<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 September 30, 2000
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.)
Union Planters Administrative Center
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
----------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (901) 580-6000
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Class Outstanding at October 31, 2000
-------------------------- -------------------------------
Common stock $5 par value 134,730,073
<PAGE> 2
UNION PLANTERS CORPORATION AND SUBSIDIARIES
FORM 10-Q FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
a) Consolidated Balance Sheet - September 30, 2000,
September 30, 1999, and December 31, 1999......................................... 3
b) Consolidated Statement of Earnings -
Three and Nine Months Ended September 30, 2000 and 1999........................... 4
c) Consolidated Statement of Changes in Shareholders' Equity -
Nine Months Ended September 30, 2000 ............................................. 5
d) Consolidated Statement of Cash Flows -
Nine Months Ended September 30, 2000 and 1999..................................... 6
e) Notes to Unaudited Consolidated Financial Statements.............................. 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations..................................... 14
Item 3. Quantitative and Qualitative Disclosures about Market Risk........................ 31
PART II. OTHER INFORMATION
Item 1. Legal Proceedings................................................................. 35
Item 2. Changes in Securities............................................................. 35
Item 3. Defaults Upon Senior Securities................................................... 35
Item 4. Submission of Matters to a Vote of Security Holders............................... 35
Item 5. Other Information................................................................. 35
Item 6. Exhibits and Reports on Form 8-K.................................................. 37
Signatures.................................................................................. 38
</TABLE>
2
<PAGE> 3
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
----------------------------- -----------
2000 1999 1999
----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Cash and due from banks .................................................. $ 898,845 $ 1,008,345 $ 1,127,902
Interest-bearing deposits at financial institutions ...................... 64,381 41,983 73,062
Federal funds sold and securities purchased under agreements to resell ... 54,732 84,222 51,117
Trading account assets ................................................... 264,294 225,510 315,734
Loans held for resale .................................................... 377,012 305,784 430,690
Available for sale securities (Amortized cost: $7,062,938,
$7,966,492, and $7,685,096, respectively) .............................. 6,920,432 7,845,191 7,472,455
Loans .................................................................... 23,457,315 21,398,942 21,474,498
Less: Unearned income .................................................. (7,885) (33,028) (28,098)
Allowance for losses on loans ................................ (340,453) (358,721) (342,300)
----------- ----------- -----------
Net loans ........................................................... 23,108,977 21,007,193 21,104,100
Premises and equipment, net .............................................. 613,633 648,090 637,628
Accrued interest receivable .............................................. 301,189 298,429 287,231
FHA/VA claims receivable ................................................. 79,838 137,066 108,618
Mortgage servicing rights ................................................ 126,051 120,223 122,110
Goodwill and other intangibles ........................................... 971,075 973,399 975,432
Other assets ............................................................. 482,130 459,057 574,274
----------- ----------- -----------
TOTAL ASSETS ..................................................... $34,262,589 $33,154,492 $33,280,353
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing ................................................... $ 3,979,560 $ 4,181,748 $ 4,035,189
Certificates of deposit of $100,000 and over .......................... 2,575,543 2,190,474 1,963,347
Other interest-bearing ................................................ 16,528,571 18,019,231 17,373,580
----------- ----------- -----------
Total deposits ................................................... 23,083,674 24,391,453 23,372,116
Short-term borrowings .................................................... 5,993,766 4,046,075 5,422,504
Short- and medium-term senior notes ...................................... 260,000 75,000 60,000
Federal Home Loan Bank advances .......................................... 601,291 203,402 203,032
Other long-term debt ..................................................... 793,652 854,539 854,738
Accrued interest, expenses, and taxes .................................... 363,275 232,180 202,303
Other liabilities ........................................................ 369,385 399,914 389,551
----------- ----------- -----------
TOTAL LIABILITIES ................................................ 31,465,043 30,202,563 30,504,244
----------- ----------- -----------
Commitments and contingent liabilities ................................... -- -- --
Shareholders' equity
Convertible preferred stock ............................................ 19,942 21,718 20,875
Common stock, $5 par value; 300,000,000 shares authorized; 134,756,611
issued and outstanding (141,781,749 at September 30, 1999,
and 138,487,381 at December 31, 1999) ............................... 673,783 708,909 692,437
Additional paid-in capital ............................................. 754,153 770,642 755,306
Retained earnings ...................................................... 1,458,488 1,540,317 1,453,468
Unearned compensation .................................................. (18,499) (12,868) (11,760)
Accumulated other comprehensive income--unrealized loss on
available for sale securities, net ................................... (90,321) (76,789) (134,217)
----------- ----------- -----------
TOTAL SHAREHOLDERS' EQUITY ....................................... 2,797,546 2,951,929 2,776,109
----------- ----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ....................... $34,262,589 $33,154,492 $33,280,353
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 4
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------- -------------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans ........................................ $ 525,187 $ 454,656 $1,495,183 $1,300,762
Interest on investment securities
Taxable ......................................................... 94,746 105,720 294,928 319,818
Tax-exempt ...................................................... 16,026 17,481 49,132 52,574
Interest on deposits at financial institutions .................... 825 879 1,632 2,316
Interest on federal funds sold and securities purchased under
agreements to resell ............................................ 1,511 1,104 4,118 2,936
Interest on trading account assets ................................ 4,266 3,834 12,682 11,363
Interest on loans held for resale ................................. 6,493 4,528 19,111 18,319
---------- ---------- ---------- ----------
Total interest income ..................................... 649,054 588,202 1,876,786 1,708,088
---------- ---------- ---------- ----------
INTEREST EXPENSE
Interest on deposits .............................................. 221,519 200,210 612,081 619,510
Interest on short-term borrowings ................................. 96,860 39,315 267,937 84,657
Interest on long-term debt ........................................ 26,667 20,448 66,658 68,406
---------- ---------- ---------- ----------
Total interest expense .................................... 345,046 259,973 946,676 772,573
---------- ---------- ---------- ----------
NET INTEREST INCOME ....................................... 304,008 328,229 930,110 935,515
PROVISION FOR LOSSES ON LOANS ....................................... 19,939 20,365 56,941 54,384
---------- ---------- ---------- ----------
NET INTEREST INCOME AFTER PROVISION FOR LOSSES ON LOANS ... 284,069 307,864 873,169 881,131
---------- ---------- ---------- ----------
NONINTEREST INCOME
Service charges on deposit accounts ............................... 47,451 44,273 134,149 125,663
Mortgage banking revenue .......................................... 28,110 23,506 75,927 75,208
Bank card income .................................................. 9,320 7,906 27,133 18,949
Factoring commissions ............................................. 8,462 7,583 23,148 22,014
Trust service income .............................................. 6,043 4,241 19,275 17,955
Profits and commissions from trading activities ................... 1,598 1,094 4,314 2,958
Investment securities gains (losses) .............................. -- (1,224) 77 1,968
Other income ...................................................... 46,361 35,703 129,391 125,337
---------- ---------- ---------- ----------
Total noninterest income .................................. 147,345 123,082 413,414 390,052
---------- ---------- ---------- ----------
NONINTEREST EXPENSE
Salaries and employee benefits .................................... 133,775 123,369 390,073 376,470
Net occupancy expense ............................................. 23,536 23,550 70,485 65,461
Equipment expense ................................................. 20,904 20,024 63,308 59,262
Goodwill and other intangibles amortization ....................... 16,151 15,040 47,860 40,188
Other expense ..................................................... 84,704 84,016 254,934 257,866
---------- ---------- ---------- ----------
Total noninterest expense ................................. 279,070 265,999 826,660 799,247
---------- ---------- ---------- ----------
EARNINGS BEFORE INCOME TAXES .............................. 152,344 164,947 459,923 471,936
Income taxes ........................................................ 50,763 55,413 154,120 159,288
---------- ---------- ---------- ----------
NET EARNINGS .............................................. $ 101,581 $ 109,534 $ 305,803 $ 312,648
========== ========== ========== ==========
NET EARNINGS APPLICABLE TO COMMON SHARES .................. $ 101,182 $ 109,101 $ 304,590 $ 311,311
========== ========== ========== ==========
EARNINGS PER COMMON SHARE
Basic ..................................................... $ .75 $ .77 $ 2.25 $ 2.19
Diluted ................................................... .75 .76 2.24 2.16
AVERAGE COMMON SHARES OUTSTANDING (IN THOUSANDS)
Basic ..................................................... 134,678 142,557 135,337 142,464
Diluted ................................................... 136,130 144,570 136,821 144,680
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE> 5
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
CONVERTIBLE ADDITIONAL
PREFERRED COMMON PAID-IN RETAINED
STOCK STOCK CAPITAL EARNINGS
----------- --------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 2000 ............... $ 20,875 $ 692,437 $ 755,306 $ 1,453,468
Comprehensive income
Net earnings ......................... -- -- -- 305,803
Other comprehensive income,
net of taxes:
Net change in the unrealized
losses on available for sale
securities ..................... -- -- -- --
Total comprehensive income ...
Cash dividends
Common stock, $1.50 per share ........ -- -- -- (203,721)
Preferred stock, $1.50 per share ..... -- -- -- (1,213)
Common stock issued under
employee benefit plans,
net of stock exchanged ............... -- 3,492 22,642 (457)
Conversion of preferred stock .......... (933) 233 700 --
Common stock purchased
and retired .......................... -- (22,379) (24,495) (95,392)
--------- --------- --------- -----------
BALANCE, SEPTEMBER 30, 2000 ............ $ 19,942 $ 673,783 $ 754,153 $ 1,458,488
========= ========= ========= ===========
<CAPTION>
UNREALIZED
LOSS ON
AVAILABLE
UNEARNED FOR SALE
COMPENSATION SECURITIES TOTAL
------------ ---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
BALANCE, JANUARY 1, 2000 ............... $(11,760) $(134,217) $ 2,776,109
Comprehensive income
Net earnings ......................... -- -- 305,803
Other comprehensive income,
net of taxes:
Net change in the unrealized
losses on available for sale
securities ..................... -- 43,896 43,896
-----------
Total comprehensive income ... 349,699
Cash dividends
Common stock, $1.50 per share ........ -- -- (203,721)
Preferred stock, $1.50 per share ..... -- -- (1,213)
Common stock issued under
employee benefit plans,
net of stock exchanged ............... (6,739) -- 18,938
Conversion of preferred stock .......... -- -- --
Common stock purchased
and retired .......................... -- -- (142,266)
-------- --------- -----------
BALANCE, SEPTEMBER 30, 2000 ............ $(18,499) $ (90,321) $ 2,797,546
======== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
BEFORE TAX TAX NET OF TAX
AMOUNT BENEFIT AMOUNT
---------- --------- ----------
<S> <C> <C> <C>
DISCLOSURE OF RECLASSIFICATION AMOUNT:
Change in the unrealized losses
on available for sale securities
arising during the period ........... $ 70,212 $ (26,269) $ 43,943
Less: reclassification for gains
included in net income ....... 77 (30) 47
--------- --------- ---------
Net change in the unrealized losses
on available for sale securities ..... $ 70,135 $ (26,239) $ 43,896
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE> 6
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------------
2000 1999
----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings ......................................................................... $ 305,803 $ 312,648
Reconciliation of net earnings to net cash provided by operating activities:
Provision for losses on loans, other real estate, and FHA/VA foreclosure claims .... 56,735 55,532
Depreciation and amortization of premises and equipment ............................ 59,546 50,301
Amortization of goodwill and other intangibles ..................................... 47,860 40,188
Amortization of mortgage servicing rights .......................................... 14,570 14,857
Net (accretion) amortization of investment securities .............................. (1,560) 15,952
Net realized gains on sales of investment securities ............................... (77) (1,968)
Deferred income tax expense ........................................................ 15,105 854
Decrease in assets
Trading account assets and loans held for resale ............................... 105,118 191,539
Other assets ................................................................... 85,246 191,925
Increase (decrease) in accrued interest, expenses, taxes, and other liabilities .... 119,752 (128,235)
Other, net ......................................................................... 7,532 6,222
----------- -----------
Net cash provided by operating activities .................................... 815,630 749,815
----------- -----------
INVESTING ACTIVITIES
Net decrease in short-term investments ............................................... 8,683 775,655
Proceeds from sales of available for sale securities ................................. 424,954 1,100,093
Proceeds from maturities, calls, and prepayments of available for sale securities .... 834,586 4,217,090
Purchases of available for sale securities ........................................... (636,909) (4,823,567)
Net (increase) decrease in loans ..................................................... (2,085,302) 415,704
Net cash paid for acquisitions ....................................................... (39,620) (32,028)
Purchases of premises and equipment, net ............................................. (34,159) (57,539)
----------- -----------
Net cash (used) provided by investing activities ............................. (1,527,767) 1,595,408
----------- -----------
FINANCING ACTIVITIES
Net decrease in deposits ............................................................. (287,276) (4,154,225)
Net increase in short-term borrowings ................................................ 771,262 2,138,656
Proceeds from long-term debt ......................................................... 600,000 --
Repayment of long-term debt .......................................................... (263,317) (303,955)
Proceeds from issuance of common stock ............................................... 13,238 17,440
Purchase and retirement of common stock .............................................. (142,266) (101,317)
Cash dividends paid .................................................................. (204,946) (215,759)
Other, net ........................................................................... -- 322
----------- -----------
Net cash provided (used) by financing activities ............................. 486,695 (2,618,838)
----------- -----------
Net decrease in cash and cash equivalents ............................................ (225,442) (273,615)
Cash and cash equivalents at the beginning of the period ............................. 1,179,019 1,366,182
----------- -----------
Cash and cash equivalents at the end of the period ................................... $ 953,577 $ 1,092,567
=========== ===========
SUPPLEMENTAL DISCLOSURES
Cash paid for
Interest ........................................................................... $ 872,800 $ 795,755
Income taxes ....................................................................... 56,124 136,070
Unrealized loss on available for sale securities ..................................... (142,506) (121,301)
</TABLE>
The accompanying notes are an integral part of these consolidated 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 accounting principles generally accepted in the United States of America.
