and
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,
1996 1995
------------ -------------
<S> <C> <C>
(DOLLARS IN THOUSANDS)
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 E, 8% Cumulative, Convertible,
Preferred Stock (stated at liquidation value
of $25 per share), 3,496,419 shares issued and outstanding 87,410 87,410
------------ -------------
Total preferred stock $ 91,810 $ 91,810
============ ============
</TABLE>
On April 30, 1996, all of the Series B Preferred Stock was converted into
339,765 shares of the Corporation's Common Stock.
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 1995 10-K and in Note 19 to the Corporation's consolidated
financial statements on pages 62 and 63 of the 1995 Annual Report to
Shareholders (1995 Annual Report) which is included in the 1995 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
1996 in any pending or threatened actions which affected such opinion.
12
<PAGE> 13
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following provides a narrative discussion and analysis of significant
changes in the Corporation's results of operations and financial condition.
This discussion should be read in conjunction with the consolidated financial
statements and related financial analysis set forth in the Corporation's 1995
Annual Report, the interim unaudited consolidated financial statements and
notes for the three months ended March 31, 1996 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, 1996 and 1995.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------- PERCENTAGE
1996 1995 CHANGE
---------- --------- -----------------------
<S> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Net earnings $ 39,144 $ 35,657 10%
Primary earnings per common share .82 .75 9
Fully diluted earnings per common share .78 .72 8
Return on average assets 1.40% 1.33%
Return on average common equity 17.35 18.16
Dividends per common share $ .27 $.23 17
Net interest margin (FTE) 4.61% 4.57%
Interest rate spread (FTE) 3.91 3.94
Expense ratio 1.75 2.04
Efficiency ratio 55.85 60.72
Book value per common share $ 19.76 $ 17.13 15
Leverage ratio 8.22% 7.61%
</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 = Operating net noninterest expense [noninterest expense minus
noninterest income, excluding significant nonrecurring revenues/expenses and
investment securities gains (losses)] divided by average assets
Efficiency ratio = Operating noninterest expense (excluding significant
nonrecurring expenses) divided by net interest income (FTE) plus noninterest
income, excluding significant nonrecurring revenues and investment securities
gains (losses)
FTE = Fully taxable-equivalent basis
13
<PAGE> 14
OPERATING RESULTS - THREE MONTHS ENDED MARCH 31, 1996
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
1996 1995 (DECREASE)
--------- --------- -----------
<S> <C> <C> <C>
Net interest income-FTE $ 2.37 $ 2.31 $ .06
Provision for losses on loans (.16) (.05) (.11)
--------- --------- ----------
Net interest income after provision
for losses on loans-FTE 2.21 2.26 (.05)
--------- --------- ----------
Noninterest income
Service charges on deposits .33 .35 (.02)
Bank card income .10 .10 -
Mortgage servicing income .05 .05 -
Trust service income .05 .04 .01
Profits and commissions from trading activities .04 .03 .01
Investment securities gains (losses) - - -
Other income .23 .16 .07
--------- --------- ----------
Total noninterest income .80 .73 .07
--------- --------- ----------
Noninterest expense
Salaries and employee benefits .86 .88 .02
Net occupancy expense .14 .14 -
Equipment expense .14 .15 .01
Other expense .63 .67 .04
--------- --------- ----------
Total noninterest expense 1.77 1.84 .07
--------- --------- ----------
Earnings before income taxes-FTE 1.24 1.15 .09
Applicable income taxes-FTE .46 .42 (.04)
--------- --------- ----------
Net earnings .78 .73 .05
Less preferred stock dividends - (.01) .01
--------- --------- ----------
Fully diluted earnings per share $ .78 $ .72 $ .06
========= ========= ==========
Change in net earnings applicable
to common shares using previous
year average shares outstanding $.08
Change in average shares outstanding (.02)
----------
Change in net earnings $.06
==========
</TABLE>
FTE = Fully taxable-equivalent
14
<PAGE> 15
FIRST QUARTER EARNINGS OVERVIEW
For the first quarter of 1996, the Corporation reported record earnings of
$39.1 million, or $.78 per fully diluted common share. This compares to net
earnings for the same period in 1995 of $35.7 million, or $.72 per fully
diluted common share. The record earnings level resulted in a return on average
assets of 1.40% and a return on average common equity of 17.35% for the first
quarter of 1996 which compares to 1.33% and 18.16% for the same period in 1995.
The improvement in net earnings in 1996 is attributable to increases in
net interest income of $6.6 million and noninterest income of $4.1 million,
while noninterest expense decreased $1.5 million. Partially offsetting these
items was an increase in the provision for losses on loans of $5.8 million. The
following is a more complete discussion and analysis of the first quarter of
1996 operating results compared to the same period in 1995.
EARNINGS ANALYSIS
NET INTEREST INCOME
Net interest income (FTE) for the first quarter of 1996 was $119.5
million, a 6% increase over the first quarter of 1995 which was $113.2 million,
and up 1% from the fourth quarter of 1995 which was $118.5 million. The
improvement for the first quarter of 1996 compared to 1995 resulted from growth
of average earning assets, primarily loans, and higher yields from loans and
investment securities, partially offset by higher rates paid on
interest-bearing liabilities. The improvement from the fourth quarter of 1995
relates primarily to an increase in average earning assets partially offset by
a higher level of average interest-bearing liabilities. 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 1996 was 4.61% which
compares to 4.57% for both the first quarter and fourth quarter of 1995. The
interest-rate spread decreased to 3.91% for the first quarter of 1996 from
3.94% for the same period in 1995 and compares to 3.85% for the fourth quarter
of 1995.
