RIGGS NATIONAL CORP, 424B5, 1994-01-14

RIGGS NATIONAL CORP
424B5, 1994-01-14
NATIONAL COMMERCIAL BANKS

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<PAGE>

Pursuant to Rule 424(b)(5)
under Registration No. 33-51567

SUBJECT TO COMPLETION, DATED JANUARY 13, 1994

PROSPECTUS SUPPLEMENT (TO PROSPECTUS DATED JANUARY 13, 1994)

$125,000,000

RIGGS NATIONAL CORPORATION

% SUBORDINATED NOTES DUE 2006

-----------

Interest on the % Subordinated Notes due 2006 (the "Subordinated Notes") is
payable semiannually on and of each year, commencing , 1994. The
Subordinated Notes are not redeemable at any time prior to , 1999. On and
after that date, the Subordinated Notes are redeemable at any time at the
option of Riggs National Corporation (the "Company"), in whole, or from time to
time in part, at the redemption prices set forth herein. See "Description of
the Subordinated Notes--Redemption."

The Subordinated Notes are unsecured and subordinated obligations of the
Company, as described in the accompanying Prospectus under "Description of the
Debt Securities--Subordination." Payment of the principal of the Subordinated
Notes may be accelerated only in the case of certain events involving the
bankruptcy, insolvency or reorganization of the Company. There is no right of
acceleration in the case of a default in the performance of any covenant of the
Company, including the payment of principal or interest. See "Description of
the Debt Securities--Events of Default and Limited Rights of Acceleration" in
the Prospectus.

The Subordinated Notes will be represented by one or more global securities
(the "Global Notes") registered in the name of a nominee of The Depository
Trust Company, as depository (the "Depository"). Beneficial interests in the
Global Notes will be shown on, and transfers thereof will be effected only
through, records maintained by the Depository and its participants. Except as
described under "Description of the Debt Securities--Global Securities" in the
Prospectus, Subordinated Notes in certificated form will not be issued and
owners of beneficial interests in the Global Notes will not be considered
holders of the Subordinated Notes. Settlement will be made in immediately
available funds. The Subordinated Notes will trade in the Depository's Same-Day
Funds Settlement System until maturity, and secondary market trading activity
in the Subordinated Notes will therefore settle in immediately available funds.
All payments of principal and interest will be made by the Company in
immediately available funds. See "Description of the Subordinated Notes--Same-
Day Settlement and Payment."

SEE "RISK FACTORS AND SPECIAL CONSIDERATIONS" IN THE PROSPECTUS FOR A
DISCUSSION OF CERTAIN FACTORS TO BE CONSIDERED BY POTENTIAL INVESTORS IN THE
SUBORDINATED NOTES.

-----------

THE SUBORDINATED NOTES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS
OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.

-----------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

-----------

<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public* Commissions+ Company++
<S> <C> <C> <C>
Per Subordinated Note........................ % % %
Total........................................ $ $ $
</TABLE>
* Plus accrued interest, if any, from the date of issuance.
+ The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
++ Before deducting expenses payable by the Company, estimated at $ .

-----------

The Subordinated Notes are being offered by the Underwriters as set forth in
"Underwriting". It is expected that delivery of the Subordinated Notes will be
made on or about , 1994 in New York, New York through the facilities of
the Depository. The Underwriters are:

DILLON, READ & CO. INC. FRIEDMAN, BILLINGS, RAMSEY
& CO., INC.

The date of this Prospectus Supplement is January , 1994.
<PAGE>

IN CONNECTION WITH THE OFFERING OF THE SUBORDINATED NOTES HEREBY, THE
UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN
THE MARKET PRICE OF THE SUBORDINATED NOTES AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

----------------

This Prospectus Supplement supplements and to the extent inconsistent
therewith replaces the information set forth in the Prospectus dated January
13, 1994, to which reference is hereby made.

----------------

RECENT DEVELOPMENTS

On January 13, 1994, the Company announced earnings of $3.1 million, or $.09
per share, for the fourth quarter of 1993. The Company also recorded a decline
of $60 million in nonperforming assets during the three-month period, reducing
nonperforming assets to the lowest level in more than three years.

Fourth quarter results reflected a significant improvement from the $24.1
million loss for the fourth quarter of 1992 and compare with net income of $3.0
million for the third quarter of 1993. The provision for loan losses for the
fourth quarter was $2.1 million, compared with a provision of $27.3 million for
the year-earlier period.

For full-year 1993, the Company reported a net loss of $94.2 million,
compared with a loss of $21.1 million for 1992. The 1993 loss stemmed from
losses incurred during the first half of the year. The full-year provisions for
loan losses was $69.3 million; provisions, writedowns and other expenses
related to other real estate owned totaled $12.9 million; and restructuring
charges, including the cost of implementing "BankStart '93," the Company's
strategic program to improve efficiency, totaled $34.6 million.

Approximately half of the 1993 provision for loan losses and other real
estate owned expenses related to loans originated in the United Kingdom, and
the remainder related primarily to domestic commercial real estate loans. These
negative factors were partially offset by securities gains of $24.1 million.
For 1992, provisions for loan losses totaled $52.1 million; provisions,
writedowns and other expenses related to other real estate owned totaled $15.7
million; and securities gains totaled $34.2 million.

Nonperforming assets of $213 million at year-end 1993 stood $60 million below
the $273 million at September 30, 1993, and $94 million below the $307 million
total at year-end 1992. More than half of the fourth-quarter reduction resulted
from repayments. As a percentage of total assets, nonperforming assets stood at
4.46% at year-end 1993, down from 6.04% a year earlier.

Fourth-quarter net recoveries were $1.5 million compared with net charge-offs
of $16.0 million for the like 1992 period. Full-year net charge-offs were $66.4
million compared with $68.4 million for 1992. The reserve for loan losses at
year-end was $86.5 million, or 3.42% of loans, compared with $84.2 million, or
3.86% of loans, at December 31, 1992.

At December 31, 1993, the Company's Tier I to risk-based capital ratio was
10.72%, up from 8.31% a year earlier, and compared with the Federal Reserve
Board minimum requirement of 4.00%. The total capital to risk-based asset ratio
was 16.76%, up from 14.70% at year-end 1992, and compared with the minimum
requirement of 8.00%. The leverage ratio at year-end was 6.03%, up from 4.60% a
year earlier; Federal Reserve Board guidelines require a minimum of 3.00% for
the most highly rated bank holding companies, and an additional 1.00% to 2.00%
for all others. All capital ratios for each of the Company's subsidiary banks
at year-end exceeded all minimum regulatory requirements.

S-2
<PAGE>

FINANCIAL HIGHLIGHTS
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------------- -----------------------
1993(1) 1992 1993(1) 1992
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
CONSOLIDATED SUMMARY OF IN-
COME
Interest Income............. $ 61,915 $ 69,190 $ 256,950 $ 327,540
Interest Expense............ 26,746 37,073 122,130 189,604
---------- ---------- ---------- ----------
Net Interest Income......... 35,169 32,117 134,820 137,936
Provision For Loan Losses... 2,125 27,255 69,290 52,067
---------- ---------- ---------- ----------
Net Interest Income After
Provision for Loan Losses.. 33,044 4,862 65,530 85,869
Noninterest Income Excluding
Securities Gains........... 20,417 28,077 87,903 96,200
Securities Gains (Losses),
Net........................ 216 (585) 24,141 34,213
---------- ---------- ---------- ----------
Total Noninterest Income.... 20,633 27,492 112,044 130,413
Noninterest Expense Exclud-
ing Restructuring Expense.. 50,514 57,355 231,591 238,403
Restructuring Expense....... -- -- 34,554 --
---------- ---------- ---------- ----------
Total Noninterest Expense... 50,514 57,355 266,145 238,403
---------- ---------- ---------- ----------
Income (Loss) Before Taxes.. 3,163 (25,001) (88,571) (22,121)
Applicable Income Tax (Bene-
fit) Expense............... 82 (940) 5,640 (1,069)
---------- ---------- ---------- ----------
Net Income (Loss)........... $ 3,081 $ (24,061) $ (94,211) $ (21,052)
========== ========== ========== ==========
OTHER FINANCIAL INFORMATION:
Common Shares Outstanding... 30,222,014 25,222,014 30,222,014 25,222,014
Average Primary Shares Out-
standing................... 29,135,057 25,222,014 26,208,315 24,534,063
Net Income (Loss) Per Pri-
mary Share................. $ 0.09 $ (0.97) $ (3.65) $ (0.87)
Net Interest Margin......... 3.43% 2.96% 3.23% 3.13%
Return on Average Assets.... 0.26% (1.85)% (1.91)% (0.53)%
Return on Average Stockhold-
ers' Equity................ 4.70% (34.88)% (42.84)% (10.68)%
Book Value Per Common Share
Outstanding................ $ 5.92 $ 8.98
Period End Stockholders' Eq-
uity to Total Assets....... 6.13% 4.83%
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1993(1) 1992
---------- ----------
<S> <C> <C> <C> <C>
PERIOD END:
Total Assets................ $4,780,237 $5,077,522
Total Loans, Net of Dis-
counts & Fees.............. 2,528,140 2,181,057
Total Deposits.............. 3,773,824 4,437,598
Stockholders' Equity........ 293,197 245,420
NONPERFORMING ASSETS AND
PAST DUE LOANS:
Nonaccrual Loans(2) ........ $ 130,174 $ 205,425
Renegotiated Loans.......... 30,299 11,806
Other Real Estate Owned,
Net(2) .................... 52,803 89,389
---------- ----------
Total Nonperforming Assets.. $ 213,276 $ 306,620
Nonaccrual Loans to Total
Loans...................... 5.15% 9.42%
Nonperforming Assets to To-
tal Loans and Other Real
Estate Owned, Net.......... 8.26% 13.50%
Nonperforming Assets to To-
tal Assets................. 4.46% 6.04%
RESERVE FOR LOAN LOSSES:
Reserve for Loan Losses..... $ 86,514 $ 84,155
Reserve for Loan Losses to
Total Loans................ 3.42% 3.86%
Reserve for Loan Losses to
Nonaccrual and Renegotiated
Loans...................... 53.91% 38.74%
Net Charge-Offs for the Year
to Average Loans........... 3.04% 2.66%
</TABLE>

S-3
<PAGE>

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1993(1) 1992
---------- ----------
<S> <C> <C> <C> <C>
CAPITAL RATIOS:
RIGGS NATIONAL CORPORATION:
Tier 1 Capital to Risk-Weighted
Assets.......................... 10.72% 8.31%
Combined Tier 1 & Tier 2 Capital
to Risk-Weighted Assets......... 16.76% 14.70%
LEVERAGE......................... 6.03% 4.60%
THE RIGGS NATIONAL BANK OF
WASHINGTON, D.C.:
Tier 1 Capital to Risk-Weighted
Assets.......................... 10.65% 11.29%
Combined Tier 1 & Tier 2 Capital
to Risk-Weighted Assets......... 11.93% 12.56%
Leverage......................... 6.13% 6.32%
</TABLE>
- --------
(1) Data for periods in 1993 have been derived from financial statements of the
Company that have not yet been audited.
(2) At year-end, the Company implemented the definition of In-Substance
Foreclosure required by regulatory agencies and accordingly reclassified
$35.0 million and $43.4 million from Other Real Estate Owned to Nonaccrual
Loans as of December 31, 1993, and December 31, 1992, respectively. The
related income statement reclassifications moved $8.0 million and $2.3
million from Other Real Estate Owned Expense to Provision for Loan Losses
for 1993 and 1992, respectively. Balances noted by this footnote have been
adjusted for this implementation. See "Recent Developments--Implementation
of Interagency Guidance on Reporting of In-Substance Foreclosures" in the
Prospectus.

DESCRIPTION OF THE SUBORDINATED NOTES

The following is a brief description of the particular terms of the
Subordinated Notes. This description does not purport to be complete, should be
read in conjunction with the statements under "Description of the Debt
Securities" in the Prospectus, and is subject to and qualified in its entirety
by reference to, the Indenture, to be dated as of January 1, 1994 (the
"Indenture"), between the Company and The Bank of New York, as Trustee (the
"Trustee"), pursuant to which the Subordinated Notes are to be issued. A copy
of the form of Indenture has been filed as an exhibit to the Registration
Statement of which the Prospectus is a part. Capitalized terms not defined
herein have the meanings assigned to such terms in the Prospectus or the
Indenture.

GENERAL

The Subordinated Notes will mature on , 2006, bear interest at the rate
of % per annum and be limited to $125,000,000 aggregate principal amount.
Interest on the Subordinated Notes will be payable semiannually on and
of each year, commencing , 1994, to the Person or Persons in whose
names the Subordinated Notes are registered at the close of business on the
preceding or , as the case may be. The Subordinated Notes will
constitute a separate class of Debt Securities to be issued under the
Indenture.

Principal of and interest on the Subordinated Notes will be payable, and the
transfer of Subordinated Notes will be registrable, through the Depository, as
described under "Description of the Debt Securities--Global Securities" in the
Prospectus.

The Subordinated Notes will be unsecured and subordinate in right of payment
to all Senior Indebtedness of the Company and, in certain circumstances, to all
Other Financial Obligations of the Company. See "Description of the Debt
Securities--Subordination" in the Prospectus. At December 31, 1993, the Company
had no Senior Indebtedness or Other Financial Obligations outstanding. The
Indenture does not limit or prohibit the incurrence of Senior Indebtedness or
Other Financial Obligations by the Company.

S-4
<PAGE>

Payment of the principal of the Subordinated Notes may be accelerated only in
the case of certain events involving the bankruptcy, insolvency or
reorganization of the Company. There is no right of acceleration in the case of
a default in the performance of any covenant of the Company, including the
payment of principal or interest on the Subordinated Notes. See "Description of
the Debt Securities--Events of Default and Limited Rights of Acceleration" in
the Prospectus.

REDEMPTION

The Subordinated Notes will not be redeemable prior to , 1999. Thereafter,
the Subordinated Notes will be subject to redemption at the option of the
Company, in whole or from time to time in part, upon not less than 30 nor more
than 60 days' notice, at the redemption prices (expressed as a percentage of
the principal amount thereof) set forth below, plus accrued and unpaid interest
thereon, if any, to the applicable redemption date, if redeemed during the
twelve-month period beginning on of the years indicated below:

<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
</TABLE>

GLOBAL NOTES

The Subordinated Notes will be issued in the form of one or more fully
registered Global Notes which will be deposited with, or on behalf of, the
Depository and registered in the name of the Depository's nominee. Global Notes
will not be transferable or exchangeable for Subordinated Notes in certificated
form except under the limited circumstances described in the Prospectus under
"Description of the Debt Securities--Global Securities."

SAME-DAY SETTLEMENT AND PAYMENT

Settlement for the Subordinated Notes will be made in immediately available
funds. All payments of principal and interest on the Subordinated Notes will be
made by the Company in immediately available funds. The Subordinated Notes will
trade in the Depository's Same-Day Funds Settlement System until maturity, and
therefore the Depository will require secondary trading activity in the
Subordinated Notes to be settled in immediately available funds.

UNDERWRITING

Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement"), the Company has agreed to sell to Dillon, Read
& Co. Inc. and Friedman, Billings, Ramsey & Co., Inc. (the "Underwriters"), and
the Underwriters have severally agreed to purchase, the respective principal
amounts of the Subordinated Notes set forth opposite their names below.

