<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QA
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________ TO _________
COMMISSION FILE NUMBER 0-9756
RIGGS NATIONAL CORPORATION
______________________________________________________
(Exact name of registrant as specified in its charter)
DELAWARE 52-1217953
_______________________________ ______________________________
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1503 PENNSYLVANIA AVENUE, N.W., WASHINGTON, D.C. 20005
__________________________________________________________________
(Address of principal executive offices)
(Zip Code)
(202) 835-6000
_______________________________________________________________
(Registrant's telephone number, including area code)
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
(or shorter periods that the registrant was required to file
such reports), 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 last practical date.
COMMON STOCK, $2.50 PAR VALUE 30,244,414 SHARES
________________________________ __________________________________
(Title of class) (Outstanding at November 10, 1994)
<PAGE>
RIGGS NATIONAL CORPORATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE NO.
_________
<S> <C>
Item 1. Financial Statements-Unaudited
Consolidated Statements of Income
Three and nine months ended September 30, 1994 and 1993 3
Consolidated Statements of Condition
September 30, 1994 and 1993, and December 31, 1993 4
Consolidated Statements of Changes in Stockholders' Equity
Nine months ended September 30, 1994 and 1993 5
Consolidated Statements of Cash Flows
Nine months ended September 30, 1994 and 1993 6
Financial Ratios and Other Financial Data 7
Notes to the Consolidated Statements 8-12
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13-25
PART II. OTHER INFORMATION
Item 1. Legal Proceedings None
Item 2. Change in Securities None
Item 3. Defaults Upon Senior Securities None
Item 4. Submission of Matters to a Vote of Security Holders None
Item 5. Other Information None
Item 6. Exhibits and Reports on Form 8-K 26
SIGNATURES 26
</TABLE>
2
<PAGE>
RIGGS NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
(IN THOUSANDS,EXCEPT PER SHARE AMOUNTS) 1994 1993 1994 1993
______________________________________________________________________________
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and Fees on Loans:
Taxable $48,022 $37,938 $141,077 $113,653
Tax-Exempt 850 1,176 3,330 3,773
_____________________________________________________________________________
Total Interest and Fees on Loans 48,872 39,114 144,407 117,426
_____________________________________________________________________________
Interest and Dividends on Securities
Available for Sale 8,040 5,451 21,817 14,908
Interest on Securities Held-to-Maturity:
Taxable 5,579 8,374 16,512 33,557
Tax-Exempt --- 33 33 98
_____________________________________________________________________________
Total Interest on Securities
Held-to-Maturity 5,579 8,407 16,545 33,655
_____________________________________________________________________________
Interest on Money Market Assets:
Time Deposits with Other Banks 2,383 4,440 7,062 15,454
Federal Funds Sold and Reverse
Repurchase Agreements 2,545 4,549 5,909 13,592
_____________________________________________________________________________
Total Interest on Money Market Assets 4,928 8,989 12,971 29,046
_____________________________________________________________________________
Total Interest Income 67,419 61,961 195,740 195,035
INTEREST EXPENSE
Interest on Deposits:
Savings and NOW Accounts 4,964 4,737 14,464 14,757
Money Market Deposit Accounts 6,886 7,082 19,555 22,345
Time Deposits in Domestic Offices 6,210 7,053 18,113 21,560
Time Deposits in Foreign Offices 2,825 4,909 8,263 20,826
_____________________________________________________________________________
Total Interest on Deposits 20,885 23,781 60,395 79,488
_____________________________________________________________________________
Interest on Short-Term Borrowings and
Long-Term Debt:
Federal Funds Purchased
and Repurchase Agreements 1,878 1,395 3,470 3,425
U.S. Treasury Demand Notes
and Other Short-Term Borrowings 473 673 1,914 1,550
Long-Term Debt 4,700 3,662 15,285 10,921
_____________________________________________________________________________
Total Interest on Borrowings and Debt 7,051 5,730 20,669 15,896
_____________________________________________________________________________
Total Interest Expense 27,936 29,511 81,064 95,384
Net Interest Income 39,483 32,450 114,676 99,651
Less: Provision for Loan Losses 2,100 3,772 6,300 67,165
_____________________________________________________________________________
Net Interest Income after Provision
for Loan Losses 37,383 28,678 108,376 32,486
_____________________________________________________________________________
NONINTEREST INCOME
Trust Income 6,567 7,733 21,562 21,634
Service Charges and Fees 10,227 11,659 33,448 37,247
Gain on Settlement of
Mortgage Insurance Claims --- --- 4,739 ---
Other Noninterest Income 1,999 2,572 6,953 8,605
Securities Gains (Losses), Net --- (77) 1,424 23,925
_____________________________________________________________________________
Total Noninterest Income 18,793 21,887 68,126 91,411
NONINTEREST EXPENSE
Salaries and Wages 15,970 17,110 48,851 53,151
Pensions and Other Employee Benefits 3,263 3,934 13,113 14,225
Occupancy Expense, Net 6,414 6,391 18,003 19,917
Furniture and Equipment Expense 2,163 2,622 7,111 8,687
Other Real Estate Owned
Expense (Income), Net (2,160) (2,503) (1,154) 12,207
FDIC Insurance Expense 2,370 2,517 7,233 7,793
Data Processing Services 3,981 3,897 12,647 12,546
Restructuring Expense --- --- (2,059) 34,554
Other Noninterest Expense 15,774 13,542 47,173 52,551
_____________________________________________________________________________
Total Noninterest Expense 47,775 47,510 150,918 215,631
Income (Loss) before Taxes 8,401 3,055 25,584 (91,734)
Applicable Income Tax (Benefit) Expense 171 93 (392) 5,558
_____________________________________________________________________________
NET INCOME (LOSS) $8,230 $2,962 $25,976 $(97,292)
Dividends on Preferred Stock 3,045 358 9,436 1,075
_____________________________________________________________________________
Net Income (Loss) Available
for Common Stock $5,185 $2,604 $16,540 $(98,367)
EARNINGS (LOSS) PER SHARE $.17 $.10 $.55 $(3.90)
</TABLE>
3
<PAGE>
RIGGS NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION
(UNAUDITED--SEPTEMBER 30, 1994 AND 1993)
<TABLE>
<CAPTION>
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 1994 1993 1993
______________________________________________________________________________
<S> <C> <C> <C>
ASSETS
Cash and Due from Banks $ 187,114 $ $217,814 $ 210,639
Money Market Assets:
Time Deposits with Other Banks 193,835 292,922 200,946
Federal Funds Sold and Reverse
Repurchase Agreements 179,684 412,100 205,000
_____________________________________________________________________________
Total Money Market Assets 373,519 705,022 405,946
_____________________________________________________________________________
Securities Available for Sale
(Market Value: September 30, 1994,
$613,204; September 30, 1993, $755,463;
December 31, 1993, $708,137) 613,204 753,899 708,137
Securities Held-to-Maturity
(Market Value: September 30, 1994,
$434,114; September 30, 1993, $544,890;
December 31, 1993, $660,773) 439,207 538,367 660,062
Loans, Net of Unearned Discount,
Unamortized Premium and
Net Deferred Fees 2,608,065 2,167,035 2,528,133
Reserve for Loan Losses 95,800 83,472 86,513
_____________________________________________________________________________
Loans, Net of Reserve for Loan Losses 2,512,265 2,083,563 2,441,620
_____________________________________________________________________________
Premises and Equipment, Net 153,477 164,220 161,098
Accrued Interest Receivable 28,521 18,836 22,911
Customers' Acceptance Liability 504 1,415 300
Other Real Estate Owned, Net 56,911 53,872 52,803
Other Assets 106,036 135,914 116,721
_____________________________________________________________________________
Total Assets $4,470,758 $4,672,922 $4,780,237
LIABILITIES
Noninterest-Bearing Demand Deposits $ 787,592 $ 884,351 $ 864,549
Interest-Bearing Deposits:
Savings and NOW Accounts 882,954 902,300 955,711
Money Market Deposit Accounts 1,023,895 1,203,867 1,082,048
Time Deposits in Domestic Offices 592,506 680,261 643,736
Time Deposits in Foreign Offices 261,653 263,510 227,780
_____________________________________________________________________________
Total Interest-Bearing Deposits 2,761,008 3,049,938 2,909,275
_____________________________________________________________________________
Total Deposits 3,548,600 3,934,289 3,773,824
_____________________________________________________________________________
Short-Term Borrowings:
Federal Funds Purchased and
Repurchase Agreements 208,376 160,460 302,330
U.S. Treasury Demand Notes and
Other Borrowings 184,600 150,728 151,697
_____________________________________________________________________________
Total Short-Term Borrowings 392,976 311,188 454,027
_____________________________________________________________________________
Acceptances Outstanding 504 1,415 300
Other Liabilities 39,826 55,032 45,564
Long-Term Debt 217,625 213,325 213,325
_____________________________________________________________________________
Total Liabilities 4,199,531 4,515,249 4,487,040
STOCKHOLDERS' EQUITY
Preferred Stock-$1.00 Par Value;
Shares Authorized - 25,000,000 at
September 30, 1994 and 1993, and
December 31, 1993;
Liquidation Preference - $25 per share
Cumulative Convertible Series A -
764,537 shares at September 30, 1993 and
December 31, 1993 --- 765 765
Noncumulative Perpetual Series B -
4,000,000 shares at September 30, 1994
and December 31, 1993 4,000 --- 4,000
Common Stock-$2.50 Par Value;
Shares Authorized- 50,000,000 at
September 30, 1994 and 1993,
and December 31, 1993
Shares Issued-31,141,212 at
September 30, 1994, 26,122,812 at
September 30, 1993 and
31,122,812 at December 31, 1993 77,853 65,307 77,807
Surplus - Preferred Stock 91,192 18,232 109,541
Surplus - Common Stock 156,097 131,572 156,023
Foreign Exchange Translation Adjustments (538) (793) (1,527)
Undivided Profits (Accumulated Deficit) (14,370) (33,687) (30,965)
Unrealized Net Gain (Loss) on Securities
Available for Sale (19,284) --- 1,276
Treasury Stock- 900,798 shares at
September 30, 1994 and 1993,
and December 31, 1993 (23,723) (23,723) (23,723)
______________________________________________________________________________
Total Stockholders' Equity 271,227 157,673 293,197
______________________________________________________________________________
Total Liabilities and
Stockholders' Equity $4,470,758 $4,672,922 $4,780,237
</TABLE>
4
<PAGE>
RIGGS NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
UNREALIZED NET
FOREIGN UNDIVIDED GAIN(LOSS) ON
PREFERRED COMMON EXCHANGE PROFITS SECURITIES TOTAL
STOCK STOCK TRANSL. (ACCUMULATED AVAILABLE TREASURY STOCKHOLDERS'
(IN THOUSANDS) $1.00 PAR $2.50 PAR SURPLUS ADJUSTMENTS DEFICIT) FOR SALE STOCK EQUITY
________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance,
Dec. 31, 1992 $765 $65,307 $149,804 $(11,413) $ 64,680 $ --- $(23,723) $245,420
Net Loss --- --- --- --- (97,292) --- --- (97,292)
Cash Dividends-
Preferred --- --- --- --- (1,075) --- --- (1,075)
Foreign
Exchange Transl.
Adjustments --- --- --- 10,620 --- --- --- 10,620
________________________________________________________________________________________________________
Balance,
Sept. 30, 1993 $765 $65,307 $149,804 $ (793) $(33,687) $ --- $(23,723) $157,673
Balance,
Dec. 31, 1993 $4,765 $77,807 $265,564 $(1,527) $(30,965) $1,276 $(23,723) $293,197
Net Income --- --- --- --- 25,976 --- --- 25,976
Issuance of
Common Stock-
Stock Option Plans --- 46 119 --- --- --- --- 165
Preferred Stock
Repurchase (765) --- (18,232) --- (118) --- --- (19,115)
Cash Dividends-
Preferred --- --- --- --- (9,436) --- --- (9,436)
Unrealized Net
Gain (Loss)
on Securities
Available for Sale --- --- --- --- --- (20,560) --- (20,560)
Foreign
Exchange Transl.