INTEREST INCOME
The following table presents a breakdown of average earning assets for the
first quarter of 1996 and 1995.
<TABLE>
<CAPTION>
1996 1995
-------- ---------
<S> <C> <C>
Average earning assets (Dollars in billions) $ 10.4 $ 10.1
Comprised of:
Loans 69% 68%
Investment securities 27 30
Other earning assets 4 2
- - -----------------
Fully taxable-equivalent yield on average earning assets 8.49% 8.17%
</TABLE>
Fully taxable-equivalent interest income increased 9% for the first
quarter of 1996 compared to the first quarter of 1995. The increase is
attributable primarily to a 32 basis point increase in the yield on average
earning assets which accounted for approximately $9.1 million of the increase
in interest income. Also contributing to the increase was a $373 million
increase in average earning assets, primarily loans, which accounted for
$8.5 million of the interest income increase. The mix of average earning
assets has remained constant with a slight drop in investment securities as
these funds are used to fund loan growth.
15
<PAGE> 16
INTEREST EXPENSE
The following table presents a breakdown of average interest-bearing
liabilities for the first quarter of 1996 and 1995.
<TABLE>
1996 1995
----- ----
<S> <C> <C>
Average interest-bearing liabilities (Dollars in billions) $8.8 $8.6
Comprised of:
Deposits 92% 91%
Short-term borrowings 3 4
FHLB advances and long-term debt 5 5
- - ------------------
Rate paid on average interest-bearing liabilities 4.58% 4.23%
</TABLE>
Interest expense increased 13% in the first quarter of 1996 compared to
the same period in 1995. The increase is due primarily to an increase of 35
basis points in rates paid on interest-bearing liabilities which accounted for
$8.1 million of the increase. Most of the increase relates to deposits, the
largest category of interest-bearing liabilities. The increase is also
attributable to a $278 million increase in average interest-bearing liabilities
which accounted for approximately $3.2 million of the increase in interest
expense.
The Corporation's interest-rate swaps decreased net interest income by
approximately $354,000 in the first quarter of 1996, which compared to a
decrease of $600,000 for the first quarter of 1995. In April, the Corporation's
remaining index-amortizing swaps related to loans matured, leaving only one
interest-rate swap outstanding. The future impact of the remaining swap will
not be significant to the Corporation's net interest income.
PROVISION FOR LOSSES ON LOANS
The provision for losses on loans for the first quarter of 1996 was $8.0
million, or .45% of average loans on an annualized basis, compared to $2.2
million, or .13% of average loans, for the same period in 1995. This also
compares to a provision for losses on loans of $12.4 million for the fourth
quarter of 1995, which included approximately $5.8 million related to the
Capital Bancorporation acquisition at the end of 1995. The increase in the
provision is related primarily to the Corporation's credit card portfolio which
has increased approximately $245 million over the last two years in connection
with the consumer loan marketing efforts. Management expects the provision for
losses on loans to remain at the current level for the remainder of 1996;
however, there can be no assurance this will be the case.
NONINTEREST INCOME
Noninterest income for the first quarter of 1996 was $40.2 million, an
increase of 11% over the same period in 1995 and a decrease of approximately
$977,000 from the fourth quarter of 1995. The major components of noninterst
income are presented on the face of the consolidated statement of earnings and
in Note 6 to the unaudited interim consolidated financial statements.
The increase in noninterest income between the first quarter of 1996 and
1995 is attributable primarily to increases in broker/dealer-related revenues.
Earnings from the Corporation's limited partnership investment in VSIBG
increased $1.0 million, profits and commissions from SBA trading activities
increased $593,000, and brokerage fee income from the Corporation's discount
brokerage operations increased $275,000. Favorable market conditions were the
primary reasons for the increases in these areas. Also contributing to the
increase in noninterest income was continued growth of bank card income,
mortgage servicing income, and trust income which, together, accounted for
$749,000 of the increase. Partially offsetting these increases was a decrease
in service charges on deposit accounts of approximately $557,000. The decrease
in these fees is attributable primarily to NSF (not sufficient funds) fees
which have declined.
16
<PAGE> 17
NONINTEREST EXPENSE
Noninterest expense for the first quarter of 1996 decreased $1.5 million
to $89.2 million which compares to $90.7 million for the first quarter of 1995
and $103.9 million for the fourth quarter of 1995. The major components of
noninterest expense are detailed on the face of the consolidated statement of
earnings and in Note 6 to the unaudited interim consolidated financial
statements.
The decrease in noninterest expenses for the first quarter of 1996
compared to the same period in 1995 relates primarily to a $3.8 million
decrease in FDIC insurance assessments. The decline in expenses from the
fourth quarter of 1995 relates primarily to merger-related expenses of
approximately $11.9 million which did not recur in the first quarter of 1996.
Salaries and employee benefit expense increased less than one percent
between the first quarter of 1995 and 1994. The lack of significant growth
reflects the reductions in the number of employees as a result of the
Corporation's 1994 restructuring plan. The reductions are partially offset by
increases related to acquisitions and growth in certain operations of the
Corporation, primarily credit cards. At March 31, 1996, the Corporation had
5,107 full-time equivalent employees which compares to 5,104 at December 31,
1995 and 5,407 at March 31, 1995.