<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
----------- ------------
<S> <C>
Dillon, Read & Co. Inc............................................ $
Friedman, Billings, Ramsey & Co., Inc.............................
------------
Total........................................................... $125,000,000
============
</TABLE>

The Underwriting Agreement provides that the Underwriters are obligated to
purchase all of the Subordinated Notes, if any are purchased.

S-5
<PAGE>

The Underwriters propose to offer the Subordinated Notes directly to the
public at the initial public offering price set forth on the cover page of this
Prospectus Supplement and to certain dealers at such price less a concession
not in excess of % of the principal amount. The Underwriters may allow, and
such dealers may reallow, a concession not in excess of % of the principal
amount on sales to certain other dealers. The offering of the Subordinated
Notes is made for delivery when, as and if accepted by the Underwriters and
subject to prior sale and to withdrawal, cancellation or modification of the
offer without notice. The Underwriters reserve the right to reject any order
for the purchase of the Subordinated Notes. After the initial public offering,
the public offering price and the other selling terms may be changed by the
Underwriters.

The Subordinated Notes are a new issue of securities with no established
trading market. The Company has been advised by the Underwriters that they
intend to make a market in the Subordinated Notes but they are not obligated to
do so and may discontinue market making at any time without notice. The
Subordinated Notes will not be listed on any securities exchange or eligible
for quotation in any interdealer quotation system. No assurance can be given as
to the liquidity of the trading market for the Subordinated Notes.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, or to
contribute to payments that the Underwriters may be required to make in respect
thereof.

The Underwriters and their affiliates in the ordinary course of business
engage in transactions with and perform services for the Company for which the
Underwriters receive customary compensation, which may include, among other
things, normal commercial banking and investment banking transactions and
services.

S-6
<PAGE>

PROSPECTUS

$125,000,000

RIGGS NATIONAL CORPORATION

SUBORDINATED DEBT SECURITIES

Riggs National Corporation (the "Company") may offer from time to time
subordinated debt securities in one or more series (the "Debt Securities") at
an aggregate initial offering price not to exceed $125,000,000, on terms to be
determined at the time of sale. The specific title, aggregate principal amount,
maturity, rate and time of payment of interest (if any), purchase price, any
terms for redemption and any other special terms of a specific offering of Debt
Securities ("Offered Debt Securities") will be set forth in a supplement to
this Prospectus ("Prospectus Supplement"). If so indicated in the applicable
Prospectus Supplement, Offered Debt Securities may be represented in whole or
in part by one or more global securities ("Global Securities") registered in
the name of The Depository Trust Company (the "Depository") or a nominee
thereof.

The Debt Securities will be subordinated to all existing and future Senior
Indebtedness and, under certain circumstances, Other Financial Obligations of
the Company (as such terms are defined herein). Unless otherwise indicated in
the applicable Prospectus Supplement, the maturity of the Debt Securities will
be subject to acceleration only in the case of certain events of bankruptcy,
insolvency or reorganization of the Company. See "Description of Debt
Securities."

The Debt Securities may be sold to underwriters (which may include Dillon,
Read & Co. Inc. and Friedman, Billings, Ramsey & Co., Inc.) for public offering
pursuant to terms of offering described in the applicable Prospectus
Supplement. In addition, the Debt Securities may be sold to purchasers directly
by the Company or through agents designated from time to time by the Company.
If any underwriters or agents are involved in the sale of the Offered Debt
Securities, their names and any applicable fee, commission or discount
arrangements with them will be set forth in the applicable Prospectus
Supplement. See "Plan of Distribution."

SEE "RISK FACTORS AND SPECIAL CONSIDERATIONS" FOR A DISCUSSION OF CERTAIN
FACTORS TO BE CONSIDERED BY POTENTIAL INVESTORS IN THE DEBT SECURITIES.

-----------

THE DEBT SECURITIES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF
A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT IN-
SURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.

-----------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

-----------

This Prospectus may not be used to consummate sales of Offered Debt
Securities unless accompanied by a Prospectus Supplement.

The date of this Prospectus is January 13, 1994
<PAGE>

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy and information statements and other information
with the Securities and Exchange Commission (the "Commission"). Copies of such
material can be obtained by mail from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. In addition, such reports, proxy and
information statements and other information can be inspected and copied at the
aforementioned public reference facilities and at the Commission's regional
offices at Northwest Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and at 7 World Trade Center, 13th Floor, New York, New
York 10048.

The Company has filed with the Commission a Registration Statement on Form S-
3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the Debt Securities offered hereby. This Prospectus,
which forms a part of the Registration Statement, does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information, reference is hereby made to the Registration Statement.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Commission pursuant to
the Exchange Act are incorporated by reference in and made part of this
Prospectus:

(1) Annual Report on Form 10-K for the year ended December 31, 1992, as
amended by Forms 10-KA dated July 2, 1993, September 21, 1993, October
4, 1993 and October 26, 1993;

(2) Quarterly Report on Form 10-Q for the quarter ended March 31, 1993, as
amended by Forms 10-QA dated July 2, 1993, September 21, 1993 and
October 27, 1993;

(3) Proxy Statement for the Annual Meeting of Shareholders dated April 19,
1993;

(4) Quarterly Report on Form 10-Q for the quarter ended June 30, 1993, as
amended by Forms 10-QA dated September 21, 1993 and October 27, 1993;

(5) Current Reports on Form 8-K dated October 27, 1993 and December 21,
1993; and

(6) Quarterly Report on Form 10-Q for the quarter ended September 30, 1993,
amended by Form 10-QA dated December 7, 1993.

All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the completion of the offering of the Debt Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date such documents are filed. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such earlier statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.

The Company will provide, without charge, to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the information incorporated herein by reference other
than exhibits to such information (unless such exhibits are specifically
incorporated by reference into such information). Written or oral requests
should be directed to Alexander C. Baker, Secretary, Riggs National
Corporation, 808 17th Street, N.W., Washington, D.C. 20006, telephone number
(202) 835-4987.

2
<PAGE>

PROSPECTUS SUMMARY

The following summary does not purport to be complete and is qualified in its
entirety by the more detailed information appearing elsewhere, or incorporated
by reference, in this Prospectus.

THE COMPANY

Riggs National Corporation is a multi-bank holding company with consolidated
assets of $4.7 billion, consolidated deposits of $3.9 billion and consolidated
stockholders' equity of $158 million as of September 30, 1993. Based on total
assets at June 30, 1993, the Company is the 88th largest bank holding company
in the United States and the largest bank holding company headquartered in
Washington, D.C.

The Company, through its bank and non-bank subsidiaries, provides banking,
trust, investment advisory and other financial services to selected domestic
and international markets. The Company serves the metropolitan Washington, D.C.
area through its three bank subsidiaries in Washington, D.C., Maryland and
Virginia. Its principal subsidiary, The Riggs National Bank of Washington, D.C.
("Riggs-Washington"), had consolidated assets of $4.1 billion as of September
30, 1993. The Company also has subsidiaries in Miami, London, Paris, Hong Kong,
Nassau, Gibraltar and Geneva.

Riggs-Washington is the only independent commercial bank with assets in
excess of $4 billion that is headquartered in Washington, D.C. As of March 31,
1993, Riggs-Washington had the largest share of commercial bank deposits in
Washington, D.C., at approximately 37%, based upon a recent study by the
graduate school of business administration at the University of Virginia, which
included the pro forma effects of the announced and pending mergers between
banks in the Washington, D.C. area. The Company believes that it enjoys a
highly respected position in Washington, D.C. because of its local management,
name recognition and commitment to the community, which has resulted in its
leading deposit share. In addition, the Company has developed an international
business serving foreign embassies and missions and significant trust/private
banking operations in the Washington, D.C. area.

RECENT DEVELOPMENTS

OCTOBER EQUITY SALE

On October 21, 1993, as part of the strategic initiatives announced by the
Company in the second quarter of 1993 and described herein, the Company issued
and sold 4,000,000 shares of its 10.75% Noncumulative Perpetual Preferred
Stock, Series B (the "Series B Preferred Stock") and 5,000,000 shares of its
Common Stock, par value $2.50 per share ("Common Stock"), to certain investors
in transactions exempt from the registration requirements of the Securities Act
(the "October Equity Sale"). The shares of Series B Preferred Stock and Common
Stock were sold for $25 per share and $7.75 per share, respectively. The net
proceeds to the Company from the October Equity Sale (after deducting placement
agent fees and related estimated expenses) were approximately $132 million.
Adjusted for the estimated net proceeds from the transaction, the Company's pro
forma risk-based capital and leverage ratios at September 30, 1993 were as
follows: Tier 1--10.85%, Combined Tier 1 and Tier 2--16.98% and Leverage--
5.73%.

1993 FOURTH QUARTER

For the quarter ending December 31, 1993, the Company reported net income of
$3.1 million (compared to a loss of $24.1 million for the fourth quarter of
1992). These results were attributable largely to reduced provisions for loan
losses during the quarter ($2.1 million compared to $27.3 million during the
fourth quarter of 1992). The Company also reported that, between September 30
and December 31, 1993, nonperforming assets declined by $60 million. More than
half of the fourth quarter reduction in nonperforming assets resulted from
repayments. As of December 31, 1993, the Company's nonperforming assets were at
their lowest level in more than three years.

3
<PAGE>

RECENT STRATEGIC INITIATIVES

The Company has responded to recent financial difficulties by undertaking a
series of strategic initiatives that management believes will restore the
Company to financial soundness and profitability (although there can be no
assurance that such initiatives will achieve these goals). These measures
include: (1) the appointment of Paul M. Homan as President and Chief Executive
Officer of Riggs-Washington and the addition of other experienced senior
management; (2) the announcement and implementation of a financial
restructuring plan which includes increased reserves to facilitate the
disposition of problem assets as well as exiting unprofitable lines of
business; (3) the raising of approximately $132 million of new equity in the
October Equity Sale; (4) a restructuring of the Company's London operations to
address the potential risk in the loan and other real estate owned portfolios;
(5) the creation of a Special Assets Group to focus on problem assets; (6) the
implementation of "BankStart '93," a comprehensive, corporate-wide project
designed to make the Company more cost efficient and operationally effective;
and (7) the implementation of a broad strategy designed to create a "Super
Community Bank" that will grow banking operations, redeploy liquid assets into
higher yielding loans and enhance long-term profitability. See "Risk Factors
and Special Considerations."

THE OFFERING

The Debt Securities........... The Debt Securities will be obligations of the
Company limited to $125,000,000 in aggregate
initial offering price, and may be issued in
one or more series pursuant to the Indenture
described below. The Debt Securities may be
offered for sale in a single offering or from
time to time in more than one offering.

General Terms................. The specific title, aggregate principal amount,
maturity, rate and time of payment of interest
(if any), purchase price, any terms for
redemption, any foreign currency of payment or
denomination and other special terms of a
specific series of Offered Debt Securities will
be set forth in a Prospectus Supplement
relating to such securities. If so indicated in
the applicable Prospectus Supplement, Offered
Debt Securities may be represented in whole or
in part by one or more Global Securities
registered in the name of the Depository or a
nominee thereof.

Rank.......................... Unless otherwise indicated in the applicable
Prospectus Supplement, the Debt Securities will
be unsecured and subordinated in right of
payment to all existing and future Senior
Indebtedness of the Company and, in certain
circumstances, all existing and future Other
Financial Obligations of the Company. As of
September 30, 1993, the Company had no Senior
Indebtedness and no Other Financial Obligations
outstanding. In addition, the Debt Securities
will be effectively subordinated in right of
payment to all indebtedness of the Company's
subsidiaries. The Indenture (as defined below)
will contain no limitation on the incurrence of
additional indebtedness (including additional
Senior Indebtedness and Other Financial
Obligations) by the Company or on the
incurrence of additional indebtedness by its
subsidiaries. See "Description of the Debt
Securities--Subordination."

4
<PAGE>

Limited Rights of Unless otherwise indicated in the applicable
Acceleration.................. Prospectus Supplement, payment of the principal
of the Debt Securities may be accelerated only
in the case of certain events involving the
bankruptcy, insolvency or reorganization of the
Company. There is no right of acceleration in
the case of default in the performance of any
obligation of the Company under the Indenture
or the Debt Securities, including any
obligation to pay principal or interest. See
"Description of the Debt Securities--Events of
Default and Limited Rights of Acceleration."

Indenture..................... The Debt Securities are to be issued under the
Indenture (the "Indenture"), to be dated as of
January 1, 1994, between the Company and The
Bank of New York, as Trustee (the "Trustee").

USE OF PROCEEDS

The Company currently intends to use the net proceeds from the sale of the
Debt Securities to redeem approximately $120.7 million of outstanding
subordinated debt of the Company. See "Use of Proceeds."

RISK FACTORS AND SPECIAL CONSIDERATIONS

An investment in the Debt Securities involves substantial risks which should
be considered by prospective purchasers of the Debt Securities. See "Risk
Factors and Special Considerations."