Adjustments --- --- --- 989 --- --- --- 989
Other --- --- (162) --- 173 --- --- 11
________________________________________________________________________________________________________
Balance,
Sept. 30, 1994 $4,000 $77,853 $247,289 $ (538) $(14,370) $(19,284) $(23,723) $271,227
</TABLE>
5
<PAGE>
RIGGS NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
(IN THOUSANDS) SEPTEMBER 30,
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1994 1993
______________________________________________________________________________
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 25,976 ($97,292)
Adjustments to Reconcile Net Income (Loss) to Cash
Provided By (Used In) Operating Activities:
Provisions for Loan Losses 6,300 67,165
Provisions for Other Real Estate Owned Writedowns 1,946 12,911
Depreciation Expense and Amortization of
Leasehold Improvements 9,091 9,858
Amortization of Purchase Accounting Adjustments 2,872 4,675
Restructuring Charges (2,059) 34,554
(Gains) Losses on Sales of Securities
Available for Sale (1,424) (23,925)
(Gains) Losses on Sales of Other Real Estate Owned (2,595) (2,467)
(Increase) Decrease in Accrued Interest Receivable (5,610) 7,897
(Increase) Decrease in Other Assets 11,563 1,639
Increase (Decrease) in Other Liabilities (3,679) 5,817
______________________________________________________________________________
Total Adjustments 16,405 118,124
______________________________________________________________________________
Net Cash Provided by (Used In) Operating Activities 42,381 20,832
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (Increase) Decrease In Time Deposits
with Other Banks 7,111 355,530
Proceeds from Securities Available for Sale 223,543 738,512
Purchase of Securities Available for Sale (147,746) (1,180,111)
Proceeds from the Maturity of
Securities Held-to-Maturity 1,055,024 545,351
Purchase of Securities Held-to-Maturity (834,169) (418,139)
Net (Increase) Decrease in Loans (100,155) (42,154)
Proceeds from Sales and Other Payments of
Other Real Estate Owned 20,230 13,385
Net (Increase) Decrease in Premises and Equipment (1,470) 316
Other, Net (479) 1,046
______________________________________________________________________________
Net Cash Provided by (Used In) Investing Activities 221,889 13,736
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Increase (Decrease) in:
Demand, NOW, Savings and
Money Market Deposit Accounts (207,867) (107,484)
Time Deposits (17,357) (395,825)
Federal Funds Purchased and Repurchase Agreements (93,954) 108,039
U.S. Treasury Demand Notes and
Other Short-Term Borrowings 32,903 62,649
Net Proceeds From the Issuance of Long-Term Debt 121,250 ---
Repayment of Long-Term Debt (120,700) ---
Net Proceeds From the Issuance of Common Stock 165 ---
Repurchase of Preferred Stock-Series A (19,115) ---
Dividend Payments-Preferred (9,436) (1,075)
Other, Net 11 ---
______________________________________________________________________________
Net Cash Provided by (Used In) Financing Activities (314,100) (333,696)
Effect of Exchange Rate Changes 989 (1,462)
______________________________________________________________________________
Net Increase (Decrease) in Cash and Cash Equivalents (48,841) (300,590)
Cash and Cash Equivalents at Beginning of Period 415,639 930,504
______________________________________________________________________________
Cash and Cash Equivalents at End of Period $366,798 $629,914
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
Loans Transferred to Other Real Estate Owned $23,210 $32,546
Loans to Finance the Sale of Other Real Estate Owned --- 29,408
SUPPLEMENTAL DISCLOSURES:
Interest Paid (Net of Amount Capitalized) $81,664 $95,321
Income Tax Payments (Refund) (6,976) 262
</TABLE>
6
<PAGE>
RIGGS NATIONAL CORPORATION
FINANCIAL RATIOS AND OTHER FINANCIAL DATA
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1994 1993
______________________________________________________________________________
<S> <C> <C>
PERFORMANCE:
Net Income (Loss) to Average Assets .77% N/M
Net Income (Loss) to Average Earning Assets .86% N/M
Net Income (Loss) to Average Stockholders' Equity 12.08% N/M
Net Income (Loss) Available to Common Stock
to Average Common Equity 12.75% N/M
Net Interest Income to Average Earning Assets 3.87% 3.12%
ASSET QUALITY:
Nonaccrual Loans as a % of Average Loans 1.42% 9.70%
Nonperforming Assets as a % of Total Loans and OREO 3.55% 12.32%
Nonaccrual and Renegotiated Loans as
a % of Total Loans 1.44% 10.14%
Net Charge offs (Recoveries) as
a % of Average Loans (.06)% 3.13%
Reserve for Loan Losses as a % of Total Loans 3.67% 3.85%
Reserve for Loan Losses as a % of
Nonaccrual and Renegotiated Loans 254.90% 37.99%
PER COMMON SHARE:
Net Income (Loss) $.55 $(3.90)
Book Value (at period end) $5.82 $5.50
Common Shares Outstanding (at period end) 30,240,414 25,222,014
Average Common Shares Outstanding 30,225,501 25,222,014
CAPITAL RATIOS AT PERIOD END:
Tier I 11.05% 5.78%
Combined Tier I and Tier II 17.86% 11.01%
Leverage 6.30% 3.02%
N/M--Not Meaningful
</TABLE>
7
<PAGE>
RIGGS NATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
NOTE 1. BASIS OF PRESENTATION
______________________
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments, of a normal recurring nature, necessary to present
fairly, in conformity with generally accepted accounting principles applied on
a consistent basis, the Corporation's consolidated financial position at
September 30, 1994 and 1993, and December 31, 1993 (audited), and the related
changes in stockholders' equity, the consolidated statements of income and
cash flows for the interim periods presented. These statements should be read
in conjunction with the financial statements and accompanying notes included
in the Corporation's latest annual report. Certain reclassifications have
been made to prior-period amounts to conform with the current year's
presentation. The results of operations for the first nine months of 1994 are
not necessarily indicative of the results to be expected for the full 1994
year.
NOTE 2. COMMON SHARES
_________________
Primary earnings per share are calculated using the weighted average number of
shares of common stock outstanding during the period. The weighted average
shares outstanding were 30,231,084 and 30,225,501 for the three and nine month
periods ended September 30, 1994, respectively, with 25,222,014 weighted
average shares outstanding for both the three- and nine-month periods in 1993.
The weighted average number of shares of common stock outstanding does not
include shares subject to unexercised options. Under the Riggs National
Corporation 1993 Stock Option Plan (the "1993 Plan"), options to purchase up
to 1,250,000 shares of common stock may be granted to key employees of the
Corporation. As of September 30, 1994, options to purchase 824,500 shares had
been granted and were outstanding under the 1993 Plan, at prices ranging from
$9.00 to $9.88 per share, and are currently not dilutive. In May 1994, the
Board of Directors and shareholders approved the Riggs National Corporation
1994 Stock Option Plan (the "1994 Plan"). Under the 1994 Plan, options to
purchase up to 1,250,000 shares of common stock may be granted to key
employees of the Corporation. As of September 30, 1994, no shares had been
granted under the 1994 Plan.
NOTE 3. RESERVE FOR LOAN LOSSES
________________________
Changes in the reserve for loan losses are summarized as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1994 1993 1994 1993
______________________________________________________________________________
<S> <C> <C> <C> <C>
Balance, beginning of period $92,094 $86,146 $86,513 $84,155
Provision for loan losses 2,100 3,772 6,300 67,165
Loans charged-off:
Domestic 1,707 3,320 7,171 45,788
Foreign 538 4,001 3,201 24,533
______________________________________________________________________________
Total loans charged-off 2,245 7,321 10,372 70,321
Recoveries on charged-off loans:
Domestic 1,454 392 7,468 1,448
Foreign 1,985 481 4,529 1,009
______________________________________________________________________________
Total recoveries on
charged-off loans 3,439 873 11,997 2,457
Net loans charged-off(recoveries) (1,194) 6,448 (1,625) 67,864
Foreign exchange
translation adjustments 412 2 1,362 16
______________________________________________________________________________
Balance, end of period $95,800 $83,472 $95,800 $83,472
</TABLE>
8
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
NOTE 4. OTHER REAL ESTATE OWNED
________________________
Changes in other real estate owned, net of reserves, are summarized as
follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1994 1993
__________________________________________________________________________
<S> <C> <C>
Balance, beginning of period $52,803 $89,389
Additions 23,210 32,546
Deductions:
Sales and repayments 17,183 57,820
Charge-offs 2,398 10,321
Other --- 10
_________________________________________________________________________
Total Deductions 19,581 68,151
Foreign exchange translation adjustments 479 88
_________________________________________________________________________
Balance, end of period $56,911 $53,872
</TABLE>
Changes in the reserve for other real estate owned are summarized as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1994 1993
__________________________________________________________________________
<S> <C> <C>
Balance, beginning of period $3,716 $6,637
Additions:
Provision for OREO 1,946 12,911
Other additions 398 498
__________________________________________________________________________
Total Additions 2,344 13,409
Deductions:
Charge-offs 2,398 14,203
Loss on sale of OREO and selling expenses 1,637 1,264
__________________________________________________________________________
Total Deductions 4,035 15,467
Foreign exchange translation adjustments 103 (15)
__________________________________________________________________________
Balance, end of period $2,128 $4,564
</TABLE>
9
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
NOTE 5. NEW FINANCIAL ACCOUNTING STANDARDS
___________________________________
At December 31, 1993, the Corporation implemented a narrower definition of In-
Substance Foreclosure, as required by regulatory agencies. Under previous
financial accounting guidelines, a nonaccrual loan was transferred from loans
to other real estate owned when foreclosure was probable or the loan was
considered in-substance foreclosed, which by definition in the Securities and
Exchange Commission's Financial Reporting Release No. 28 meant that the
borrower had little or no equity in the property, proceeds for repayment of
the loan could be expected to come only from the operation or sale of the
collateral, and the debtor had either abandoned control of the collateral or
it was doubtful that the debtor would be able to rebuild equity in the
collateral or otherwise repay the loan in the foreseeable future. Loans
considered in-substance foreclosed must be recorded at the lower of cost or
fair value.
Under the revised regulatory accounting guidelines, a loan is recognized as an
in-substance foreclosure when the Corporation has possession of an asset prior
to obtaining legal title. This definition is consistent with Statement of
Financial Accounting Standards No. 114, "Accounting by Creditors for
Impairment of a Loan," issued in May 1993. This change in treatment impacts
only the classification of accounts in the financial statements and does not
result in a change in the accounting policy related to the determination of
the assets' carrying value. The consolidated statements of condition, income
and cash flows and the related notes to the consolidated financial statements
reflect these reclassifications. In addition, SFAS No. 114 must be adopted,
on a prospective basis, by January 1, 1995. SFAS No. 114 requires that
impaired loans be measured at the present value of expected future cash flows
discounted at the loan's effective interest rate, at the loan's observable
market price, or the fair value of the collateral if the loan is collateral-
dependent. At this time, the Corporation does not intend an early adoption of
SFAS No. 114, and does not anticipate any material financial impact from its
adoption in 1995.
NOTE 6. INCOME TAXES
_____________
The provision for income taxes is based on income reported for consolidated
financial statement purposes and includes deferred taxes resulting from the
recognition of certain revenues and expenses in different periods for tax
reporting purposes. Income (loss) before income taxes relating to the
operations of domestic and foreign offices is presented for the interim
periods as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1994 1993 1994 1993
______________________________________________________________________________
<S> <C> <C> <C> <C>
Domestic Offices $2,486 $5,039 $ 5,444 $(25,087)
Foreign Offices 5,915 (1,984) 20,140 (66,647)
______________________________________________________________________________
Total $8,401 $3,055 $25,584 $(91,734)
</TABLE>
The provision for income taxes for the interim periods are presented as
follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1994 1993 1994 1993
______________________________________________________________________________
<S> <C> <C> <C> <C>
Current Provision (Benefit):
Federal $ 840 $ --- $ 840 $ (24)
State 168 63 315 189
Foreign 3 30 (707) 84
______________________________________________________________________________
Total Current Provision (Benefit) 1,011 93 448 249
Deferred Provision (Benefit):
Federal (840) --- (840) 5,309
State --- --- --- ---
Foreign --- --- --- ---
______________________________________________________________________________
Total Deferred Provision (Benefit) (840) --- (840) 5,309
______________________________________________________________________________
Applicable Income
Tax (Benefit) Expense $ 171 $ 93 $ (392) $5,558
</TABLE>
10
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
NOTE 7. COMMITMENTS AND CONTINGENT LIABILITIES
_______________________________________
In the normal course of business, various commitments and contingent
liabilities arise, including commitments to extend credit, standby letters of
credit, and financial derivatives such as interest-rate swaps, forward
contracts, futures, options on financial futures, and interest-rate caps,
collars and floors. The following table summarizes the Corporation's off-
balance sheet commitments and contingent liabilities at September 30, 1994:
<TABLE>
<CAPTION>
CONTRACTUAL OR
NOTIONAL VALUE
AT SEPTEMBER 30, 1994
______________________________________________________________________
<S> <C>
Commitments to Extend Credit:
Commercial $225,684
Real Estate 217,999
Consumer 63,109
______________________________________________________________________
Total Commitments to Extend Credit $506,792
Letters of Credit:
Commercial $ 49,894
Standby-Financial 26,063
Standby-Performance 24,264
______________________________________________________________________
Total Letters of Credit $100,221
Financial Instruments with off-balance sheet market risk:
Interest rate swap agreements $254,488
Interest rate option contracts 400,000
Foreign exchange contracts:
Commitments to purchase 41,420
Commitments to sell 142,433
</TABLE>
The Corporation's management believes financial derivatives can be an
important element of prudent balance sheet and interest-rate risk management.