EARNINGS CONSIDERATIONS RELATED TO PENDING ACQUISITIONS
It is expected that the Corporation or the institutions in process of
being acquired by it (Note 2 to the unaudited interim consolidated financial
statements) will incur charges related to such acquisitions and to the
assimilation of those institutions into the Corporation's organization. The
majority of the charges are expected to relate to the Leader Financial
Corporation (Leader Federal) acquisition. Charges are expected to arise from
matters such as, but not limited to, legal and accounting fees, financial
advisory fees, consulting fees, payment of contractual benefits triggered by a
change of control, early retirement and involuntary separation and related
benefits, costs associated with elimination of duplicate facilities and branch
closings, data processing charges, cancellation of vendor contracts, the
potential for additional provisions for losses on loans and similar costs which
normally arise from the consolidation of operational activities.
Aggregate charges expected to arise from the pending acquisitions have
been preliminarily estimated to be in the range of $17 million to $22 million
after taxes, which does not include a potential after tax charge of
approximately $6.0 million for the recapture of Leader Federal's thrift bad
debt reserve which, under existing law, would be triggered by the assimilation
of Leader Federal's branches into Union Planters National Bank, the
Corporation's principal subsidiary, and certain other banking subsidiaries.
Legislation has been passed by both the House and Senate and a conference
committee is being formed to resolve any differences. If enacted by the
Congress, pending legislation would eliminate this recapture. The range of
anticipated charges does not take into account any special regulatory
assessments discussed below. To the extent that any of these charges should be
contingent upon consummation of a particular transaction, those charges would
be recognized in the period in which such transaction closes. This range of
potential charges is based on currently available information as well as
preliminary estimates and is subject to change. The range is provided as a
preliminary estimate of the significant charges which may in the aggregate be
required and should be viewed accordingly.
SPECIAL REGULATORY ASSESSMENT
The Corporation's 1995 Annual Report, on page 10, provides a discussion of
several bills that were under consideration by the Congress which would have
resulted in a one-time regulatory assessment. The proposed legislation, as of
April 30, 1996, has not passed, and based on currently available information,
management does not expect it to pass in 1996. Should the legislation be
adopted, the Corporation would be required to recognize as an expense the
aggregate assessment at the time the legislation is passed. There has been no
significant change in the level of deposits that might be subject to this
special assessment or the estimate of the impact from what was disclosed in the
Corporation's 1995 Annual Report.
17
<PAGE> 18
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED DAILY AVERAGE BALANCE SHEET AND INTEREST RATES
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
---------------------------------------------------------------------------------------
1996 1995
---------------------------------------------------------------------------------------
INTEREST INTEREST
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE
----------- ---------- ------ ---------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
ASSETS
Interest-bearing deposits at
financial institutions $ 3,672 $ 57 6.24% $ 19,940 $ 315 6.41%
Federal funds sold and securities
purchased under agreements to resell 342,288 4,818 5.66 57,298 843 5.97
Trading account assets 120,952 2,387 7.94 164,390 2,736 6.75
Investment securities (1) and (2)
Taxable 2,306,577 35,735 6.23 2,486,232 36,804 6.00
Tax-exempt 486,216 11,068 9.16 522,613 12,028 9.33
----------- ---------- ----------- -----------
Total investment securities 2,792,793 46,803 6.74 3,008,845 48,832 6.58
Loans, net of unearned income (1) 7,167,990 165,972 9.31 6,804,632 149,755 8.93
----------- ---------- ----------- -----------
TOTAL EARNING ASSETS (1) AND (2) 10,427,695 220,037 8.49 10,055,105 202,481 8.17
---------- -----------
Cash and due from banks 420,051 429,056
Premises and equipment 231,262 229,308
Allowance for losses on loans (136,896) (137,099)
Other assets 333,640 277,563
----------- -----------
TOTAL ASSETS $11,275,752 $10,853,933
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Money market accounts $ 1,468,737 11,597 3.18% $ 1,483,088 11,383 3.11%
Savings deposits 1,830,468 11,548 2.54 1,824,901 11,835 2.63
Certificates of deposit of
$100,000 and over 761,060 10,924 5.77 664,120 8,102 4.95
Other time deposits 4,073,991 55,925 5.52 3,838,320 46,626 4.93
Short-term borrowings 226,974 2,934 5.20 362,817 4,821 5.39
Federal Home Loan Bank advances 259,666 3,548 5.50 255,412 3,863 6.13
Long-term debt
Subordinated capital notes 214,421 4,018 7.54 115,001 2,306 8.13
Other 1,905 40 8.45 15,622 317 8.23
----------- ---------- ----------- -----------
TOTAL INTEREST-BEARING LIABILITIES 8,837,222 100,534 4.58 8,559,281 89,253 4.23
Noninterest-bearing demand deposits 1,343,150 1,334,968
----------- -----------
TOTAL SOURCES OF FUNDS 10,180,372 9,894,249
Other liabilities 138,881 109,018
Shareholders' equity 956,499 850,666
----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $11,275,752 $10,853,933
=========== ===========
NET INTEREST INCOME (FTE) $ 119,503 $ 113,228
========== ===========
INTEREST-RATE SPREAD (FTE) 3.91% 3.94%
===== =====
NET INTEREST MARGIN (FTE) 4.61% 4.57%
===== =====
- - ----------------------------
(1) Taxable-equivalent adjustments:
Loans $ 512 $ 475
Investment securities 3,518 3,914
---------- -----------
$ 4,030 $ 4,389
========== ===========
</TABLE>
(2) Yields are calculated on historical cost and exclude the impact of the
net unrealized gain (loss) on available for sale securities.