5
<PAGE>

SUMMARY FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
----------------------- ---------------------------------------------------------
1993 1992 1992 1991 1990 1989 1988
----------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED SUMMARY OF
INCOME:
Interest Income........ $ 195,035 $ 258,350 $ 327,540 $ 474,815 $ 649,010 $ 621,200 $ 505,625
Interest Expense....... 95,384 152,531 189,604 319,719 476,397 442,099 342,146
----------- ---------- ---------- ---------- ---------- ---------- ----------
Net Interest Income.... 99,651 105,819 137,936 155,096 172,613 179,101 163,479
Less: Provision for
Loan Losses........... 59,141 23,462 49,789 43,525 105,508 5,588 1,176
----------- ---------- ---------- ---------- ---------- ---------- ----------
Net Interest Income
after Provision for
Loan Losses........... 40,510 82,357 88,147 111,571 67,105 173,513 162,303
Noninterest Income
Excluding Securities
Gains................. 67,486 68,123 96,200 92,961 78,179 65,144 56,861
Securities Gains
(Losses), Net......... 23,925 34,798 34,213 13,692 1,263 8,285 (96)
Provision for Losses on
Accelerated
Disposition of Real
Estate Assets......... -- -- -- 49,800 -- -- --
Noninterest Expense.... 223,655 182,398 240,681 240,501 237,177 189,910 165,326
----------- ---------- ---------- ---------- ---------- ---------- ----------
Income (Loss) before
Taxes and
Extraordinary Item.... (91,734) 2,880 (22,121) (72,077) (90,630) 57,032 53,742
Applicable Income Tax
(Benefit) Expense..... 5,558 (129) (1,069) (6,130) (29,413) 17,609 16,726
----------- ---------- ---------- ---------- ---------- ---------- ----------
Income (Loss) before
Extraordinary Item,
Net of Taxes.......... (97,292) 3,009 (21,052) (65,947) (61,217) 39,423 37,016
Extraordinary Item--Net
of Taxes(1)........... -- -- -- 2,486 4,569 -- --
----------- ---------- ---------- ---------- ---------- ---------- ----------
Net Income (Loss)...... $ (97,292) $ 3,009 $ (21,052) $ (63,461) $ (56,648) $ 39,423 $ 37,016
=========== ========== ========== ========== ========== ========== ==========
PER COMMON SHARE:
Net Income (Loss)...... $ (3.90) $ 0.12 $ (0.86) $ (4.61) $ (4.11) $ 2.86 $ 2.54
Book Value (at period
end).................. 5.50 10.13 8.98 14.88 20.16 24.85 23.41
Average Shares Out-
standing(2)........... 25,222,014 24,303,072 24,534,063 13,777,014 13,777,014 13,777,014 14,594,131
CONSOLIDATED BALANCES AT
PERIOD END:
Total Assets........... $ 4,672,922 $5,357,251 $5,077,522 $5,535,803 $7,050,602 $7,337,187 $7,001,910
Reserve for Loan Loss-
es.................... 80,869 74,520 83,307 103,674 108,887 39,863 49,038
Nonaccrual and Renego-
tiated Loans.......... 158,274 165,220 173,880 231,836 158,789 4,504 24,950
Other Real Estate
Owned................. 112,732 134,450 131,892 99,275 120,207 37,963 787
----------- ---------- ---------- ---------- ---------- ---------- ----------
Total Nonperforming As-
sets(3)............... 271,006 299,670 305,772 331,111 278,996 42,467 25,737
Loans, Net of Unearned
Discount and Deferred
Fees.................. 2,105,572 2,354,609 2,137,706 2,992,693 3,791,256 3,808,760 3,562,831
Total Deposits......... 3,934,289 4,630,312 4,437,598 4,912,372 6,110,594 5,976,934 5,537,275
Long-Term Debt......... 213,325 213,325 213,325 232,127 245,897 308,914 223,175
Stockholders' Equity... 157,673 274,565 245,420 204,979 277,697 342,332 322,476
RATIO OF EARNINGS TO
FIXED CHARGES(4):
Including Interest on
Deposits.............. -- 1.02x -- -- -- 1.13x 1.16x
Excluding Interest on
Deposits.............. -- 1.19x -- -- -- 1.84x 2.12x
CAPITAL RATIOS AT PERIOD
END:
Combined Tier 1 and
Tier 2 Risk-Weighted.. 11.01% 15.05% 14.70% 10.46% 10.79% N/A N/A
Tier 1 Risk-Weighted... 5.78 8.60 8.31 5.23 5.39 N/A N/A
Leverage............... 3.02 4.93 4.60 3.57 3.80 N/A N/A
SELECTED PRO FORMA DATA AT SEPTEMBER
30, 1993(5):
Book Value Per Common
Share................. $ 5.81
Number of Shares Out-
standing.............. 30,222,014
Capital Ratios:
Combined Tier 1 and
Tier 2 Risk-Weighted.. 16.98%
Tier 1 Risk-Weighted... 10.85
Leverage............... 5.73
Stockholder's Equity to
Total Assets.......... 6.03
</TABLE>
- --------
(1) During 1991 and 1990, the Company purchased, on the open market at a
discount, $13.2 million and $33.5 million principal amount of its
subordinated long-term debt, which resulted in extraordinary gains.
(2) The Company purchased 900,798 shares of its common stock in the fourth
quarter of 1988.
(3) Nonperforming assets consist of nonaccrual loans, renegotiated loans, other
real estate owned (net of reserves) and, for the period from September 30,
1991 through the second quarter of 1992, assets subject to accelerated
disposition (net of reserves).
(4) Earnings include the consolidated earnings of the national banking
subsidiaries, which may not be available (due to legal limitations on the
sources and amount of dividends national banks are permitted to pay their
parent companies) to cover fixed charges of the holding company. See "Risk
Factors and Special Considerations--Holding Company Liquidity" Fixed
charges include interest on long-term debt of the holding company. During
the nine month period ended September 30, 1993 and the years ended December
31, 1992, 1991 and 1990, earnings were insufficient to cover fixed charges
(including interest on deposits) by $91.7 million, $22.1 million, $72.1
million and $90.6 million, respectively.
(5) Adjusted to give effect, as of September 30, 1993, to the October Equity
Sale and the investment of the net proceeds thereof (approximately $132
million) in short-term money market assets, which have been risk-weighted
at 20% for purposes of capital ratio calculations. No effect is given to
any offering of Debt Securities or any repayment of outstanding
subordinated debt. See "Capitalization."

6
<PAGE>

RISK FACTORS AND SPECIAL CONSIDERATIONS

An investment in the Company involves substantial risks, including those
described below, and other considerations that should be carefully reviewed by
investors prior to the purchase of the Debt Securities offered hereby.

CONTINUED LOSSES AND NONPERFORMING ASSETS

The Company has experienced and continues to experience serious financial
and operational difficulties, principally as a result of deterioration in its
domestic commercial real estate portfolio (which is concentrated in the
greater Washington, D.C. metropolitan area) and in the commercial real estate
and corporate loan portfolios of Riggs AP Bank Limited ("Riggs AP") and the
London branch of Riggs-Washington (collectively, the "London Operations"). The
Company reported net losses of $56.6 million in 1990, $63.5 million in 1991,
$21.1 million in 1992 and $97.3 million for the nine months ended September
30, 1993. These results included provisions for loan losses of $105.5 million
in 1990, $43.5 million in 1991, $49.8 million in 1992 and $59.1 million in the
nine months ended September 30, 1993. During these same periods, the Company
had net charge-offs of $37.5 million, $35.6 million, $67.0 million and $61.6
million, respectively. Of the total net charge-offs for these periods of
$201.7 million, $65.6 million was associated with the London Operations.

Nonperforming assets, which include nonaccrual loans, renegotiated loans,
other real estate owned (net of reserves) and, for the period from September
30, 1991 through the second quarter of 1992, real estate assets subject to
accelerated disposition (net of reserves), increased from $279.0 million at
December 31, 1990 to $331.1 million at December 31, 1991 (net of $46.8 million
of reserves for real estate assets subject to accelerated disposition), before
decreasing to $305.8 million at December 31, 1992 and $271.0 million at
September 30, 1993. (Changes in the level of nonperforming assets are the
function of a number of factors, including sales, charge-offs and new
nonperforming assets.) Because of the reduction in the size of the Company's
loan portfolio since December 31, 1991, nonperforming assets have continued to
increase as a percentage of total loans and other real estate owned from 7.1%
at December 31, 1990 to 10.7% at December 31, 1991 and 13.5% at December 31,
1992, before decreasing to 12.2% at September 30, 1993. At September 30, 1993,
the Company's ratio of reserve for loan losses to nonaccrual, renegotiated and
past due loans was 49.8% compared to 47.5% and 44.1% at December 31, 1992 and
1991, respectively. Although the Company has taken steps to reduce
nonperforming assets (see "Recent Developments"), there can be no assurance
that such actions will be successful, particularly if economic conditions
should continue to have an adverse impact on these assets.

The high levels of nonperforming assets that the Company has experienced
over the past several years, together with the shift in the Company's assets
from loans toward money market assets for capital and liquidity reasons, has
significantly and adversely affected the Company's earnings. Improvement in
the Company's earnings will depend in part on increases in the size of the
Company's loan portfolio. There can be no assurance that the Company will be
able to generate sufficient loan growth to improve earnings. See "--Holding
Company Liquidity," "Recent Developments--Financial Difficulties and Recent
Strategic Initiatives--Further Revenue Enhancements: Increased Loan to Deposit
Ratio" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

The Company has recently purchased, or agreed to purchase, in the open
market approximately $520 million of residential mortgage loans. Substantially
all of these loans were recently originated, have original maturities of 15 or
30 years, bear interest at fixed rates and are secured by properties located
in various regions throughout the United States. See "Recent Developments--
Financial Difficulties and Recent Strategic Initiatives--Further Revenue
Enhancements: Increased Loan to Deposit Ratio."

Improvements in asset quality, particularly with respect to loans secured by
commercial real estate, will depend on economic conditions in the Company's
principal markets and their impact on nonaccrual loans, the disposition of
other real estate owned and past due loan levels of the Company. The Company
is unable to predict when, or at what rate, economic conditions in these areas
will begin to improve on a sustainable basis. Due to cyclical lagging factors,
high levels of charge-offs could continue even if general business

7
<PAGE>

conditions start to improve. The Company's earnings will continue to be
restrained by the high levels of nonperforming assets, expenses associated with
the collection of problem commercial real estate loans, the carrying expenses
of other real estate owned and, if necessary, additional provisions and
writedowns. Consequently, there can be no assurance as to whether the Company
will at any time have sufficient resources to make principal and interest
payments on the Debt Securities.

COMMERCIAL REAL ESTATE MARKETS

At September 30, 1993, $562.8 million, or 26.7%, of the Company's loan
portfolio consisted of loans secured by commercial real estate, approximately
70.0% and 29.7% of which were secured by properties located in the Washington
D.C. area and in the United Kingdom, respectively. Of the $229 million of loans
attributable to the London Operations at September 30, 1993, 73.8% were secured
by real estate. The Company had an additional $113 million in other real estate
owned, net at September 30, 1993, 84.1% of which was located in the Washington,
D.C. metropolitan area and 10.1% of which was located in the United Kingdom. At
September 30, 1993, the twelve largest borrower relationships represented
$189.9 million, or 65.2%, of the Company's total domestic commercial real
estate loans. The commercial real estate markets in these areas have been
experiencing deteriorating economic trends, including declining occupancy and
rental rates and property values. These trends have resulted in substantial
increases in the delinquency and default rates on the Company's commercial real
estate loan portfolio and, because of the deterioration in the value of the
associated collateral, significant losses to the Company. At September 30,
1993, approximately $107.7 million, or 19.1%, of the Company's commercial real
estate and construction loans were 90 days or more past due. Virtually all past
due loans were on nonaccrual status at September 30, 1993. See "Recent
Developments--Financial Difficulties and Recent Strategic Initiatives" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

In light of current economic conditions in the United States and the United
Kingdom, and the possibility of further deterioration in commercial real estate
values in the Washington, D.C. area and the United Kingdom and increases in
interest rates in the United Kingdom, significant additional provisions and
writedowns are possible and nonperforming assets (as well as the cost of
carrying nonperforming assets) could increase. However, given the uncertainties
created by current economic conditions both domestically and in the United
Kingdom, such additional provisions and writedowns cannot be reasonably
estimated at this time, and the extent to which they may be required in the
future will depend on future economic conditions and their impact on specific
borrowers' operations and liquidity.

HOLDING COMPANY LIQUIDITY

The Company's cash flows are affected by its ongoing operations, including
the provision of support to its subsidiary banks, and its investing and
financing activities. At September 30, 1993, the Company had, on a parent
company only basis, liquid assets (consisting of cash, deposits in other banks
and securities purchased subject to resale ("repos")) of $30.2 million,
compared to $78.4 million at December 31, 1992 and $31.4 million at December
31, 1991. On a pro forma basis after giving effect to the October Equity Sale,
the Company, on a parent company only basis, would have had liquid assets of
approximately $160 million as of September 30, 1993. Liquid assets at the
parent company level may be substantially reduced from time to time if capital
contributions to the subsidiary banks are deemed to be necessary. For example,
the Company made capital contributions of cash to Riggs-Washington of
approximately $38 million during the first nine months of 1993. Although the
Company has no current plans to make any substantial capital contributions to
its subsidiary banks through 1994, its plans are subject to change in light of
economic, financial and regulatory considerations.

As a holding company, the Company conducts its operations principally through
its subsidiaries and, therefore, its principal source of cash, other than its
investing and financing activities, is dividends from Riggs-Washington and the
Company's other subsidiary banks. However, there are legal limitations on the
source and amount of dividends that national banks are permitted to pay their
parent companies. See "Supervision and Regulation." A national bank may pay
dividends only to the extent that retained net profits (including the portion
transferred to surplus) exceed bad debts (as defined by regulation). Moreover,
unless a national bank's surplus fund equals its common capital, dividends may
be paid only after 10 percent of its net profits (as defined) for the specified
preceding period have been transferred to the bank's surplus fund. In addition,

8
<PAGE>

prior approval of the Office of the Comptroller of the Currency (the "OCC") is
required if the total of all dividends declared by a national bank in any
calendar year will exceed the sum of that bank's net profits (as defined) for
that year and its retained net profits for the preceding two calendar years,
less any required transfers to either surplus or any fund for retirement of any
preferred stock. Riggs-Washington and The Riggs National Bank of Maryland
("Riggs-Maryland") had net losses (as defined) of $154 million and $208
thousand, respectively, for the combined periods of 1991, 1992 and the first
nine months of 1993. Thus, neither bank would be able to pay dividends to the
Company in the current year unless it generated earnings in excess of such
losses. The Riggs National Bank of Virginia ("Riggs-Virginia") had net income
(as defined) of $7.5 million for the combined periods of 1991, 1992 and the
first nine months of 1993. The payment of dividends by the Company's national
bank subsidiaries may also be affected by other factors, such as requirements
for the maintenance of adequate capital. In addition, the OCC is authorized to
determine, under certain circumstances relating to the financial condition of a
national bank, whether the payment of dividends would be an unsafe or unsound
banking practice and to prohibit payment thereof. In accordance with its
written agreement with the OCC (described below), Riggs-Washington may pay
dividends to the Company only when it is in compliance with its approved
capital program and with prior written notification to the OCC. See
"Supervision and Regulation" for a further discussion of dividend restrictions
and the policy of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board") regarding bank holding company support for its
subsidiary banks.

The Company has outstanding two series of floating rate subordinated notes
totalling approximately $147 million in principal amount, which mature in
September 1996. The Company intends to redeem approximately $120.7 million of
these notes with the net proceeds from the sale of Debt Securities. In order to
meet its obligations to repay the remaining portion of these notes at their
maturity, the Company may need to access the capital markets or otherwise
refinance the notes. There is no assurance that the Company will be able to do
so on favorable terms.

The Company's estimated cash needs, on a parent company only basis, over the
twelve month period commencing October 1, 1993 (before giving effect to
interest on the Debt Securities offered hereby or any repayment of outstanding
debt) include $14.1 million of interest payments on outstanding subordinated
debt, $12.2 million of dividends on outstanding preferred stock (assuming the
preferred stock sold in the October Equity Sale was outstanding on October 1,
1993) and other expenses related to payroll, benefits, occupancy and other
noninterest expenses of $6.6 million. These cash outflows will be partially
offset by anticipated interest income and other cash inflows aggregating $6.1
million, resulting in an estimated annual aggregate cash outflow for the parent
company of approximately $26.8 million (before giving effect to interest on the
Debt Securities offered hereby or any repayment of outstanding debt).

The Company expects that the offering and sale of the Debt Securities and the
use of the net proceeds thereof to redeem a substantial portion of its
outstanding subordinated debt (which currently bears interest at a floating
rate equal to 5 1/4% per annum) will result in increased annual interest
expense for the parent company. The amount of such additional interest expense
will depend on the interest rate in effect on the debt to be redeemed and on
the terms of the Debt Securities, which will not be set until the time of
issuance and will reflect market conditions and the Company's financial
position at that time.