Interest-rate swaps, caps, collars and floors are entered into as hedges
against fluctuations in the interest rate of specifically identified assets or
liabilities. Such transactions have no effect on the level of total assets or
liabilities of the Corporation. Net receivables or payables under agreements
designated as hedges are recorded when realized or accrued as adjustments to
interest income or interest expense related to the hedged asset or liability.
Related fees are deferred and amortized over the life of the agreements as an
adjustment to interest income or interest expense related to the hedged assets
or liabilities. Unrealized gains and losses will not be reflected in the
accompanying financial statements unless the hedges are terminated.
Other than swaps entered into for customers, the Corporation's involvement
with off-balance sheet financial derivative instruments has been for hedging
purposes, and includes a $200 million interest-rate swap agreement, entered
into in July 1993, to hedge money market assets against the possibility of
declining interest rates. Since inception, this swap agreement has functioned
as an effective hedge. At September 30, 1994, total receivables and payables
relating to unpaid interest income/expense from the swap agreement totaled
$2.6 million and $2.7 million, respectively, with no unamortized fees
outstanding at quarter-end. As interest rates began to rise in early 1994,
the level of interest rate risk of the Corporation increased. The market
value of the swap agreement has fluctuated, from an unrealized gain of $0.9
million at year-end 1993, to an unrealized loss of approximately $12.5 million
at September 30, 1994. Based on the possibility of further increases in
interest rates, in April 1994 the Corporation purchased a separate instrument
known as a corridor to mitigate the negative impact of rising interest rates
on net interest income and reduce the level of interest-rate risk. In
July 1994, the Corporation entered into an additional $200 million corridor
transaction, which includes a terminating cap, to hedge the cost of certain
short-term borrowings against rising interest rates.
11
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
NOTE 7. COMMITMENTS AND CONTINGENT LIABILITIES, CONTINUED
__________________________________________________
At September 30, 1994, there were not any net receivables and payables
outstanding relating to interest income/expense from either corridor
transaction, with unamortized fees totaling $3.2 million and aggregate
unrealized gains of approximately $1.1 million at quarter-end for the
two corridor transactions.
NOTE 8. OTHER DEVELOPMENTS
___________________
On February 1, 1994, the Corporation sold $125 million of 8.5% subordinated
notes due February 2006. The notes were sold at par and are not callable for
five years. The notes were sold under a shelf registration statement declared
effective on January 13, 1994. The net proceeds from the sale totaled $121.3
million and were used to redeem approximately $51.5 million of floating-rate
subordinated notes and $69.2 million of floating-rate subordinated capital
notes, both bearing an interest rate of 5.25% at the date of redemption and
maturing in 1996.
On September 27, 1994, the Corporation repurchased all 764,537 shares of its
7.5% cumulative convertible preferred stock, Series A, from the Norwich Union
Life Insurance Society. This repurchase will reduce dividends payable on
preferred stock by $1.4 million annually. The Series A preferred shares were
previously convertible into 2,002,141 shares of common stock.
President Clinton signed the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 (the "Interstate Act") on September 29, 1994. The
Interstate Act authorizes bank holding companies to engage in interstate
acquisitions one year after the date of enactment, interstate branching
through interstate bank mergers beginning in June 1997 (subject to individual
states ability, in certain circumstances, to prohibit such merger activity by
enacting legislation prior to June 1997), interstate consolidations of
affiliated banks beginning in June 1997, and other de novo interstate
branching if authorized by state law. The Corporation is assessing the
impact of this legislation on the banking industry and the Corporation.
NOTE 9. REGULATORY MATTERS
___________________
In December 1992, new federal regulations were adopted to implement the prompt
corrective action provisions of the Federal Deposit Insurance Corporation
Improvement Act (FDICIA), which group FDIC-insured institutions into
categories based on certain capital ratios and other criteria. The categories
are "well capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized" and "critically undercapitalized." Each of
the Corporation's insured banking subsidiaries are "well-capitalized."
On May 14, 1993, the Corporation entered into a Memorandum of Understanding
with the Federal Reserve Bank of Richmond ("Federal Reserve") and Riggs-
Washington entered into a Written Agreement with the Office of the Comptroller
of the Currency (the "OCC"). The Memorandum of Understanding and the Written
Agreement were the result of regulatory concern over financial and operational
weaknesses and continued losses related primarily to the Corporation's
domestic and United Kingdom commercial real estate exposure. On September 16,
1994, the Corporation was notified by the OCC that it had terminated the
Written Agreement. Under the terms of the Memorandum of Understanding, the
Corporation must notify the Federal Reserve in advance of dividend
declarations, the issuance and/or redemption of long-term debt and the use of
cash assets in certain circumstances. The Corporation is also required to
submit plans and reports to the Federal Reserve relating to capital, asset
quality, loan loss reserves and operations, including contingency measures if
projected operational results do not occur. As of September 30, 1994, the
Corporation was in substantial compliance with the provisions and requirements
of the Memorandum of Understanding.
12
<PAGE>
RIGGS NATIONAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
SUMMARY
The Corporation reported consolidated net income of $8.2 million ($.17 per
common share) for the third quarter of 1994 compared with net income of $3.0
million ($.10 per common share) for the same quarter a year earlier. The
third quarter performance in 1994 was the Corporation's fifth consecutive
profitable quarter. Results for the third quarter of 1994 reflect the
benefits of a $6.9 million (pretax) increase in net interest income (on a tax-
equivalent basis, see "Net Interest Income") and a $1.7 million reduction in
the provision for loan losses. The increase in net interest income in the
latest period was the result of improved asset mix and reductions in
nonperforming assets, and was partially offset during the period by reductions
in noninterest income of $3.1 million. Two factors contributing to the
reduction in noninterest income were declines of $1.2 million in trust income
and $1.4 million in service charges and fees (see "Noninterest Income").
The provision for loan losses in the third quarter of 1994 was $2.1 million.
The reduced provision in 1994 when compared to the year-earlier period was the
result of improvements in asset quality, as nonperforming assets were reduced
$179.1 million or 65%, from $273.6 million at the end of the third quarter of
1993 to $94.5 million at the end of the third quarter of 1994. The September
30, 1994 level of nonperforming assets is the lowest since the first quarter
of 1990. The Corporation's overall asset quality continues to improve as a
result of collection and asset-management efforts, as well as improved
economic conditions domestically and in the United Kingdom.
Consolidated net income for the first nine months of 1994 was $26.0 million
($.55 per common share), compared with a loss of $97.3 million ($3.90 per
common share) for the same period a year earlier. Significant factors
contributing to the 1993 loss were a $67.2 million provision for loan losses
and restructuring charges of $34.6 million (see "Performance Enhancing
Strategies"). The 1993 provision for loan losses related to domestic
commercial loans and foreign (primarily United Kingdom) corporate loans.
Results for 1994 reflect the benefits of a $13.9 million (pretax) increase in
the net interest income (on a tax-equivalent basis, see "Net Interest
Income"), a $4.7 million (pre-tax) gain from the settlement of mortgage
insurance claims related to other real estate owned in the United Kingdom, and
a $2.1 million (pretax) credit representing the recapture of restructuring
expenses accrued in the first quarter of 1993 for the cost of implementing
BankStart '93 (see "Performance Enhancing Strategies"). The reduced provision
for the first nine months of 1994 was the result of improved asset quality.
Assets totaled $4.47 billion at September 30, 1994, down $309.5 million from
year-end 1993, and $202.2 million from September 30, 1993. The decrease in
total assets from September 30, 1993, consisted primarily of decreases
in securities and money market assets totaling $571.4 million, offset
by an increase in net loans of $441.0 million. The decrease in short-term,
lower-yielding assets, combined with the increase in higher-yielding
loans and securities, is part of an overall asset/liability strategy
implemented in 1993 and ongoing in 1994 to improve the Corporation's overall
interest margin performance. Deposits at September 30, 1994, totaled $3.55
billion, a decrease of $225.2 million from year-end 1993 and a decrease of
$385.7 million from September 30, 1993. The decrease during the last twelve
months was due primarily to reductions in money market and demand deposit
accounts, the result of general reductions in banking deposits, as customers
sought higher investment returns, primarily through non-banking competitors,
in response to the historically low interest-rate environment. Total
liabilities decreased $287.5 million during 1994 and decreased $315.7 million
from the year-earlier balance. The decrease from the year-earlier balance was
due to the aforementioned decline in deposits, partially offset by a $81.8
million increase in short-term borrowings.
13
<PAGE>
PERFORMANCE ENHANCING STRATEGIES
BankStart '93 was initiated in January 1993 and was a corporation-wide project
to improve efficiency and increase operational effectiveness. In the first
quarter of 1993, the Corporation took a restructuring charge of $13.8 million,
representing management's estimate of the cost of implementing the program.
During the first half of 1994, the implementation of BankStart '93 was
substantially completed and a $2.1 million recovery was recognized. This
recovery was the result of lower than anticipated expenses associated with
staff reductions. Accrued and unpaid restructuring expenses totaled
$1.2 million at September 30, 1994, with related disbursements expected
to be made in the fourth quarter of 1994 and in future periods.
At the end of the second quarter of 1993, the Corporation announced a
financial restructuring of its domestic and certain foreign operations, which
included enhancing certain lines of business domestically and exiting
unprofitable lines of business in the United Kingdom, reducing its investments
in certain foreign subsidiaries and increasing reserves against problem assets
in order to facilitate their disposition. At September 30, 1994, the
restructurings were substantially complete. Accrued and unpaid restructuring
expenses totaled $1.3 million at September 30, 1994, with related disbursements
expected to be made during the remainder of 1994 and the first half of 1995.
SECURITIES
Schedules detailing securities available for sale and securities held-to-
maturity follow:
<TABLE>
<CAPTION>
SEPTEMBER 30, 1994 SEPTEMBER 30, 1993
AVAILABLE FOR SALE AMORTIZED MARKET/ AMORTIZED COST/ MARKET
(IN THOUSANDS) COST BOOK VALUE BOOK VALUE VALUE
______________________________________________________________________________
<S> <C> <C> <C> <C>
U.S. Treasury Securities $138,368 $137,315 $538,119 $539,365
Government Agencies Securities 26,534 25,043 --- ---
Mortgage-Backed Securities 453,161 436,421 215,780 216,098
Other Securities 14,425 14,425 --- ---
______________________________________________________________________________
Total $632,488 $613,204 $753,899 $755,463
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30, 1994 SEPTEMBER 30, 1993
HELD-TO-MATURITY BOOK MARKET BOOK MARKET
(IN THOUSANDS) VALUE VALUE VALUE VALUE
______________________________________________________________________________
<S> <C> <C> <C> <C>
U.S. Treasury Securities $312,607 $311,096 $ 94,555 $ 95,998
Government Agencies Securities 125,000 121,418 --- ---
Obligations of States &
Political Subdivisions --- --- 1,999 2,262
Mortgage-Backed Securities --- --- 406,509 408,818
Other Securities 1,600 1,600 35,304 37,812
______________________________________________________________________________
Total $439,207 $434,114 $538,367 $544,890
</TABLE>
14
<PAGE>
SECURITIES, CONTINUED
Investment securities and securities held for sale for 1993 are presented in
the held-to-maturity and available for sale categories, respectively, in the
preceding tables. Effective December 31, 1993, the Corporation adopted SFAS
No. 115, "Accounting for Certain Investments in Debt and Equity Securities."
SFAS No. 115 requires that all unrealized gains and losses from the securities
available for sale portfolio be included, net, in stockholders' equity until
realized. This treatment is a change from previous accounting policy, which
required such securities to be carried at the lower of cost or market with any
unrealized gains and losses included in earnings. SFAS No. 115 may not be
applied retroactively to prior years' financial statements.