18
<PAGE> 19
UNION PLANTERS CORPORATION AND SUBSIDIARIES
ANALYSIS OF VOLUME AND RATE CHANGES
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1996 VERSUS 1995
--------------------------------------
INCREASE (DECREASE)
DUE TO CHANGE IN: (1)
-------------------------------------- TOTAL
AVERAGE AVERAGE INCREASE
VOLUME(2) RATE(2) (DECREASE)
------------ ---------- --------------
<S> <C> <C> <C>
(DOLLARS IN THOUSANDS)
INTEREST INCOME
Interest-bearing deposits at
financial institutions $ (250) $ (8) $ (258)
Federal funds sold and securities
purchased under agreements to resell 4,021 (46) 3,975
Trading account assets (792) 443 (349)
Investment securities (FTE) (3,295) 1,266 (2,029)
Loans, net of unearned income (FTE) 8,947 7,270 16,217
-------------
TOTAL INTEREST INCOME 8,477 9,079 17,556
-------------
INTEREST EXPENSE
Money market accounts (81) 295 214
Savings deposits 44 (331) (287)
Certificates of deposit of $100,000 and over 1,317 1,505 2,822
Other time deposits 3,135 6,164 9,299
Short-term borrowings (1,725) (162) (1,887)
Long-term debt 1,676 (556) 1,120
-------------
TOTAL INTEREST EXPENSE 3,202 8,079 11,281
-------------
CHANGE IN NET INTEREST INCOME (FTE) $ 6,275
=============
PERCENTAGE INCREASE IN NET INTEREST
INCOME OVER PRIOR PERIOD 5.54%
==========
</TABLE>
- - --------------------
FTE - Fully taxable-equivalent
(1) The change due to both rate and volume has been allocated to change due
to volume and change due to rate in proportion to the relationship of the
absolute dollar amounts of the change in each.
(2) Variances are computed on a line-by-line basis and are nonadditive.
19
<PAGE> 20
FINANCIAL CONDITION
The Corporation's total assets were $11.4 billion at March 31, 1996
compared to $10.8 billion at March 31, 1995, and $11.3 billion at December 31,
1995. Average assets were $11.3 billion for the first quarter of 1996 compared
to $10.9 billion for the first quarter of 1995. The growth of total assets is
primarily related to acquisitions.
INVESTMENT SECURITIES
The Corporation's investment securities portfolio of $3.0 billion at March
31, 1996 consisted entirely of available for sale securities which are carried
on the balance sheet at fair value. This compares to investment securities of
$2.8 billion at December 31, 1995. At March 31, 1996 and December 31, 1995,
these securities had net unrealized gains of $31.3 million and $34.7 million,
respectively. Reference is made to Note 5 to the unaudited interim
consolidated financial statements which provides the composition of the
investment portfolio at March 31, 1996 and December 31, 1995.
U. S. Treasury and U.S. Government agency obligations represented
approximately 79% of the investment securities portfolio at March 31, 1996. 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 97% U.S.
Government agency issues; the remaining 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 58% 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 (i) municipal securities; (ii) nonagency CMOs and
mortgage-backed securities; and (iii) corporate stocks, notes, debentures, and
mutual funds which accounted for 17%, 1%, and 4%, respectively, of the
investment securities portfolio at March 31, 1996.
At March 31, 1996, the Corporation had approximately $38 million of
structured notes, which constitutes approximately 1% 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 U.S. 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 at fair value. The unrealized loss in these securities at March 31,
1996 was approximately $367,000. 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.
LOANS
Loans at March 31, 1996 were $7.1 billion compared to $6.8 billion and
$7.1 billion at March 31, 1995 and December 31, 1995, respectively. Average
loans for the first quarter of 1996 were $7.2 billion, a 5% increase over $6.8
billion for the first quarter of 1995. Note 3 to the unaudited interim
consolidated financial statements presents the composition of the loan
portfolio. Acquisitions accounted for approximately $180 million of the
increase between the first quarter of 1996 and 1995 and accounted for
approximately $47 million of the increase between the first quarter of 1996 and
the fourth quarter of 1995.
The growth in loans between March 31, 1996 and 1995 is attributable to
consumer loans which increased approximately $157 million (approximately $30
million related to credit card loans), loans secured by 1-4 family residential
mortgage loans which increased approximately $55 million, real estate
construction loans which increased approximately $33 million, and other loans
which had a net increase of approximately $48 million. Growth of residential
real estate loans has slowed due to lower refinancing activity in the current
interest rate environment. Additionally, credit card loans declined
approximately $11 million from year end and the growth of these loans is
expected to be at a slower rate in the future than was the case in 1994 and
1995. Commercial,
20
<PAGE> 21
financial, and agricultural loans declined approximately $24 million and
$28 million, respectively, from March 31, 1995 to 1996 and from December 31,
1995 to March 31, 1996.