In connection with its memorandum of understanding (the "Memorandum of
Understanding") with the Federal Reserve Bank of Richmond (the "Reserve Bank")
described under "--Regulatory Developments" below, the Company submitted a
capital plan, which it revises periodically, to the Reserve Bank. On a regular
basis, the Reserve Bank monitors the Company's financial condition and results
of operations in light of the capital plan on a consolidated basis. The Company
will submit to the Reserve Bank for its review a modified capital plan that
provides for increased revenues from loan growth, which, if achieved, would
offset the increased interest expense resulting from the issuance of the Debt
Securities, net of interest expense reductions due to the redemption of
outstanding subordinated notes. Such loan growth would be in addition to the
approximately $520 million of recent and pending purchases of residential
mortgage loans (see "Recent Developments--Financial Difficulties and Recent
Strategic Initiatives--Further Revenue Enhancements: Increased Loan to Deposit
Ratio"). The Company currently expects to pursue such additional growth
principally through the origination of new business and consumer loans in its
local community market. The amount of loan growth necessary to offset the
increased interest expense will depend on a number of factors, including the
terms and amount of any Debt Securities issued, the amount of subordinated debt
redeemed and the performance of its existing loan portfolio. The Company's
ability to achieve its loan growth targets

9
<PAGE>

will depend on various economic, financial and regulatory factors, many of
which are beyond the Company's control. In the Company's primary markets,
growth in demand for new loans has been relatively limited and competition
among lenders has increased in recent years. See "--Competition." Consequently,
there is no assurance that this additional loan growth can be achieved or as to
the effect of such growth on the Company's results of operations or financial
condition. In addition, the Reserve Bank will review the financial condition
and results of operations of the Company in light of the Company's ability to
achieve the operating results projected in the modified capital plan.

Although management currently believes that the parent company's liquid
assets, including the estimated approximately $132 million of net proceeds from
the October Equity Sale, will be sufficient to meet its cash needs for the next
several years, unanticipated contingencies could reduce its liquidity and,
thus, impair or limit its ability to make interest and principal payments on
the Debt Securities. For example, the parent company could use a portion of its
liquid assets, including the net proceeds from the October Equity Sale, to make
investments in or loans to its banking subsidiaries if it determined such use
was necessary to strengthen the capital base of any of those banks, or if
required to do so by regulatory authorities. Moreover, the ability of the
parent company to meet its cash needs beyond the next several years will depend
on the ability of its subsidiary banks to begin generating earnings in amounts
sufficient to permit substantial dividend payments to the parent and on its
ability to successfully refinance by 1996 any of its subordinated debt that
remains outstanding. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Interest Rate Sensitivity and Liquidity"
and "Supervision and Regulation."

REGULATORY DEVELOPMENTS

On May 14, 1993, the Company entered into the Memorandum of Understanding
with the Reserve Bank and Riggs-Washington entered into a written agreement
(the "Written Agreement") with the OCC. The Written Agreement and the
Memorandum of Understanding were the result of regulatory concern over
financial and operational weaknesses and continued losses primarily related to
the Company's domestic and United Kingdom commercial real estate exposure.

The Company's and Riggs-Washington's respective regulators have broad powers
under current law and, if the Company or Riggs-Washington fails to comply with
any material provisions of the Memorandum of Understanding or the Written
Agreement, such regulators may take further supervisory action, including
possible further constraints on operations, limitations on the payment of
principal, interest or dividends and more severe regulatory oversight. The
powers of the regulatory authorities and the potential adverse impact on
holders of Debt Securities increase significantly if the subsidiary banks are
not adequately capitalized. Such supervisory action could impair the Company's
ability to make principal and interest payments on the Debt Securities. See
"Supervision and Regulation."

REGULATORY CAPITAL REQUIREMENTS

The Company and each of its banking subsidiaries are subject to regulatory
capital guidelines. At September 30, 1993, each of the Company's banking
subsidiaries was in compliance with applicable regulatory capital requirements,
including, in the case of Riggs-Washington, the capital targets set forth in
the Written Agreement. The Company, at that date, had a total capital to risk-
weighted assets ratio of 11.01% and a Tier 1 capital to risk-weighted assets
ratio of 5.78%, both above the minimum requirements of 8.0% and 4.0%,
respectively. The Company's leverage ratio at that date was 3.02% or, on a pro
forma basis after giving effect to the October Equity Sale, 5.73%.

Although the minimum leverage ratio requirement is 3.00%, most bank holding
companies, including the Company, are expected to maintain an additional
cushion of at least 100 to 200 basis points above the minimum. However, the
Federal Reserve Board may assign a specific capital ratio to an individual bank
holding company, including the Company, based on its assessment of asset
quality, earnings performance, interest-rate risk and liquidity. As of the date
of this Prospectus, the Federal Reserve Board has not advised the Company of a
specific leverage ratio requirement. Pursuant to the Memorandum of
Understanding, on July 13, 1993, the Company submitted a capital plan to the
Reserve Bank which projected an improvement in the Company's leverage ratio to
approximately 5.00% by year-end 1993, which, as noted above, has been exceeded
as a result of the October Equity Sale. The Memorandum of Understanding does
not require the Company's capital plan to be approved by the Reserve Bank;
however, the Company's plan was submitted to

10
<PAGE>

and reviewed without objection by the Reserve Bank. A modified capital plan
will be formally submitted to the Reserve Bank in early 1994. See "--Holding
Company Liquidity." Riggs-Washington's capital plan has been approved by the
OCC but a modified capital plan will be formally submitted to the OCC in early
1994.

There can be no assurance that the Company will continue to be able to meet
all the capital projections in its capital plan or that Riggs-Washington will
continue to meet the minimum capital ratios to which it is committed under the
Written Agreement. In the event that the Company is unable to meet the
projections in its capital plan, or any of its banking subsidiaries falls
below the minimum capital requirements described above, the agencies may take
additional regulatory action including, in the case of subsidiary banks that
fail to meet capital requirements, "prompt corrective action." Such actions
could impair the Company's ability to make principal and interest payments on
the Debt Securities. See "Supervision and Regulation."

SUBORDINATION

Unless otherwise indicated in the applicable Prospectus Supplement, the Debt
Securities will be unsecured and subordinated in right of payment to all
existing and future Senior Indebtedness (as defined herein) of the Company
and, in certain circumstances, to all existing and future Other Financial
Obligations (as defined herein) of the Company. See "Description of the Debt
Securities--Subordination." As of September 30, 1993, the Company had no
Senior Indebtedness and no Other Financial Obligations outstanding. In
addition, the Company is a holding company that conducts substantially all of
its operations through its subsidiaries, and claims of creditors of the
Company's subsidiaries generally will have priority as to the assets of such
subsidiaries over the claims of the Company and its creditors, including
holders of the Debt Securities. The Indenture under which the Debt Securities
are to be issued does not limit or prohibit the incurrence of additional
Senior Indebtedness, Other Financial Obligations or any other indebtedness by
the Company, or the incurrence of any indebtedness by its subsidiaries, nor
does the Indenture contain any provisions which would protect the holders of
the Debt Securities (or any beneficial interest therein) against a decline in
credit quality resulting from takeovers, recapitalizations or other similar
restructurings. See "Description of the Debt Securities--Subordination."

Unless otherwise indicated in the applicable Prospectus Supplement, payment
of the principal of the Debt Securities may be accelerated only in the case of
certain events involving the bankruptcy, insolvency or reorganization of the
Company. Unless otherwise indicated in the applicable Prospectus Supplement,
there is no right of acceleration in the case of a default in the performance
of any obligation of the Company under the Indenture or the Debt Securities,
including any obligation to pay principal or interest on the Debt Securities.
See "Description of the Debt Securities--Events of Default and Limited Rights
of Acceleration."

COMPETITION

The Company competes with commercial banks, thrift institutions, mortgage
banks, credit unions, insurance companies and other institutions. Such
competition is primarily based on the scope and type of services offered,
interest rates paid on deposits, pricing of loans and number and locations of
branches, among other things. In addition, during the past few years,
significant consolidation among financial institutions in the Washington, D.C.
metropolitan area has occurred. Competition has intensified and is expected to
continue to intensify in the Washington, D.C. metropolitan area as a result of
the merger of C&S/Sovran Corporation into NCNB Bancorporation (now known as
NationsBank Corporation), the recently completed acquisitions of First
American Metro Corp. and Dominion Bankshares Corporation by First Union
Corporation and the pending acquisition of MNC Financial, Inc. (the parent
company of American Security Bank, N.A.) by NationsBank Corporation. These
competitors and certain other competitors of the Company have substantially
greater resources than the Company. Although management believes the Company
has been able to compete effectively in its market areas, there can be no
assurance that it will be able to continue to do so.

TRADING MARKET FOR THE DEBT SECURITIES

The Company does not intend to apply for listing of the Debt Securities on
any national securities exchange or to have the Debt Securities approved for
quotation on any interdealer quotation system. The liquidity of, and the
trading market for, the Debt Securities may be adversely affected by declines
in the market for high yield securities generally. Such a decline may
adversely affect such liquidity and trading markets independent of the
financial performance of, and prospects for, the Company. Accordingly, no
assurance can be given as to the liquidity of, or trading markets for, the
Debt Securities.

11
<PAGE>

THE COMPANY

Riggs National Corporation is a multi-bank holding company registered under
the Bank Holding Company Act of 1956, as amended (the "BHCA"), and incorporated
in the State of Delaware. Based on total assets as of June 30, 1993, the
Company is the 88th largest bank holding company in the United States and the
largest bank holding company headquartered in Washington, D.C. As of September
30, 1993, the Company had consolidated assets of $4.7 billion, consolidated
deposits of $3.9 billion and consolidated stockholders' equity of $158 million
($289.9 million after giving effect to the October Equity Sale).

The Company, through its bank and non-bank subsidiaries, provides banking,
trust, investment advisory and other financial services to selected domestic
and international markets. The Company currently has banking subsidiaries in
Washington, D.C.; Virginia; Maryland; Miami, Florida; London, England; Paris,
France; and Nassau, Bahamas. Additionally, the Company provides investment
advisory services domestically through a subsidiary registered under the
Investment Advisers Act of 1940 and internationally through a subsidiary in
Geneva, Switzerland. In addition to its domestic trust services, the Company
provides trust services through two subsidiaries in Gibraltar.

The primary market for the Company is the Washington, D.C. metropolitan area,
which it serves through three subsidiary banks: Riggs-Washington, Riggs-
Virginia and Riggs-Maryland. The number of branches, deposits, assets and
equity for each of these banking subsidiaries at September 30, 1993 are shown
in the table below:

<TABLE>
<CAPTION>
BRANCHES DEPOSITS ASSETS EQUITY
-------- -------- ------ ------
(dollars in millions)
<S> <C> <C> <C> <C>
Riggs-Washington............................ 34 $3,455 $4,079 $266
Riggs-Virginia.............................. 17 306 338 31
Riggs-Maryland.............................. 11 175 188 13
</TABLE>

The consolidation currently underway in the local banking industry has left
Riggs-Washington as the only independent commercial bank with assets in excess
of $4 billion headquartered in Washington, D.C. As of March 31, 1993, Riggs-
Washington had the largest share of commercial bank deposits in Washington,
D.C. at approximately 37%, based upon a recent study by the graduate school of
business administration at the University of Virginia, which included the pro
forma effects for the announced and pending mergers between banks in the
Washington, D.C. area. The Company believes that it enjoys a highly respected
position in Washington, D.C. because of its local management, name recognition
and commitment to the community, which has resulted in this leading deposit
share. In addition, the Company has developed an international business serving
foreign embassies and missions and significant trust/private banking operations
in the Washington, D.C. area.

The location of its headquarters in Washington, D.C. has provided the Company
with a unique opportunity to develop banking relationships with foreign
embassies and missions located in Washington, D.C. and their employees.
Currently, Riggs-Washington has a dominant share of this business, serving
embassies or missions for 158 of the 168 countries represented by embassies or
missions in Washington, D.C. by providing a variety of services including
deposit products, foreign exchange, cash management, letters of credit, private
banking and credit assistance with U.S. Government programs. The embassy and
mission business is complemented by the Company's international private
banking, foreign correspondent banking and advisory services.

Riggs-Washington's Financial Services Group provides domestic trust,
investment management and private banking services. At September 30, 1993, the
Trust Division had $9.1 billion in assets under administration, with
discretionary investment management responsibility for over $4.7 billion of
that amount. In recent years, the Trust Division has expanded its investment
management advisory services. As a result, assets under management grew at an
annual compounded rate of 16.0% for the five years ended December

12
<PAGE>

31, 1992 and trust revenue grew at an annual compounded rate of 12.5% during
the same period. Trust revenues of $21.6 million for the first nine months of
1993 were slightly greater than those for the same period a year earlier as the
reduction in corporate custodial business was offset by increased fees for
trust and investment advisory services. Assets under management declined
slightly from September 30, 1992 to September 30, 1993.

Management believes that the Company, as the largest commercial bank holding
company headquartered in the nation's capital, has a unique position in the
center of an affluent market combining significant public and private sector
customers. The Company's primary mission is to provide a full range of quality
banking services throughout the greater Washington, D.C. community. In order to
capitalize on its strong market position, deposit share and reputation in the
Washington, D.C. area, the Company is implementing a strategy which emphasizes
its ability to offer loan, deposit and investment advisory services as a "Super
Community Bank." As part of this strategy, the Company will offer its customers
a breadth of financial products typical of a regional bank with the
personalized service and local decision-making of a community bank. The Company
believes that its size will allow it to offer a broader product line than its
smaller competitors, while its personalized service and local decision-making
will give the Company a distinct advantage over its larger regional
competitors. Local decision-making and a commitment to the community will be
the key to retaining its existing customers and building new relationships.

The address of the principal executive offices of the Company is 1503
Pennsylvania Avenue, N.W., Washington, D.C. 20005. The telephone number is
(202) 835-6000.

RECENT DEVELOPMENTS

OCTOBER EQUITY SALE

On October 21, 1993, as part of the strategic initiatives announced by the
Company in the second quarter of 1993 and described below, the Company issued
and sold 4,000,000 shares of its Series B Preferred Stock and 5,000,000 shares
of its Common Stock to certain investors in transactions exempt from the
registration requirements of the Securities Act. The shares of Series B
Preferred Stock and Common Stock were sold for $25 per share and $7.75 per
share, respectively. The net proceeds to the Company from the October Equity
Sale (after deducting placement agent fees and related estimated expenses) were
approximately $132 million. Adjusted for the estimated net proceeds from the
transaction, the Company's pro forma risk-based capital and leverage ratios at
September 30, 1993 were as follows: Tier 1--10.85%, Combined Tier 1 and Tier 2
- --16.98% and Leverage--5.73%.

All of the Series B Preferred Stock and 2,924,000 shares of the Common Stock
sold in the October Equity Sale have been registered for resale by the
investors referred to above (and their permitted assigns) pursuant to a
separate shelf registration statement, which was recently filed with the
Commission and is to be maintained in effect for a period of three years. The
Company will not receive any of the proceeds from such resales.