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 (collectively, Union Planters or the Company) 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 Union Planters Corporation's 1999 Annual Report to Shareholders
(1999 Annual Report), a copy of which is Exhibit 13 to Union Planters
Corporation's Annual Report on Form 10-K for the year ended December 31, 1999
(1999 10-K). Certain prior year amounts have been reclassified to be consistent
with the 2000 financial reporting presentation.
RECENT ACCOUNTING PRONOUNCEMENTS
In Note 1 to Union Planters' Annual Report to Shareholders (page 48 of
the report) there is a discussion of FASB Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This statement was issued in
June 1998 and is effective January 1, 2001. Union Planters does not believe the
implementation of this statement will have a material impact on Union Planters'
financial position, results of operations, and cash flows, since the
organization has very limited activity covered by the statement. The new
statement will have some impact on the Company's mortgage banking operations but
the exact impact has not been completely identified since some of the issues
relating to mortgage banking are still being finalized.
NOTE 2. ACQUISITIONS
CONSUMMATED ACQUISITIONS
On April 26, 2000, Union Planters Bank, National Association (UPB), the
Company's principal subsidiary, completed the acquisition of Strategic
Outsourcing, Inc. (SOI) which is headquartered in Charlotte, North Carolina. SOI
is one of the largest providers of professional employment organization services
(e.g. workers' compensation management, employee benefits management, payroll
administration, safety and risk management, human resources administration, and
compliance administration) in the United States. Clients, which are small and
mid-sized businesses, are provided integrated and cost-effective approaches to
the management of critical human resources responsibilities and employer risks.
The cash purchase price for this acquisition was $45.9 million (excluding up to
$10 million of future contingent consideration, based on the operating
performance of SOI) and goodwill and other intangibles resulting from the
acquisition were $46.5 million.
PENDING ACQUISITIONS
On September 20, 2000, Union Planters and Jefferson Savings Bancorp,
Inc. (Jefferson Savings) of Ballwin, Missouri signed a definitive agreement for
the acquisition of Jefferson Savings by Union Planters. Jefferson Savings is the
parent company of Jefferson Heritage Bank, a federal savings bank. Jefferson
Savings has total assets of approximately $1.6 billion, total loans of $1.3
billion, and total deposits of $938 million at July 31, 2000. Approximately 54%
of Jefferson Saving's deposits are in the St. Louis metropolitan market and the
balance in Texas. Jefferson Savings also operates mortgage origination offices
in Missouri, Texas, Tennessee, Washington, Oregon, Colorado, and Arizona.
Under the terms of the agreement, shareholders of Jefferson Savings
would receive .433 shares of Union Planters common stock (or approximately 4.3
million shares of Union Planters common stock in the aggregate) for each share
of Jefferson Savings common stock, in a tax-free exchange. The transaction will
be accounted for as a tax-free purchase and is subject to approval by the
Jefferson Savings shareholders and regulatory authorities. The Company has
authorized the purchase of the Union Planters common shares to be issued in the
transaction; however, no such shares have been purchased as of October 31, 2000.
The acquisition is expected to be completed in the first quarter of 2001.
7
<PAGE> 8
NOTE 3. LOANS
Loans are summarized by type as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------------ DECEMBER 31,
2000 1999 1999
------------ ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Commercial, financial, and agricultural .... $ 5,053,745 $ 4,588,050 $ 4,799,840
Foreign .................................... 494,359 386,661 374,814
Accounts receivable - factoring ............ 807,787 606,115 555,128
Real estate - construction ................. 1,931,004 1,554,455 1,581,164
Real estate - mortgage
Secured by 1-4 family residential ........ 6,081,364 5,425,444 5,554,943
FHA/VA government-insured/guaranteed ..... 306,421 538,398 519,213
Other mortgage ........................... 5,195,034 4,809,855 4,591,110
Home equity ................................ 656,114 571,790 584,546
Consumer ................................... 2,827,663 2,845,714 2,835,014
Direct lease financing ..................... 103,824 72,460 78,726
------------ ------------ ------------
TOTAL LOANS ...................... $ 23,457,315 $ 21,398,942 $ 21,474,498
============ ============ ============
</TABLE>
Nonperforming loans are summarized as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Nonaccrual loans........................... $ 133,434 $ 127,766
Restructured loans......................... 1,524 1,878
---------- ----------
TOTAL NONPERFORMING LOANS........ $ 134,958 $ 129,644
========== ==========
FHA/VA GOVERNMENT-INSURED/GUARANTEED
LOANS ON NONACCRUAL STATUS............... $ 4,212 $ 6,613
========== ==========
</TABLE>
NOTE 4. ALLOWANCE FOR LOSSES ON LOANS
The changes in the allowance for losses on loans for the three and nine
months ended September 30, 2000 are summarized as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 2000 SEPTEMBER 30, 2000
------------------ ------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
BEGINNING BALANCE .............................. $ 345,858 $ 342,300
Provision for losses on loans .................. 19,939 56,941
Recoveries of loans previously charged off ..... 10,345 39,249
Loans charged off .............................. (33,814) (96,162)
Decrease due to sale of loans .................. (1,875) (1,875)
---------- ----------
BALANCE, SEPTEMBER 30, 2000 .................... $ 340,453 $ 340,453
========== ==========
</TABLE>
8
<PAGE> 9
NOTE 5. INVESTMENT SECURITIES
The amortized cost and fair value of investment securities are
summarized as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, 2000
------------------------------------------------------
UNREALIZED
AMORTIZED ------------------------
COST GAINS LOSSES FAIR VALUE
----------- --------- --------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE SECURITIES
U.S. Government obligations
U.S. Treasury ....................................... $ 119,565 $ 273 $ 614 $ 119,224
U.S. Government agencies
Collateralized mortgage obligations ............... 2,333,941 1,659 63,331 2,272,269
Mortgage-backed ................................... 510,816 1,890 13,719 498,987
Other ............................................. 884,598 1,512 17,857 868,253
----------- --------- --------- -----------
Total U.S. Government obligations ........... 3,848,920 5,334 95,521 3,758,733
Obligations of states and political subdivisions ...... 1,230,395 15,101 19,956 1,225,540
Other stocks and securities ........................... 1,983,623 3,968 51,432 1,936,159
----------- --------- --------- -----------
TOTAL AVAILABLE FOR SALE SECURITIES ......... $ 7,062,938 $ 24,403 $ 166,909 $ 6,920,432
=========== ========= ========= ===========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1999
------------------------------------------------------
UNREALIZED
AMORTIZED ------------------------
COST GAINS LOSSES FAIR VALUE
----------- --------- --------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE SECURITIES
U.S. Government obligations
U.S. Treasury ....................................... $ 165,335 $ 398 $ 1,190 $ 164,543
U.S. Government agencies
Collateralized mortgage obligations ............... 2,440,301 498 85,350 2,355,449
Mortgage-backed ................................... 650,125 3,507 16,870 636,762
Other ............................................. 1,048,180 1,879 26,232 1,023,827
----------- --------- --------- -----------
Total U.S. Government obligations ........... 4,303,941 6,282 129,642 4,180,581
Obligations of states and political subdivisions ...... 1,303,088 13,902 43,845 1,273,145
Other stocks and securities ........................... 2,078,067 3,510 62,848 2,018,729
----------- --------- --------- -----------
TOTAL AVAILABLE FOR SALE SECURITIES ......... $ 7,685,096 $ 23,694 $ 236,335 $ 7,472,455
=========== ========= ========= ===========
</TABLE>
Investment securities having a fair value of approximately $3.6 billion
and $2.8 billion at September 30, 2000 and December 31, 1999, respectively, were
pledged to secure public and trust funds on deposit, securities sold under
agreements to repurchase, and Federal Home Loan Bank (FHLB) advances.
The following table presents the gross realized gains and losses on
available for sale investment securities for the three and nine months ended
September 30, 2000 and 1999 (Dollars in thousands).
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------- ------------------------------
2000 1999 2000 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Realized gains........... $ 1 $ 467 $ 1,697 $ 5,626
Realized losses.......... 1 1,691 1,620 3,658
</TABLE>
9
<PAGE> 10
NOTE 6. OTHER NONINTEREST INCOME AND EXPENSE
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED,
SEPTEMBER 30, SEPTEMBER 30,
--------------------- ------------------------
2000 1999 2000 1999
-------- -------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
OTHER NONINTEREST INCOME
ATM transaction fees ................................................. $ 6,600 $ 6,917 $ 21,461 $ 18,183
Brokerage fee income ................................................. 4,507 4,191 14,097 13,841
Annuity sales income ................................................. 2,163 3,977 10,155 13,812
Insurance commissions ................................................ 4,344 4,610 13,077 13,052
Letters of credit fees ............................................... 2,160 1,869 5,597 5,037
Gain on sales of branches/deposits and other assets .................. 1,235 983 2,725 3,917
Gain on securitization and sale of mortgage loans .................... 2,764 -- 2,764 5,317
Gain on sale of asset-based loans .................................... 2,693 -- 2,693 --
Gain on sale of credit card portfolio ................................ -- -- -- 3,268
Gain on sale of corporate trust business ............................. -- -- -- 2,417
Earnings (losses) of equity method investments ....................... 131 (630) (640) (760)
Reversion of excess assets of a pension plan of an acquired entity ... -- -- 4,762 --
Other income ......................................................... 19,764 13,786 52,700 47,253
-------- -------- --------- ---------
TOTAL OTHER NONINTEREST INCOME ............................... $ 46,361 $ 35,703 $ 129,391 $ 125,337
======== ======== ========= =========
OTHER NONINTEREST EXPENSE
Communications ....................................................... $ 8,816 $ 8,752 $ 28,172 $ 25,112
Other contracted services ............................................ 8,283 7,814 25,113 24,229
Postage and carrier .................................................. 6,987 8,294 21,593 23,437
Stationery and supplies .............................................. 6,569 7,624 19,541 23,804
Merchant interchange fees ............................................ 6,682 5,536 18,962 12,584
Advertising and promotion ............................................ 6,282 7,228 20,362 20,708
Amortization of mortgage servicing rights ............................ 5,275 4,269 14,570 14,857
Other personnel services ............................................. 3,385 4,286 10,038 13,198
Legal fees ........................................................... 3,098 3,331 9,220 9,576
Travel ............................................................... 2,905 2,924 7,976 8,528
Consultant fees ...................................................... 1,032 2,068 4,453 6,396
Federal Reserve fees ................................................. 1,876 1,433 5,167 4,035
Accounting and audit fees ............................................ 1,302 994 4,765 3,526
Other real estate expense ............................................ 1,344 679 4,132 3,578
Brokerage and clearing fees on trading activities .................... 1,593 1,164 4,419 3,749
Taxes other than income .............................................. 1,382 1,270 4,836 5,248
FDIC insurance ....................................................... 1,185 1,508 3,651 4,544
Dues, subscriptions, and contributions ............................... 995 1,106 3,023 3,365
Insurance ............................................................ 837 749 2,567 1,981
Provision for losses on FHA/VA foreclosure claims .................... 1,216 633 1,260 883
Miscellaneous charge-offs ............................................ 2,735 2,472 5,560 7,620
Other expense ........................................................ 10,925 9,882 35,554 36,908
-------- -------- --------- ---------
TOTAL OTHER NONINTEREST EXPENSE .............................. $ 84,704 $ 84,016 $ 254,934 $ 257,866
======== ======== ========= =========
</TABLE>
NOTE 7. INCOME TAXES
Applicable income taxes for the nine months ended September 30, 2000,
were $154.1 million, resulting in an effective tax rate of 33.51%. Applicable
income taxes for the same period in 1999 were $159.3 million, resulting in an
effective tax rate of 33.75%. The decrease in the effective rate in 2000, as
compared to 1999, is due primarily to the change in the mix of taxable and
nontaxable revenues. The tax expense applicable to investment securities gains
for the nine months ended September 30, 2000 and 1999 was $30,000 and $766,000,
respectively.
At September 30, 2000, Union Planters had a net deferred tax asset of
$216.0 million compared to $254.7 million at December 31, 1999. The net deferred
tax asset includes a deferred tax asset related to the net unrealized loss on
available for sale securities of $52.2 million and $78.4 million at those dates,
respectively. Based upon historical earnings and anticipated future earnings,
management believes that normal operations will generate sufficient future
taxable income to realize in full these deferred tax benefits. Therefore, no
extraordinary strategies are deemed necessary by management to generate
sufficient taxable income for purposes of realizing the net deferred tax asset.
10
<PAGE> 11
NOTE 8. BORROWINGS
SHORT-TERM BORROWINGS
Short-term borrowings include short-term FHLB advances, federal funds
purchased, securities sold under agreements to repurchase, and other short-term
borrowings. Short-term FHLB advances are borrowings from the FHLB, which are
collateralized by mortgage-backed securities and mortgage loans. Federal funds
purchased arise from Union Planters' market activity with its correspondent
banks and generally mature in one business day. Securities sold under agreements
to repurchase are collateralized by U.S. Government and agency securities.
Short-term borrowings are summarized as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
-------------------------- -----------
2000 1999 1999
----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Balances at period end:
Short-term FHLB advances ..................................................... $ 2,500,000 $ 2,000,000 $ 3,000,000
Federal funds purchased ...................................................... 2,023,480 736,160 945,869
Securities sold under agreements to repurchase ............................... 1,469,834 1,309,426 1,476,142
Other short-term borrowings .................................................. 452 489 493
----------- ----------- -----------
Total short-term borrowings ........................................ $ 5,993,766 $ 4,046,075 $ 5,422,504
=========== =========== ===========
Federal funds purchased and securities sold under agreements to repurchase
Daily average balance ...................................................... $ 2,679,909 $ 1,951,404 $ 1,980,674
Weighted average interest rate ............................................. 5.85% 4.52% 4.62%
Short-term FHLB advances
Daily average balance ...................................................... $ 2,805,758 $ 473,260 $ 928,493
Weighted average interest rate ............................................. 6.40% 5.87% 5.42%
</TABLE>
SHORT- AND MEDIUM-TERM SENIOR NOTES
UPB has a $5 billion senior and subordinated bank note program to
supplement UPB's funding sources. Under the program, UPB may from time to time
issue senior bank notes having maturities ranging from 30 days to one year from
their respective issue dates (Short-Term Senior Notes), senior bank notes having
maturities of more than one year to 30 years from their respective dates of
issue (Medium-Term Senior Notes), and subordinated bank notes with maturities
from 5 years to 30 years from their respective dates of issue (Subordinated
Notes). At September 30, 2000, September 30, 1999, and December 31, 1999, UPB
had no Subordinated Notes outstanding under this program. At September 30, 1999
and December 31, 1999, UPB had no Short-Term Senior Notes outstanding. A summary
of the Short-Term and Medium-Term Senior Notes outstanding follows.