The weighted-average maturities and yields for securities held-to-maturity,
adjusted for anticipated prepayments, was approximately 1.5 years and 5.51% at
September 30, 1994. The weighted-average maturities and yields for securities
available for sale, adjusted for anticipated prepayments, was approximately
3.2 years and 5.78% at September 30, 1994. Total securities held-to-maturity
and available for sale decreased $315.8 million (23.1%) during the nine months
of 1994, and $239.9 million (18.6%) since September 30, 1993. The decrease
in securities for the first nine months of 1994 was due to maturities and
sales during the period being shifted to residential mortgage loans, as well
as being used to fund reductions in deposits and short-term borrowings during
the period. The decrease in securities during the past year occurred
as proceeds from maturities and sales, combined with proceeds from maturing
money market investments, were invested in longer-term, fixed-rate residential
mortgage loans, as part of a strategy to improve earnings.
LOANS
The following table reflects loans by type for the periods indicated:
<TABLE>
<CAPTION>
LOAN TYPE SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
(IN THOUSANDS) 1994 1993 1993
______________________________________________________________________________
<S> <C> <C> <C>
Commercial and Financial $ 461,432 $ 340,477 $ 412,006
Real Estate-Commercial/Construction 337,941 453,493 388,442
Residential Mortgage 1,316,023 747,863 1,149,363
Home Equity 223,243 253,761 234,049
Consumer 76,328 88,428 82,819
Foreign 186,641 283,925 255,396
______________________________________________________________________________
Total Loans 2,601,608 2,167,947 2,522,075
Less: Unearned Discount,
(Unamortized Premium) and
Net Deferred Fees (6,457) 912 (6,058)
______________________________________________________________________________
Total $2,608,065 $2,167,035 $2,528,133
</TABLE>
15
<PAGE>
LOANS, CONTINUED
At September 30, 1994, total loans outstanding (net of premiums/discounts)
were $2.61 billion, compared with $2.53 billion at December 31, 1993, and
$2.17 billion at September 30, 1993. The increase in loans from September 30,
1993, was primarily attributable to purchases of approximately $436 million in
residential mortgage loans during the fourth quarter of 1993 and an additional
$90 million during the first quarter of 1994, combined with local-area
originations of residential mortgage loans. The increase in residential
mortgages is part of a strategy to improve earnings (see "Securities"). The
increase from December 31, 1993, which totaled $79.9 million, was due
primarily to an increase in residential mortgages of $166.7 million during the
first nine months of 1994, the result of residential loan purchases of $90
million during the first quarter of 1994, combined with local-area
originations during the nine-month period. Commercial and financial loans
also increased during the first nine months of 1994 ($49.4 million), the
result of new local-area commercial loan originations. These increases were
partially offset by net decreases in real estate-commercial/construction, home
equity, consumer and foreign loans, which decreased an aggregate $136.6
million during the period.
REAL ESTATE-COMMERCIAL/CONSTRUCTION LOANS
GEOGRAPHIC DISTRIBUTION BY TYPE
SEPTEMBER 30, 1994
<TABLE>
<CAPTION>
GEOGRAPHIC LOCATION
PROJECT TYPE DISTRICT OF UNITED
(IN THOUSANDS) COLUMBIA VIRGINIA MARYLAND KINGDOM OTHER TOTAL
______________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Land $ 14,710 $ 22,229 $ 26,727 $ --- $ --- $ 63,666
Construction:
Single-Family
Residential 9,100 11,518 4,426 --- --- 25,044
Office Buildings 38,193 16,706 17,270 --- 2,431 74,600
Multifamily
Residential 1,234 3,670 1,069 --- 2,158 8,131
Industrial/
Warehouse Loans 369 2,810 6,447 --- --- 9,626
Shopping Centers --- 17,423 18,420 --- --- 35,843
Hotels 4,612 5,626 --- --- --- 10,238
Other --- 5,190 59 --- --- 5,249
________________________________________________________________________________
Total Land and
Construction 68,218 85,172 74,418 --- 4,589 232,397
Commercial Mortgages 33,801 46,705 25,623 113,549 644 220,322
________________________________________________________________________________
Total Real Estate-
Commercial/
Construction Loans $102,019 $131,877 $100,041 $113,549 $5,233 $452,719
</TABLE>
At September 30, 1994, the Corporation had no cross-border outstandings
exceeding 1% of its total assets to countries experiencing difficulties in
repaying their external debt. The table below details the countries in which
the Corporation had total outstandings in excess of 1% of its total assets.
The Corporation did not have any cross-border outstandings between .75% and
1.00% of total assets at September 30, 1994, December 31, 1993, or September
30, 1993.
CROSS-BORDER OUTSTANDINGS WHICH EXCEED 1% OF TOTAL ASSETS
<TABLE>
<CAPTION>
90 DAYS
% OF NON- OR MORE POTENTIAL
(IN MILLIONS) AMOUNT ASSETS ACCRUAL RENEGOTIATED PAST DUE PROBLEM
______________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
SEPTEMBER 30, 1994
United Kingdom $170.1 3.8% $12.6 $0.3 $0.3 $ 4.4
France 51.4 1.1 --- --- --- ---
DECEMBER 31, 1993
United Kingdom 186.8 3.9 37.7 0.8 --- 8.9
SEPTEMBER 30, 1993
United Kingdom 205.2 4.4 49.0 0.9 --- 13.3
</TABLE>
16
<PAGE>
ASSET QUALITY
Nonperforming assets, which include nonaccrual loans, renegotiated loans and
other real estate owned (net of reserves), totaled $94.5 million at September
30, 1994, a $118.8 million (55.7%) decrease from the year-end 1993 total of
$213.3 million and a $179.1 million (65.5%) decrease from the September 30,
1993 total. The composition of nonperforming assets and past due loans is
detailed below:
NONPERFORMING ASSETS AND PAST DUE LOANS
<TABLE>
<CAPTION>
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
(IN THOUSANDS) 1994 1993 1993
______________________________________________________________________________
<S> <C> <C> <C>
NONPERFORMING ASSETS:
Nonaccrual Loans: (1)
Domestic $19,309 $144,576 $ 85,075
Foreign 17,789 65,714 45,099
______________________________________________________________________________
Total Nonaccrual Loans 37,098 210,290 130,174
______________________________________________________________________________
Renegotiated Loans: (2)
Domestic 189 8,533 29,465
Foreign 298 914 834
______________________________________________________________________________
Total Renegotiated Loans 487 9,447 30,299
______________________________________________________________________________
Other Real Estate Owned, Net:
Domestic 49,703 43,153 45,049
Foreign 7,208 10,719 7,754
______________________________________________________________________________
Total Other Real Estate Owned, Net 56,911 53,872 52,803
______________________________________________________________________________
Total Nonperforming Assets $94,496 $273,609 $213,276
PAST DUE LOANS: (3)
Domestic $ 1,782 $ 4,214 $ 3,315
Foreign --- 31 4
______________________________________________________________________________
Total Past Due Loans $ 1,782 $ 4,245 $ 3,319
</TABLE>
[FN]
(1)- Loans (other than consumer) that are contractually past due 90 days or
more in either principal or interest that are not well-secured and in
the process of collection.
(2)- Loans for which terms have been renegotiated to provide a reduction of
interest or principal as a result of a deterioration in the financial
position of the borrower in accordance with Statement of Financial
Accounting Standards No. 15. Renegotiated loans do not include
$13.7 million in loans renegotiated at market terms that have performed
in accordance with their respective renegotiated terms. These
performing, market rate loans are no longer included in nonperforming
assets totals.
(3)- Loans contractually past due 90 days or more in principal or interest
that are well-secured and in the process of collection.
17
<PAGE>
ASSET QUALITY, CONTINUED
At September 30, 1994, nonaccrual loans, including both domestic and foreign
loans, were $37.1 million, or 1.4% of total loans, compared with $130.2
million, or 5.2% of total loans, at year-end 1993 and $210.3 million, or 9.7%
of total loans, at September 30, 1993. Loans are generally placed on
nonaccrual status when, in management's judgment, there is doubt as to the
ability to collect either principal or interest, or when interest or principal
is 90 days or more past due and the loan is not well-secured and in the
process of collection. The decrease in nonaccrual loans during the nine month
period ended September 30, 1994, was due to paydowns and payoffs of $54.2
million, in addition to loans returning to accrual status of $31.8 million,
transfers to other real estate owned of $20.3 million and charge-offs of $5.8
million. These reductions were partially offset by net additions of $10.0
million, foreign exchange fluctuations of $1.6 million and a transfer of a
renegotiated loan totaling $7.4 million to nonaccrual status. Of the $54.2
million in paydowns and payoffs during the first nine months of 1994, $24.4
million (45%) related to foreign nonaccrual loans and $29.8 million (55%)
related to domestic nonaccrual loans. Renegotiated loans decreased $29.8
million during the first nine months of 1994, with paydowns and payoffs
totaling $2.8 million, combined with charge-offs of $1.9 million, transfers to
other real estate owned of $2.9 million, transfers back to accrual status of
$14.8 million and the aforementioned $7.4 million transfer to nonaccrual
status during the period.
NONACCRUAL AND RENEGOTIATED REAL ESTATE-COMMERCIAL/CONSTRUCTION LOANS
GEOGRAPHIC DISTRIBUTION BY TYPE
SEPTEMBER 30, 1994
<TABLE>
<CAPTION>
GEOGRAPHIC LOCATION
PROJECT TYPE DISTRICT OF UNITED
(IN THOUSANDS) COLUMBIA VIRGINIA MARYLAND KINGDOM OTHER TOTAL
______________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Land $ --- $ 882 $7,036 $ --- $ --- $ 7,918
Construction:
Single-Family
Residential --- --- --- --- --- ---
Office Buildings 320 683 432 --- --- 1,435
Multifamily
Residential 658 --- --- --- --- 658
Industrial/
Warehouse Loans 369 1,243 750 --- --- 2,362
Shopping Centers --- --- --- --- --- ---
Hotels --- --- --- --- --- ---
Other --- --- 58 --- --- 58
Commercial Mortgages --- --- --- 13,508 --- 13,508
________________________________________________________________________________
Total Nonaccrual and
Renegotiated Real Estate-
Commercial/
Construction Loans $1,347 $2,808 $8,276 $13,508 $ --- $25,939
</TABLE>
Other real estate owned, net of reserves, increased to $56.9 million at
September 30, 1994, from $52.8 million at December 31, 1993, and $53.9 million
at September 30, 1993. The increase during the first nine months of 1994 was
the result of net additions of $23.2 million and exchange rate fluctuations of
$0.5 million, partially offset by paydowns and sales of $17.2 million and
charge-offs of $2.4 million. At September 30, 1994, residential and
commercial land composed 56% of other real estate owned, with office,
industrial, retail and other categories accounting for the remainder of the
portfolio.
18
<PAGE>
ASSET QUALITY, CONTINUED
OTHER REAL ESTATE OWNED
GEOGRAPHIC DISTRIBUTION BY TYPE
SEPTEMBER 30, 1994
<TABLE>
<CAPTION>
GEOGRAPHIC LOCATION
PROJECT TYPE DISTRICT OF UNITED
(IN THOUSANDS) COLUMBIA VIRGINIA MARYLAND KINGDOM OTHER TOTAL
______________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Land $ --- $27,461 $ 4,368 $ --- $ --- $31,829
Single-Family
Residential 947 561 281 --- 15 1,804
Office Buildings/
Retail 1,038 1,734 6,007 2,612 2,561 13,952
Multifamily
Residential --- --- --- --- --- ---
Industrial/
Warehouse Loans 215 --- 615 1,094 --- 1,924
Shopping Centers --- --- --- 1,649 --- 1,649
Other --- 3,900 --- 1,853 --- 5,753
________________________________________________________________________________
Total Other Real
Estate Owned, Net-(1)$2,200 $33,656 $11,271 $7,208 $2,576 $56,911
</TABLE>
[FN]
(1)-Balances are net of reserves totaling $2.1 million.
Past due loans consist predominantly of residential real estate and consumer
loans that are well-secured and in the process of collection and that are
accruing interest. Past due loans decreased $1.5 million during the first
nine months of 1994 to $1.8 million, while decreasing $2.5 million from
September 30, 1993.