1993 FOURTH QUARTER

13
<PAGE>

FINANCIAL DIFFICULTIES AND RECENT STRATEGIC INITIATIVES

Since 1990, the Company has experienced significant and continuing losses
totalling (as of September 30, 1993) in excess of $238 million, principally as
a result of deterioration in its domestic commercial real estate portfolio in
the Washington, D.C. metropolitan area and in the commercial real estate and
corporate loan portfolios of the Company's London Operations. See "Risk Factors
and Special Considerations." In its initial response to these difficulties, the
Company took a number of steps in 1991 and 1992, as discussed in the next
section. In 1993, largely under the direction of new senior management, the
Company implemented a series of integrated strategic initiatives intended to
restore the Company to financial soundness and profitability. These new
initiatives include:

. NEW MANAGEMENT TEAM. In June 1993, Paul M. Homan was appointed President
and Chief Executive Officer of Riggs-Washington and Vice-Chairman of the
Company. From August 1991 through December 1992, Mr. Homan served as
president and chief executive officer of First Florida Banks, Inc. of Tampa
(assets of $5.8 billion at December 31, 1991) during which time the bank
implemented restructuring programs to address asset quality problems and
returned to profitability within six months. From 1985 to 1987, Mr. Homan
was executive vice president of Continental Bank Corporation with
responsibility for corporate finance, strategic planning, capital planning
and government relations. Prior to joining Continental Bank Corporation, he
was chairman and chief executive officer of Nevada National Bank, which
also returned to profitability during his tenure. Prior to these bank
management positions, Mr. Homan worked at the OCC from 1966 to 1983, rising
to the position of senior deputy comptroller for bank supervision, the
OCC's top career position. As such, he supervised 4,700 national banks. He
also served as senior adviser to the Comptroller of the Currency in 1990
and 1991.

In addition to the appointment of Mr. Homan, the Company has
significantly strengthened its senior management team since early 1993 with
the appointment of a new Chief Financial Officer, a new head of its General
Banking Group and new heads of its Retail, Corporate and Commercial
Lending, Commercial Real Estate Lending, Loan Review, Audit and Appraisal
Services Divisions and its newly created Risk Management Division. Each of
the new Division Heads has extensive banking experience. In addition to the
large number of changes throughout the management team which have already
occurred, other steps may be taken to strengthen senior management before
year-end 1993. See "Management."

. FINANCIAL RESTRUCTURING. At the end of the second quarter of 1993, the
Company announced a financial restructuring designed to facilitate its
return to profitability. The steps taken included charging off the doubtful
portions of all loans, 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. These actions led to second quarter provisions for loan losses
of $44.2 million, restructuring charges of $20.8 million and expenses for
other real estate owned of $21.9 million. Of the $44.2 million in
provisions for loan losses, $19.7 million related to commercial real estate
in the Washington, D.C. area and $24.5 million related to commercial
property loans and corporate loans in the United Kingdom. See also "--
Restructuring of London Operations."

. NEW CAPITAL. Concurrently with the announcement of its financial
restructuring plan, the Company announced plans to raise approximately $100
million in new equity. As part of this plan, the Company completed the
October Equity Sale, in which it raised equity totalling approximately $132
million. After taking account of the October Equity Sale, the Company's pro
forma consolidated leverage ratio as of September 30, 1993 was 5.73%. See
"Capitalization" and "Supervision and Regulation."

. RESTRUCTURING OF LONDON OPERATIONS. During the second quarter of 1993,
the Company adopted a plan to address the potential risk in the loan and
other real estate owned portfolios of its London Operations, to facilitate
the disposition of certain of its troubled assets in the United Kingdom and
to exit unprofitable lines of business in the United Kingdom. The London
Operations have been reorganized on a basis consistent with the Company's
strategy domestically to segregate its ongoing banking business from the
management of problem assets. Continued ongoing business lines are now
centered on financing

14
<PAGE>

income-producing commercial real estate properties in the United Kingdom as
well as financing international trade transactions, primarily for mid-sized
corporations based in the United Kingdom. Management of the London
Operations has been strengthened with the recent addition of individuals
with specific experience in real estate appraisals, workouts and regulatory
compliance issues, who have joined a Managing Director and Chief Credit
Officer posted to London from Riggs-Washington within the last two years.
Over the last two years, the Company has substantially completed its with-
drawal from certain business activities in the United Kingdom including
commercial leasing, corporate banking, corporate finance and trading in
foreign exchange and money market instruments.

. SPECIAL ASSETS GROUP. In order to improve the Company's ability to work
out or liquidate problem assets, the Company has consolidated the majority
of its nonperforming and other problem assets in the domestic and United
Kingdom markets and transferred them into a Special Assets Group. The
Special Assets Group now handles problem assets throughout the Company. The
Special Assets Group is managed by dedicated personnel experienced in real
estate and problem asset disposition strategies and led by a senior officer
with an extensive banking background in loan and other real estate owned
workouts. The Company believes that maintaining the separation of the
workout function from the ongoing banking business will enable it to
concentrate more efficiently on resolution of its nonperforming and other
problem assets and at the same time focus attention on its "Super Community
Bank" strategy in building new business. Since 1991, Riggs-Washington has
had a Special Assets Committee to approve workout strategies for problem
assets.

. BANKSTART '93. In January 1993, the Company initiated BankStart '93, a
comprehensive, corporate-wide project designed to make the Company more
cost-efficient and operationally effective. Through BankStart '93, the
Company reexamined each of its lines of business in order to identify
opportunities to improve efficiencies and reduce costs. The goal of the
project was to identify revenue enhancements, productivity advances,
expense reductions and product line modifications needed to facilitate the
Company's return to consistent profitability. A portion of the expense
reductions is expected to come from reduced staffing. When the program
began, the authorized number of full-time positions for the Company's
domestic subsidiaries was 2,060. It was expected that approximately 550
positions would be eliminated as a result of BankStart '93, although the
number of actual layoffs was expected to be considerably less due to normal
turnover and attrition. At November 30, 1993, the number of full time
equivalent domestic employees was approximately 1,650. After giving effect
to further implementation of BankStart 93' and staff increases recently
determined to be needed to implement the Company's Super Community Bank
strategy, the Company currently anticipates that its authorized complement
for 1994 will be approximately level with its number of full-time
equivalent domestic employees at November 30, 1993.

In the first quarter of 1993, the Company took a restructuring charge of
$13.8 million, representing management's best estimate of the cost of
implementing BankStart '93. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Income--Nine Months 1993 vs.
Nine Months 1992." While all of this charge was accrued in the first
quarter, approximately $7.8 million of the actual expenses had been paid by
September 30, 1993, and the remaining $6.0 million is expected to be paid
between that date and the time when the program is fully implemented.
BankStart '93 is expected to be substantially implemented by mid-year 1994.
This estimate of the implementation cost is evaluated by management on an
ongoing basis and, as adjustments become known, will be revised
accordingly.

. FURTHER REVENUE ENHANCEMENTS: INCREASED LOAN TO DEPOSIT RATIO. As the
Company placed increasing emphasis on its liquidity in the past few years,
its loan to deposit ratio decreased from 62.0% as of December 31, 1990 to
53.5% as of September 30, 1993. This reduced ratio has had a negative
impact on net interest income. The Company's goal is to improve its loan to
deposit ratio to levels that currently are not expected to exceed
approximately 77% (although this level could be exceeded depending on
economic, financial and regulatory factors). The Company has moved toward
that goal in the short term

15
<PAGE>

by increasing residential mortgage loans through open market purchases of
approximately $340 million of first mortgages through November 1993. In
addition, the Company has entered into agreements to purchase approximately
$180 million of residential mortgage loans which are expected to be
acquired by February 1994. Substantially all of the mortgage loans acquired
and to be acquired bear interest at fixed rates, were recently originated,
have original maturities of 15 or 30 years and are secured by properties
located in various regions throughout the United States. The Company
intends further to pursue this goal over the longer term through a
combination of new loan underwriting initiatives for consumer and business
loans and a reduction of shorter-term assets. The Company believes this
strategy, combined with its aforementioned strategy to become a "Super
Community Bank," will have a significant positive impact on net interest
income and will be an important component of the plan to increase
profitability. Whether these lending goals will be achieved and
profitability enhanced as currently intended will depend on a variety of
economic, financial and regulatory factors, many of which are beyond the
Company's control. In particular, in the Company's primary markets, growth
in demand for new loans has been relatively limited and competition among
lenders has increased in recent years. Consequently, there is no assurance
that the Company will be successful in achieving its lending goals. See
"Recent Developments and Special Considerations--Holding Company
Liquidity."

INITIAL RESPONSES TO FINANCIAL DIFFICULTIES

Before implementing the strategic initiatives described in the preceding
section, the Company took a number of initial steps in 1990, 1991 and 1992 in
response to its financial difficulties. These initial steps were intended to
restore the Company's capital and regulatory capital ratios to adequate levels,
reduce the burden of nonperforming assets, control noninterest expense and
improve its systems and controls for managing its loan and real estate
portfolios. The Company believes that these initial steps were important in
addressing its continuing financial difficulties as they developed and in
establishing the foundation for the recently announced strategic initiatives.
These initial actions included:

. ASSET REDUCTION. During 1991 and 1992, the Company sought to maintain its
regulatory capital ratios and improve liquidity by reducing assets and
shifting a greater proportion of its assets from loans into money market
assets. Such assets generally carry a lower risk-weighting for capital
purposes, although they typically generate lower yields than the Company's
lending activities. Over this period, the as Company reduced its total
assets by approximately $2.0 billion, or 28%, while liquid assets increased
as a percentage of total assets from 37.3% at December 31, 1990 to 48.7% at
December 31, 1992. By September 30, 1993 total assets had declined by an
additional $405 million, with liquid assets representing 46.6% of total
assets.

. NEW CAPITAL. In a further move to improve capital levels and ratios, in
January 1992, the Company raised $49.1 million in new common equity through
a fully subscribed rights offering to its stockholders. This offering was
followed in June 1992 by the private issuance of $19.0 million of the
Company's 7.5% Cumulative Convertible Preferred Stock, Series A (the
"Series A Preferred Stock") in exchange for certain outstanding debt. The
Company also conserved capital by eliminating the payment of dividends on
its Common Stock following the first quarter of 1991.

. REDUCED EXPOSURE TO COMMERCIAL REAL ESTATE. The Company significantly
curtailed all new commercial real estate lending in the United States and
the United Kingdom beginning in 1990 and 1991, respectively. As a result of
these actions, as well as charge-offs, repayments and transfers to other
real estate owned, commercial real estate-related loans (both foreign and
domestic) decreased from $1.19 billion, or 17% of total assets, at December
31, 1990 to $687.6 million, or 14% of total assets, at December 31, 1992.
(At September 30, 1993, these loans totalled $562.8 million, or 12% of
total assets.)

. DISPOSITION OF CERTAIN PROBLEM ASSETS. During the third quarter of 1991,
the Company initiated a program to accelerate the disposition of $191.0
million of domestic problem commercial real estate assets. Through June 30,
1992, when this program was discontinued, the Company had reduced these
program assets by $146.3 million (or 77%) through sales, the return of
loans to performing status and writedowns. The Company continues its
efforts to dispose of problem assets as appropriate. During the second half
of 1992 and the first nine months of 1993, the Company has offset
substantial additions to

16
<PAGE>

non-performing assets with reductions of $162.3 million through sales and
repayments and $135.5 million through charge-offs, writedowns, provisions
for other real estate owned and the return of loans to performing status.

. IMPROVED CREDIT ANALYSIS AND RISK MANAGEMENT. In early 1991, the Company
began to refine (i) its underwriting methodology, (ii) its procedures for
ongoing risk evaluation (including the estimation of reserves) and (iii)
its process for determining workout strategies for criticized assets. In
addition, an internal appraisal department was formed, loan policy manuals
were rewritten and an enhanced commercial real estate lending policy manual
was created. These manuals strengthened underwriting standards for the
subsidiary banks to include requirements for cross-collateralization,
personal guarantees, and sales release provisions as requirements for
future commitments, renewals and workouts. In addition, the limit for
senior loan committee approval was lowered from $1 million to $500,000. A
Special Assets Committee consisting of managers with real estate and
workout experience was also formed to approve workout strategies for
problem assets. In 1991 and 1992, several consultants were retained to
assist the Company in improving its appraisal review, documentation
tracking and risk-rating procedures and systems. In late 1992, the Company
began to allocate additional resources to the loan review process, doubling
the size of this department, including a new manager of loan review and
adding professionals with real estate experience.

IMPLEMENTATION OF INTERAGENCY GUIDANCE ON REPORTING OF IN-SUBSTANCE
FORECLOSURES

At December 31, 1993, the Company implemented the narrower definition of In-
Substance Foreclosure required by the March 10, 1993 Interagency Policy
Statement on Credit Availability and the June 10, 1993 Interagency Guidance on
Reporting of In-Substance Foreclosures. Under previous financial accounting
guidelines, nonaccrual loans were transferred from loans receivable to other
real estate owned when foreclosure was probable or the loan was considered in-
substance foreclosed, which by definition in the Commission's Financial
Reporting Release No. 28 means that the borrower has little or no equity in the
property, proceeds for repayment of the loan can be expected to come only from
the operation or sale of the collateral, and the debtor has either abandoned
control of the collateral or it is doubtful that the debtor will 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 current regulatory accounting guidelines, loans
receivable are recognized as in-substance foreclosures when the Company 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" which will be required for
fiscal years beginning after December 15, 1994. This change in treatment only
impacts the classification of accounts in the financial statements and does not
result in a change in the accounting policy related to the carrying value
determination of these assets. The impact of this change in definition of in-
substance foreclosures on certain categories in the Company's Consolidated
Statements of Condition and Statements of Income for the nine month periods
ended September 30, 1993 and 1992, and the years ended December 31, 1992
through 1988 is presented in the following table.

ADJUSTMENTS TO IMPLEMENT NEW DEFINITION OF IN-SUBSTANCE FORECLOSURES

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------------ ------------------------------------------------
1993 1992 1992 1991 1990 1989 1988
-------- -------- -------- -------- -------- -------- --------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF
CONDITION
Loans Receivable, Net... $ 61,463 $ 32,735 $ 43,351 $ 13,774 $ 47,125 $ 31,861 $ --
Reserve for Loan Losses. 2,603 -- 848 -- -- -- --
Other Real Estate Owned,
Net.................... (58,860) (32,735) (42,503) (13,774) (47,125) (31,861) --
-------- -------- -------- -------- -------- -------- --------
Net Affect on Total As-
sets................... $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
======== ======== ======== ======== ======== ======== ========
</TABLE>

17
<PAGE>

<TABLE>
<CAPTION>
NINE MONTHS ENDED FOR THE YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
------------------- -----------------------------------------
1993 1992 1992 1991 1990 1989 1988
---------------------------- ------- -------- ------ ------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF INCOME
Provision for Loan Loss-
es...................... $ 8,024 $ 1,350 $ 2,278 $ 130 $ 900 $ -- $ --
Other Real Estate Owned
Exp., Net............... (8,024) (1,350) (2,278) (130) (900) -- --
--------- -------- ------- ------- -------- ------ ------
Net Affect on Pretax
Income.................. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
========= ======== ======= ======= ======== ====== ======
Provision for Loan Losses
As Reported............ $59,141 $23,462 $49,789 $43,525 $105,508 $5,588 $1,176
As Adjusted............ 67,165 24,812 52,067 43,655 106,408 5,588 1,176
Other Real Estate Owned
Exp., Net
As Reported............ $ 20,231 $ 16,986 $17,981 $14,370 $ 13,353 $1,208 $ (99)
As Adjusted............ 12,207 15,636 15,703 14,240 12,453 1,208 (99)
</TABLE>

The impact of the change in definition of in-substance foreclosures on
nonperforming assets for the nine month periods ended September 30, 1993 and
1992 and the years ended December 31, 1992 through 1988 is presented in the
following table. Nonperforming assets under the previous definition of in-
substance foreclosure are disclosed in "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Nonperforming Assets and Past
Due Loans."