<TABLE>
<CAPTION>
SHORT-TERM
SENIOR NOTES MEDIUM-TERM SENIOR NOTES
------------- ----------------------------------------------------
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
2000 2000 1999 1999
------------- ------------- -------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Balances at period end... $ 200,000 $ 60,000 $ 75,000 $ 60,000
Fixed-rate notes......... 200,000 60,000 75,000 60,000
Range of maturities...... 10/00 8/01 - 10/01 10/99 - 10/01 8/01 - 10/01
</TABLE>
FEDERAL HOME LOAN BANK ADVANCES
Certain of Union Planters' banking and thrift subsidiaries had
outstanding advances, with original maturity dates of greater than one year,
from the FHLB under Blanket Agreements for Advances and Security Agreements (the
Agreements). The Agreements enable these subsidiaries to borrow funds from the
FHLB to fund mortgage loan programs and to satisfy certain other funding needs.
The value of the mortgage-backed securities and mortgage loans pledged under the
Agreements must be maintained at not less than 115% and 150%, respectively, of
the advances outstanding. At September 30, 2000, Union Planters had an adequate
amount of mortgage-backed securities and loans to satisfy the collateral
requirements. A summary of the advances is as follows.
11
<PAGE> 12
<TABLE>
<CAPTION>
SEPTEMBER 30,
---------------------------- DECEMBER 31,
2000 1999 1999
------------ ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Balance at period end........ $ 601,291 $ 203,402 $ 203,032
Range of interest rates...... 1.75 - 6.61% 3.25 - 6.85% 1.75 - 6.85%
Range of maturities.......... 2001 - 2015 2000 - 2015 2000 - 2015
</TABLE>
OTHER LONG-TERM DEBT
Union Planters' other long-term debt is summarized as follows.
Reference is made to Note 9 to the consolidated financial statements in the 1999
Annual Report for additional information regarding these borrowings.
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
----------------------- ------------
2000 1999 1999
--------- --------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Corporation-Obligated Mandatorily Redeemable Capital Pass-through
Securities of Subsidiary Trust holding solely a Corporation-Guaranteed
Related Subordinated Note (Trust Preferred Securities) ..................... $ 199,071 $ 199,035 $ 199,044
Variable-rate asset-backed certificates ...................................... 114,939 175,000 175,000
6 3/4% Subordinated Notes due 2005 ........................................... 99,699 99,640 99,655
6.25% Subordinated Notes due 2003 ............................................ 74,339 74,787 74,800
6.5% Putable/Callable Subordinated Notes due 2018 ............................ 300,915 301,577 301,055
Other long-term debt ......................................................... 4,689 4,500 5,184
--------- --------- ---------
TOTAL OTHER LONG-TERM DEBT ......................................... $ 793,652 $ 854,539 $ 854,738
========= ========= =========
</TABLE>
NOTE 9. SHAREHOLDERS' EQUITY
PREFERRED STOCK
Union Planters' outstanding preferred stock, all of which is
convertible into shares of Union Planters' common stock, is summarized as
follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
----------------------- ------------
2000 1999 1999
--------- --------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Preferred stock, without par value, 10,000,000 shares authorized
Series F Preferred Stock
300,000 shares authorized, none issued ..................................... $ -- $ -- $ --
Series E, 8% Cumulative, Convertible, Preferred Stock (stated at liquidation
value of $25 per share), 797,683 shares issued and outstanding (868,700
at September 30, 1999 and 835,006 at December 31, 1999) ................... 19,942 21,718 20,875
--------- --------- ---------
TOTAL PREFERRED STOCK ................................................ $ 19,942 $ 21,718 $ 20,875
========= ========= =========
</TABLE>
12
<PAGE> 13
NOTE 10. EARNINGS PER SHARE
The calculation of net earnings per share is summarized as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------- -----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
BASIC
Net earnings................................ $ 101,581 $ 109,534 $ 305,803 $ 312,648
Less preferred dividends.................. 399 433 1,213 1,337
------------ ------------ ------------ ------------
Net earnings applicable to common shares.... $ 101,182 $ 109,101 $ 304,590 $ 311,311
============ ============ ============ ============
Average common shares outstanding........... 134,678,290 142,556,840 135,337,293 142,464,382
============ ============ ============ ============
Net earnings per common share -- basic...... $ .75 $ .77 $ 2.25 $ 2.19
============ ============ ============ ============
DILUTED
Net earnings................................ $ 101,581 $ 109,534 $ 305,803 $ 312,648
Elimination of interest on convertible debt. -- 17 -- 37
------------ ------------ ------------ ------------
Net earnings applicable to common shares.... $ 101,581 $ 109,551 $ 305,803 $ 312,685
============ ============ ============ ============
Average common shares outstanding........... 134,678,290 142,556,840 135,337,293 142,464,382
Stock option adjustment..................... 453,102 857,419 464,828 913,388
Preferred stock adjustment.................. 998,590 1,097,234 1,018,844 1,130,449
Effect of other dilutive securities......... -- 58,201 -- 172,202
------------ ------------ ------------ ------------
Average common shares outstanding........... 136,129,982 144,569,694 136,820,965 144,680,421
============ ============ ============ ============
Net earnings per common share -- diluted.... $ .75 $ .76 $ 2.24 $ 2.16
============ ============ ============ ============
</TABLE>
NOTE 11. LINES OF BUSINESS REPORTING
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 2000
-----------------------------------------------------------------------
OTHER
OPERATING PARENT CONSOLIDATED
BANKING UNITS COMPANY TOTAL
------------ ----------- --------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Net interest income ............... $ 292,160 $ 14,854 $ (3,006) $ 304,008
Provision for losses on loans ..... (15,439) (4,500) -- (19,939)
Noninterest income (1) ............ 89,783 51,606 499 141,888
Noninterest expense ............... (218,189) (47,563) (1,862) (267,614)
Other significant items, net ...... (8,692) 2,693 -- (5,999)
------------ ----------- --------- ------------
Earnings before taxes (1) ......... $ 139,623 $ 17,090 $ (4,369) $ 152,344
============ =========== ========= ============
Average assets .................... $ 31,618,831 $ 2,448,596 $ 138,536 $ 34,205,963
============ =========== ========= ============
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 2000
-----------------------------------------------------------------------
OTHER
OPERATING PARENT CONSOLIDATED
BANKING UNITS COMPANY TOTAL
------------ ----------- --------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Net interest income ............... $ 896,633 $ 42,099 $ (8,622) $ 930,110
Provision for losses on loans ..... (45,786) (11,155) -- (56,941)
Noninterest income (1) ............ 251,890 151,075 153 403,118
Noninterest expense ............... (670,430) (138,764) (6,010) (815,204)
Other significant items, net ...... (3,853) 2,693 -- (1,160)
------------ ----------- --------- ------------
Earnings before taxes (1) ......... $ 428,454 $ 45,948 $ (14,479) $ 459,923
============ =========== ========= ============
Average assets .................... $ 31,181,062 $ 2,452,309 $ 142,259 $ 33,775,630
============ =========== ========= ============
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 1999
-----------------------------------------------------------------------
OTHER
OPERATING PARENT CONSOLIDATED
BANKING UNITS COMPANY TOTAL
------------ ----------- --------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Net interest income ............... $ 317,258 $ 13,263 $ (2,292) $ 328,229
Provision for losses on loans ..... (15,842) (4,523) -- (20,365)
Noninterest income (1) ............ 74,306 50,045 (1,028) 123,323
Noninterest expense ............... (220,309) (44,252) (1,178) (265,739)
Other significant items, net ...... (501) -- -- (501)
------------ ----------- --------- ------------
Earnings before taxes (1) ......... $ 154,912 $ 14,533 $ (4,498) $ 164,947
============ =========== ========= ============
Average assets..................... $ 30,377,645 $ 2,524,234 $ 217,102 $ 33,118,981
============ =========== ========= ============
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1999
-----------------------------------------------------------------------
OTHER
OPERATING PARENT CONSOLIDATED
BANKING UNITS COMPANY TOTAL
------------ ----------- --------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Net interest income ............... $ 894,252 $ 48,354 $ (7,091) $ 935,515
Provision for losses on loans ..... (46,350) (8,034) -- (54,384)
Noninterest income (1) ............ 214,471 154,545 (892) 368,124
Noninterest expense ............... (658,623) (134,082) (6,021) (798,726)
Other significant items, net ...... 8,980 11,002 1,425 21,407
------------ ----------- --------- ------------
Earnings before taxes (1) ......... $ 412,730 $ 71,785 $ (12,579) $ 471,936
============ =========== ========= ============
Average assets..................... $ 29,882,591 $ 2,711,035 $ 228,460 $ 32,822,086
============ =========== ========= ============
</TABLE>
13
<PAGE> 14
--------------------
(1) Parent company noninterest income and earnings before income taxes are
net of the intercompany dividend eliminations of $67.6 million and
$185.8 million for the three months ended September 30, 2000 and 1999,
respectively, and $228.0 million and $294.9 million, respectively, for
the nine months ended September 30, 2000 and 1999.
NOTE 12. CONTINGENT LIABILITIES
Union Planters and/or various subsidiaries are parties to certain
pending or threatened civil actions which are described in Item 3, Part I of
Union Planters' 1999 10-K, in Note 20 to Union Planters' consolidated financial
statements on page 70 of the 1999 Annual Report, and in Note 12 of the Quarterly
Reports in Form 10-Q for the quarterly periods ended March 31, 2000 and June 30,
2000. Various other legal proceedings pending against Union Planters 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 Union Planters'
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 third quarter of 2000 in any
of the pending or threatened actions that affected such opinion.
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 Union Planters' 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 Union Planters'
1999 Annual Report, the interim unaudited consolidated financial statements and
notes for the three and nine months ended September 30, 2000 included in Part I
hereof, and the supplemental financial data included in this discussion.
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING INFORMATION
This discussion contains certain forward-looking statements (as defined
in the Private Securities Litigation Reform Act of 1995). Such statements are
based on management's expectations as well as certain assumptions made by, and
information available to, management. Specifically, this discussion contains
forward-looking statements with respect to the following items:
- effects of projected changes in interest rates
- effects of changes in general economic conditions
- the adequacy of the allowance for losses on loans and the
level of future provisions for losses on loans
- the effect of legal proceedings on Union Planters' financial
condition, results of operations, and liquidity
- the effect of Internal Revenue Service examinations on Union
Planters' financial condition, results of operations, and
liquidity
- business plans for the year 2000 and beyond
When used in this discussion, the words "anticipate," "project,"
"expect," "believe," "should" and similar expressions are intended to identify
forward-looking statements.
These forward-looking statements involve significant risks and
uncertainties including changes in general economic and financial market
conditions, changes in banking laws and regulations, and Union Planters' ability
to execute its business plans. Although Union Planters believes that the
expectations reflected in the forward-looking statements are reasonable, actual
results could differ materially.
14
<PAGE> 15
SELECTED FINANCIAL DATA
The following table presents selected financial highlights for the
three- and nine-month periods ended September 30, 2000 and 1999.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- PERCENTAGE ------------------------- PERCENTAGE
2000 1999 CHANGE 2000 1999 CHANGE
--------- --------- ---------- --------- --------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
NET EARNINGS ............................... $ 101,581 $ 109,534 (7)% $ 305,803 $ 312,648 (2)%
Per share
Basic .................................. .75 .77 (3) 2.25 2.19 3
Diluted ................................ .75 .76 (1) 2.24 2.16 4
Return on average assets ................. 1.18% 1.31% 1.21% 1.27%
Return on average common equity .......... 14.67 14.43 14.60 14.01
CASH OPERATING EARNINGS .................... $ 116,476 $ 124,382 (6) $ 344,917 $ 336,459 3
Per share
Basic .................................. .86 .87 (1) 2.54 2.35 8
Diluted ................................ .86 .86 -- 2.52 2.33 8
Return on average assets ................. 1.35% 1.49% 1.36% 1.37%
Return on average common equity .......... 16.83 16.40 16.47 15.08
Return on average tangible assets ........ 1.39 1.53 1.40 1.40
Return on average tangible common equity . 26.15 23.89 25.25 19.89
Dividends per common share ................. $ .50 $ .50 $ 1.50 $ 1.50
Net interest margin (FTE) .................. 3.98% 4.49% 4.17% 4.35%
Net interest spread (FTE) .................. 3.25 3.84 3.48 3.67
Expense ratio .............................. 1.27 1.51 1.44 1.57
Efficiency ratio ........................... 55.31 54.25 56.42 56.77
Book value per common share ................ $ 20.61 $ 20.67 $ 20.61 $ 20.67
Leverage ratio ............................. 6.36% 7.03% 6.36% 7.03%
Common share prices
High closing price ....................... $ 33.81 $ 49.00 $ 37.25 $ 49.00
Low closing price ........................ 28.69 39.19 25.63 39.19
Closing price at quarter end ............. 33.06 40.75 33.06 40.75
</TABLE>
--------------------
Cash operating earnings = Net earnings adjusted for the after-tax impact of
goodwill and other intangibles amortization and nonoperating items
Net interest margin = Net interest income (FTE) as a percentage of average
earning assets
Net interest spread = Difference in the FTE 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 nonoperating revenues/expenses,
investment securities gains (losses) and goodwill and other intangibles
amortization] divided by average assets
Efficiency ratio = Operating noninterest expense (excluding significant
nonoperating expenses and goodwill and other intangibles amortization) divided
by net interest income (FTE) plus noninterest income, excluding significant
nonoperating revenues and investment securities gains (losses)
FTE = Fully taxable-equivalent basis
15
<PAGE> 16
OPERATING RESULTS -- THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
The following table presents a summary of Union Planters' operating
results for the three and nine months ended September 30, 2000 and 1999
identifying significant nonoperating items impacting the results for the periods
shown.