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, 1996 and 1995 and for the year ended
December 31, 1995.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------------------ FOR THE YEAR ENDED
1996 1995 DECEMBER 31, 1995
----------- ---------- ------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Balance at the beginning
of the period $ 133,487 $ 133,966 $ 133,966
Recoveries on loans previously charged off
Credit cards and related plans 312 72 526
Other consumer loans 1,204 1,020 4,060
Loans secured by real estate 766 638 2,416
Commercial, financial, and agricultural 1,195 2,250 5,188
---------- ---------- ----------
Total recoveries 3,477 3,980 12,190
---------- ---------- ----------
Loans charged off
Credit cards and related plans 3,869 561 12,088
Other consumer loans 3,430 2,065 11,742
Loans secured by real estate 585 523 5,598
Commercial, financial, and agricultural 1,399 2,096 8,234
---------- ---------- ----------
Total charge-offs 9,283 5,245 37,662
---------- ---------- ----------
Net charge-offs (5,806) (1,265) (25,472)
Provision charged to expense 7,981 2,222 22,231
Allowance of banks acquired (1) 615 487 2,762
---------- ---------- ----------
Balance at end of period $ 136,277 $ 135,410 $ 133,487
========== ========== ==========
Loans, net of unearned income,
at end of period $7,091,737 $6,797,363 $7,069,853
========== ========== ==========
Average loans, net of unearned income,
during period $7,167,990 $6,804,632 $6,990,400
========== ========== ==========
Ratios:
Allowance at end of period to loans,
net of unearned income 1.92% 1.99% 1.89%
Charge-offs to average loans,
net of unearned income (2) .52 .31 .54
Recoveries to average loans,
net of unearned income (2) .19 .23 .18
Net charge-offs to average loans,
net of unearned income (2) .33 .08 .36
Provision to average loans,
net of unearned income(2) .45 .13 .32
</TABLE>
- - ----------------------
(1) 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.
(2) Amounts annualized for March 31, 1996 and 1995
The allowance at March 31, 1996, was $136.3 million, an increase of $2.8
million over December 31, 1995, and compared to $135.4 million at March 31,
1995. The provision for losses on loans exceeded net charge-offs for the first
quarter by $2.2 million which accounted for most of
21
<PAGE> 22
the increase, while allowances of banks acquired accounted for the
remainder. Management believes that the allowance is sufficient to absorb
estimated losses inherent in the loan portfolio at quarter end. Credit card
charge-offs were $3.9 million for the first quarter of 1996 but are expected to
increase to a range of approximately $5.5 million to $6.5 million. No other
significant increases in charge-offs are expected.
NONPERFORMING ASSETS
NONACCRUAL, RESTRUCTURED, AND PAST DUE LOANS AND FORECLOSED PROPERTIES
<TABLE>
<CAPTION>
MARCH 31,
------------------------- DECEMBER 31,
1996 1995 1995
-------- ------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Nonaccrual loans $ 33,759 $ 23,711 $ 32,847
Restructured loans 1,495 2,259 1,330
-------- -------- -------------
Total nonperforming loans 35,254 25,970 34,177
-------- -------- -------------
Foreclosed property
Other real estate owned, net 5,908 6,199 6,561
Other foreclosed properties 806 463 1,138
-------- -------- -------------
Total foreclosed properties 6,714 6,662 7,699
-------- -------- -------------
Total nonperforming assets $ 41,968 $ 32,632 $ 41,876
======== ======== =============
Loans 90 days or more past due
and not on nonaccrual status $ 19,903 $ 9,662 $ 18,317
======== ======== =============
------------------
Nonperforming loans as a
percentage of loans .50% .38% .48%
Nonperforming assets as a
percentage of loans plus
foreclosed properties .59 .48 .59
Allowance for losses on loans
as a percentage of
nonperforming loans 387 521 391
Loans 90 days or more past
due and not on nonaccrual
status as a percentage of loans .28 .14 .26
</TABLE>
A breakdown of nonaccrual loans and loans 90 days or more past due and not
on nonaccrual status is as follows:
<TABLE>
<CAPTION>
LOANS 90 DAYS
NONACCRUAL LOANS OR MORE PAST DUE
-------------------------- -------------------------
MARCH 31, DECEMBER 31, MARCH 31, DECEMBER 31,
LOAN TYPE 1996 1995 1996 1995
------------ --------- ------------- ---------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Secured by single family residential $ 12,630 $ 12,149 $ 4,703 $ 5,084
Secured by nonfarm nonresidential 6,153 5,037 410 383
Other real estate 2,872 4,578 487 560
Commercial, financial, and agricultural,
including direct lease financing 8,874 7,848 1,967 2,468
Credit cards and related plans - 15 7,495 5,269
Other consumer 3,230 3,220 4,841 4,553
--------- --------- ---------- --------
Total $ 33,759 $ 32,847 $ 19,903 $ 18,317
========= ========= ========== ========
</TABLE>
22
<PAGE> 23
The Corporation's asset quality indicators are currently at acceptable
levels, in management's opinion. Nonperforming assets were level with the
amounts at December 31, 1995. Loans 90 days or more past due and still accruing
interest increased $1.6 million over December 31, 1995 and $10.2 million over
the first quarter of 1995. The increase relates primarily to credit card
loans. Some future increases are expected as the loan portfolio grows but not
as significant an increase as occurred between the first quarter of 1996 and
1995.
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, 1996, the Corporation had potential problem assets (all of which were
loans) of $16.9 million.