NONPERFORMING ASSETS AND PAST DUE LOANS--AS ADJUSTED

The impact of the change in definition of in-substance foreclosures on the
reserve for loan losses for the nine month periods ended September 30, 1993 and
1992 and the years ended December 31, 1992 through 1988 is presented in the
following table. The reserve for loan losses under the previous definition of
in-substance foreclosure is disclosed in "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Reserve for Loan Losses and
Summary of Charge-offs and Recoveries."

18
<PAGE>

RESERVE FOR LOAN LOSSES AND SUMMARY OF CHARGE-OFFS AND RECOVERIES--AS ADJUSTED

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
---------------- --------------------------------------------
1993 1992 1992 1991 1990 1989 1988
------- -------- -------- -------- -------- ------- -------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, Beginning of
Period................. $84,155 $103,674 $103,674 $108,887 $ 39,863 $49,038 $66,415
Additions:
Provision for Loan
Losses............... 67,165 24,812 52,067 43,655 106,408 5,588 1,176
Deductions:
Loans Charged-Off..... 70,321 54,352 73,708 39,379 39,226 15,291 22,050
Recoveries on Charged-
Off Loans............ 2,457 1,940 5,313 3,659 865 1,039 3,619
------- -------- -------- -------- -------- ------- -------
Net Charge-offs....... 67,864 52,412 68,395 35,720 38,361 14,252 18,431
Other:
Reserve Transferred to
Real Estate Assets
Subject to Accelerated
Disposition............ -- -- -- 13,165 -- -- --
Foreign Exchange
Translation
Adjustments............ 16 (1,554) (3,191) 17 977 (511) (122)
------- -------- -------- -------- -------- ------- -------
Balance, End of Period.. $83,472 $ 74,520 $ 84,155 $103,674 $108,887 $39,863 $49,038
======= ======== ======== ======== ======== ======= =======
</TABLE>

USE OF PROCEEDS

The Company expects to use the net proceeds of the offering made hereby,
estimated at $120.7 million (assuming all the Debt Securities are sold, at
par), to redeem approximately $51.5 million of its Floating Rate Subordinated
Notes due 1996 (the "Floating Rate Subordinated Notes"), which have an
outstanding principal amount of $51.5 million, and approximately $69.2 million
of its Floating Rate Subordinated Capital Notes due 1996 (the "Subordinated
Capital Notes"), which have an outstanding principal amount of $95.3 million.
The Floating Rate Subordinated Notes mature in September 1996 and accrue
interest at an adjustable annual rate equal to the London interbank offered
rate for three-month Eurodollar deposits ("LIBOR"), which is determined
quarterly, plus 1/4% (subject to a minimum annual rate of 5 1/4%). The
Subordinated Capital Notes mature in September 1996 and accrue interest at an
adjustable annual rate equal to LIBOR, which is determined quarterly, plus
3/16% (subject to a minimum annual rate of 5 1/4%). As of September 30, 1993,
the interest rates in effect for the Floating Rate Subordinated Notes and the
Subordinated Capital Notes were 5 1/4% per annum and 5 1/4% per annum,
respectively.

Any proceeds from the sale of Debt Securities that are held pending
redemption of the subordinated notes described above will be invested in short-
term money market assets.

19
<PAGE>

CAPITALIZATION

The following table sets forth the consolidated capitalization of the
Company as of September 30, 1993, (i) as adjusted to give effect to the
October Equity Sale and the investment of the net proceeds thereof in short-
term money market assets, and (ii) as adjusted to give effect to the October
Equity Sale, the investment of the net proceeds thereof in short-term money
market assets, the issuance and sale of all the Debt Securities (at par) and
the use of the proceeds from such issuance to redeem approximately $120.7
million of outstanding subordinated debt. See "Use of Proceeds." The table
should be read in conjunction with the detailed information and consolidated
financial statements and related notes contained elsewhere in this Prospectus
and incorporated by reference herein. See "Incorporation of Certain Documents
by Reference."

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1993
---------------------------------
AS ADJUSTED
AS ADJUSTED FOR THE OCTOBER
FOR THE OCTOBER EQUITY SALE AND
EQUITY SALE (1) THE OFFERINGS (2)
--------------- -----------------
(dollars in thousands)
<S> <C> <C>
LONG-TERM DEBT
Floating Rate Subordinated Notes due 1996. $ 51,500 $ --
Floating Rate Subordinated Capital Notes
due 1996................................. 95,300 26,050
9.65% Subordinated Debentures due 2009.... 66,525 66,525
Subordinated Debt Securities offered here-
by....................................... -- 125,000
-------- --------
Total Long-Term Debt.................... 213,325 217,575
STOCKHOLDERS' EQUITY
Preferred Stock--$1.00 Par Value
Shares Authorized--25,000,000 shares
Shares Issued--
7.5% Cumulative Convertible Preferred
Stock, Series A (liquidation prefer-
ence $25.00 per share)--764,537...... 765 765
10.75% Noncumulative Perpetual Pre-
ferred Stock, Series B (liquidation
preference $25.00 per share)--
4,000,000............................ 4,000 4,000
Class B Common Stock--$2.50 Par Value
Shares Authorized--20,000,000
Shares Issued--None..................... -- --
Common Stock--$2.50 Par Value (3)
Shares Authorized--50,000,000
Shares Issued--31,122,812............... 77,807 77,807
Surplus
Preferred Stock......................... 109,541 109,541
Common Stock............................ 156,022 156,022
Foreign Exchange Translation Adjustments.. (792) (792)
Undivided Profits......................... (33,688) (34,362)
Treasury Stock--900,798 shares............ (23,723) (23,723)
-------- --------
Total Stockholders' Equity.............. 289,932 289,258
-------- --------
Total Long-Term Debt and Stockholders'
Equity................................. $503,257 $506,833
======== ========
CAPITAL RATIOS (4)
Combined Tier 1 and Tier 2 Risk-Weighted.. 16.98% 17.51%
Tier 1 Risk-Weighted...................... 10.85% 10.82%
Leverage Ratio............................ 5.73% 5.72%
</TABLE>
- --------
(1) Adjusted to give effect to the October Equity Sale and the investment of
the net proceeds thereof (approximately $132 million) in short-term money
market assets, which have been risk-weighted at 20% for purposes of
capital ratio calculations.
(2) Adjusted to give effect to the October Equity Sale and the investment of
the net proceeds thereof as described in note (1) above, the assumed
issuance and sale of all the Debt Securities at par and the use of the net
proceeds of the Debt Securities (estimated at $120.7 million) to redeem
outstanding subordinated debt of the Company.
(3) Excludes shares which may be issued upon exercise of options now or
hereafter granted under the 1993 Riggs National Corporation Stock Option
(the "Plan"). Under the Plan, options to purchase 400,000 shares of Common
Stock (at an exercise price of $8.125 per share) were granted to Paul M.
Homan in June 1993 and options to purchase an additional 342,000 shares of
Common Stock (at an exercise price of $9.00 per share) were granted to
other officers (including options to purchase 185,000 shares which were
granted to executive officers) in November 1993. Of the options to
purchase 508,000 shares of Common Stock still available under the Plan,
the Company currently estimates that options to purchase up to 108,000
additional shares of Common Stock may be granted to current or new
officers of the Company in the near future. See "Management--Contract of
New Chief Executive Officer of Riggs-Washington." Also excludes 2,002,141
shares initially reserved for issuance upon conversion of the Series A
Preferred Stock.
(4) After adjustment as described in note (1) above, Tier 1 Capital and
Combined Tier 1 and Tier 2 Capital would have been $279.6 million and
$437.7 million, respectively, at September 30, 1993. After adjustment as
described in note (2) above, Tier 1 Capital and Combined Tier 1 and Tier 2
Capital would have been $279.0 million and $451.3 million, respectively,
at September 30, 1993.

20
<PAGE>

SELECTED CONSOLIDATED FINANCIAL INFORMATION

The following summary and related footnotes should be read in conjunction
with, and are qualified in their entirety by, the detailed information and
consolidated financial statements and related notes included in and
incorporated by reference into this Prospectus. The information set forth below
for the nine months ended as of September 30, 1992 and 1993 has been derived
from unaudited condensed consolidated financial statements of the Company. In
the opinion of management, the unaudited financial statements have been
prepared on the same basis as the audited financial statements and include all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the financial position and results of operations for these
periods. The results for the nine months ended September 30, 1993 are not
necessarily indicative of the results for a full fiscal year. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations." At
December 31, 1993, the Company implemented the Interagency Guidance on
Reporting of In-Substance Foreclosures. See "Recent Developments--
Implementation of Interagency Guidance on Reporting of In-Substance
Foreclosures."

SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
---------------------- ---------------------------------------------------------
1993 1992 1992 1991 1990 1989 1988
---------- ---------- ---------- ---------- ---------- ---------- ----------
(dollars in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED SUMMARY OF
INCOME:
Interest Income........ $ 195,035 $ 258,350 $ 327,540 $ 474,815 $ 649,010 $ 621,200 $ 505,625
Interest Expense....... 95,384 152,531 189,604 319,719 476,397 442,099 342,146
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net Interest Income.... 99,651 105,819 137,936 155,096 172,613 179,101 163,479
Less: Provision for
Loan Losses........... 59,141 23,462 49,789 43,525 105,508 5,588 1,176
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net Interest Income
after Provision for
Loan Losses........... 40,510 82,357 88,147 111,571 67,105 173,513 162,303
Noninterest Income Ex-
cluding Securities
Gains................. 67,486 68,123 96,200 92,961 78,179 65,144 56,861
Securities Gains (Loss-
es), Net.............. 23,925 34,798 34,213 13,692 1,263 8,285 (96)
Provision for Losses on
Accelerated
Disposition of Real
Estate Assets......... -- -- -- 49,800 -- -- --
Noninterest Expense.... 223,655 182,398 240,681 240,501 237,177 189,910 165,326
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (Loss) before
Taxes and
Extraordinary Item.... (91,734) 2,880 (22,121) (72,077) (90,630) 57,032 53,742
Applicable Income Tax
(Benefit) Expense..... 5,558 (129) (1,069) (6,130) (29,413) 17,609 16,726
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (Loss) before
Extraordinary Item,
Net of Taxes.......... (97,292) 3,009 (21,052) (65,947) (61,217) 39,423 37,016
Extraordinary Item--Net
of Taxes(1)........... -- -- -- 2,486 4,569 -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net Income (Loss)...... $ (97,292) $ 3,009 $ (21,052) $ (63,461) $ (56,648) $ 39,423 $ 37,016
========== ========== ========== ========== ========== ========== ==========
PER COMMON SHARE:
Net Income (Loss)...... $ (3.90) $ 0.12 $ (0.86) $ (4.61) $ (4.11) $ 2.86 $ 2.54
Book Value (at period
end).................. 5.50 10.13 8.98 14.88 20.16 24.85 23.41
Average Shares Out-
standing(2)........... 25,222,014 24,303,072 24,534,063 13,777,014 13,777,014 13,777,014 14,594,131
CONSOLIDATED BALANCES AT
PERIOD END:
Total Assets........... $4,672,922 $5,357,251 $5,077,522 $5,535,803 $7,050,602 $7,337,187 $7,001,910
Reserve for Loan Loss-
es.................... 80,869 74,520 83,307 103,674 108,887 39,863 49,038
Nonaccrual and
Renegotiated Loans.... 158,274 165,220 173,880 231,836 158,789 4,504 24,950
Other Real Estate
Owned................. 112,732 134,450 131,892 99,275 120,207 37,963 787
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Nonperforming As-
sets(3)............... 271,006 299,670 305,772 331,111 278,996 42,467 25,737
Loans, Net of Unearned
Discount and Deferred
Fees.................. 2,105,572 2,354,609 2,137,706 2,992,693 3,791,256 3,808,760 3,562,831
Total Deposits......... 3,934,289 4,630,312 4,437,598 4,912,372 6,110,594 5,976,934 5,537,275
Long-Term Debt......... 213,325 213,325 213,325 232,127 245,897 308,914 223,175
Stockholders' Equity... 157,673 274,565 245,420 204,979 277,697 342,332 322,476
</TABLE>

21
<PAGE>

SELECTED FINANCIAL DATA (CONTINUED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1993 1992 1992 1991 1990 1989 1988
----------- ------ ----- ------ ------ ------ ------
(dollars in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED RATIOS:
PERFORMANCE RATIOS:
Return on Average As-
sets.................. (2.59)% 0.07% (.40)% (1.04)% (0.80)% 0.60% 0.59%
Return on Average
Stockholders' Equity.. (63.06) 1.54 (7.99) (25.19) (16.63) 11.90 11.10
Net Interest Yield on
Average Earning
Assets................ 3.16 3.20 3.15 3.04 2.86 3.23 3.16
Ratio of Earnings to
Fixed Charges(4):
Including Interest on
Deposits.............. -- 1.02x -- -- -- 1.13x 1.16x
Excluding Interest on
Deposits.............. -- 1.19x -- -- -- 1.84x 2.12x
CAPITAL RATIOS AT PERIOD
END:
Combined Tier 1 and
Tier 2 Risk-Weighted.. 11.01% 15.05% 14.70% 10.46% 10.79% N/A N/A
Tier 1 Risk-Weighted... 5.78 8.60 8.31 5.23 5.39 N/A N/A
Leverage............... 3.02 4.93 4.60 3.57 3.80 N/A N/A
Stockholders' Equity to
Total Assets.......... 3.37 5.13 4.83 3.70 3.94 4.67% 4.61%
ASSET QUALITY RATIOS AT
PERIOD END:
Nonperforming Assets as
a Percent of Period-
End Loans and Other
Real Estate Owned(3).. 12.22 12.04 13.47 10.71 7.13 1.10 0.72
Nonaccrual Loans as a
Percent of Period-End
Total Loans........... 7.07 6.40 7.58 7.75 4.19 0.12 0.70
Nonperforming Assets as
a Percent of Total
Assets................ 5.80 5.59 6.02 5.98 3.96 0.58 0.37
Net Charge-offs as a
Percent of Average
Loans................. 2.92 1.93 2.64 1.05 0.93 0.38 0.55
Reserve for Loan Losses
as a Percent of
Period-End Loans...... 3.84 3.16 3.90 3.46 2.87 1.05 1.38
Reserve for Loan Losses
as a Percent of
Nonaccrual,
Renegotiated and Past
Due Loans............. 49.76 44.68 47.52 44.05 50.82 237.82 156.13
SELECTED PRO FORMA DATA AT SEPTEMBER 30, 1993(5):
Book Value Per Common
Share................. $5.81
Number of Shares
Outstanding........... 30,222,014
Capital Ratios:
Combined Tier 1 and
Tier 2 Risk-Weighted.. 16.98%
Tier 1 Risk-Weighted... 10.85
Leverage............... 5.73
Stockholder's Equity to
Total Assets.......... 6.03
</TABLE>
- --------
(1) During 1991 and 1990, the Company purchased, on the open market at a
discount, $13.2 million and $33.5 million principal amount of its
subordinated long-term debt, which resulted in extraordinary gains.
(2) The Company purchased 900,798 shares of its common stock in the fourth
quarter of 1988.
(3) Nonperforming assets consist of nonaccrual loans, renegotiated loans,
other real estate owned (net of reserves) and, for the period from
September 30, 1991 through the second quarter of 1992, assets subject to
accelerated disposition (net of reserves).
(4) Earnings include the consolidated earnings of the national banking
subsidiaries, which may not be available (due to legal limitations on the
sources and amount of dividends national banks are permitted to pay their
parent companies) to cover fixed charges of the holding company. Fixed
charges include interest on long-term debt of the holding company. See
"Risk Factors and Certain Considerations--Restrictions on Ability to Pay
Dividends." During the nine month period ended September 30, 1993 and the
years ended December 31, 1992, 1991 and 1990, earnings were insufficient
to cover fixed charges (including interest on deposits) by $91.7 million,
$22.1 million, $72.1 million and $90.6 million, respectively.
(5) Adjusted to give effect, as of September 30, 1993, to the October Equity
Sale and the investment of the net proceeds thereof (approximately $132
million) in short-term money market assets, which have been risk-weighted
at 20% for purposes of capital ratio calculations. No effect is given to
any offering of Debt Securities or any redemption of any outstanding
subordinated debt.