UNION PLANTERS CORPORATION
SUMMARY OF CONSOLIDATED RESULTS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- --------------------------
2000 1999 2000 1999
--------- --------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Interest income ....................................................... $ 649,054 $ 588,202 $ 1,876,786 $ 1,708,088
Interest expense ...................................................... (345,046) (259,973) (946,676) (772,573)
--------- --------- ----------- -----------
NET INTEREST INCOME ................................................. 304,008 328,229 930,110 935,515
PROVISION FOR LOSSES ON LOANS ......................................... (19,939) (20,365) (56,941) (54,384)
--------- --------- ----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR LOSSES ON LOANS ............. 284,069 307,864 873,169 881,131
--------- --------- ----------- -----------
NONINTEREST INCOME
Service charges on deposit accounts .................................. 47,451 44,273 134,149 125,663
Mortgage banking revenue ............................................. 28,110 23,506 75,927 75,208
Bank card income ..................................................... 9,320 7,906 27,133 18,949
Factoring commissions ................................................ 8,462 7,583 23,148 22,014
Trust service income ................................................. 6,043 4,241 19,275 17,955
Profits and commissions from trading activities ...................... 1,598 1,094 4,314 2,958
Other income ......................................................... 40,904 35,703 119,172 109,294
--------- --------- ----------- -----------
Total noninterest income ............................................ 141,888 124,306 403,118 372,041
--------- --------- ----------- -----------
NONINTEREST EXPENSE
Salaries and employee benefits ....................................... 122,319 123,369 378,617 376,470
Net occupancy expense ................................................ 23,536 23,550 70,485 65,461
Equipment expense .................................................... 20,904 20,024 63,308 59,262
Goodwill and other intangibles amortization .......................... 16,151 15,040 47,860 40,188
Other expense ........................................................ 84,704 83,756 254,934 257,345
--------- --------- ----------- -----------
Total noninterest expense ........................................... 267,614 265,739 815,204 798,726
--------- --------- ----------- -----------
EARNINGS BEFORE NONOPERATING ITEMS AND INCOME TAXES ................... 158,343 166,431 461,083 454,446
NONOPERATING ITEMS
Gain on sale of the credit card portfolio ............................ -- -- -- 3,268
Gain on securitization and sale of loans ............................. 2,764 -- 2,764 5,317
Gain on sale of loans ................................................ 2,693 -- 2,693 5,041
Gain on sale of corporate trust business ............................. -- -- -- 2,417
Reversion of excess assets of a pension plan of an acquired entity ... -- -- 4,762 --
Settlement of executive contractual obligations ...................... (11,456) -- (11,456) --
Investment securities gains (losses) ................................. -- (1,224) 77 1,968
Other, net ........................................................... -- (260) -- (521)
--------- --------- ----------- -----------
EARNINGS BEFORE INCOME TAXES ....................................... 152,344 164,947 459,923 471,936
Income taxes .......................................................... (50,763) (55,413) (154,120) (159,288)
--------- --------- ----------- -----------
NET EARNINGS ....................................................... $ 101,581 $ 109,534 $ 305,803 $ 312,648
========= ========= =========== ===========
NET EARNINGS .......................................................... $ 101,581 $ 109,534 $ 305,803 $ 312,648
Nonoperating items, net of taxes ...................................... 1,458 907 (1,035) (10,687)
--------- --------- ----------- -----------
NET OPERATING EARNINGS ................................................ 103,039 110,441 304,768 301,961
Goodwill and other intangibles amortization, net of taxes ............. 13,437 13,941 40,149 34,498
--------- --------- ----------- -----------
CASH OPERATING EARNINGS ............................................... $ 116,476 $ 124,382 $ 344,917 $ 336,459
========= ========= =========== ===========
PER COMMON SHARE DATA
Diluted earnings per share .......................................... $ .75 $ .76 $ 2.24 $ 2.16
Diluted operating earnings per share ................................ .76 .76 2.23 2.09
Diluted cash operating earnings per share ........................... .86 .86 2.52 2.33
</TABLE>
16
<PAGE> 17
The table that follows presents the contributions to diluted earnings
per common share. A discussion of the operating results follows this table.
UNION PLANTERS CORPORATION
CONTRIBUTIONS TO DILUTED EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, EPS
------------------------------- INCREASE
2000 1999 (DECREASE)
------------ ------------ ------------
<S> <C> <C> <C>
Net interest income-FTE ....................................... $ 7.00 $ 6.66 $ .34
Provision for losses on loans ................................. (.42) (.38) (.04)
------------ ------------ ------------
Net interest income after provision for losses on loans-FTE ... 6.58 6.28 .30
------------ ------------ ------------
Noninterest income
Service charges on deposit accounts ......................... .98 .87 .11
Mortgage banking revenue .................................... .55 .52 .03
Bank card income ............................................ .20 .13 .07
Factoring commissions ....................................... .17 .15 .02
Trust service income ........................................ .14 .12 .02
Profits and commissions from trading activities ............. .03 .02 .01
Investment securities gains ................................. -- .01 (.01)
Other income ................................................ .95 .88 .07
------------ ------------ ------------
TOTAL NONINTEREST INCOME ............................ 3.02 2.70 .32
------------ ------------ ------------
Noninterest expense
Salaries and employee benefits .............................. 2.85 2.60 (.25)
Net occupancy expense ....................................... .52 .45 (.07)
Equipment expense ........................................... .46 .41 (.05)
Goodwill and other intangibles amortization ................. .35 .28 (.07)
Other expense ............................................... 1.86 1.78 (.08)
------------ ------------ ------------
TOTAL NONINTEREST EXPENSE ........................... 6.04 5.52 (.52)
------------ ------------ ------------
EARNINGS BEFORE INCOME TAXES-FTE .............................. 3.56 3.46 .10
Income taxes-FTE .............................................. 1.32 1.30 (.02)
------------ ------------ ------------
NET EARNINGS .................................................. 2.24 2.16 .08
Less preferred stock dividends ................................ -- -- --
------------ ------------ ------------
DILUTED EARNINGS PER COMMON SHARE ................... $ 2.24 $ 2.16 $ .08
============ ============ ============
Change in net earnings applicable to diluted earnings
per share using previous year average shares outstanding .... $ (.05)
Change in average shares outstanding .......................... .13
------------
CHANGE IN NET EARNINGS .............................. $ .08
============
AVERAGE DILUTED SHARES (IN THOUSANDS) ......................... 136,821 144,680
============ ============
</TABLE>
--------------------
FTE = Fully taxable-equivalent basis
THIRD QUARTER EARNINGS OVERVIEW
For the third quarter of 2000, Union Planters reported cash operating
earnings, which exclude the after tax impact of nonoperating items and goodwill
and other intangibles, of $116.5 million, or $.86 per diluted common share. This
compared to cash operating earnings for the same period in 1999 of $124.4
million, or $.86 per diluted common share. Cash operating earnings for the third
quarter of 2000 resulted in annualized returns on average assets and average
common equity of 1.35% and 16.83%, respectively, which compares to 1.49% and
16.40%, respectively, for the same period in 1999.
For the nine months ended September 30, 2000, cash operating earnings
were $344.9 million, or $2.52 per common diluted share, which compares to $336.5
million, or $2.33 per diluted common share, for the same period in 1999. These
earnings represented annualized returns on average assets and average common
equity of 1.36% and 16.47%, respectively. This compared to 1.37% and 15.08%,
respectively, for the same period in 1999.
17
<PAGE> 18
Nonoperating items for the third quarter of 2000 included gains from
the sale and securitization of residential mortgage loans of $5.5 million ($3.3
million after tax) and salaries and employee benefits expense of $11.5 million
($4.8 million after tax) related to the settlement of executive contractual
obligations. For the same period in 1999, nonoperating items included investment
securities losses of $1.2 million ($.7 million after tax). Reference is made to
the "Summary of Consolidated Results" on page 16 for a comparison of the
nonoperating items impacting results for the three and nine months ended
September 30, 2000 and 1999.
Net earnings for the third quarter of 2000 were $101.6 million, or $.75
per diluted common share, which compared to $109.5 million, or $.76 per diluted
common share in 1999. These earnings represented annualized returns on average
assets and average common equity of 1.18% and 14.67%, respectively, which
compared to 1.31% and 14.43%, respectively, for the same period in 1999. For the
nine months ended September 30, 2000, net earnings were $305.8 million, or $2.24
per diluted common share. For the same period in 1999, net earnings were $312.6
million, or $2.16 per diluted common share.
EARNINGS ANALYSIS
NET INTEREST INCOME
Net interest income (FTE) for the third quarter of 2000 was $312.7
million, a decline of $25.1 million from $337.8 million for the same period in
1999 and compared to $320.4 million for the second quarter of 2000. The Company
experienced strong loan growth during the quarter; however, the impact of higher
funding costs compressed the net interest margin resulting in the decline. For
the nine months ended September 30, 2000, net interest income (FTE) was $957.0
million, a decline from $964.2 million for the same period in 1999. Reference is
made to Union Planters' average balance sheet and analysis of volume and rate
changes, which follow this discussion for additional information regarding the
changes in net interest income.
The net interest margin for the third quarter of 2000 was 3.98%, which
compares to 4.49% and 4.19%, respectively, for the third quarter of 1999 and
second quarter of 2000. The interest-rate spread was 3.25% for the third quarter
of 2000, down from 3.84% and 3.50%, respectively, for the third quarter of 1999
and second quarter of 2000.
INTEREST INCOME
The following table presents a breakdown of average earning assets for
the three and nine months ended September 30, 2000 and 1999.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------- -------------------
2000 1999 2000 1999
------ ------ ------ ------
(DOLLARS IN BILLIONS)
<S> <C> <C> <C> <C>
Average earning assets ...................................... $ 31.2 $ 29.9 $ 30.7 $ 29.6
Comprised of:
Loans ................................................... 76% 72% 75% 71%
Investment securities ................................... 23 27 24 28
Other earning assets .................................... 1 1 1 1
-------------
Fully taxable-equivalent yield on average earning assets ... 8.38% 7.94% 8.29% 7.84%
</TABLE>
Interest income (FTE) increased $60.0 million for the third quarter of
2000 compared to the same period in 1999. The increase is attributable primarily
to the growth of average earning assets and to an increase in the yield on
average earning assets.
Average earning assets for the third quarter of 2000 increased $1.37
billion compared to the same period in 1999, which accounted for $34.4 million
of the increase in interest income. This growth is due primarily to average
loans, excluding FHA/VA loans, which increased 14%. This growth related
primarily to residential real estate loans. The growth is net of a decrease of
approximately $294 million related to the sale and securitization of residential
mortgage loans and the sale of asset-based loans of a subsidiary during the
quarter. The
18
<PAGE> 19
loan growth was partially offset by a decline in other earning assets,
primarily investment securities, as proceeds from maturing assets were used to
fund the loan growth.
The average yield on earning assets increased from 7.94% for the third
quarter of 1999 to 8.38% for the same period in 2000, which accounted for $25.6
million of the increase in interest income. The higher yield is attributable
primarily to the rising interest-rate environment over this period.
Interest income increased $22.0 million compared to the second quarter
of 2000. The increase was attributable to an increase in average earning assets,
which accounted for $18.2 million of the increase. An increase in the average
yield on earning assets accounted for the remaining $3.8 million of the
increase.
For the nine months ended September 30, 2000, interest income increased
$166.9 million compared to the same period in 1999. The increase is attributable
primarily to the growth of average earning assets, primarily loans, which
accounted for $86.0 million of the increase. The remaining amount of the
increase, $80.9 million, is attributable to an increase in the average yield on
earning assets. The yield on earning assets was 7.84% for the first nine months
of 1999, which increased to 8.29% for the same period in 2000.
INTEREST EXPENSE
The following table presents a breakdown of average interest-bearing
liabilities for the three and nine months ended September 30, 2000 and 1999.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------- -------------------
2000 1999 2000 1999
------ ------ ------ ------
(DOLLARS IN BILLIONS)
<S> <C> <C> <C> <C>
Average interest-bearing liabilities ........................ $ 26.8 $ 25.1 $ 26.3 $ 24.8
Comprised of:
Deposits ................................................ 72% 83% 73% 85%
Short-term borrowings ................................... 22 13 22 10
FHLB advances and long-term debt ........................ 6 4 5 5
---------------
Rate paid on average interest-bearing liabilities ........... 5.13% 4.10% 4.81% 4.17%
</TABLE>
Interest expense increased $85.1 million in the third quarter of 2000
compared to the same period in 1999. The increase was attributable primarily to
an increase in the average rate paid for interest-bearing liabilities, which
accounted for $50.6 million of the increase. For the third quarter of 2000, the
average rate paid on average interest-bearing liabilities was 5.13%, an increase
of 103 basis points over 4.10% for the same period in 1999. Interest expense
increased $34.5 million in the third quarter of 2000 due to the growth of
average interest-bearing liabilities. This growth was attributable to an
increase in short-term borrowings (primarily short-term FHLB advances), which
was partially offset by a decline in average interest-bearing deposits of $1.4
billion.
Compared to the second quarter of 2000, interest expense increased
$29.7 million. This increase was attributable primarily to an increase in the
rate paid on interest-bearing liabilities, which accounted for $19.4 million of
the increase. Also contributing to the increase was a $389 million increase in
average interest-bearing liabilities.
PROVISION FOR LOSSES ON LOANS
The provision for losses on loans for the third quarter of 2000 was
$19.9 million, or .34% of average loans on an annualized basis. This compares to
$20.4 million, or .39% of average loans, for the same period in 1999 and $19.7
million, or .35% of average loans, for the second quarter of 2000. Reference is
made to the "Allowance for Losses on Loans" discussion for additional
information regarding loan charge-offs and other items impacting the provision
for losses on loans.
19
<PAGE> 20
NONINTEREST INCOME
Noninterest income for the third quarter of 2000 was $147.3 million, an
increase of $24.2 million from $123.1 million in the same period last year and
an increase of $8.8 million from the second quarter of 2000. For the nine months
ended September 30, 2000, noninterest income was $413.4 million, an increase of
$23.4 million compared to the same period in 1999.