OFF-BALANCE-SHEET INSTRUMENTS
The Corporation, on a limited basis, uses off-balance-sheet financial
instruments to manage interest-rate risk. Since December 31, 1995, there has
been no significant change in off-balance-sheet instruments other than the
maturity of certain interest-rate swaps as shown below. Reference is made to
Note 17 to the audited consolidated financial statements in the Corporation's
1995 Annual Report to Shareholders for additional information regarding these
instruments.
A summary of the Corporation's interest-rate swaps follows.
<TABLE>
Net Interest
Income Impact
Current Rates (1) ------------------ Unrealized
Notional Amount -------------------- Three Months Ended Loss
------------------------ Variable Fixed March 31, March 31,
March 31, December 31, Rate Rate Maturity ------------------ -----------
Balance Sheet Instruments 1996 1995 Paid Received Date 1996 1995 1996
- - ------------------------- ---- ---- ---- -------- ---- ---- ---- ----
(In millions) (In millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Loans (2) $41 $150 5.63% 5.22% 4/5/96 $(.2) $(.5) $(.4)
Long-term debt-debentures 50 50 5.81 4.46 5/96 (.2) (.2) -
Long-term debt-FHLB
advances - - - - - - .1 -
--- ---- ---- ---- ----
Total $91 $200 $(.4) $(.6) $(.4)
=== ==== ===== ===== ====
</TABLE>
- - ------------------------------
(1) The variable rates paid are tied to the three-month LIBOR rate for the
loan swap and the six-month LIBOR rate for the debentures swap.
(2) This interest-rate swaps matured on April 5, 1996.
ASSET LIABILITY MANAGEMENT
The following table presents the Corporation's interest-rate sensitivity
(GAP) analysis at March 31, 1996. The analysis is made as of that 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 growth of earning assets, the mix of
earning assets and interest-bearing liabilities, the magnitude of the
interest-rate changes, the timing of the repricing of assets and liabilities,
interest-rate spreads, and the asset/liability strategies implemented by
management impact the Corporation's net interest income. This discussion should
be read in connection with the discussion in the 1995 Annual Report on page 16.
23
<PAGE> 24
At March 31, 1996, the GAP analysis indicated that the Corporation was
asset sensitive with $263 million more assets than liabilities repricing within
one year. At 2% of total assets, this position was within management's
guidelines of 10% of total assets. Generally, this position would indicate that
over the course of one year a downward trend in interest rates will negatively
impact net interest income.
Balance sheet simulation analysis has been conducted at March 31, 1996 to
determine the impact on net interest income for the coming twelve months under
several interest-rate scenarios. One such scenario uses rates at March 31,
1996, and holds the rates and volumes constant for 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 on the Corporation's net interest income was a positive $26 million and
a negative $31 million pretax, respectively. Another simulation uses a "most
likely" scenario of rates falling 25 basis points resulting in a $5 million
pretax decrease in net interest income from the constant rate/volume
projection. The results under these scenarios are within the Corporation's
policy limit of 5% of shareholders' equity.
24
<PAGE> 25
UNION PLANTERS CORPORATION AND SUBSIDIARIES
RATE SENSITIVITY ANALYSIS AT MARCH 31, 1996
<TABLE>
<CAPTION>
INTEREST-SENSITIVE WITHIN (1) AND (6)
---------------------------------------------------------------------------------
NON-
0-30 31-90 91-180 181-365 1-2 2-5 OVER INTEREST-
DAYS DAYS DAYS DAYS YEARS YEARS 5 YEARS BEARING TOTAL
-------- ------- ------- ------- ------ ------ ------- ------- -----
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Loans and leases (2) and (3) $1,931 $ 474 $ 517 $1,013 $ 576 $1,857 $ 722 $ 34 $ 7,124
Investment securities (4) and (5) 450 360 275 469 541 478 378 - 2,951
Other earning assets 321 90 - 1 - - - - 412
Other assets - - - - - - - 882 882
------ ------ ------ ------ ------ ------ ------ ------- -------
Total assets $2,702 $ 924 $ 792 $1,483 $1,117 $2,335 $1,100 $ 916 $11,369
====== ====== ====== ====== ====== ====== ====== ======= =======
SOURCES OF FUNDS
Money market deposits (6) and (7) $ - $ 490 $ - $ 417 $ - $ 605 $ - $ - $ 1,512
Other savings and time deposits 636 1,209 945 841 533 1,675 24 - 5,863
Certificates of deposit of
$100,000 and over 145 203 155 160 69 52 - - 784
Short-term borrowings 228 1 7 - - - - - 236
Federal Home Loan Bank
advances 176 14 3 8 14 29 12 - 256
Long-term debt - - - - 1 1 214 - 216
Noninterest-bearing deposits - - - - - - - 1,364 1,364
Other liabilities - - - - - - - 145 145
Shareholders' equity - - - - - - - 993 993
------ ------ ------ ------ ------ ------ ------ ------- -------
Total sources of funds $1,185 $1,917 $1,110 $1,426 $ 617 $2,362 $ 250 $ 2,502 $11,369
====== ====== ====== ====== ====== ====== ====== ======= =======
Interest-rate swaps (8) $ - $ - $ - $ - $ - $ - $ - $ -
Interest-rate sensitivity gap $1,517 $ (993) $ (318) $ 57 $ 500 $ (27) $ 850 $(1,586)
Cumulative interest rate
sensitivity gap $1,517 $ 524 $ 206 $ 263 $ 763 $ 736 $1,586 $ -
Cumulative gap as a percentage
of total assets (7) 13% 5% 2% 2% 7% 6% 14% -%
</TABLE>
- - -------------------
Management has made the following assumptions in the above analysis:
(1) Assets and liabilities are generally scheduled according to their
earliest repricing dates regardless of their contractual maturities.