At September 30, 1994, the Corporation had identified approximately $20.4
million in potential problem loans that were currently performing but that
management believes have certain attributes that may lead to nonaccrual or
past due status in the foreseeable future. These loans consisted of $16.0
million of domestic loans, primarily commercial and financial, and $4.4
million of commercial property and corporate loans originated in the United
Kingdom.
The Corporation's banking subsidiaries maintain reserves for loan losses that
are available to absorb potential losses in the current loan portfolio. The
reserve for loan losses is based on management's assessment of existing
conditions and reflects potential losses determined to be probable and subject
to reasonable estimation. The reserve for loan losses was $95.8 million, or
3.67% of total loans (net of premiums/discounts), at September 30, 1994,
compared with $86.5 million, or 3.42% of total loans, at December 31, 1993,
and $83.5 million, or 3.85% of total loans, at September 30, 1993. The
decrease in the percentage of reserves to total loans from September 30, 1993,
to September 30, 1994, was due to the increase in total loans during the
periods, primarily in residential mortgage-type loans. The Corporation's
coverage ratio was 255% at September 30, 1994, 54% at year-end 1993 and 38% at
September 30, 1993. The increase in the coverage ratio during the periods is
primarily the result of a decline in total nonperforming loans and an
increase in the reserve for loan losses during the periods.
DEPOSITS, SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Deposits, which are offered through several banking subsidiaries of the
Corporation, are the primary and most stable source of funds for the
Corporation. Deposits totaled $3.55 billion at September 30, 1994, declining
$225.2 million from the year-end 1993's deposit total and $385.7 million
(9.8%) from the September 30, 1993 deposit total. The decrease from the year-
earlier balance was due to decreases in money market and demand deposits
($276.7 million), in addition to declines in domestic time deposits ($87.8
million), the result of general reductions in banking deposits, as customers
sought higher investment returns, primarily through non-banking competitors,
in response to the historically low interest-rate environment.
Short-term borrowings decreased $61.1 million (13.4%) during the first nine
months of 1994, while increasing $81.8 million (26.3%) since the end of the
third quarter of 1993. The decrease in short-term borrowings from year-end
1993 was primarily due to the use of a portion of funds received on maturities
and sales of securities to repay maturing short-term borrowings.
19
<PAGE>
DEPOSITS, SHORT-TERM BORROWINGS AND LONG-TERM DEBT, CONTINUED
The increase in short-term borrowings from the prior year's balance was used
to replace a portion of the decrease in total deposits during the period.
On February 1, 1994, the Corporation sold $125 million of 8.5% Subordinated
Notes, due February 2006. The notes were priced at par and are not callable
for five years. The notes were sold under a shelf registration statement
declared effective on January 13, 1994. The Corporation has used the net
proceeds from the offering, $120.7 million, to redeem floating-rate
subordinated notes and subordinated capital notes due in 1996. The proceeds
were placed in short-term investments prior to the redemption of the floating-
rate notes in March 1994. The balance of long-term debt at September 30,
1994, was $217.6 million, up slightly from the balance at year-end and
September 30, 1993, of $213.3 million. The increase from the year-end balance
reflects the difference between the gross proceeds from the sale of the
subordinated notes in February 1994 ($125.0 million) and the amount of debt
redeemed in March 1994 ($120.7 million).
LIQUIDITY
The Corporation seeks to maintain sufficient liquidity to meet the needs of
depositors, borrowers and creditors, at a reasonable cost and without undue
stress on the operations of the Corporation and its banking subsidiaries. The
Corporation's Asset-Liability Committee actively analyzes and manages
liquidity in coordination with other areas of the organization (see "Interest
Rate Risk Management" below). At September 30, 1994, the Corporation's liquid
assets, on a consolidated basis, which include cash and due from banks, U.S.
Treasury securities and Government obligations, federal funds sold, reverse
repurchase agreements and time deposits at other banks, totaled $1.6 billion
(35.7% of total assets). This total compares with $1.8 billion (36.9%) at
December 31, 1993, and $2.2 billion (46.6%) at September 30, 1993. The
decreases in total liquid assets and the percentage of liquid assets to total
assets from September 30, 1993 were the result of the Corporation's strategy
to improve earnings by increasing its loan-to-deposit ratio. The Corporation
expects liquid assets to remain at approximately the September 30, 1994 level
for the foreseeable future.
Liquidity needs of the Corporation are met by the steady source of funds
maintained through the Corporation's core deposit relationships, in addition
to its ability to attract new deposits and other sources of funds, such as
short-term borrowings and assets available for securitization.
INTEREST-RATE RISK MANAGEMENT
Financial institutions manage the inherently different maturity and repricing
characteristics of their loan and deposit products to achieve a desired
interest-rate sensitivity position and to limit their exposure to interest-
rate risk. The Corporation manages interest-rate risk through its Asset-
Liability Committee, comprised of senior executives of the Corporation, which
reports to the Executive Committee of the Board of Directors. Policies,
approved by the Board of Directors, have been established related to
acceptable levels of interest-rate risk.
At September 30, 1994, the Corporation's interest sensitivity gap was
marginally liability-sensitive. Thus, increases in interest rates would tend
to decrease the Corporation's net interest income, while downward movements
would tend to increase net interest income. The one-year interest sensitivity
gap was liability-sensitive by approximately $200 million, or 5% of total
assets, at September 30, 1994.
The interest-sensitivity gap position reflects the impact of the off-balance
sheet derivative transactions the Corporation has entered into to help manage
its interest-rate risk. The Corporation uses off-balance sheet instruments to
manage interest-rate risk when such instruments present a cost-effective
alternative to traditional on-balance sheet methods. The Corporation is not a
dealer in off-balance sheet instruments, nor does it enter into off-balance
sheet positions as a part of its trading account activities.
20
<PAGE>
STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL
Total stockholders' equity at September 30, 1994, was $271.2 million, down
$22.0 million from the year-end 1993 total and up $113.6 million from
September 30, 1993. The decrease during 1994 was the result of earnings
totaling $26.0 million, as well as foreign exchange translation and other
activity totaling $1.1 million, which, in the aggregate, were more than offset
by $20.6 million of unrealized losses on securities in the Corporation's
available for sale portfolio, the repurchase of the Preferred Stock, Series A
totaling $19.1 million and dividends on preferred stock of $9.4 million. The
increase in stockholders' equity from the preceding year is primarily
attributable to the issuance of common and preferred stock in October 1993,
which resulted in net proceeds of $132.3 million.
The Corporation's total (Combined Tier I and Tier II) and core (Tier I)
capital ratios were 17.86% and 11.05%, respectively, at September 30, 1994,
compared with 16.81% and 10.76% at December 31, 1993, and 11.01% and 5.78% at
September 30, 1993, respectively. The Federal Reserve Board's risk-based
capital guidelines require bank holding companies to meet a minimum ratio of
qualifying total (combined Tier I and Tier II) capital to risk-weighted assets
of 8.00%, at least half of which must be composed of core (Tier I) capital
elements. The Federal Reserve Board has established an additional capital
adequacy guideline-the leverage ratio- which measures the ratio of Tier I
capital to quarterly average assets. The most highly rated bank holding
companies are required to maintain a minimum leverage ratio of 3.00%.
However, most bank holding companies, including the Corporation, are expected
to maintain an additional cushion of at least 100 to 200 basis points above
the 3.00% minimum. The actual required ratio for individual bank holding
companies is based on the Federal Reserve Board's assessment of the applicable
company's asset quality, earnings performance, interest-rate risk and
liquidity. The Federal Reserve Board has not advised the Corporation of a
specific leverage ratio requirement. The Corporation's leverage ratio was
6.30% at September 30, 1994, compared with leverage ratios of 6.03% and 3.02%
at December 31, 1993, and September 30, 1993, respectively. Regulatory
capital ratios do not include the impact of the $19.3 million unrealized loss
on securities available for sale portfolio. The Corporation's equity to
assets ratio, which does include these unrealized losses, remains solid, with
a ratio of 6.07% at September 30, 1994 compared to 6.13% and 3.37% at December
31, 1993, and September 30, 1993, respectively.
The Corporation ensures that its operating subsidiaries are capitalized in
accordance with regulatory guidelines. The three national bank subsidiaries
of the Corporation are subject to minimum capital ratios prescribed by the
Office of the Comptroller of the Currency, which are generally the same as
those of the Federal Reserve Board. The following table details the actual
and required minimum ratios for the Corporation and its insured bank
subsidiaries:
CAPITAL RATIOS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, REQUIRED
1994 1993 1993 MINIMUMS
______________________________________________________________________________
<S> <C> <C> <C> <C>
RIGGS NATIONAL CORPORATION:
Tier I 11.05% 10.76% 5.78% 4.00%
Combined Tier I and Tier II 17.86 16.81 11.01 8.00
Leverage 6.30 6.03 3.02 3.00
THE RIGGS NATIONAL BANK
OF WASHINGTON, D.C.:
Tier I 12.53 10.69 11.04 4.00
Combined Tier I and Tier II 13.82 11.97 12.31 8.00
Leverage 7.16 6.13 5.69 3.00
THE RIGGS NATIONAL BANK
OF VIRGINIA:
Tier I 18.45 17.05 16.43 4.00
Combined Tier I and Tier II 19.70 18.31 17.68 8.00
Leverage 9.62 8.94 8.80 3.00
THE RIGGS NATIONAL BANK
OF MARYLAND:
Tier I 12.97 11.46 11.13 4.00
Combined Tier I and Tier II 14.22 12.71 12.37 8.00
Leverage 6.80 6.69 6.57 3.00
</TABLE>
21
<PAGE>
NET INTEREST INCOME
Net interest income on a tax-equivalent basis (net interest income plus an
amount equal to the tax savings on tax-exempt interest) totaled $40.2 million
in the third quarter of 1994, up $1.2 million from the second quarter of 1994,
and up $6.9 million from the third quarter of 1993. Net interest income on a
tax-equivalent basis was $117.2 million for the first nine months of 1994,
compared with $103.4 million for the like period in the prior year. The net
interest margin (net interest income on a tax-equivalent basis divided by
average earning assets) for the third quarter of 1994 was 4.01% (see schedule
on the following page), an increase of 9 basis points from 3.92% for the
second quarter of 1994 and 95 basis points from 3.06% for the third quarter of
1993. The net interest margin for the nine-month periods ended September 30,
1994 and 1993, was 3.87% and 3.12%, respectively. Since September 30, 1993,
the positive impact of the lower interest-rate environment on interest paid
for deposits and borrowings was only partially offset by lower yields on
earning assets. While interest rates rose during the first nine months of
1994, the net interest margin continued to improve as assets generally
repriced faster than liabilities. The Corporation does not anticipate
significant changes in the net interest margin for the remainder of the year.
Also having a positive impact on the Corporation's net interest income and
margin have been decreases in nonperforming assets, combined with a shift to
longer-term, higher-yielding assets from short-term investments (see
"Securities"). In 1993, the Corporation established a goal of increasing its
loan-to-deposit ratio to approximately 70% in 1994. The loan-to-deposit ratio
stood at 73% at September 30, 1994. The goal was largely accomplished through
the purchase in the open market of approximately $526 million of residential
mortgages in 1993 and the first quarter of 1994. The ratio of loans to
average earning assets was 65% for the third quarter of 1994, which is
comparable with the ratio for the second quarter of 1994 and 15 basis points
higher than the ratio for the third quarter of 1993 (50%).
Interest income recognized on nonaccrual and restructured loans totaled
$1.3 million and $1.9 million for the nine months ended September 30, 1994 and
1993, respectively. Interest income that would have been earned under the
original terms of these loans was $5.6 million and $9.7 million, respectively,
which reduced the net interest margin by approximately 14 basis points in 1994
and 24 basis points in 1993.
INTEREST INCOME ON NONACCRUAL AND
RENEGOTIATED LOANS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
(IN THOUSANDS) SEPTEMBER 30, 1994-(1)
____________________________________________________________________________
<S> <C>
Interest Income at Original Terms:
Nonaccrual Loans:
Domestic Loans $3,159
Foreign Loans 1,978
Renegotiated Loans 413
_____________________________________________________________________________
Total $5,550
Actual Interest Income Recognized:
Nonaccrual Loans:
Domestic Loans $ 418
Foreign Loans 882
Renegotiated Loans ---
_____________________________________________________________________________
Total $1,300
</TABLE>
[FN]
(1) For loans on nonaccrual and renegotiated status at September 30, 1994,
the table shows total interest income at original terms and actual
income recognized for the nine months ended September 30, 1994.