Noninterest income for the third quarter of 2000 included net gains
aggregating $5.5 million from the securitization and sale of residential
mortgage loans and the sale of asset-based loans of a subsidiary. The third
quarter of 1999 included investment securities losses of $1.2 million. For the
first nine months of 2000, noninterest income included aggregated gains of $10.3
million related to the reversion of excess assets of a pension plan of an
acquired entity, the securitization and sale of residential mortgage loans, and
the sale of asset-based loans. The same period in 1999 included aggregate net
gains of $18.1 million from the securitization and sale of mortgage loans, the
sale of ARM loans, investment securities gains, a gain from the sale of Union
Planters' corporate trust business, and the sale of the remaining portion Union
Planters' credit card portfolio.
Excluding these nonoperating items, noninterest income for the third
quarter of 2000 increased $17.6 million compared to the same period in 1999. For
the nine months ended September 30, 2000, noninterest income increased $31.1
million. Reference is made to the "Summary of Consolidated Results" on page 16
for a detail of the nonoperating items. The major components of noninterest
income are presented on the consolidated statement of earnings and in Note 6 to
the unaudited interim consolidated financial statements included in Item 1, Part
I of this report.
The increase in operating noninterest income for the third quarter of 2000
compared to the same period in 1999 is attributable primarily to the following
items:
- $6.0 million increase in net revenues from Strategic
Outsourcing, Inc. (SOI), a subsidiary acquired in April 2000
that provides professional employment administrative services.
- $4.6 million increase in mortgage banking revenues related to
expansion of the mortgage operations through acquisition and
to the sale of servicing in the third quarter.
- $3.2 million increase in service charges on deposit accounts.
- $1.8 million increase in trust service income.
- $1.4 million increase in bank card income (merchant
processing).
- $1.8 million decrease in annuity sales income due primarily to
the uncertain interest rate environment.
- $2.4 million net increase in all other noninterest income
categories.
The increase in noninterest income for the third quarter of 2000 compared
to the second quarter of 2000 is attributable to the following:
- $4.5 million increase in net revenues from SOI.
- $3.2 million increase in mortgage banking revenues resulting
primarily from the sale of servicing.
- $2.8 million increase in service charges on deposit accounts.
- $1.2 million decrease in annuity sales income.
- $1.1 million net decrease in all other noninterest income.
The increase in noninterest income for the nine months ended September 30,
2000 compared to the same period in 1999 is attributable to the following.
- $8.5 million increase in service charges on deposit accounts.
- $8.2 million increase in bank card income (merchant
processing) due primarily to growth through acquisitions.
- $7.4 million increase in net revenues from SOI, which was
acquired in April 2000.
- $3.3 million increase in ATM transaction fees, which relate to
noncustomer usage of Union Planters' 1,056 ATMs.
- $3.7 million decrease in annuity sales income due primarily to
the uncertain interest rate environment.
- $7.4 million net increase in all other noninterest income.
20
<PAGE> 21
NONINTEREST EXPENSE
Noninterest expense for the third quarter of 2000 increased $13.1 million
to $279.1 million, which compares to $266.0 million for the third quarter of
1999 and $275.9 million for the second quarter of 2000. For the first nine
months of 2000, noninterest expense was $826.7 million compared to $799.2
million for the same period in 1999.
Noninterest expense for the three and nine months ended September 30, 2000
included salaries and employee benefits expense totaling $11.5 million related
to the settlement of executive contractual retirement obligations and death
benefits. Excluding this nonoperating item, noninterest expense increased $1.9
million and $16.5 million for the three and nine months ending September 30,
2000. Compared to the second quarter of 2000, operating noninterest expense
decreased $8.3 million. The major components of noninterest income are presented
on the consolidated statement of earnings and in Note 6 to the unaudited interim
consolidated financial statements included in Item 1, Part I of this report.
For the third quarter of 2000 compared to the same period in 1999 there
were no significant variances in any of the individual line items. The
acquisition of SOI in April increased noninterest expenses $4.0 million, with
salaries and employee benefits expense accounting for $2.4 million of the
increase. Excluding the impact of the SOI acquisition, noninterest expenses
decreased $2.1 million, with a $3.5 million decrease in salaries and employee
benefits expense being the largest variance.
The decrease in noninterest expense, excluding the nonoperating item, for
the third quarter of 2000 compared to the second quarter of 2000 relates
primarily to the following items.
- $5.2 million decrease in salaries and employee benefits. The
decrease is net of a $1.6 million increase related to SOI.
- $2.4 million decrease in advertising and promotion expenses.
- $ .7 million net decrease in all other noninterest expenses.
The increase in noninterest expenses, excluding the nonoperating item, for
the nine months ended September 30, 2000 compared to the same period in 1999
relates primarily to the following.
- $9.1 million increase in occupancy and equipment expense
related primarily to purchase acquisitions.
- $7.7 million increase in goodwill and other intangibles
amortization.
- $6.4 million increase in merchant interchange fees, which are
directly related to the increase in bank card income (merchant
processing).
- $3.1 million increase in communications expense.
- $2.1 million increase in salaries and employee benefits
expense.
- $4.3 million decrease in stationery and supplies expense.
- $3.2 million decrease in other personnel expenses (contracted
clerical labor, training, relocation expenses, etc.)
- $2.1 million decrease in miscellaneous charge-offs related
primarily to recoveries of previously charged-off items.
- $2.3 million net decrease in all other noninterest expenses.
The largest component of noninterest expense, salaries and employee
benefits, was $122.3 million for the third quarter of 2000 (excluding the impact
of the $11.5 million nonoperating settlement of executive contractual
obligations). This compares to $123.4 million for the same quarter last year and
to $127.6 million for the second quarter of 2000. Full-time-equivalent employees
at September 30, 2000 were 12,767 compared to 13,249 at September 30, 1999 and
12,639 at June 30, 2000.
21
<PAGE> 22
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED DAILY AVERAGE BALANCE SHEET AND INTEREST RATES
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
-------------------------------------------------------------------------------
2000 1999
--------------------------------------- ------------------------------------
INTEREST FTE INTEREST FTE
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.................................. $ 33,090 $ 825 9.92% $ 85,019 $ 879 4.10%
Federal funds sold and securities purchased
under agreements to resell.................... 93,592 1,511 6.42 94,312 1,104 4.64
Trading account assets.......................... 214,725 4,266 7.90 231,917 3,834 6.56
Investment securities(1)(2)
Taxable....................................... 5,868,233 94,746 6.42 6,666,613 105,720 6.29
Tax-exempt.................................... 1,223,732 23,339 7.59 1,321,480 25,691 7.71
----------- ------------ ----------- ------------
Total investment securities............. 7,091,965 118,085 6.62 7,988,093 131,411 6.53
Loans, net of unearned income(1)(3)(4).......... 23,799,262 533,087 8.91 21,467,801 460,577 8.51
----------- ------------ ----------- ------------
TOTAL EARNING ASSETS(1)(2)(3)(4) 31,232,634 657,774 8.38 29,867,142 597,805 7.94
------------ ------------
Cash and due from banks......................... 867,145 965,325
Premises and equipment.......................... 618,552 624,552
Allowance for losses on loans................... (347,638) (361,829)
Goodwill and other intangibles.................. 977,477 940,256
Other assets.................................... 857,793 1,083,535
----------- -----------
TOTAL ASSETS............................ $34,205,963 $33,118,981
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Money market accounts........................... $ 3,795,223 $ 42,411 4.45% $ 3,860,633 $ 36,441 3.74%
Interest-bearing checking....................... 3,143,839 11,880 1.50 3,528,658 13,076 1.47
Savings deposits................................ 1,431,130 5,165 1.44 1,731,701 6,345 1.45
Certificates of deposit of $100,000 and over 2,641,260 41,108 6.19 2,251,806 28,781 5.07
Other time deposits............................. 8,358,869 120,955 5.76 9,434,587 115,567 4.86
Short-term borrowings
Federal funds purchased and securities sold
under agreements to repurchase.............. 3,032,833 47,501 6.23 2,040,452 24,261 4.72
Short-term senior notes....................... 463,043 8,197 7.04 -- --
Short-term FHLB advances...................... 2,396,097 41,162 6.83 1,126,624 15,054 5.30
Long-term debt
Federal Home Loan Bank advances............... 601,365 10,149 6.71 204,522 2,682 5.20
Subordinated capital notes.................... 474,963 7,751 6.49 477,066 7,783 6.47
Medium-term senior notes...................... 60,000 1,025 6.80 91,304 1,537 6.68
Trust Preferred Securities.................... 199,067 4,128 8.25 199,031 4,128 8.23
Other......................................... 152,875 3,614 9.40 197,842 4,318 8.66
----------- ------------ ----------- ------------
TOTAL INTEREST-BEARING LIABILITIES........... 26,750,564 345,046 5.13 25,144,226 259,973 4.10
Noninterest-bearing demand deposits............. 3,996,811 4,262,360
----------- ------------ -----------
TOTAL SOURCES OF FUNDS....................... 30,747,375 345,046 29,406,586 259,973
------------ ------------
Other liabilities............................... 694,978 691,412
Shareholders' equity
Preferred stock............................... 19,972 21,945
Common equity................................. 2,743,638 2,999,038
----------- -----------
Total shareholders' equity.................. 2,763,610 3,020,983
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $34,205,963 $33,118,981
=========== ===========
NET INTEREST INCOME(1)............................ $ 312,728 $ 337,832
============ ============
INTEREST-RATE SPREAD(1)........................... 3.25% 3.84%
====== ======
NET INTEREST MARGIN(1)............................ 3.98% 4.49%
====== ======
TAXABLE-EQUIVALENT ADJUSTMENTS:
Loans......................................... $ 1,407 $ 1,393
Securities.................................... 7,313 8,210
----------- ------------
TOTAL................................... $ 8,720 $ 9,603
============ ============
</TABLE>
---------------
(1) Taxable-equivalent yields are calculated assuming a 35% federal income
tax rate.
(2) Yields are calculated on historical cost and exclude the impact of the
unrealized gain (loss) on available for sale securities.
(3) Includes loan fees in both interest income and the calculation of the
yield on income.
(4) Includes loans on nonaccrual status.
22
<PAGE> 23
UNION PLANTERS CORPORATION AND SUBSIDIARIES
ANALYSIS OF VOLUME AND RATE CHANGES
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
2000 VERSUS 1999
----------------------------------------------
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 ............ $ (765) $ 711 $ (54)
Federal funds sold and securities purchased under agreements
to resell...................................................... (8) 415 407
Trading account assets ......................................... (302) 734 432
Investment securities (FTE) .................................... (15,212) 1,886 (13,326)
Loans, net of unearned income (FTE) ............................ 50,637 21,873 72,510
-------- -------- --------
TOTAL INTEREST INCOME .................................. 34,350 25,619 59,969
======== ======== ========
INTEREST EXPENSE
Money market accounts .......................................... (634) 6,604 5,970
Interest-bearing checking ...................................... (1,479) 283 (1,196)
Savings deposits ............................................... (1,102) (78) (1,180)
Certificates of deposit of $100,000 and over ................... 5,411 6,916 12,327
Other time deposits ............................................ (14,188) 19,576 5,388
Short-term borrowings .......................................... 41,664 15,881 57,545
Long-term debt ................................................. 4,820 1,399 6,219
-------- -------- --------
TOTAL INTEREST EXPENSE ................................. 34,492 50,581 85,073
-------- -------- --------
CHANGE IN NET INTEREST INCOME (FTE) .............................. $ (142) $(24,962) $(25,104)
======== ======== ========
PERCENTAGE DECREASE IN NET INTEREST INCOME (FTE) FROM PRIOR PERIOD (7.43)%
========
</TABLE>
---------------
FTE = Fully taxable-equivalent basis
(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.
23
<PAGE> 24
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED DAILY AVERAGE BALANCE SHEET AND INTEREST RATES
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
---------------------------------------------------------------------------------
2000 1999
---------------------------------------- -------------------------------------
INTEREST FTE INTEREST FTE
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................................. $ 31,793 $ 1,632 6.86% $ 78,904 $ 2,316 3.92%
Federal funds sold and securities purchased
under agreements to resell................... 87,129 4,118 6.31 82,131 2,936 4.78
Trading account assets......................... 221,686 12,682 7.64 242,300 11,363 6.27
Investment securities (1)(2)
Taxable...................................... 6,126,819 294,928 6.43 6,941,227 319,818 6.16
Tax-exempt................................... 1,248,624 71,925 7.69 1,321,441 77,428 7.83
----------- ----------- ----------- -----------
TOTAL INVESTMENT SECURITIES............ 7,375,443 366,853 6.64 8,262,668 397,246 6.43
Loans, net of unearned income(1)(3)(4)......... 22,965,988 1,518,378 8.83 20,949,727 1,322,882 8.44
----------- ----------- ----------- -----------
TOTAL EARNING ASSETS(1)(2)(3)(4) 30,682,039 1,903,663 8.29 29,615,730 1,736,743 7.84
----------- -----------
Cash and due from banks........................ 917,522 1,018,114
Premises and equipment......................... 628,066 591,106
Allowance for losses on loans.................. (347,965) (351,376)
Goodwill and other intangibles................. 968,688 718,163
Other assets................................... 927,280 1,230,349
----------- -----------
TOTAL ASSETS........................... $33,775,630 $32,822,086
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Money market accounts.......................... $ 3,845,602 $ 121,513 4.22% $ 3,471,667 $ 102,225 3.94%
Interest-bearing checking...................... 3,285,154 36,984 1.50 3,753,264 41,722 1.49
Savings deposits............................... 1,500,833 16,202 1.44 1,726,628 20,707 1.60
Certificates of deposit of $100,000 and over 2,284,113 98,971 5.79 2,342,882 92,277 5.27
Other time deposits............................ 8,343,814 338,411 5.42 9,712,950 362,579 4.99
Short-term borrowings
Federal funds purchased and securities sold
under agreements to repurchase............. 2,679,909 117,332 5.85 1,951,404 66,002 4.52
Short-term senior notes...................... 315,328 16,213 6.87
Short-term FHLB advances..................... 2,805,758 134,392 6.40 474,220 18,655 5.26
Long-term debt
Federal Home Loan Bank advances.............. 347,660 17,025 6.54 335,014 12,633 5.04
Subordinated capital notes................... 475,197 23,264 6.54 479,200 23,337 6.51
Medium-term senior notes..................... 60,000 3,074 6.84 100,385 5,060 6.74
Trust Preferred Securities................... 199,058 12,383 8.31 199,022 12,383 8.32
Other........................................ 156,973 10,912 9.29 253,021 14,993 7.92
----------- ----------- ----------- -----------
TOTAL INTEREST-BEARING LIABILITIES.......... 26,299,399 946,676 4.81 24,799,657 772,573 4.17
Noninterest-bearing demand deposits............ 4,027,572 4,347,165
----------- ----------- -----------
TOTAL SOURCES OF FUNDS...................... 30,326,971 946,676 29,146,822 772,573
----------- -----------
Other liabilities.............................. 641,031 682,362
Shareholders' equity
Preferred stock.............................. 20,377 22,609
Common equity................................ 2,787,251 2,970,293
----------- -----------
Total shareholders' equity................. 2,807,628 2,992,902
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $33,775,630 $32,822,086
=========== ===========
NET INTEREST INCOME(1)........................... $ 956,987 $ 964,170
=========== ===========
INTEREST-RATE SPREAD(1).......................... 3.48% 3.67%
====== ======
NET INTEREST MARGIN(1)........................... 4.17% 4.35%
====== ======
TAXABLE-EQUIVALENT ADJUSTMENTS:
Loans........................................ $ 4,084 $ 3,801
Securities................................... 22,793 24,854
----------- -----------
TOTAL.................................. $ 26,877 $ 28,655
=========== ===========
</TABLE>
---------------
(1) Taxable-equivalent yields are calculated assuming a 35% federal income
tax rate.