(2) Nonaccrual loans are included in the noninterest-bearing category.
(3) Fixed-rate mortgage loan maturities are estimated based on the currently
prevailing principal-prepayment patterns of comparable mortgage-backed
securities.
(4) The scheduled maturities of mortgage-backed securities, including REMICs
and CMOs, assume principal prepayment of these securities on dates
estimated by management relying primarily upon current and consensus
interest-rate forecasts in conjunction with the latest three-month
historical prepayment schedules.
(5) Securities are scheduled according to their call dates when valued at a
premium to par.
(6) Money market deposits and savings deposits that have no contractual
maturities are scheduled according to management's best estimate of their
repricing in response to changes in market rates. The impact of changes in
market rates would vary by product type and market.
(7) 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 (16%), (16%), (18%), (14%), and (10%), and
positive 6% 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, 1996.
(8) The notional value of interest-rate swaps at March 31, 1996 is $91 million.
Of these amounts, $41 million matures in 0-30 days and $50 million
matures in 31-90 days. There are no mismatched amounts in the outstanding
contracts.
25
<PAGE> 26
LIQUIDITY
The Corporation's core deposit base is its most important and stable
funding source and consists of deposits from the communities served by the
Corporation. Core deposits, along with available for sale securities and other
marketable earning assets, provide liquidity for the Corporation.
<TABLE>
<CAPTION>
AVERAGE DEPOSITS
----------------------------------------------
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, DECEMBER 31,
-------------------------- ------------------
1996 1995 1995
------------ ----------- ------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Demand deposits $1,343,150 $1,334,968 $1,352,611
Money market accounts (1) 1,468,737 1,483,088 1,416,897
Savings deposits (2) 1,830,468 1,824,901 1,806,525
Other time deposits (3) 4,073,991 3,838,320 4,030,892
---------- ---------- ----------
Total core deposits 8,716,346 8,481,277 8,606,925
Certificates of deposit
of $100,000 and over 761,060 664,120 757,917
---------- ---------- ----------
Total average deposits $9,477,406 $9,145,397 $9,364,842
========== ========== ==========
</TABLE>
- - ---------------------
(1) Includes money market savings accounts, High Yield accounts, and super NOW
accounts.
(2) Includes regular and premium savings accounts and NOW accounts.
(3) Includes certificates of deposit under $100,000, investment savings
accounts, and other time deposits.
Average deposits for the first quarter of 1996 were $9.5 billion, which
represents increases of $332.0 million and $112.6 million, respectively, from
the averages for the first quarter of 1995 and the fourth quarter of 1995. The
increases relate primarily to acquired banks.
The parent company's source of liquidity is management fees and dividends
received from subsidiaries, interest on advances to subsidiaries, and interest
on its available for sale investment securities. 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, 1996, the
parent company had cash and cash equivalents totaling $53.4 million. The parent
company's net working capital at March 31, 1996 was $162.5 million. The parent
company expects to receive dividends from its subsidiary banks totaling $30.9
million during the second quarter of 1996. Additional dividends will be
dependent on the future earnings of the subsidiary banks.
SHAREHOLDERS' EQUITY
The Corporation's total shareholders' equity increased by $26.5 million
from December 31, 1995 to $992.9 million at March 31, 1996. The increase was
due to retained net earnings of $25.0 million and Common Stock issued in
connection with benefit plans of $3.7 million partially offset by the net
change in the unrealized gain (loss) on available for sale securities which
reduced shareholders' equity $2.2 million.
26
<PAGE> 27
CAPITAL ADEQUACY
The following table presents capital adequacy information for 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,
1996 1995 1995
--------- --------- -------------
<S> <C> <C> <C>
CAPITAL ADEQUACY DATA
Total shareholders' equity/total assets
(at period end) 8.73% 7.98% 8.57%
Average shareholders' equity/average
total assets 8.48 7.84 8.21
Tier 1 capital/unweighted assets
(leverage ratio) (1) 8.22 7.61 8.09
Parent company long-term debt/equity 21.63 13.34 22.22
Dividend payout ratio 36.07 30.44 37.55
</TABLE>
- - -------------------
(1) Based on period-end capital and quarterly adjusted average assets.
At March 31, 1996, total shareholders' equity was 8.73% of total assets
and the leverage ratio was 8.22% compared to 8.57% and 8.09%, respectively, at
December 31, 1995. The improvement in these ratios relates primarily to the
Corporation's retained net earnings.
27
<PAGE> 28
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 a
result of loan growth, since loans are typically 100% risk-weighted, and also
increased as a result of acquisitions during the quarter.