22
<PAGE>
RIGGS NATIONAL CORPORATION
AVERAGE CONSOLIDATED STATEMENTS OF CONDITION AND RATES
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 1994 SEPTEMBER 30, 1993
(TAX-EQUIVALENT BASIS) AVERAGE INCOME/ AVERAGE INCOME/
(IN THOUSANDS) BALANCE EXPENSE RATE BALANCE EXPENSE RATE
______________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Loans: (1) (2)
Commercial - Taxable $ 382,511 $ 6,559 6.80% $ 259,501 $ 4,483 6.85%
Commercial - Tax-Exempt 54,220 1,336 9.78 80,532 1,835 9.04
Real Estate -
Commercial/Construction 335,890 7,533 8.90 463,566 7,230 6.19
Residential Mortgage 1,337,217 23,344 6.93 695,117 13,090 7.47
Home Equity 224,873 4,523 7.98 260,514 4,438 6.76
Consumer 76,073 2,257 11.77 87,885 2,788 12.59
Foreign 187,811 3,806 8.04 304,041 5,909 7.71
_______________________________________________________________________________
Total Loans (Including Fees)2,598,595 49,358 7.54 2,151,156 39,773 7.34
_______________________________________________________________________________
Securities Available for Sale 543,445 8,040 5.87 601,108 5,451 3.60
Securities Held-to-Maturity:(1)
U.S. Treasury Securities 296,599 4,116 5.51 121,581 1,388 4.53
Obligations of States and
Political Subdivisions --- --- --- 1,999 51 10.12
Government Agencies and
Mortgage-Backed Securities125,138 1,703 5.40 421,462 6,084 5.73
Other Securities 7,281 4 .22 34,750 1,122 12.81
______________________________________________________________________________
Total Secur. Held-to-Maturity 429,018 5,823 5.38 579,792 8,645 5.92
_______________________________________________________________________________
Time Deposits with Other Banks190,415 2,383 4.97 409,643 4,440 4.30
Federal Funds Sold and
Resale Agreements 221,533 2,545 4.56 576,221 4,549 3.13
_______________________________________________________________________________
Total Earning Assets and
Average Rate Earned 3,983,006 68,149 6.79 4,317,920 62,858 5.78
_______________________________________________________________________________
Less: Reserve for Loan Losses 94,234 82,585
Cash and Due from Banks 214,039 291,931
Premises and Equipment, Net 154,996 165,693
Other Assets 183,702 196,888
________________________________________________________________
Total Assets $4,441,509 $4,889,847
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-Bearing Deposits:
Savings and NOW Accounts $ 901,508 $ 4,964 2.18% $ 914,620 $ 4,737 2.05%
Money Market Dep. Accounts 1,044,066 6,886 2.62 1,165,439 7,082 2.41
Time Deposits:
Domestic Offices 733,322 6,210 3.36 906,527 7,752 3.39
Foreign Offices 223,079 2,825 5.02 361,672 4,210 4.62
_______________________________________________________________________________
Total Interest-
Bearing Deposits 2,901,975 20,885 2.86 3,348,258 23,781 2.82
_______________________________________________________________________________
Borrowed Funds:
Federal Funds Purchased and
Repurchase Agreements 157,922 1,878 4.72 198,963 1,395 2.78
U.S. Treasury Notes and
Other Borrowed Funds 41,247 473 4.55 94,765 673 2.82
Long-Term Debt 217,627 4,700 8.57 213,325 3,662 6.81
_______________________________________________________________________________
Total Interest-Bearing Funds
and Average Rate Paid 3,318,771 27,936 3.34 3,855,311 29,511 3.04
_______________________________________________________________________________
Demand Deposits 793,098 833,495
Other Liabilities 43,101 48,195
Stockholders' Equity 286,539 152,846
_________________________________________________________________
Total Liabilities and
Stockholders' Equity $4,441,509 $4,889,847
_______________________________________________________________________________
Net Interest Income and Spread $40,213 3.45% $33,347 2.74%
_______________________________________________________________________________
Net Interest Margin 4.01% 3.06%
</TABLE>
[FN]
(1) Income and rates are computed on a tax-equivalent basis using a Federal
income tax rate of 34% and local tax rates as applicable.
(2) Nonperforming loans are included in average balances used to
determine rates.
23
<PAGE>
RIGGS NATIONAL CORPORATION
AVERAGE CONSOLIDATED STATEMENTS OF CONDITION AND RATES
<TABLE>
<CAPTION>
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1994 SEPTEMBER 30, 1993
(TAX-EQUIVALENT BASIS) AVERAGE INCOME/ AVERAGE INCOME/
(IN THOUSANDS) BALANCE EXPENSE RATE BALANCE EXPENSE RATE
_______________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Loans: (1) (2)
Commercial - Taxable $ 377,307 $17,614 6.24% $ 274,525 $13,994 6.82%
Commercial - Tax-Exempt 64,417 5,217 10.83 85,570 5,902 9.22
Real Estate :
Commercial/Construction 360,347 22,319 8.28 502,967 22,824 6.07
Residential Mortgage 1,297,947 68,891 7.10 603,306 36,023 7.98
Home Equity 225,306 12,355 7.33 267,435 13,865 6.93
Consumer 75,725 6,721 11.87 92,278 8,516 12.34
Foreign 209,165 13,176 8.42 339,193 18,431 7.26
_______________________________________________________________________________
Total Loans (Including Fees)2,610,214 146,293 7.49 2,165,274 119,555 7.38
_______________________________________________________________________________
Securities Available for Sale 576,460 21,817 5.06 469,143 14,908 4.25
Securities Held-to-Maturity:(1)
U.S. Treasury Securities 391,221 12,952 4.43 327,435 14,817 6.05
Obligations of States and
Political Subdivisions 652 52 10.66 1,999 154 10.30
Government Agencies and
Mortgage-Backed Securities 72,643 3,262 6.00 402,665 17,549 5.83
Other Securities 14,393 946 8.79 39,763 2,708 9.11
_______________________________________________________________________________
Total Secur. Held-to-Maturity 478,909 17,212 4.81 771,862 35,228 6.10
_______________________________________________________________________________
Time Deposits with Other Banks184,839 7,062 5.11 434,536 15,454 4.75
Federal Funds Sold and
Resale Agreements 195,668 5,909 4.04 581,873 13,592 3.12
_______________________________________________________________________________
Total Earning Assets and
Average Rate Earned 4,046,090 198,293 6.55 4,422,688 198,737 6.01
_______________________________________________________________________________
Less: Reserve for Loan Losses 90,279 86,618
Cash and Due from Banks 224,580 291,473
Premises and Equipment, Net 157,801 170,025
Other Assets 184,975 220,785
_________________________________________________________________
Total Assets $4,523,167 $5,018,353
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-Bearing Deposits:
Savings and NOW Accounts $ 921,916 $14,464 2.10% $ 928,278 $14,757 2.13%
Money Market Dep. Accounts 1,052,167 19,555 2.48 1,203,172 22,345 2.48
Time Deposits:
Domestic Offices 766,884 18,113 3.16 829,165 22,259 3.59
Foreign Offices 218,782 8,263 5.05 514,552 20,127 5.23
_______________________________________________________________________________
Total Interest-
Bearing Deposits 2,959,749 60,395 2.73 3,475,167 79,488 3.06
_______________________________________________________________________________
Borrowed Funds:
Federal Funds Purchased and
Repurchase Agreements 115,722 3,470 4.01 169,962 3,425 2.69
U.S. Treasury Notes and
Other Borrowed Funds 72,406 1,914 3.53 74,096 1,550 2.80
Long-Term Debt 237,901 15,285 8.59 213,325 10,921 6.84
_______________________________________________________________________________
Total Interest-Bearing Funds
and Average Rate Paid 3,385,778 81,064 3.20 3,932,550 95,384 3.24
_______________________________________________________________________________
Demand Deposits 803,387 834,705
Other Liabilities 46,515 44,810
Stockholders' Equity 287,487 206,288
_________________________________________________________________
Total Liabilities and
Stockholders' Equity $4,523,167 $5,018,353
_______________________________________________________________________________
Net Interest Income and Spread $117,229 3.35% $103,353 2.77%
_______________________________________________________________________________
Net Interest Margin 3.87% 3.12%
</TABLE>
[FN]
(1) Income and rates are computed on a tax-equivalent basis using a Federal
income tax rate of 34% and local tax rates as applicable.
(2) Nonperforming loans are included in average balances used to
determine rates.
24
<PAGE>
NONINTEREST INCOME
Noninterest income for the third quarter of 1994 was $18.8 million, compared
with $22.6 million for the second quarter of 1994 and $21.9 million for the
third quarter of 1993. Noninterest income for the nine-month periods ended
September 30, 1994, and 1993, totaled $68.1 million and $91.4 million,
respectively. The $3.1 million decrease when comparing quarters on a year-to-
year basis was attributable primarily to decreases in trust income of $1.2
million and $1.4 million in service charges and fees. The decrease in trust
income was due to overall net reductions of trust account balances, while the
decrease in service charges and fees is attributable to reductions in analysis
and advisory fee income, the result of decreased noninterest income from the
sale of three foreign subsidiaries in the third quarter of 1994. The $23.3
million decrease when comparing the nine-month periods on a year-to-year basis
was the result of a decrease in securities gains of $22.5 million, combined
with a decrease in service charges and fees of $3.8 million, offset by $4.7
million in pretax income from the settlement of mortgage insurance claims
relating to other real estate owned properties in the United Kingdom. The
decrease in service charges and fees during the period was the result of the
decline of overall deposits from balances a year earlier, because of the low
interest-rate environment.
NONINTEREST EXPENSE
Noninterest expense for the third quarter of 1994 totaled $47.8 million, flat
when compared with the third quarter of 1993 and a $1.8 million decrease when
compared with the second quarter of 1994. Reductions in salaries and other
benefits of $1.8 million and furniture and equipment of $0.5 million were
offset by an increase in other noninterest expense of $2.2 million, primarily
the result of losses and other write-offs totaling $1.4 million from the sale
of three foreign subsidiaries in the third quarter of 1994 and an increase in
outsourcing fees of $0.5 million between the periods.
Noninterest expense for the nine-month periods ended September 30, 1994 and
1993, totaled $150.9 million and $215.6 million, respectively. The $64.7
million decrease in noninterest expense from the prior year was due primarily
to decreases in restructuring charges aggregating $36.6 million and decreases
of $13.4 million in other real estate owned expenses. These decreases
combined with across-the-board decreases in noninterest expenses, with
salaries, occupancy, and other expenses accounting for an additional $12.7
million of the decrease.
TAXES
The Corporation's provision for income taxes includes federal, state and
foreign income taxes. Income tax expense totaling $171 thousand was
recognized for the quarter ended September 30, 1994, compared with income tax
benefit of $693 thousand for the quarter ended June 30, 1994, and income tax
expense of $93 thousand for the quarter ended September 30, 1993. Income tax
benefits totaling $392 thousand, compared with income tax expense of $5.6
million, was recognized for the nine-month periods ended September 30, 1994,
and 1993, respectively. The 1994 tax provision was less than the statutory
rate because of the Corporation's ability to carryforward net operating losses
and the settlement of an outstanding tax issue with the United Kingdom taxing
authorities. This settlement resulted in a tax refund of $750 thousand in the
second quarter of 1994.
25
<PAGE>
RIGGS NATIONAL CORPORATION
EXHIBITS AND SIGNATURES
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
________________________________
(a) Exhibits
_________
(10.8) - Letter Confirming Compensation of Fred L. Bollerer,
dated October 5, 1994.
(10.9) - Deferred Compensation Plan for Directors.
(10.10)- Description of 1994 Bonus Plan (incorporated by
reference to the description appearing on page 14 of the
Registrant's Proxy Statement dated April 13, 1994).
(b) Reports on Form 8-K
___________________
On September 16, 1994, the Corporation filed a Form 8-K announcing it
had been notified by the Office of the Comptroller of the Currency
(the "OCC") that the OCC had terminated the Written Agreement under
which The Riggs National Bank of Washington, D.C. had been operating
since May 14, 1993.
On September 27, 1994, the Corporation filed a Form 8-K detailing the
repurchase of all 764,537 shares of its 7.5% cumulative convertible
preferred stock, Series A.
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.
Date: November 14, 1994 /s/ Timothy C. Coughlin
_________________ ________________________
Timothy C. Coughlin
President
Date: November 14, 1994 /s/ John L. Davis
_________________ ___________________
John L. Davis
Chief Financial Officer
(Principal Financial and
Accounting Officer)
26
<PAGE>
RIGGS NATIONAL CORPORATION
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this amendment to be signed on its behalf
by the undersigned thereunto duly authorized.