(2) Yields are calculated on historical cost and exclude the impact of the
unrealized gain (loss) on available for sale securities.
(3) Includes loan fees in both interest income and the calculation of the
yield on income.
(4) Includes loans on nonaccrual status.
24
<PAGE> 25
UNION PLANTERS CORPORATION AND SUBSIDIARIES
ANALYSIS OF VOLUME AND RATE CHANGES
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
2000 VERSUS 1999
----------------------------------------------
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 ............ $ (1,843) $ 1,159 $ (684)
Federal funds sold and securities purchased under agreements to
resell........................................................ 188 994 1,182
Trading account assets ......................................... (1,024) 2,343 1,319
Investment securities (FTE) .................................... (43,509) 13,116 (30,393)
Loans, net of unearned income (FTE) ............................ 132,228 63,268 195,496
-------- -------- --------
TOTAL INTEREST INCOME .................................. 86,040 80,880 166,920
======== ======== ========
INTEREST EXPENSE
Money market accounts .......................................... 11,553 7,735 19,288
Interest-bearing checking ...................................... (5,229) 491 (4,738)
Savings deposits ............................................... (2,545) (1,960) (4,505)
Certificates of deposit of $100,000 and over ................... (2,346) 9,040 6,694
Other time deposits ............................................ (53,670) 29,502 (24,168)
Short-term borrowings .......................................... 148,824 34,456 183,280
Long-term debt ................................................. (8,160) 6,412 (1,748)
-------- -------- --------
TOTAL INTEREST EXPENSE ................................. 88,427 85,676 174,103
-------- -------- --------
CHANGE IN NET INTEREST INCOME (FTE) .............................. $ (2,387) $ (4,796) $ (7,183)
======== ======== ========
PERCENTAGE DECREASE IN NET INTEREST INCOME (FTE) FROM PRIOR PERIOD (.74)%
========
</TABLE>
---------------
FTE = Fully taxable-equivalent basis
(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.
FINANCIAL CONDITION
Union Planters' total assets were $34.3 billion at September 30, 2000
compared to $33.2 billion at September 30, 1999 and $33.3 billion at December
31, 1999. Average assets were $34.2 billion for the third quarter of 2000
compared to $33.1 billion for the third quarter of 1999.
Earning assets at September 30, 2000 were $31.1 billion, an increase of
$1.3 billion from year-end. Average earning assets were $31.2 billion for the
third quarter of 2000 which compares to $29.9 billion for the same period last
year and compared to $30.8 billion for the second quarter of 2000.
INVESTMENT SECURITIES
Union Planters' investment securities portfolio of $6.9 billion at
September 30, 2000 consisted entirely of available for sale securities, which
are carried on the balance sheet at fair value. This compares to investment
securities of $7.9 billion and $7.5 billion at September 30, 1999 and December
31, 1999, respectively.
At September 30, 2000, these securities had net unrealized losses of
$142.5 million (before income taxes). This compares to net unrealized losses of
$237.5 million and $212.6, respectively, at June 30, 2000 and December 31, 1999.
The investment portfolio had a net unrealized loss of $121.3 million at
September 30, 1999. The unrealized loss in the investment portfolio resulted
from the increasing interest-rate environment during the latter part of 1999 and
first half of 2000. Management expects that maturities of securities and other
funding sources should provide sufficient funds to meet Union Planters'
liquidity needs, so that the Company will not be forced to sell investments at a
loss prior to maturity. As a result, management expects that any losses
recognized will result from strategic or
25
<PAGE> 26
discretionary decisions to restructure the portfolio. The investment portfolio
has decreased as funds received from the maturities and calls of securities were
used to meet other funding needs. Reference is made to Note 5 to the unaudited
interim consolidated financial statements which provides the composition of the
investment portfolio at September 30, 2000 and December 31, 1999.
U.S. Treasury and U.S. Government agency obligations represented
approximately 54% of the investment securities portfolio at September 30, 2000,
74% of which were Collateralized Mortgage Obligations (CMOs) and mortgage-backed
securities issues. Union Planters has some credit risk in the investment
portfolio; however, management does not consider that risk to be significant and
does not believe that cash flows will be significantly impacted. Reference is
made to the "Net Interest Income" and "Asset/Liability and Market Risk
Management" discussions for information regarding the market-risk in the
investment securities portfolio.
The limited credit risk in the investment securities portfolio at
September 30, 2000 consisted of 24% investment grade CMOs, 18% municipal
obligations, and 4% other stocks and securities (primarily Federal Reserve Bank
and FHLB stock).
LOANS
Loans, net of unearned income, at September 30, 2000 were $23.4 billion
compared to $21.4 billion and $23.3 billion at September 30, 1999 and June 30,
2000, respectively. Average loans for the third quarter of 2000 were $23.8
billion compared to $21.5 billion for the third quarter of 1999 and $23.3
billion for the second quarter of 2000. Note 3 to the unaudited interim
consolidated financial statements included in Part I. Item 1 of this report
presents the composition of the loan portfolio.
The Company experienced strong loan growth during the quarter driven
primarily by a 14% increase in residential real estate loans. During the quarter
the Company securitized and sold approximately $707 million ($414 million
average for the quarter) of residential mortgage loans and sold approximately
$57 million ($56 million average for the quarter) of asset-based loans.
ALLOWANCE FOR LOSSES ON LOANS
Union Planters maintains the allowance for losses on loans (the allowance)
at a level deemed adequate to absorb estimated losses incurred in the loan
portfolio. The allowance is reviewed quarterly to assess the risk in the
portfolio. This methodology includes assigning loss factors, based on historical
experience as adjusted for current business and economic conditions, to loans
with similar characteristics for which estimates of incurred probable loss can
be assessed. The loss factors are applied to the respective portfolios to assist
in the determination of the overall adequacy of the allowance.
A periodic review of selected credits (based on loan size) is conducted to
identify loans with heightened risk or incurred losses. The primary
responsibility for this review rests with management assigned accountability for
the credit relationship. This review is supplemented with periodic reviews by
Union Planters' credit review function and regulatory agencies. These reviews
provide information which assists in the timely identification of problems or
potential problems and in deciding whether the credit represents a probable loss
or risk which should be recognized.
26
<PAGE> 27
The following table provides a reconciliation of the allowance at the
dates indicated and certain key ratios for the nine-month periods ended
September 30, 2000 and 1999 and for the year ended December 31, 1999.
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
-------------------------------- ------------
2000 1999 1999
------------ ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
BALANCE AT THE BEGINNING OF PERIOD ............................ $ 342,300 $ 321,476 $ 321,476
LOANS CHARGED OFF
Commercial, financial, and agricultural ..................... 31,669 36,236 42,657
Foreign ..................................................... 118 207 459
Accounts receivable - factoring ............................. 11,604 5,009 24,992
Real estate - construction .................................. 2,854 2,413 3,330
Real estate - mortgage
Secured by 1-4 family residential ........................ 8,174 7,647 11,024
Other mortgage ........................................... 2,121 12,657 15,818
Home equity ................................................. 1,225 977 1,234
Consumer .................................................... 38,397 34,868 49,247
Direct lease financing ...................................... -- 390 396
------------ ------------ ------------
Total charge-offs ................................... 96,162 100,404 149,157
------------ ------------ ------------
RECOVERIES ON LOANS PREVIOUSLY CHARGED OFF
Commercial, financial, and agricultural ..................... 11,379 16,782 21,404
Foreign ..................................................... 177 75 77
Accounts receivable - factoring ............................. 1,500 960 1,862
Real estate - construction .................................. 626 388 670
Real estate - mortgage
Secured by 1-4 family residential ......................... 1,383 1,763 2,151
Other mortgage ............................................ 5,589 4,204 5,333
Home equity ................................................. 499 105 155
Consumer .................................................... 18,096 15,817 21,083
Direct lease financing ...................................... -- 96 126
------------ ------------ ------------
Total recoveries .................................... 39,249 40,190 52,861
------------ ------------ ------------
Net charge-offs ............................................... (56,913) (60,214) (96,296)
Provision charged to expense .................................. 56,941 54,384 74,045
Decrease due to loan sales .................................... (1,875) -- --
Increase due to acquisitions .................................. -- 43,075 43,075
------------ ------------ ------------
BALANCE AT END OF PERIOD ............................ $ 340,453 $ 358,721 $ 342,300
============ ============ ============
Total loans, net of unearned income, at end of period ......... $ 23,449,430 $ 21,365,914 $ 21,446,400
Less: FHA/VA government insured/guaranteed loans .............. 306,421 538,398 519,213
------------ ------------ ------------
LOANS USED TO CALCULATE RATIOS ...................... $ 23,143,009 $ 20,827,516 $ 20,927,187
============ ============ ============
Average total loans, net of unearned income, during period .... $ 22,965,988 $ 20,949,727 $ 21,141,576
Less: Average FHA/VA government-insured/guaranteed loans ...... 446,375 621,243 597,944
------------ ------------ ------------
AVERAGE LOANS USED TO CALCULATE RATIOS .............. $ 22,519,613 $ 20,328,484 $ 20,543,632
============ ============ ============
RATIOS (1):
Allowance at end of period/loans, net of unearned income .... 1.47% 1.72% 1.64%
Charge-offs/average loans, net of unearned income (2) ....... .57 .66 .73
Recoveries/average loans, net of unearned income (2) ........ .23 .26 .26
Net charge-offs/average loans, net of unearned income (2) ... .34 .40 .47
Provision/average loans, net of unearned income (2) ......... .34 .36 .36
</TABLE>
---------------
(1) Ratio calculations exclude FHA/VA government-insured/guaranteed loans
(FHA/VA loans), since they represent minimal credit risk.
(2) Amounts annualized for September 30, 2000 and 1999.
The allowance at September 30, 2000 was $340.5 million, a decrease of $1.8
million from December 31, 1999, and compared to $358.7 million at September 30,
1999. The decrease from December 31, 1999 relates to a reduction in the
allowance due to the securitization and sales of loans during the year. Net
charge-offs for the third quarter of 2000 were .40% of average loans compared to
.45% and .35%, respectively, for the third quarter 1999 and second quarter of
2000.
27
<PAGE> 28
NONPERFORMING ASSETS
NONACCRUAL, RESTRUCTURED, AND PAST DUE LOANS AND FORECLOSED PROPERTIES
<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------------- JUNE 30,
2000 1999 2000
-------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
NONACCRUAL LOANS ........................................................ $133,434 $147,273 $127,685
RESTRUCTURED LOANS ...................................................... 1,524 2,147 1,680
-------- -------- --------
TOTAL NONPERFORMING LOANS ..................................... 134,958 149,420 129,365
-------- -------- --------
FORECLOSED PROPERTIES
Other real estate owned, net .......................................... 40,149 31,756 38,868
Other foreclosed property ............................................. 1,425 1,429 1,213
-------- -------- --------
TOTAL FORECLOSED PROPERTIES ................................... 41,574 33,185 40,081
-------- -------- --------
TOTAL NONPERFORMING ASSETS .................................... $176,532 $182,605 $169,446
======== ======== ========
LOANS PAST DUE 90 DAYS OR MORE AND STILL ACCRUING INTEREST .............. $ 91,511 $ 80,205 $ 78,843
======== ======== ========
FHA/VA GOVERNMENT-INSURED/GUARANTEED LOANS
Loans past due 90 days or more and still accruing interest ............ $145,365 $261,681 $166,231
Nonaccrual loans ...................................................... 4,212 7,750 4,408
RATIOS (1):
Nonperforming loans/loans, net of unearned income ..................... .58% .72% .57%
Nonperforming assets/loans, net of unearned income plus foreclosed
properties........................................................... .76 .88 .74
Allowance for losses on loans/nonperforming loans ..................... 252 240 267
Loans past due 90 days or more and still accruing interest/loans,
net of unearned income............................................... .40 .39 .34
</TABLE>
---------------
(1) FHA/VA government-insured/guaranteed loans are excluded from loans in
the ratio calculations.