22
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

INCOME

Nine Months 1993 vs Nine Months 1992

For the first nine months of 1993, the Company reported a consolidated net
loss of $97.3 million or $3.90 per share as compared to a net income of $3.0
million or $.12 per share for the first nine months of 1992. Included in the
first nine months' results were provisions for loan losses of $59.1 million and
provisions, writedowns and other expenses related to other real estate owned of
$20.2 million. Also contributing to the loss were restructuring charges of
$34.6 million. In the first quarter of 1993, a restructuring charge of $13.8
million was taken representing the cost of implementing BankStart '93. The
$13.8 million of restructuring expenses related to BankStart '93 consisted of
$7.0 million in consulting fees, $4.0 million in severance related costs, $1.0
million of occupancy related costs and $1.8 million of other costs. The costs
represent management's best estimate of the costs of implementing BankStart
'93. Implementation of BankStart '93 is expected to be mid-1994. The items were
accrued in the first quarter of 1993 upon adoption of the BankStart '93 plan.
During the first nine months of 1993, $7.8 million of these expenses were paid
while the remaining $6.0 million are expected to be paid over the
implementation period. The estimate of the implementation cost is evaluated by
management on an ongoing basis and, as adjustments become known, will be
revised accordingly.

In the second quarter of 1993, a restructuring charge of $20.8 million was
taken related to Riggs AP. The $20.8 million of restructuring expenses in the
second quarter of 1993 consisted of $1.6 million in severance expenses, a $5.0
million writeoff of fixed assets, $2.2 million in writeoffs of service
contracts, $544 thousand related to goodwill directly associated with
terminated business lines and a $11.5 million writeoff of the foreign exchange
translation accounts related to the Company's investment in Riggs AP Bank. As
of September 30, 1993, $15.9 million of the second quarter restructuring
expense had been paid leaving $4.9 million to be paid. These negative factors
were partially offset by securities gains of $23.9 million. For the same period
a year earlier, provisions for loan losses totaled $23.5 million and
provisions, writedowns and other expenses related to other real estate owned
were $17.0 million, which were partially offset by securities gains of $34.8
million.

For the third quarter of 1993, the Company reported net income of $3.0
million or $.10 per share compared to net income of $5.2 million or $.21 per
share for the third quarter of 1992. Provisions for loan losses during the
third quarter of 1993 totaled $2.0 million. In the third quarter of 1992,
earnings were negatively impacted by provisions for loan losses of $5.5 million
and provisions, writedowns and other expenses related to other real estate
owned of $13.6 million, which were offset by securities gains of $22.1 million.

1992 vs 1991

The Company reported a net loss of $21.1 million for 1992 or $.86 per share,
compared to a net loss of $63.5 million or $4.61 per share for 1991. Reflected
in the 1992 results were $65.7 million of provisions for loan losses and
provisions and writedowns related to problem assets compared to provisions of
$101.5 million a year earlier. Provisions and writedowns during 1992 primarily
related to commercial real estate and corporate loans in the United Kingdom and
commercial real estate loans in the Washington, D.C. area. Partially offsetting
these provisions were securities gains of $34.2 million in 1992 and $13.7
million in 1991. Additionally, 1992 results included $5.9 million of
nonrecurring interest income related to a tax receivable, while 1991 results
included extraordinary gains of $4.2 million from the purchase by the Company
of its subordinated debt at a discount.

NET INTEREST INCOME

Nine Months 1993 vs Nine Months 1992

In the first nine months of 1993, net interest income on a tax-equivalent
basis (net interest income plus an amount equal to the tax savings on tax-
exempt interest) was $103.4 million, down $7.4 million from the

23
<PAGE>

$110.8 million earned during the first nine months of 1992, as the effect of a
$261.8 million decrease in average earning assets was compounded by an
unfavorable change in the mix of earnings assets. Loans were 48.3% of average
earning assets during the first nine months of 1993 as compared to 57.0% during
the same period in 1992. The net interest yield (net interest income on a tax-
equivalent basis divided by average earning assets) was 3.16% during the first
nine months of 1993, down 4 basis points from the 3.20% for the same period of
1992, due to a decrease in demand deposits and an increase in nonperforming
assets. Interest not included in income on nonaccrual loans ($7.8 million) had
the effect of reducing the net interest yield by approximately 27 basis points
during the first nine months of 1993. Net interest spread (the difference
between the average tax-equivalent rate received on earning assets and the
average rate paid on interest-bearing liabilities) for the first nine months
was 2.84%, up 10 basis points over the 2.74% for the same period of 1992.

Net interest income on a tax-equivalent basis during the third quarter of
1993 was $33.3 million, down $2.3 million from the $35.7 million earned during
the third quarter of 1992, as the negative effect of a $412 million decrease in
average earning assets was partially offset by a 7 basis point increase in the
net interest yield. Loans were 49.0% of average earning assets during the third
quarter of 1993 as compared to 52.8% during the same quarter last year. The net
interest yield was 3.11% during the third quarter of 1993, up slightly over the
3.04% for the same period in 1992. The net interest spread for the third
quarter of 1993 was 2.82%, up 18 basis points over the 2.64% for the third
quarter of 1992.

As described above, one of the Company's strategic objectives is to increase
its loan to deposit ratio, from 53.5% at September 30, 1993 to approximately
77%. The Company has moved toward this goal in the short term by increasing
residential mortgage loans through open market purchases of approximately $340
million of predominantly fixed-rate, long-term first mortgages through November
1993. In addition, the Company has entered into agreements to purchase
approximately $180 million of predominantly fixed-rate mortgage loans which are
expected to be acquired by February 1994. The Company intends further to pursue
this goal over the longer term through a combination of new loan underwriting
initiatives for consumer and business loans and a reduction of shorter-term
assets. The Company believes this strategy, combined with its aforementioned
strategy to become a "Super Community Bank," will have a significant positive
impact on net interest income. Whether this lending goal or increased interest
income will be achieved will depend on a variety of economic, financial and
regulatory factors, many of which are beyond the Company's control, and there
is no assurance that the Company will be successful in this regard. See "Recent
Developments--Financial Difficulties and Recent Strategic Initiatives--Further
Revenue Enhancements: Increased Loan to Deposit Ratio."

1992 vs 1991

Net interest income on a tax-equivalent basis totalled $144.4 million during
1992, down $17.8 million or 11.0% below the $162.2 million earned in 1991 as
the positive impact of an improved net interest spread was more than offset by
the effect of a $745 million decrease in the volume of average earning assets
and, to a lesser extent, a reduced benefit of noninterest bearing funds in a
declining rate environment. The net interest yield was 3.15% during 1992, up
from 3.04% for 1991. Net interest spread for 1992 was 2.71%, a 30 basis point
improvement over 1991.

Average earning assets during 1992 decreased $745 million or 14.0% to $4.59
billion. This decline reflected both weak loan demand due to unfavorable
economic conditions and management's desire to improve asset quality and
further reduce the size of the Company to enhance capital ratios. During 1992,
the loan portfolio declined primarily due to loan payments. Average loans were
$2.54 billion during 1992, down $853 million or 25.1% below the average for
1991.

Net interest income in 1992 continued to be affected by a high level of
nonperforming assets. Interest not included in income on nonaccrual loans
during 1992 amounted to $16.6 million compared to interest of $29.6 million not
included in income during 1991. Nonaccrual loans had the effect of reducing
both the net interest yield and the net interest spread by approximately 36
basis points during 1992.

Over the last two years, the Company has experienced a favorable shift in the
mix of its deposit base as a decline in higher cost foreign and domestic time
deposits was partially offset by an increase in lower cost savings and NOW
accounts as a percentage of total deposit liabilities. Average demand, savings
and NOW accounts were 37.0% of average total deposits during 1992 compared to
31.6% during 1991 and 25.7% during 1990.

24
<PAGE>

AVERAGE CONSOLIDATED STATEMENTS OF CONDITION AND RATES(1)

<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------------------------------
1993 1992
--------------------------- ---------------------------
AVERAGE AVERAGE
AVERAGE INCOME/ YIELDS/ AVERAGE INCOME/ YIELDS/
BALANCES EXPENSE RATES BALANCES EXPENSE RATES
---------- -------- ------- ---------- -------- -------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Loans:
Commercial-Taxable....... $ 274,308 $ 13,994 6.82% $ 403,955 $ 22,690 7.50%
Commercial-Tax-Exempt.... 85,570 5,902 9.22 105,197 8,743 11.10
Real Estate-
Commercial/Construction. 455,894 22,824 6.69 503,300 29,080 7.72
Residential Mortgage..... 603,107 36,023 7.99 646,153 45,243 9.35
Home Equity.............. 266,971 13,865 6.94 305,678 17,547 7.67
Consumer................. 92,278 8,516 12.34 130,074 12,379 12.71
Foreign.................. 334,275 18,431 7.37 547,926 45,650 11.13
---------- -------- ----- ---------- -------- -----
Total Loans (Including
Fees).................... 2,112,403 119,555 7.57 2,642,283 181,332 9.17
Securities Held for Sale.. 469,143 14,908 4.25 276,251 14,868 7.19
Investment Securities:
U.S. Treasury Securities. 327,435 14,817 6.05 551,429 26,669 6.46
Obligations of States and
Political Subdivisions.. 1,999 154 10.30 1,999 154 10.29
Mortgage-Backed Securi-
ties.................... 402,665 17,549 5.83 24,542 1,618 8.81
Other Securities......... 39,763 2,708 9.11 75,153 4,310 7.66
---------- -------- ----- ---------- -------- -----
Total Investment Securi-
ties..................... 771,862 35,228 6.10 653,123 32,751 6.70
Time Deposits with Other
Banks.................... 434,536 15,454 4.75 531,888 19,296 4.85
Federal Funds Sold and Re-
sale Agreements.......... 581,873 13,592 3.12 528,065 15,122 3.83
---------- -------- ----- ---------- -------- -----
Total Earning Assets and
Average Rate Earned...... 4,369,817 198,737 6.08 4,631,610 263,369 7.60
Less: Reserve for Loan
Losses................... 86,618 86,026
Cash and Due from Banks... 291,473 300,995
Premises and Equipment,
Net...................... 170,025 185,368
Other Assets.............. 273,656 296,414
---------- ----------
Total Assets.............. $5,018,353 $5,328,361
========== ==========
LIABILITIES AND STOCKHOLD-
ERS' EQUITY
Interest-Bearing Deposits:
Savings and NOW Accounts. $ 928,278 $ 14,757 2.13% $ 858,073 $ 21,074 3.28%
Money Market Deposit Ac-
counts.................. 1,203,172 22,345 2.48 1,227,695 33,503 3.65
Time Deposits in Domestic
Offices................. 829,165 22,259 3.59 1,023,170 34,505 4.50
Time Deposits in Foreign
Offices(2).............. 514,552 20,127 5.23 720,916 48,234 8.94
---------- -------- ----- ---------- -------- -----
Total Interest-Bearing De-
posits................... 3,475,167 79,488 3.06 3,829,854 137,316 4.79
Borrowed Funds:
Federal Funds Purchased
and Repurchase Agree-
ments................... 169,962 3,425 2.69 97,154 2,133 2.93
U.S. Treasury Demand
Notes and Other Borrowed
Funds................... 74,096 1,550 2.80 40,728 997 3.27
Long-Term Debt........... 213,325 10,921 6.84 225,213 12,085 7.17
---------- -------- ----- ---------- -------- -----
Total Interest-Bearing
Funds and Average Rate
Incurred................. 3,932,550 95,384 3.24 4,192,949 152,531 4.86
Demand Deposits........... 834,705 846,116
Other Liabilities......... 44,810 29,087
Stockholders' Equity...... 206,288 260,209
---------- -------- ----- ---------- -------- -----
Total Liabilities and
Stockholders' Equity..... $5,018,353 $5,328,361
========== ==========
Net Interest Income and
Spread................... $103,353 2.84% $110,838 2.74%
======== ===== ======== =====
Net Interest Yield on
Earning Assets........... 3.16% 3.20%
</TABLE>
- --------
(1) Where applicable, income and rates are computed on a tax-equivalent basis
using a federal income tax rate of 34% and applicable local tax rates.
Loan amounts include nonaccrual and renegotiated loans. Average foreign
assets, excluding net pool funds provided, were 15.9% and 26.3% of average
total assets for the periods presented, respectively. Average foreign
liabilities were 19.1% and 30.2% of average total liabilities for the
periods presented, respectively.
(2) The relatively high average rate on time deposits in foreign offices is
primarily due to the inclusion of deposits at the Company's London
Operations, which are predominantly sterling-based, a currency whose
interest rates have been higher than for U.S. dollars.