Riggs National Corporation
____________________________
(Registrant)
Date: November 22, 1994 /s/ Timothy C. Coughlin
_________________ _________________________
Timothy C. Coughlin
President
27
<PAGE>
Exhibit 10.8
THE RIGGS NATIONAL BANK OF WASHINGTON, D.C.
Human Resources Division
800 17th Street, N.W.
Washington, D.C. 20074-0097
(202) 835-6320 Fax: (202) 835-6341
KATHERINE MCKENZIE D'ARCY
Senior Vice President
and Director Human Resources
RIGGS Logo
October 5, 1994
Mr. Fred L. Bollerer
911 Rolling Holly Drive
Great Falls, VA 22066
Dear Fred:
We are pleased that you have accepted our offer as President and Chief
Executive Officer of The Riggs National Bank of Washington, DC, and would
like to take this opportunity to confirm the terms and conditions of that
offer in writing:
Title: President and Chief Executive Officer
The Riggs National Bank of Washington, D.C.
Effective Date: July 13, 1994.
Salary: $300,000, annually.
Options: Effective July 13, 1994, you received
75,000 options which vested that day, but
will not be exercisable until the earliest
to occur of the following dates, provided
you are still employed by Riggs: five years
from the date of the Grant (July 12, 1999);
or the date on which the reported closing
price of Riggs National Corporation Common
Stock has been at least $12.00 per share on
90% of the trading days during any
consecutive 6 month period; or the date on
which change in control occurs, as defined
by the plan. The issue price of your
options is $9.00 per share, the closing
price of the stock on July 13.
Bonus: 50% of base pay. This amount is based on
ROA of 50 basis points for 1994 and
75 basis points for 1995.
SERP: Upon normal retirement, as defined by the
Plan, you will be entitled to a maximum
benefit of $40,000 annually for 15 years.
This benefit will cliff vest 100% in
3 years.
CONFIDENTIAL
-1-
<PAGE>
page 2
Bollerer
Club Membership: Riggs will pay any initiation fee, plus any
monthly fees for you at the social club of
your choice.
The title and salary offer were approved by the Joint Compensation
Committee, the Board of Directors of Riggs National Corporation and The
Riggs National Bank of Washington, DC. The Stock Options and their
vesting schedule were approved by the Outside Directors Committee.
Please indicate your acceptance of this offer by signing a copy of this
letter and returning it to me for the files.
Sincerely,
/s/ KATHERINE M. D'ARCY
________________________
Katherine M. D'Arcy
Signature: /s/ FRED L. BOLLERER
_____________________
Fred L. Bollerer
Date: October 5, 1994
_____________________
-2-
<PAGE>
Exhibit 10.9
April 11, 1994
RIGGS NATIONAL CORPORATION
and
THE RIGGS NATIONAL BANK OF WASHINGTON, D.C.
DEFERRED COMPENSATION PLAN FOR DIRECTORS
____________________________________________
I .
INTRODUCTION
This Deferred Compensation Plan (the "Plan") is
established by Riggs National Corporation (the "Company") and
The Riggs National Bank of Washington, D.C. (the "Bank") for the
benefit of their Directors and their Beneficiaries, and it shall
be maintained according to the terms hereof. The Plan allows
Directors to defer receipt and taxation of Director's Fees and
to invest deferred fees in Shares of the Company.
II.
DEFINITIONS
A. DEFINITIONS. When used herein, the following words
and phrases shall have the meanings assigned to them, unless the
context clearly indicates otherwise:
-1-
<PAGE>
1. "Bank" means The Riggs National Bank of
Washington, D.C.
2. "Beneficiary" means the person or persons, natural
or otherwise, designated by a Director under section 8.1 to
receive any death benefit payable under section 7.3.
3. "Board of Directors" means the board of directors
of the Company unless otherwise stated.
4. "Cash Deferred Fee Account" means an account
established in the name of a Director to which is credited any
Director's Fees that are deferred by the Director under section
3.1(a) and directed into the Cash Deferred Fee Account under
section 3.1(c), any Prior Deferred Fees which the Director
elects to have transferred pursuant to section 3.6(a), any
interest that is credited under section 5.1, any dividends that
are credited under sections 6.1(c) and 7.2(b) and from which is
debited payments made under Article VII.
5. "Common Stock" means the common shares, $2.50 par
value per share, of the Company.
-2-
<PAGE>
6. "Company" means the Riggs National Corporation.
7. "Deferred Fee Accounts" means a Director's Cash
Deferred Fee Account and Stock Deferred Fee Account.
8. "Deferred Fee Agreement" means the written
agreement, substantially in the form of Exhibit A hereto,
between the Director and the Company or the Bank, as
appropriate, that together with the Plan, governs the Director's
rights to payment of deferred Director's Fees (adjusted for
investment performance) under the Plan.
9. "Director" means a non-employee member of the
board of directors of the Company, the Bank or any subsidiaries
or affiliates whose participation is approved by the board of
directors of the Company.
10. "Director's Fees" means the annual retainer paid
to a Director, any fees paid to a Director for attending
meetings of the board of directors or any committee of the board
of directors and any fees paid to a Director for serving as
chairman of a committee of the board of directors.
11. "Fair Market Value" means, with respect to a
share of the Common Stock, (i)
-3-
<PAGE>
if the Common Stock is listed on a national securities exchange
or traded on the National Market System, the closing price of
the Common Stock on the determination date or if there are no
sales on such date, then on the next preceding date on which
there were sales of Common Stock, all as published in the
Eastern Edition of The Wall Street Journal, (ii) if the Common
Stock is not listed on a national securities exchange or traded
on the National Market System, the closing price last reported
by the National Association of Securities Dealers, Inc. for the
over-the-counter market on the determination date or, if no
sales are reported on such date, then on the next preceding date
on which there were such quotations, or (iii) if the Common
Stock is not listed on a national securities exchange or traded
on the National Market System and quotations for the Common
Stock are not reported by the National Association of Securities
Dealers, Inc., the fair market value determined by Board of
Directors. In no case, however, shall the Fair Market Value be
less than the par value of the Common Stock.
12. "Interest" means the amount of interest credited
to a Director's Cash Deferred Fee Account at an annual rate
determined in accordance with section 5.2.
13. "Plan" means the Riggs National Corporation and
The Riggs National Bank of Washington, D.C. Deferred
Compensation Plan for Directors set forth in this document, as
amended from time to time.
-4-
<PAGE>
14. "Plan Year" means the twelve-month period
beginning February 1 and ending the following January 31, except
for the initial Plan Year which shall be June 1, 1994 through
January 31, 1995.
15. "Prior Deferred Fees" means Director's Fees
earned prior to June 30, 1994 and deferred under a previous
deferred compensation arrangement sponsored by the Company or
the Bank.
16. "Shares" means the phantom shares of Common Stock
credited to a Director's Stock Deferred Fee Account.
17. "Stock Deferred Fee Account" means an account
established in the name of a Director to which is credited
Shares for any Director's Fees that are deferred by the Director
under section 3.1(a) and directed into the Stock Deferred Fee
Account under section 3.1(c), any Prior Deferred Fees that the
Director elects to have transferred pursuant to section 3.6(b)
and any additional Shares that are credited under section 6.1(b)
and from which are debited payments made under Article VII.
-5-
<PAGE>
III.
DEFERRAL OF DIRECTOR'S FEES
A. ELECTION TO DEFER FEES. 1. For the initial Plan
Year, the election to defer all or a portion of Director's Fees
earned on and after June 1, 1994, the effective date of the
Plan, shall be made prior to such date. Before the beginning of
any subsequent Plan Year, a Director may elect to defer all or
part of his or her Director's Fees to be earned in that year and
following years. For a new Director, the election to defer
Director's Fees earned during his or her initial year of service
shall be made within thirty (30) days following the Director's
election or appointment and shall be effective for Director's
Fees earned as of the first day of the month after the election
is made.
2. Any election to defer shall continue in effect for
subsequent Plan Years unless modified or revoked in accordance
with section 3.4.
3. When a Director elects to defer Director's Fees
under section 3.1(a) the Director shall also elect whether
amounts deferred should be credited to his or her Cash Deferred
Fee Account, to his or her Stock Deferred Fee Account, or both,
in the percentages authorized in the Director's Deferred Fee
Agreement.
B. LIMITATION ON STOCK DEFERRED FEES. 1. A Director
cannot elect to credit more than $10,000 of Director's Fees each
Plan Year to the Director's Stock Deferred Fee Account. This
limit shall not be prorated for the initial Plan Year,
-6-
<PAGE>
therefore, a Director can credit $10,000 of Director's Fees
earned from June 1, 1994 to January 31, 1995 to the Stock
Deferred Fee Account. The $10,000 limit shall not apply to
dividends credited to the Director's Stock Deferred Fee Account
under section 6.1(b).
2. In the event that a Director or Directors elect to
defer Director's Fees in the form of Shares and the total number
of Shares to be credited to all Directors' Stock Deferred Fee
Accounts at such time exceeds the number of shares of Common
Stock then available under the Plan, the number of Shares
credited to each Director's Stock Deferred Fee Account shall be
reduced on a pro rata basis and the remaining Director's Fees
shall be credited to the Director's Cash Deferred Fee Account.
The excess Director's Fees credited to the Director's Cash
Deferred Fee Account cannot thereafter be transferred to the
Director's Stock Deferred Fee Account.
3. There is no limit on the amount of Director's Fees
that can be credited to the Director's Cash Deferred Fee
Account.
C. CREDITING TO DEFERRED FEE ACCOUNTS. 1. When a
Director elects under section 3.1(c) to have Director's Fees
credited to his or her Cash Deferred Fee Account, the Director's
Cash Deferred Fee Account shall be credited with the amount of
such Director's Fees as of the day such Director's Fees would
have been paid
-7-
<PAGE>
to the Director were they not deferred under the Plan.
2. When a Director elects under section 3.1(c) to
have Director's Fees credited to his or her Stock Deferred Fee
Account, the Director's Stock Deferred Fee Account shall be
credited with a number of Shares as of the day such Director's
Fees would have been paid to the Director were they not deferred
under the Plan. Subject to sections 3.2(a) and 3.2(b), the
number of Shares credited to the Stock Deferred Fee Account
shall be the quotient of the amount of Director's Fees to be
credited to the Stock Deferred Fee Account divided by the Fair
Market Value of the Common Stock on such date.
D. MODIFICATION OR REVOCATION OF DEFERRAL. A
Director may, on a prospective basis for future Plan Years,
change the amount of Director's Fees to be deferred by executing
a new Deferred Fee Agreement or revoke his or her election to
defer Director's Fees by executing a written revocation to the
Secretary of the Company, but no new Deferred Fee Agreement or
revocation of an election to defer Director's Fees shall be
effective in the Plan Year in which it is executed.
E. MODIFICATION OF INVESTMENT DIRECTION. Twice a
year, a Director may, on a prospective basis for future
Director's Fees, modify his or her election regarding the
Deferred Fee Accounts to which his or her deferred Director's
Fees are
-8-
<PAGE>
credited, but no modification of such an election shall affect
amounts deferred in prior years. Modifications must be made no
later than: (i) January 31 for fees paid on and after the
following February 1 and (ii) July 31 for fees paid on and after
the following August 1.
F. TRANSFERS FROM PREVIOUS DEFERRED COMPENSATION
ARRANGEMENTS. (a) The Director can elect to transfer the
balance credited on his or her behalf in any previous Director's
deferred compensation arrangement sponsored by the Company or
the Bank to the Director's Cash Deferred Fee Account.
(b) The Director can make a one-time election to
transfer up to $10,000 of Director's Fees credited to any
previous Director's deferred compensation arrangement sponsored
by the Company or the Bank to the Director's Stock Deferred Fee
Account. The election must be made prior to June 1, 1994. The
transfer shall be effective as of the first date on which fees
deferred by any Director under the Plan are credited to that
Director's Deferred Fee Account. This transfer shall be in
addition to and shall not in any way impact or limit the
Director's ability to defer $10,000 of Director's fees earned
after June 1, 1994 for the initial Plan Year to the Director's
Stock Deferred Fee Account.
-9-
<PAGE>
IV.