The breakdown of nonaccrual loans and loans past due 90 days or more and
still accruing interest, both excluding FHA/VA loans, is as follows:
<TABLE>
<CAPTION>
NONACCRUAL LOANS (1) LOANS PAST DUE 90 DAYS OR MORE (1)
----------------------------------------- -----------------------------------------
SEPTEMBER 30, SEPTEMBER 30,
-------------------------- JUNE 30, --------------------------- JUNE 30,
2000 1999 2000 2000 1999 2000
------------ ------------ ------------- ------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
LOAN TYPE
Commercial, financial, and agricultural.. $ 60,772 $ 60,576 $ 53,367 $ 13,530 $ 12,318 $ 9,522
Foreign.................................. -- 912 85 49 -- --
Real estate - construction............... 14,963 13,921 17,722 2,460 4,945 1,485
Real estate - mortgage
Secured by 1-4 family residential..... 24,912 20,890 22,275 61,518 52,769 53,049
Other mortgage........................ 29,678 42,919 30,347 7,226 3,951 9,689
Home equity.............................. 1,267 3,871 1,398 997 756 617
Consumer................................. 1,826 4,169 2,476 5,148 5,250 4,044
Direct lease financing................... 16 15 15 583 216 437
--------- --------- --------- --------- --------- ---------
TOTAL............................ $ 133,434 $ 147,273 $ 127,685 $ 91,511 $ 80,205 $ 78,843
========= ========= ========= ========= ========= =========
</TABLE>
--------------------
(1) See the preceding table for the amount of FHA/VA government-insured
guaranteed/loans on nonaccrual and past due 90 days or more and still
accruing interest.
LOANS OTHER THAN FHA/VA LOANS. As a percentage of loans and foreclosed
properties, nonperforming assets were .76% at September 30, 2000 compared to
.88% at September 30, 1999 and .74% at June 30, 2000. The coverage of
nonperforming loans (allowance for losses on loans as a percentage of
nonperforming loans) was 252% at September 30, 2000, which compares to 240% at
September 30, 1999 and 267% at June 30, 2000.
28
<PAGE> 29
Loans past due 90 days or more and still accruing interest totaled $91.5
million, or .40% of loans, at September 30, 2000 compared to $80.2 million, or
.39%, and $78.8 million, or .34% of loans, at September 30, 1999 and June 30,
2000, respectively. The preceding table details the composition of these loans.
FHA/VA LOANS. FHA/VA government-insured/guaranteed loans do not, in
management's opinion, have traditional credit risk inherent in the balance of
the loan portfolio and risk of principal loss is considered minimal. FHA/VA
loans past due 90 days or more and still accruing interest totaled $145.4
million at September 30, 2000 which compares to $261.7 million and $166.2
million at September 30, 1999 and June 30, 2000, respectively. The decrease in
past due loans relates to a decline in the overall volume of these loans. At
September 30, 2000, September 30, 1999, and June 30, 2000, $4.2 million, $7.8
million and $4.4 million, respectively, of these loans were placed on nonaccrual
status by management because the contractual payment of interest by FHA/VA had
stopped due to missed filing dates. No loss of principal is expected from these
loans.
FHA/VA FORECLOSURE CLAIMS
Provisions for losses related to FHA/VA claims are provided through
noninterest expense as provisions for losses on FHA/VA foreclosure claims and
the corresponding liability is carried in other liabilities. Provisions for
losses on FHA/VA foreclosure claims totaled $1.2 million and $633,000 for the
third quarters of 2000 and 1999, respectively. At September 30, 2000, the
Company had a reserve for FHA/VA claims losses of $14.2 million compared to
$15.3 million and $28.0 million at June 30, 2000 and December 31, 1999,
respectively.
POTENTIAL PROBLEM ASSETS
Potential problem assets are assets which are generally collateralized and
not currently considered nonperforming, but where information about possible
credit problems has caused management to have serious doubts as to the ability
of the borrowers to comply in the future with present repayment terms.
Historically, these assets were loans, which became nonperforming. At September
30, 2000, Union Planters had potential problem assets of $48.5 million, composed
of 10 loans, the largest being $23.3 million. This compares to $45.4 million, or
10 loans, at June 30, 2000 and $41.4 million, or 13 loans, at September 30,
1999.
DEPOSITS
Union Planters' core deposit base is its most important and stable funding
source and consists of deposits from the communities served by Union Planters.
<TABLE>
<CAPTION>
AVERAGE DEPOSITS
---------------------------------------------------------------------------
THREE MONTHS ENDED
------------------------------------------- NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------- JUNE 30, -----------------------------
2000 1999 2000 2000 1999
------------ ------------- ------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Demand deposits........................ $ 3,996,811 $ 4,262,360 $ 4,058,827 $ 4,027,572 $ 4,347,165
Money market accounts.................. 3,795,223 3,860,633 3,826,930 3,845,602 3,471,667
Interest-bearing checking.............. 3,143,839 3,528,658 3,309,979 3,285,154 3,753,264
Savings deposits....................... 1,431,130 1,731,701 1,513,795 1,500,833 1,726,628
Other time deposits.................... 8,358,869 9,434,587 8,268,440 8,343,814 9,712,950
----------- ----------- ----------- ----------- -----------
Total core deposits.......... 20,725,872 22,817,939 20,977,971 21,002,975 23,011,674
Certificates of deposit of $100,000 and
over................................. 2,641,260 2,251,806 2,228,985 2,284,113 2,342,882
----------- ----------- ----------- ----------- -----------
Total average deposits ...... $23,367,132 $25,069,745 $23,206,956 $23,287,088 $25,354,556
=========== =========== =========== =========== ===========
</TABLE>
Average deposits for the third quarter of 2000 were $23.4 billion, down
from $25.1 billion for the same period in 1999 and up from $23.2 billion for the
second quarter of 2000. The decrease since September 30, 1999 is attributable to
several factors, including time deposits that matured and were not renewed
(including higher priced deposits of acquired entities), not competing as
aggressively for public fund deposits (which require pledging of investment
securities), the competitive market in general, and increased competition from
other investment sources (annuities, mutual funds, broker money market accounts,
etc.), including Union Planters' sale of nontraditional deposit products.
29
<PAGE> 30
SHAREHOLDERS' EQUITY
Union Planters' total shareholders' equity increased by $21.4 million
from December 31, 1999 to $2.8 billion at September 30, 2000. The major items
affecting shareholders' equity are as follows:
- $100.9 million increase due to retained net earnings (net earnings
less dividends paid).
- $43.9 million increase due to the net change in the unrealized loss
on available for sale investment securities.
- $18.9 million increase due to common stock issued for employee
benefit plans.
- $142.3 million decrease due to shares purchased (4.5 million shares
purchased).
In August 1999, the Company's Board of Directors authorized the
purchase of up to 5% of Union Planters' common stock or approximately 7.1
million shares. In February 2000, the Company completed the purchase of the 7.1
million shares under this plan. On February 17, 2000, the Board of Directors
authorized the purchase from time to time of up to an additional 7.1 million
shares. The purchases are expected to take place over a period of 18 to 24
months either in the open market or privately negotiated transactions. As of
October 31, 2000, 1.6 million shares had been purchased under this second plan.
CAPITAL ADEQUACY
The following table presents capital adequacy information for Union Planters:
<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------- DECEMBER 31,
2000 1999 1999
---- ---- ----
<S> <C> <C> <C>
CAPITAL ADEQUACY DATA
Total shareholders' equity/total assets (at period end)............. 8.17% 8.90% 8.34%
Average shareholders' equity/average total assets................... 8.31 9.12 9.06
Tier 1 capital/unweighted average assets (leverage ratio) (1)....... 6.36 7.03 6.65
</TABLE>
---------------
(1) Based on period-end capital and quarterly adjusted average assets.
The following table presents Union Planters' risk-based capital and
capital adequacy ratios. Union Planters' regulatory capital ratios qualify
Union Planters for the "well-capitalized" regulatory classification.
UNION PLANTERS CORPORATION
RISK-BASED CAPITAL
<TABLE>
<CAPTION>
SEPTEMBER 30,
--------------------------------- DECEMBER 31,
2000 1999 1999
------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
TIER 1 CAPITAL
Shareholders' equity ............................................... $ 2,797,546 $ 2,951,929 $ 2,776,109
Trust Preferred Securities and minority interest in consolidated ... 202,259 202,223 202,232
subsidiaries
Less: Goodwill and other intangibles .............................. (968,381) (969,347) (971,770)
Disallowed deferred tax asset ............................... (1,372) (1,147) (1,053)
Unrealized loss on available for sale securities ............ 90,321 76,789 134,217
------------- ------------- -------------
TOTAL TIER 1 CAPITAL ....................................... 2,120,373 2,260,447 2,139,735
TIER 2 CAPITAL
Allowance for losses on loans ...................................... 309,493 278,593 282,149
Qualifying long-term debt .......................................... 445,217 461,047 445,590
Other adjustments .................................................. -- 37 --
------------- ------------- -------------
TOTAL CAPITAL BEFORE DEDUCTIONS ............................ 2,875,083 3,000,124 2,867,474
Less investment in unconsolidated subsidiaries ..................... (9,610) (10,678) (10,289)
------------- ------------- -------------
TOTAL CAPITAL .............................................. $ 2,865,473 $ 2,989,446 $ 2,857,185
============= ============= =============
RISK-WEIGHTED ASSETS ................................................. $ 24,728,512 $ 22,207,344 $ 22,511,772
============= ============= =============
RATIOS AS A PERCENT OF END OF PERIOD RISK-WEIGHTED ASSETS
Tier 1 capital ..................................................... 8.57% 10.18% 9.50%
Total capital ...................................................... 11.59 13.46 12.69
</TABLE>
30
<PAGE> 31
UNION PLANTERS BANK, NATIONAL ASSOCIATION
RISK-BASED CAPITAL
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------------------ DECEMBER 31,
2000 1999 1999
-------------- -------------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
TIER 1 CAPITAL ................................... $ 1,987,810 $ 1,975,570 $ 1,878,443
Total capital .................................. 2,585,379 2,549,996 2,456,210
Risk-weighted assets ........................... 24,464,143 21,834,657 22,130,083
RATIOS
Leverage ....................................... 6.05% 6.27% 5.95%
Tier 1 risk-based capital ...................... 8.13 9.05 8.49
Total risk-based capital ....................... 10.57 11.68 11.10
</TABLE>
Union Planters' shareholders' equity to total assets ratio decreased
at September 30, 2000 compared to December 31, 1999 due primarily to the
Company's share purchase plans. Regulatory capital ratios were further impacted
by goodwill and other intangibles resulting from the 2000 purchase acquisition
of SOI, which are deducted from capital in calculating regulatory capital.
Union Planters' capital ratios still fall within the "well-capitalized"
regulatory capital category.
LIQUIDITY
Union Planters requires liquidity sufficient to meet cash requirements
for deposit withdrawals, to make new loans and satisfy loan commitments, to
take advantage of attractive investment opportunities, and to repay borrowings
at maturity. Deposits, available for sale securities, and money market
investments are Union Planters' primary sources of liquidity. Liquidity is also
achieved through short-term borrowings, borrowings under available lines of
credit, and issuance of securities and debt instruments in the financial
markets. Union Planters believes it has adequate liquidity to meet its
operating requirements.
Parent company liquidity is achieved and maintained by dividends
received from subsidiaries, interest on advances to subsidiaries, and interest
on its available for sale investment securities portfolio. At September 30,
2000, the parent company had cash and cash equivalents totaling $148.0 million,
which compares to $180.6 million and $264.3 million, respectively, at June 30,
2000 and December 31, 1999. Net working capital (total assets maturing within
one year less similar liabilities) was $142.9 million, which compares to $177.1
million and $296.5 million, respectively, at June 30, 2000 and December 31,
1999. The decrease in parent company liquidity relates primarily to the
Company's share purchase plan.
At October 1, 2000, the parent company could have received dividends
from subsidiaries of $196 million without prior regulatory approval. The
dividends to be paid in the fourth quarter of 2000 will be limited by
management to approximately $78 million due to capital and liquidity
requirements of individual financial institutions. The payment of additional
dividends by Union Planters' subsidiaries will be dependent on the future
earnings and growth of the subsidiaries. Management believes that the parent
company has adequate liquidity to meet its cash needs, including the payment of
its regular dividends and servicing of its debt.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ASSET LIABILITY AND MARKET RISK MANAGEMENT
Union Planters' assets and liabilities are principally financial in
nature and the resulting earnings, primarily net interest income, are subject
to changes as a result of fluctuations in market interest rates and the mix of
the various assets and liabilities. Interest rates in the financial markets
affect decisions on pricing its assets and liabilities, which impacts net
interest income, which is approximately 71% of Union Planters' operating
revenues. As a result, a substantial part of Union Planters' risk management
activities are devoted to managing interest-rate risk. Currently, Union
Planters does not have any significant risks related to foreign exchange,
commodities or equity risk exposure.
31
<PAGE> 32
INTEREST-RATE RISK. One of the most important aspects of management's
efforts to sustain long-term profitability for Union Planters is the management
of interest-rate risk. Management's goal is to maximize net interest income
within acceptable levels of interest-rate risk and liquidity. To achieve this
goal, a proper balance must be maintained between assets and liabilities with
respect to size, maturity, repricing date, rate of return, and degree of risk.
The Union Planters' Asset/Liability Management Committee (the ALCO
Committee) oversees the conduct of asset/liability and interest-rate
management. The ALCO Committee meets monthly and reviews the outlook for the
economy and interest rates, Union Planters' balance sheet structure, and yields
on earning assets and rates on interest-bearing liabilities. Union Planters
uses two methods to measure interest-rate risk, interest-rate sensitivity
analysis and simulation analysis.
Interest-rate sensitivity analysis (GAP analysis) is used to monitor
the amounts and timing of balances exposed to changes in interest rates, as
shown in the following table. The analysis has been made at a point in time and
could change significantly on a daily basis.
As a general policy guideline, management expects the GAP position at one
year not to exceed 10% of Union Planters' assets. At September 30, 2000, this
position was 14% of Union Planters' total assets with $4.9 billion more
liabilities repricing than assets. This position is unchanged from the position
at June 30, 2000.
Even though the GAP position exceeds the policy at one year, $4.0
billion of the liabilities affecting the one year GAP are scheduled money
market, savings, and interest-bearing checking deposits whose rates are
administered by management. Total money market, savings, and interest-bearing
checking deposits of $8.2 billion that have no contractual maturity are
scheduled according to management's best estimate of their repricing in
response to changes in interest rates. Even with conservative estimates of
their rate sensitivity, the resulting impact on earnings at risk in simulation
analysis produces results, which bring interest-rate risk into an acceptable
range and one not implied by GAP analysis alone.