RISK-BASED CAPITAL
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------- DECEMBER 31,
1996 1995 1995
------------ ------------ ---------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Tier 1 capital
Shareholders' equity $ 992,865 $ 860,488 $ 966,331
Minority interest in consolidated subsidiaries 1,088 1,088 1,088
Less goodwill, other intangibles, and one-half
of investment in unconsolidated subsidiaries (50,090) (44,145) (46,913)
Less deferred tax asset not qualifying for
regulatory capital (2,530) (2,384) (2,237)
Unrealized (gain) loss on available for
sale securities (19,145) 7,825 (21,366)
---------- ---------- ----------
Total Tier 1 capital 922,188 822,872 896,903
Tier 2 capital
Allowance for losses on loans (1) 89,990 83,228 89,230
Qualifying long-term debt 174,037 74,553 174,166
Less one-half of investment in unconsolidated
subsidiaries (110) (102) (107)
---------- ---------- ----------
Total capital $1,186,105 $ 980,551 $1,160,192
========== ========== ==========
Risk-weighted assets (2) $7,153,029 $6,605,944 $7,094,254
========== ========== ==========
Ratios as a percent of end of
period risk-weighted assets
Tier 1 capital 12.89% 12.46% 12.64%
Total capital 16.58 14.84 16.35
</TABLE>
- - -------------------
(1) Limited as required by regulatory guidelines.
(2) Based on "risk-weighted assets" as defined by regulatory guidelines.
28
<PAGE> 29
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 1995 Form 10-K , Note 19 to the
Corporation's consolidated financial statements on pages 62 and 63 of the 1995
Annual Report, and Note 10 to the Corporation's unaudited interim consolidated
financial statements included herein.
ITEM 2 -- CHANGES IN SECURITIES
None.
ITEM 3 -- DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 -- OTHER INFORMATION
None
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
11 -- Computation of 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>
1. January 6, 1996 Acquisition of Capital Bancorporation
Inc. on December 31, 1995
2. March 8, 1996 Union Planters Corporation signed a
definitive agreement to acquire Leader
Financial Corporation
3. April 1, 1996 Audited financial statements of Leader
Financial Corporation for 1995, a
pending probable acquisition
4. April 2, 1996 Unaudited pro forma consolidated financial
statements dated December 31, 1995 for certain
pending probable acquisitions
5. April 18, 1996 Press release announcing first quarter
of 1996 net earnings
</TABLE>
29
<PAGE> 30
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 8, 1996
--------------------
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
30
<PAGE> 1
EXHIBIT 11
PAGE 1 OF 2
UNION PLANTERS CORPORATION AND SUBSIDIARIES
COMPUTATION OF PRIMARY EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------
1996 1995
---------- -----------
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)
<S> <C> <C>
PRIMARY EARNINGS PER COMMON SHARE
Average shares outstanding 45,522,312 44,250,273
Assumed exercise of options outstanding 230,137 264,790
----------- -----------
Primary average shares outstanding 45,752,449 44,515,063
=========== ===========
Net earnings $ 39,144 $ 35,657
Less: Preferred stock dividends
Series B (88) (88)
Series D - (123)
Series E (1,748) (1,554)
Preferred stock of an acquired entity - (337)
----------- -----------
Net earnings applicable to common shares $ 37,308 $ 33,555
=========== ===========
Primary net earnings per common share $ .82 $ .75
</TABLE>
<PAGE> 2
EXHIBIT 11
PAGE 2 OF 2
UNION PLANTERS CORPORATION AND SUBSIDIARIES
COMPUTATION OF FULLY DILUTED EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------------
1996 1995
------------- ------------
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)
<S> <C> <C>
FULLY DILUTED EARNINGS PER COMMON SHARE
Average shares outstanding 45,522,312 44,250,273
Assumed exercise of options outstanding 230,151 266,091
Assumed conversion of preferred stock outstanding:
Series B 339,768 339,768
Series D - 253,655
Series E 4,370,524 3,884,902
----------- -----------
Fully diluted average shares outstanding 50,462,755 48,994,689
=========== ===========
Net earnings $ 39,144 $ 35,657
Less: Preferred stock dividends of an acquired entity - (337)
----------- -----------
Net earnings applicable to common shares $ 39,144 $ 35,320
=========== ===========
Fully diluted net earnings per common share $ .78 $ .72
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 475,211
<INT-BEARING-DEPOSITS> 3,820
<FED-FUNDS-SOLD> 182,199
<TRADING-ASSETS> 134,926
<INVESTMENTS-HELD-FOR-SALE> 2,951,092
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 7,091,737
<ALLOWANCE> 136,277
<TOTAL-ASSETS> 11,368,682
<DEPOSITS> 9,522,876
<SHORT-TERM> 236,220
<LIABILITIES-OTHER> 144,255
<LONG-TERM> 472,466
0
91,810
<COMMON> 228,012
<OTHER-SE> 673,043
<TOTAL-LIABILITIES-AND-EQUITY> 11,368,682
<INTEREST-LOAN> 164,033
<INTEREST-INVEST> 43,285
<INTEREST-OTHER> 8,689
<INTEREST-TOTAL> 216,007
<INTEREST-DEPOSIT> 89,994
<INTEREST-EXPENSE> 100,534
<INTEREST-INCOME-NET> 115,473
<LOAN-LOSSES> 7,981
<SECURITIES-GAINS> 60
<EXPENSE-OTHER> 89,152
<INCOME-PRETAX> 58,537
<INCOME-PRE-EXTRAORDINARY> 39,144
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39,144
<EPS-PRIMARY> .82
<EPS-DILUTED> .78
<YIELD-ACTUAL> 4.61
<LOANS-NON> 33,759
<LOANS-PAST> 20,327
<LOANS-TROUBLED> 1,495
<LOANS-PROBLEM> 16,921
<ALLOWANCE-OPEN> 133,487
<CHARGE-OFFS> 9,283
<RECOVERIES> 3,477
<ALLOWANCE-CLOSE> 136,277
<ALLOWANCE-DOMESTIC> 136,277
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