CHANGE IN CAPITAL STRUCTURE
A. CHANGE IN CAPITAL STRUCTURE. If the Company shall
effect a subdivision or consolidation of shares or other capital
readjustment, the payment of a stock dividend, or other increase
or reduction of the number of shares of the Common Stock
outstanding, without receiving compensation therefore in money,
services or property, then (i) the number, class, and per share
price of shares of Common Stock credited to the Director's Stock
Deferred Fee Account shall be appropriately adjusted in such a
manner as to entitle the Director to receive upon distribution
the same total number and class of shares as he would have
received had the Director received the distribution of Common
Stock under section 7.1 immediately prior to the event requiring
the adjustment; and (ii) the number and class of shares then
reserved for issuance under the Plan shall be adjusted by
substituting for the total number and class of shares of Common
Stock then reserved the number and class of shares of Common
Stock that would have been received by the owner of an equal
number of outstanding shares of each class of Common Stock as
the result of the event requiring the adjustment.
-10-
<PAGE>
V.
INTEREST
A. INTEREST. Interest shall be credited to each
Director's Cash Deferred Fee Account, as of the end of each
quarter, at an annual rate determined pursuant to section 5.2.
Interest shall be credited during each quarter that a Director
has any amount credited to his or her Cash Deferred Fee Account
under the Plan.
B. RATE OF INTEREST. Interest shall be credited
during the Plan Year at a rate equal to the interest rate paid
by the Bank on its certificates of deposit having a one-year
maturity as of February 1 of that Plan Year.
VI.
DIVIDENDS
A. CREDITING OF DIVIDENDS. (a) Each Director
with shares credited to his or her Stock Deferred Fee Account on
the record date of a dividend on the Common Stock shall be
credited on the payment date of the dividend with an amount
determined by the product of the number of Shares credited to
the Director's Stock Deferred Fee Account on the dividend record
date and the dividend per share on the Common Stock.
-11-
<PAGE>
(b) If the Director is currently deferring all or a
portion of his or her Director's Fees to the Director's Stock
Deferred Fee Account, the Director's Stock Deferred Fee Account
shall be credited on the dividend payment date with a number of
Shares determined by dividing the amount of the dividends for
the Director as determined under section 6.1(a) by the Fair
Market Value of the Common Stock on the dividend payment date.
(c) If the Director is not currently deferring all or
a portion of his or her Director's Fees to the Director's Stock
Deferred Fee Account, the amount of dividends determined under
section 6.1(a) shall be credited on the dividend payment date to
the Director's Cash Deferred Fee Account.
VII.
PAYMENT OF DEFERRED FEES
A. FORM OF PAYMENT OF DEFERRED FEES. A Director
shall be entitled to receive a benefit equal to the amounts
credited to his or her Deferred Fee Accounts at the time or
times specified in such Director's Deferred Fee Agreement.
Amounts credited to a Director's Cash Deferred Fee Account shall
be paid in cash. Shares credited to a Director's Stock Deferred
Fee Account shall be paid by the delivery by the Company of
certificates representing a like number of the Common Stock.
-12-
<PAGE>
B. TIMING OF PAYMENT OF DEFERRED FEES. 1. At the
election of a Director, the amount credited to the Director's
Cash Deferred Fee Account shall be paid in a lump sum or in
installments in accordance with the terms of such Director's
Deferred Fee Agreement. Amounts credited to a Director's Cash
Deferred Fee Account shall bear interest at the rate specified
in section 5.2 during the installment payout period.
2. The shares credited to the Director's Stock
Deferred Fee Account shall be issued to the Director in a lump
sum. The Director's Cash Deferred Fee Account shall be credited
with dividends for Shares credited to a Director's Stock
Deferred Fee Account from the date on which the Director ceases
to be a Director until such lump sum payment is made.
3. Notwithstanding the foregoing, no payment of
Shares from a Director's Stock Deferred Fee Account shall be
made until at least six months and one day that an individual
ceases to be a Director. Furthermore, no payment of Shares from
a Director's Stock Deferred Fee Account shall be made unless the
Company may validly issue Common Stock at such time pursuant to
all applicable rules and regulations, including
-13-
<PAGE>
but not limited to corporate law, securities law and stock
exchange rules. If Common Stock may not be issued, subject to
compliance with applicable securities laws requirements, the
Fair Market Value of the Shares credited to a Director's Stock
Deferred Fee Account shall be distributed in cash.
C. DEATH OF A DIRECTOR. If a Director dies with any
amount credited to his or her Deferred Fee Accounts, then his or
her Beneficiary shall be entitled to receive the entire amount
in a lump sum. Such payment shall be made as soon as
practicable after the end of the calendar quarter in which the
Director's death occurred.
VIII.
BENEFICIARIES
A. DESIGNATION OF BENEFICIARY. Each Director may
designate from time to time any person or persons, natural or
otherwise, as his or her Beneficiary or Beneficiaries to whom
benefits under section 7.3 are to be paid if he or she dies
while entitled to benefits. Each Beneficiary designation shall
be made either in the Deferred Fee Agreement or on a form
prescribed by the Secretary of the Company and shall be
effective only when filed with the Secretary during the
Director's lifetime. Each
-14-
<PAGE>
Beneficiary designation filed with the Secretary shall revoke
all Beneficiary designations previously made by the Director.
The revocation of a Beneficiary designation shall not require
the consent of any designated Beneficiary.
IX.
ADMINISTRATION
A. SHARES AVAILABLE UNDER THE PLAN. 1. As of the
effective date of the Plan, 25,000 shares of Common Stock shall
be available to be credited to the Directors' Stock Deferred Fee
Accounts and issued under the Plan.
2. The number of shares of Common Stock available
for crediting to the Directors' Deferred Fee Accounts and issued
under the Plan may be increased upon the approval of the
Shareholders of the Company.
B. RIGHT TO AMEND OR TERMINATE THE PLAN. (a) The
Company and the Bank acting jointly may amend or terminate the
Plan at any time in whole or in part. No amendment or
termination of the Plan shall reduce any amounts credited to a
Director's Deferred Fee Accounts, any amount owed to him or her
as of the date of amendment or termination, or the amount of
Interest accrued or number of Shares to be credited, as of such
date, to his or her account.
-15-
<PAGE>
(b) The Plan cannot be amended more often than every
six (6) months except as required by the Internal Revenue Code
of 1986, as amended, the Employee Retirement Income Security Act
of 1974, or the rules and regulations issued thereunder.
C. NO FUNDING OBLIGATION. Obligations to pay any
benefits under the Plan shall be unfunded and unsecured, and any
payments under the Plan shall be made from the general assets of
the Company or the Bank, as appropriate. The Company or the
Bank, as appropriate, in its discretion, may set aside assets or
purchase annuity or life insurance contracts to discharge all or
part of the obligations under the Plan. The assets set aside or
the annuity or life insurance contracts shall remain in the name
of the Company or the Bank, as appropriate, and no trust shall
be created by setting aside the assets or purchasing annuity or
life insurance contracts. A Director's rights under the Plan
are not assignable or transferable other than by will or the
laws of descent and distribution, and such rights are
exercisable during the Director's lifetime only by him or her,
or by his or her guardian or legal representative.
D. APPLICABLE LAW. This Plan shall be construed
and enforced in accordance with the laws of the District of
Columbia, except to the extent superseded by
-16-
<PAGE>
federal law.
E. ADMINISTRATION AND INTERPRETATION. The
President of the Company shall have the authority and
responsibility to administer and interpret the Plan. Benefits
due and owing to a Director or Beneficiary under the Plan shall
be paid when due without any requirement that a claim for
benefits be filed. However, any Director or Beneficiary who has
not received the benefits to which he or she believes himself or
herself entitled may file a written claim with the President,
who shall act on the claim within thirty days, and such action
on any such claim shall be conclusive.
F. EFFECTIVE DATE. The Plan shall become
effective as of June 1, 1994 upon approval by the board of
directors of the Company and the Bank.
-17-
<PAGE>
EXHIBIT A
DEFERRED FEE AGREEMENT
This Agreement between ____________________ (the
"Company/Bank") and ___________________________ (the "Director")
is made the ___ day of ___________, 19__, under the Riggs
National Corporation and The Riggs National Bank of Washington,
D.C. Deferred Compensation Plan for Directors (the "Plan").
(1) DEFERRED FEE PLAN. The Director agrees to the
terms and conditions of the Plan, a copy of which has been
delivered to the Director and constitutes a part of this
Agreement. Capitalized words and phrases in this Agreement shall
have the meaning given to them in the Plan, unless the context
clearly indicates otherwise.
(2) ELECTION TO DEFER FEES. The Director
authorizes and directs the Company/Bank to defer
________________________ [insert percentage or dollar amount] of
the Director's Fees earned on and after ____________ 19__ and in
each subsequent Plan Year. The Director may at any time change
or this election on a prospective basis for Plan Years beginning
after the date of such change or revocation by executing a new
Deferred Fee Agreement; the Director may at any time revoke this
election on a prospective basis for Plan Years beginning after
the date of such revocation by delivering to the Secretary of
the Company a written revocation of the election. No change or
revocation shall be effective for the Plan Year in which it is
executed.
-18-
<PAGE>
(3) INVESTMENT OF DEFERRED FEES. The Director
elects to have his or her deferred Director's Fees apportioned
between the Cash and Stock Deferred Fee Accounts as follows:
(circle appropriate percentages):
Cash Deferred Fee Account: 0% 25% 50% 75% 100%
Stock Deferred Fee Account: 0% 25% 50% 75% 100%
(4) FORM OF PAYMENT. 1. CASH DEFERRED FEES ACCOUNT.
The Director elects to receive the amount of Director's Fees
credited to his or her Cash Deferred Fee Accounts pursuant to
this Agreement in (check one):
( ) a lump sum; or
( ) substantially equal annual installments over a
period of ___ years (not to exceed ten).
Payments shall commence:
( ) _________________, 19__; or
( ) upon termination of service as director.
-19-
<PAGE>
2. STOCK DEFERRED FEE ACCOUNT. The Director shall
receive the amount of Director's Fees credited to his or her
Stock Deferred Fee Account in a lump sum no earlier than the
date which is six (6) months and one day after the Director
ceases to be a Director.
5. BENEFICIARY. The Director requests that, upon
his or her death, any amounts remaining in his or her Deferred
Fees Account be paid to the Beneficiary or Beneficiaries he or
she has designated in this Agreement or in a Notice of
Designation of Beneficiary filed with the Secretary of the
Company.
Percentage of
Deferred
Beneficiary Address Fees Account
_______________ _______________________ ________________
_______________ _______________________ ________________
_______________ _______________________ ________________
_______________ _______________________ ________________
-20-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year written above.
_____________________________ _____________________________
Witness Director
RIGGS NATIONAL CORPORATION
THE RIGGS NATIONAL BANK OF WASHINGTON, D.C.
By:
Name:
Title:
-21-
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FORM 10-Q/A DATED SEPTEMBER 30, 1994, AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 187,114
<INT-BEARING-DEPOSITS> 193,835
<FED-FUNDS-SOLD> 179,684
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 613,204
<INVESTMENTS-CARRYING> 439,207
<INVESTMENTS-MARKET> 434,114
<LOANS> 2,608,065
<ALLOWANCE> 95,800
<TOTAL-ASSETS> 4,470,758
<DEPOSITS> 3,548,600
<SHORT-TERM> 392,976
<LIABILITIES-OTHER> 39,826
<LONG-TERM> 217,625
<COMMON> 77,853
0
4,000
<OTHER-SE> 189,374
<TOTAL-LIABILITIES-AND-EQUITY> 4,470,758
<INTEREST-LOAN> 144,407
<INTEREST-INVEST> 38,362
<INTEREST-OTHER> 12,971
<INTEREST-TOTAL> 195,740
<INTEREST-DEPOSIT> 60,935
<INTEREST-EXPENSE> 81,064
<INTEREST-INCOME-NET> 114,676
<LOAN-LOSSES> 6,300
<SECURITIES-GAINS> 1,424
<EXPENSE-OTHER> 150,918
<INCOME-PRETAX> 25,584
<INCOME-PRE-EXTRAORDINARY> 25,584
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,976
<EPS-PRIMARY> .55
<EPS-DILUTED> .55
<YIELD-ACTUAL> 387
<LOANS-NON> 37,098
<LOANS-PAST> 1,782
<LOANS-TROUBLED> 487
<LOANS-PROBLEM> 20,412
<ALLOWANCE-OPEN> 86,513
<CHARGE-OFFS> 10,372
<RECOVERIES> 11,997
<ALLOWANCE-CLOSE> 95,800
<ALLOWANCE-DOMESTIC> 73,469
<ALLOWANCE-FOREIGN> 22,331
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