Interest-rate risk is evaluated by conducting balance sheet simulation
analysis to project net interest income for twelve months forward under
different interest rate scenarios. Each of these scenarios is compared with a
base case scenario wherein current market rates and current period balances are
held constant for the simulation period.
The scenarios include immediate "shocks" to current rates of 200 basis
points up and down and a "most likely" scenario in which current rates are
moved according to economic forecasts and management's expectations of changes
in administered rates.
The results of these simulations are compared to policy guidelines
approved by the ALCO Committee of Union Planters. The policy limits the changes
of net interest income to 20% of net operating earnings (net earnings before
nonoperating items, net of taxes, annualized - see the "Summary of Consolidated
Results" on page 16) when compared with the base case (flat) scenario. The
simulations have consistently fallen within the policy guidelines.
At September 30, 2000, the 200 basis point immediate rise in interest
rates produced a projected 16% ($63 million after-tax) decrease in net
operating earnings, which compares to a projected 16% ($65 million after-tax)
decrease at June 30, 2000. The 200 basis point immediate fall in interest rates
produced a projected 10% ($39 million after-tax) increase in net operating
earnings versus a projected 10% ($41 million after-tax) increase at June 30,
2000. The "most likely" calculated scenario at September 30, 2000 produced a
projected .3% ($1.3 million after-tax) decrease in net operating earnings
compared to a projected projected .1% ($382,000 after-tax) decrease in net
operating earnings at June 30, 2000. The "most likely" scenario at September
30, 2000 assumed the Federal Funds rate remains flat at 6.50% until June 2001
and then decreases 50 basis points over the remaining three months of the
twelve-month simulation period. At June 30, 2000, the "most likely" scenario
assumed the Federal Funds rate increases from 6.50% to 6.75% over the first
three months of the twelve-month simulation period.
The key assumptions used in simulation analysis include the following
- prepayment rates on mortgage-related assets
- cash flows and maturities of all financial instruments
- changes in volumes and pricing
- future shapes of the yield curve
32
<PAGE> 33
- money market spreads
- credit spreads
- deposit sensitivity
- management's financial capital plan
These assumptions are inherently uncertain and, as a result, the
simulation cannot precisely estimate net interest income or precisely predict
the impact of higher or lower interest rates on net interest income. Actual
results will differ from simulated results due to timing, magnitude, and
frequency of interest-rate changes, the difference between actual experience
and the characteristics assumed, and changes in market conditions and
management strategies.
33
<PAGE> 34
UNION PLANTERS CORPORATION AND SUBSIDIARIES
RATE SENSITIVITY ANALYSIS AT SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
INTEREST-SENSITIVE WITHIN (1)(7)
---------------------------------------------------------
0-90 91-180 181-365 1-3 3-5
DAYS DAYS DAYS YEARS YEARS
-------- -------- -------- -------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
ASSETS
Loans and leases (2)(3)(4) $ 8,192 $ 1,909 $ 2,783 $ 6,134 $ 3,167
Investment securities (5)(6) 478 336 330 1,753 1,873
Other earning assets............ 760 -- -- -- --
Other assets.................... -- -- -- -- --
-------- -------- -------- -------- --------
TOTAL ASSETS............ $ 9,430 $ 2,245 $ 3,113 $ 7,887 $ 5,040
======== ======== ======== ======== ========
SOURCES OF FUNDS
Money market deposits (7)(8) $ 1,329 $ -- $ 1,210 $ 1,246 $ --
Savings and interest-bearing
checking deposits (7)(8) 1,462 -- -- 1,462 --
Other time deposits............. 1,995 1,911 2,567 1,586 215
Certificates of deposit of
$100,000 and over............. 893 566 800 291 22
Short-term borrowings........... 6,192 1 1 -- --
Short- and medium-term
senior notes................ -- -- 40 20 --
Federal Home Loan Bank
Advances..................... 600 -- -- 1 --
Other long-term debt............ 116 1 2 1 74
Noninterest-bearing deposits -- -- -- -- --
Other liabilities............... -- -- -- -- --
Shareholders' equity............ -- -- -- -- --
-------- -------- -------- -------- --------
TOTAL SOURCES OF FUNDS $ 12,587 $ 2,479 $ 4,620 $ 4,607 $ 311
======== ======== ======== ======== ========
INTEREST-RATE SENSITIVITY GAP .... $ (3,157) $ (234) $ (1,507) $ 3,280 $ 4,729
CUMULATIVE INTEREST-RATE
SENSITIVITY GAP (8)............. (3,157) (3,391) (4,898) (1,618) 3,111
CUMULATIVE GAP AS A
PERCENTAGE OF TOTAL ASSETS (8) (9)% (10)% (14)% (5)% 9%
POLICY........................... None +/- 15% +/- 10% +/- 5% > 0%
<CAPTION>
INTEREST-SENSITIVE WITHIN (1)(7)
--------------------------------------------
NON-
5-15 OVER 15 INTEREST-
YEARS YEARS BEARING TOTAL
-------- -------- -------- --------
ASSETS
<S> <C> <C> <C> <C>
Loans and leases (2)(3)(4) $ 743 $ 33 $ 496 $ 23,457
Investment securities (5)(6) 1,988 305 (143) 6,920
Other earning assets............ 1 -- -- 761
Other assets.................... -- -- 3,125 3,125
-------- -------- -------- --------
TOTAL ASSETS............ $ 2,732 $ 338 $ 3,478 $ 34,263
======== ======== ======== ========
SOURCES OF FUNDS
Money market deposits (7)(8) $ $ -- $ -- $ 3,785
Savings and interest-bearing
checking deposits (7)(8) 1,507 -- 4,431
Other time deposits............. 36 3 -- 8,313
Certificates of deposit of
$100,000 and over............. 3 -- -- 2,575
Short-term borrowings........... -- -- -- 6,194
Short- and medium-term
senior notes................ -- -- -- 60
Federal Home Loan Bank
Advances..................... -- -- -- 601
Other long-term debt............ 401 199 -- 794
Noninterest-bearing deposits -- -- 3,980 3,980
Other liabilities............... -- -- 733 733
Shareholders' equity............ -- -- 2,797 2,797
-------- -------- -------- --------
TOTAL SOURCES OF FUNDS $ 1,947 $ 202 $ 7,510 $ 34,263
======== ======== ======== ========
INTEREST-RATE SENSITIVITY GAP .... $ 785 $ 136 $ (4,032) --
CUMULATIVE INTEREST-RATE
SENSITIVITY GAP (8)............. 3,896 4,032 --
CUMULATIVE GAP AS A
PERCENTAGE OF TOTAL ASSETS (8) 11% 12% --%
POLICY........................... > 0% > 0%
</TABLE>
---------------
Management has made the following assumptions in presenting the above analysis:
(1) Assets and liabilities are generally scheduled according to their
earliest repricing dates regardless of their contractual maturities.
(2) Nonaccrual loans and accounts receivable-factoring 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) Delinquent FHA/VA loans are scheduled based on foreclosure and
repayment patterns.
(5) The scheduled maturities of mortgage-backed securities and CMOs assume
principal prepayment of these securities on dates estimated by
management, relying primarily upon current and consensus interest-rate
forecasts in conjunction with the latest three-month historical
prepayment schedules.
(6) Securities are generally scheduled according to their call dates when
valued at a premium to par.
(7) Money market deposits, interest-bearing checking, 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 be
expected to vary by product type and market.
(8) If all money market, interest-bearing checking, and savings deposits
had been included in the 0-90 Days category above, the cumulative gap
as a percentage of total assets would have been negative (25%), (26%),
(27%), and (9%) for the 0-90 Days, 91-180 Days 181-365 Days and 1-3
Years categories and positive 5%, 11%, and 12%, respectively, for the
3-5 Years, 5-15 Years, and over 15 Years categories at September 30,
2000.
34
<PAGE> 35
PART II -- OTHER INFORMATION
ITEM 1 -- LEGAL PROCEEDINGS
During the period covered by this report, there have been no new
material legal proceedings or material developments in pending material
litigation to which Union Planters or any of its subsidiaries is a party or of
which any of their property is subject, other than ordinary routine litigation
incidental to their business. Information concerning legal proceedings is
contained in Item 3, Part I of Union Planters' 1999 Form 10-K, Note 20 to Union
Planters' consolidated financial statements on page 70 of the 1999 Annual
Report, and Note 12 to Union Planters' unaudited interim consolidated financial
statements included herein under Item 1 of Part I.
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
DEATH OF BENJAMIN W. RAWLINS, JR.
The Union Planters family was saddened on September 12, 2000 to learn
of the sudden death of Benjamin W. Rawlins, Jr., the then Chairman and CEO of
Union Planters Corporation. Mr. Rawlins had served as CEO of Union Planters for
over sixteen years. Under his leadership, Union Planters expanded from a $2
billion Memphis, Tennessee bank to a twelve state, $34 billion financial
services company.
In accordance with the by-laws of the Company, Jackson W. Moore, the
then President assumed the position of Chairman and CEO. On September 18, 2000
in a Special Meeting, the Board of Directors elected Mr. Moore Chairman and
Chief Executive Officer of Union Planters Corporation and its principal
subsidiary, Union Planters Bank, National Association.
APPOINTMENT OF TWO EXECUTIVE MANAGEMENT GROUPS
On October 16, 2000, Jackson W. Moore, Chairman and Chief Executive
Officer of Union Planters Corporation, announced the appointment of two
executive management groups that will provide operational management oversight
and strategic direction planning for the Company. The membership of the two
groups will rotate over time so the Company will benefit from new and broadened
input.
The Executive Management Committee, composed of Mr. Moore and nine
senior executives, will provide guidance in managing the Company and will make
key operational decisions. The initial committee includes the following
members:
Bobby L. Doxey Senior Executive Vice President
Finance and Accounting
Lloyd B. DeVaux Senior Executive Vice President
Technology and Operations
Robert S. Duncan Senior Executive Vice President
Administration
Adolfo Henriques Chief Executive Officer
Union Planters Bank, Florida
35
<PAGE> 36
Alan W. Kennebeck Senior Executive Vice President
Retail Services
Lou Ann Poynter Executive Vice President
Regional Bank Group Manager,
Southeast Region
Michael B. Russell Senior Executive Vice President
Lending and Credit Administration
Steven J. Schenck Chief Executive Officer
Union Planters Bank, Indiana
John V. White, Jr. Chief Executive Officer
Union Planters Bank, Memphis
The Chairman's Management Council is a broader group of the Company's
local banking executives who will meet quarterly to focus on policy and
strategic issues. In addition to Mr. Moore and the other members of the
Executive Management Committee, the Council's initial membership includes:
Harbert Alexander Regional Bank Group Manager,
West Tennessee and Arkansas
Tommy Anderton Chief Executive Officer
Union Planters Bank, Shelbyville TN
Jimmy Brown Chief Executive Officer
Union Planters Bank, Grenada MS
Jackson Huff Regional Bank Group Manager,
Louisiana and Texas
Tom Holloway Chief Executive Officer
Union Planters Bank, Belleville IL
Ken Plunk Regional Bank Group Manager,
Mid-West Region
Michael Ross Chief Executive Officer
Union Planters Bank, St. Louis
Ron Samuels Chief Executive Officer
Union Planters Bank, Greater Nashville
In addition, the following management changes have been made:
Robert S. Duncan assumes the new position of Senior Executive Vice
President of Administration. Duncan will oversee mergers and acquisitions
activity and will have line responsibility for mortgage lending, and will
supervise the risk management and legal staff functions. Duncan had recently
served as Executive Vice President and Regional Bank Group Manager for Union
Planters operations in East Tennessee, North Alabama and Eastern Kentucky.
Prior to that, he was Chief Executive of Union Planters portfolio mortgage
operation and responsible for banks in Mississippi and South Alabama. He had
served as Chairman of the Board of Magna Bancorp, Inc. from 1993 until its 1997
acquisition by UPC. Duncan's career spans 32 years in banking and finance.
36
<PAGE> 37
Lou Ann Poynter assumes additional responsibility as Regional Bank
Group Manager for the Southeast Region, consisting of East Tennessee, East
Kentucky, Mississippi and Alabama. She was previously Regional Bank Group
Manager for Mississippi and Central/South Alabama. A 28-year banking
professional, Poynter served as President and Chief Executive of Magnolia
Federal Bank for Savings until the 1997 merger with Union Planters.
Ron Samuels, Chief Executive Officer of Union Planters, Nashville,
will now have responsibility for the Greater Nashville Group. Reporting to him
will be the CEOs of Union Planters Banks in Clarksville, Dickson, Columbia and
Murfreesboro. These banks will continue to be run by the local market CEOs with
the ability to better coordinate marketing throughout Middle Tennessee. The
local CEOs will also have access to staff resources currently housed within the
Nashville bank, which will better leverage the Bank's expertise. Mr. Samuels,
whose financial career spans 32 years, joined Union Planters in 1999.
Previously he was Metro Region President for First Union National Bank of
Tennessee in Nashville from 1994 - 1999.
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
11 Computation of Per Share Earnings (incorporated by reference
to Note 10 to Union Planters' unaudited interim consolidated
financial statements included herein)
27 Financial Data Schedule (for SEC use only)
b) Reports on Form 8-K:
<TABLE>
<CAPTION>
Date of Current Report Subject
---------------------- -----------------------------------------
<S> <C>
1. July 20, 2000 Press release announcing second quarter
2000 net earnings, reported under Item 5.
2. October 19, 2000 Press release announcing third quarter
2000 net earnings, reported under Item 5.
</TABLE>
37
<PAGE> 38
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNION PLANTERS CORPORATION
--------------------------
(Registrant)
Date: November 2, 2000
--------------------------
By: /s/ Jackson W. Moore
--------------------------------------
Jackson W. Moore
Chairman and Chief Executive Officer
By: /s/ Bobby L. Doxey
--------------------------------------
Bobby L. Doxey
Senior Executive Vice President, Chief
Financial Officer and Chief Accounting
Officer
38
<PAGE> 39
UNION PLANTERS CORPORATION
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- ------------------------------------------------
11 Computation of Per Share Earnings (incorporated
by reference to Note 10 to Union Planters'
unaudited interim consolidated financial
statements included herein)
27 Financial Data Schedule (for SEC use only)