25
<PAGE>

AVERAGE CONSOLIDATED STATEMENTS OF CONDITION AND RATES(1)

<TABLE>
<CAPTION>
TWELVE MONTHS ENDED DECEMBER 31,
-------------------------------------------------------
1992 1991
--------------------------- ---------------------------
AVERAGE AVERAGE
AVERAGE INCOME/ YIELDS/ AVERAGE INCOME/ YIELDS/
BALANCES EXPENSE RATES BALANCES EXPENSE RATES
---------- -------- ------- ---------- -------- -------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Loans:
Commercial-Taxable....... $ 314,575 $ 22,721 7.22% $ 574,522 $ 45,488 7.92%
Commercial-Tax-Exempt.... 102,809 11,148 10.84 115,613 13,649 11.81
Real Estate-
Commercial/Construction. 567,358 41,581 7.33 688,413 58,737 8.53
Residential Mortgage..... 619,384 57,076 9.21 770,882 72,988 9.47
Home Equity.............. 300,509 22,602 7.52 337,562 33,963 10.06
Consumer................. 125,016 15,762 12.61 198,486 22,700 11.44
Foreign.................. 510,827 54,438 10.66 707,516 85,933 12.15
---------- -------- ----- ---------- -------- -----
Total Loans (Including
Fees).................... 2,540,478 225,328 8.87 3,392,994 333,458 9.83
Securities Held for Sale.. 242,890 15,985 6.58 25,807 1,942 7.53
Investment Securities:
U.S. Treasury Securities. 559,502 35,847 6.41 595,930 45,973 7.71
Obligations of States and
Political Subdivisions.. 1,999 205 10.26 10,359 936 9.04
Mortgage-Backed Securi-
ties.................... 54,109 3,725 6.88 78,738 7,544 9.58
Other Securities......... 70,505 5,347 7.58 104,654 8,862 8.47
---------- -------- ----- ---------- -------- -----
Total Investment Securi-
ties..................... 686,115 45,124 6.58 789,681 63,315 8.02
Time Deposits with Other
Banks.................... 524,902 26,033 4.96 592,880 52,259 8.81
Federal Funds Sold and Re-
sale Agreements.......... 596,165 21,520 3.61 533,778 30,927 5.79
---------- -------- ----- ---------- -------- -----
Total Earning Assets and
Average Rate Earned...... 4,590,550 333,990 7.28 5,335,140 481,901 9.03
Less: Reserve for Loan
Losses................... 82,498 109,117
Cash and Due from Banks... 296,893 321,018
Premises and Equipment,
Net...................... 183,080 182,325
Other Assets.............. 287,930 345,845
---------- ----------
Total Assets.............. $5,275,955 $6,075,211
========== ==========
LIABILITIES AND STOCKHOLD-
ERS' EQUITY
Interest-Bearing Deposits:
Savings and NOW Accounts. $ 871,347 $ 27,045 3.10% $ 775,107 $ 31,876 4.11%
Money Market Deposit Ac-
counts.................. 1,241,790 42,730 3.44 1,292,361 65,805 5.09
Time Deposits in Domestic
Offices................. 991,130 42,774 4.32 1,198,124 80,301 6.70
Time Deposits in Foreign
Offices(2).............. 693,560 57,659 8.31 1,134,981 112,790 9.94
---------- -------- ----- ---------- -------- -----
Total Interest-Bearing De-
posits................... 3,797,827 170,208 4.48 4,400,573 290,772 6.61
Borrowed Funds:
Federal Funds Purchased
and Repurchase Agree-
ments................... 87,339 2,502 2.86 99,120 5,058 5.10
U.S. Treasury Demand
Notes and Other Borrowed
Funds................... 40,235 1,278 3.18 91,395 4,929 5.39
Long-Term Debt........... 222,162 15,616 7.03 235,263 18,960 8.06
---------- -------- ----- ---------- -------- -----
Total Interest-Bearing
Funds and Average Rate
Incurred................. 4,147,563 189,604 4.57 4,826,351 319,719 6.62
Demand Deposits........... 845,584 895,455
Other Liabilities......... 19,210 101,423
Stockholders' Equity...... 263,598 251,982
---------- -------- ----- ---------- -------- -----
Total Liabilities and
Stockholders' Equity..... $5,275,955 $6,075,211
========== ==========
Net Interest Income and
Spread................... $144,386 2.71% $162,182 2.41%
======== ===== ======== =====
Net Interest Yield on
Earning Assets........... 3.15% 3.04%
</TABLE>
- --------
(1) Where applicable, income and rates are computed on a tax-equivalent basis
using a federal income tax rate of 34% and applicable local tax rates.
Loan amounts include nonaccrual and renegotiated loans. Average foreign
assets, excluding net pool funds provided, were 21.5% and 23.4% of average
total assets for the periods presented, respectively. Average foreign
liabilities were 23.9%, and 29.8% of average total liabilities for the
periods presented, respectively.
(2) The relatively high average rate on time deposits in foreign offices is
primarily due to the inclusion of deposits at the Company's London
Operations, which are predominantly sterling-based, a currency whose
interest rates have been higher than for U.S. dollars.

26
<PAGE>

INTEREST RATE SENSITIVITY AND LIQUIDITY

A key element of banking is the monitoring and management of liquidity and
interest rate risk. The process of planning and controlling asset and liability
mixes, volumes and maturities to stabilize the net interest margin is referred
to as asset and liability management. The goal of the asset and liability
management process is to manage the structure of the balance sheet to maximize
net interest income while maintaining acceptable levels of risk to changes in
market rates of interest. This creates a balance between credit risk,
profitability and liquidity. The Asset Liability Committee generally meets
biweekly to monitor and manage the structure of the balance sheet, control
interest rate exposure and evaluate pricing strategies for the Company and its
domestic banking subsidiaries.

Liquidity is managed by the Company through controls over credit and market
risk and through its asset and liability management process which ensures the
maintenance of sufficient funds to meet expected and potential demand from both
depositors and borrowers. Liquidity can be provided by the sale or maturity of
assets or by the acquisition of funds in the form of deposits or other
borrowings, such as repurchase agreements. During 1992 and the first nine
months of 1993, the Company continued to maintain a relatively high level of
liquidity. At year-end 1992 and September 30, 1993, liquid assets totalled
$2.48 billion, or 48.7%, of total assets and $2.18 billion, or 46.6%, of total
assets, respectively. Liquid assets consist of cash and due from banks, U.S.
Treasury securities and Government obligations, trading account securities,
Federal funds sold, resale agreements and time deposits with other banks. In
light of the Company's strategic objective of increasing its loan to deposit
ratio from 53.5% at September 30, 1993 to approximately 77%, the Company
expects that its liquid assets, as a percentage of its total assets, will
continue to decline for the foreseeable future. See "Recent Developments--
Financial Difficulties and Recent Strategic Initiatives--Further Revenue
Enhancements; Increased Loan to Deposit Ratio."

The Company's core deposits provide a relatively stable source of funds which
enhances the overall liquidity position of the Company. Total average core
deposits, which consist of total deposits in domestic offices, excluding
negotiable certificates of deposit, averaged $3.73 billion during the first
nine months of 1993 compared with $3.89 billion during 1992 and $4.10 billion
in 1991.

On a consolidated basis, the Company seeks to maintain sufficient liquidity
to meet customer credit requirements and depositor withdrawals. The Company's
cash flows are impacted by its ongoing operations and its investing and
financing activities. During the third quarter of 1993, cash and cash
equivalents decreased $25 million as $460 million of net cash provided by
investing activities more than offset $252 million used in financing activities
and partially offset the $234 million of net cash used in operating activities.

For a discussion of the Company's cash needs and its ability to meet them,
see "Risk Factors and Special Considerations--Holding Company Liquidity."

INTEREST RATE RISK MANAGEMENT

The Company's asset and liability management process closely monitors and
manages, among other things, the balance sheet's interest rate sensitivity,
investments, and funding and liquidity needs. All of these factors, as well as
projected growth, current and potential pricing actions, competitive
influences, national monetary and fiscal policy, and the national and regional
economic environment, are considered in the asset and liability management
decision process.

At September 30, 1993, the Company had interest-bearing liabilities subject
to repricing in less than one year in excess of its earning assets subject to
repricing within the same period. This liability-sensitive position was $111
million or 2.4% of total assets at September 30, 1993. At December 31, 1992,
the Company had earning assets subject to repricing in less than one year in
excess of its interest-bearing liabilities. This asset- sensitive position was
$195 million or 3.8% of total assets at December 31, 1992. The change in the
Company's position from asset-sensitive to liability-sensitive between December
31, 1992 and September 30, 1993 is primarily attributable to an increase in the
Company's outstanding interest rate swaps and futures contracts combined with
an increase in the percentage of residential mortgage loans to total loans
during the period, which percentage increased from 24.4% at December 31, 1992
to 28.6% at September 30, 1993. The increase in the Company's interest rate
swaps and futures contracts position was effected to hedge the Company's
current investments in money market related assets. Thus, as of September 30,
1993, upward movements in interest rates would tend to moderately decrease the
Company's net interest income while downward movements would tend to moderately
increase net interest income.

27
<PAGE>

PERIOD-END RATE SENSITIVITY

<TABLE>
<CAPTION>
SEPTEMBER 30, 1993
-----------------------------------------------------------------------------
30 DAYS 31-90 91-180 181-364 1-5 GREATER THAN TOTAL
OR LESS DAYS DAYS DAYS YEARS 5 YEARS AMOUNT
---------- --------- --------- --------- -------- ------------ ----------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Time Deposits with Other
Banks.................... $ 151,423 $ 73,936 $ 65,447 $ 2,116 $ -- $ -- $ 292,922
Federal Funds Sold and
Resale Agreements........ 407,100 -- 5,000 -- -- -- 412,100
Securities Held for Sale.. 181,148 162,232 148,258 141,083 107,778 13,400 753,899
Investment Securities(1):
Taxable.................. 3,805 19,948 30,203 47,947 19,172 415,293 536,368
Tax-Exempt............... -- -- -- -- -- 1,999 1,999
Loans(2).................... 909,045 70,441 106,317 135,273 451,944 432,552 2,105,572
---------- --------- --------- --------- -------- -------- ----------
Total Earning Assets...... 1,652,521 326,557 355,225 326,419 578,894 863,244 4,102,860
Cash and Due from Banks... 217,814
Less: Reserve for Loan
Losses................... 80,869
Bank Premises and
Equipment, Net........... 164,220
Other Assets.............. 268,897
---------- --------- --------- --------- -------- -------- ----------
Total Assets.............. $1,652,521 $ 326,557 $ 355,225 $ 326,419 $578,894 $863,244 $4,672,922
---------- --------- --------- --------- -------- -------- ----------
Deposits:
Savings and NOW
Accounts(3)............. $ 8,211 $ 16,783 $ 24,452 $ 50,799 $211,228 $590,827 $ 902,300
Money Market Deposits.... 1,203,867 -- -- -- -- -- 1,203,867
Other Time Deposits....... 300,728 200,033 191,432 148,246 103,332 -- 943,771
Federal Funds Purchased
and Repurchase
Agreements............... 160,460 -- -- -- -- -- 160,460
U.S. Treasury Demand Notes
and Other Borrowings..... 150,728 -- -- -- -- -- 150,728
Long-Term Debt............ -- 146,800 -- -- -- 66,525 213,325
---------- --------- --------- --------- -------- -------- ----------
Total Interest-Bearing
Liabilities.............. 1,823,994 363,616 215,884 199,045 314,560 657,352 3,574,451
Demand Deposits........... 884,351
Other Liabilities......... 56,447
Stockholders' Equity...... 157,673
---------- --------- --------- --------- -------- -------- ----------
Total Liabilities and
Stockholders' Equity..... $1,823,994 $ 363,616 $ 215,884 $ 199,045 $314,560 $657,352 $4,672,922
---------- --------- --------- --------- -------- -------- ----------
Repricing Differential.... $ (171,473) $ (37,059) $ 139,341 $ 127,374 $264,334 $205,892 $ --
Effect of Interest Rate
Swaps and Futures........ (202,449) 11,869 33,342 (12,366) 169,604 -- --
---------- --------- --------- --------- -------- -------- ----------
Adjusted Repricing
Differential............. $ (373,922) $ (25,190) $ 172,683 $ 115,008 $433,938 $205,892 $ --
========== ========= ========= ========= ======== ======== ==========
Cumulative Adjusted
Repricing................ $ (373,922) $(399,112) $(226,429) $(111,421) $322,517 $528,409 --
</TABLE>
- --------
(1) Differences between the distribution of investment securities based upon
rate sensitivity and distributions based upon maturity exist as a result
of $206 million of floating rate securities.
(2) Differences between the distribution of loans based upon rate sensitivity
and distributions based upon maturity exist as a result of certain
floating rate loans.
(3) Savings and NOW accounts have been distributed for rate sensitivity
purposes based upon the Company's historical experience and independent
studies regarding retention of such deposits. Although such accounts are
subject to immediate withdrawal, the Company's experience indicates that
they generally provide a stable source of funds.

28
<PAGE>

NONINTEREST INCOME

Nine Months 1993 vs Nine Months 1992

Noninterest income for the first nine months of 1993 was $91.4 million, down
$11.5 million or 11.2% compared to the first nine months of 1992. Excluding
securities gains of $23.9 million and $34.8 million for the first nine months
of 1993 and 1992, respectively, noninterest income was down $637 thousand or
0.9%. Trust income of $21.6 million was up $918 thousand or 4.4% as a decrease
in institutional custody fees due to a loss of corporate custodial business was
largely offset by increased fees for trust and investment services. The loss of
these corporate custodial accounts should not have a material impact on future
trust income as they provided marginal profitability. Total assets under
management by the Trust Group at September 30, 1993 were approximately $4.7
billion, down from $4.8 billion at September 30, 1992. The market value of
trust and custody assets of the Company's Trust Group decreased $12.9 billion
or 58.7% to $9.1 billion from $22.0 billion a year earlier. Service charges of
$37.2 million were up $1.5 million or 4.3% primarily due to an increase in
advisory fee income of $1.0 million. Other noninterest income of $8.6 million
was down $3.1 million, due primarily to a decrease of $1.7 million in foreign
exchange income and $747 thousand in letters of credit fees.

Noninterest income for the third quarter of 1993 was $21.9 million compared
to $45.2 million for the same period last year. Excluding securities losses of
$77 thousand and securities gains of $22.1 million for the third quarters of
1993 and 1992, respectively, noninterest income was down $1.1 million, or 4.8%
from last year. Trust income of $7.7 million was up to $937 thousand or 13.8%
primarily due to growth and increased market value of assets under management.
Service charge income of $11.7 million was down $158 thousand or 1.3%. Other
noninterest income of $2.6 million was down $1.9 million or 42.2% from 1992,
primarily due to a decrease in foreign exchange income of $1.3 million and
letter of credit fees of $346 thousand.

1992 vs 1991

Noninterest income during 1992 increased $23.8 million or 22.3% to $130.4
million. Included in noninterest income during the year were $34.2 million of
securities gains as compared to securities gains of $13.7 million for 1991.
Excluding securities transactions and $5.9 million of nonrecurring interest
income related to a tax receivable, noninterest income for the year was down
$2.7 million or 2.9% from 1991. Trust income was $27.5 million, up $235
thousand as growth in personal trust account income was partially offset by a
reduction in institutional custody account income. Total assets under
management by the Trust Group were $4.4 billion, down from $4.6 billion a year
earlier. The market value of trust and custody assets of the Company's Trust
Group decreased $19.5 billion or 50.6% to $19.0 billion from $38.5 billion a
year earlier due to the loss of corporate custodial business. The loss of these
accounts should not have a material impact on future trust income as they
provided marginal profitability.

Service charge income was $38.4 million for 1992, down $2.4 million below the
1991 level due to a decline in the volume of services provided. International
noncredit commissions and fees were $9.5 million, up $1.8 million or 23.3% over
1991. Foreign exchange income was $5.0 million, down $3.2 million or 39.1% from
1991 due to a reduced trading volume and lower margins. Other noninterest
income, which includes letter of credit fees, safe deposit income and trading
income, amounted to $9.9 million during the year, up $939 thousand or 10.5%
from 1991.

29
<PAGE>

<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
------------------ -----------------
1993 1992 1992 1991
-------- --------- -------- --------
(dollars in thousands)
<S> <C> <C> <C> <C>
Trust Income.............................. $ 21,634 $ 20,716 $ 27,530 $ 27,295
Service Charges........................... 29,914 28,730 38,436 40,859
International Advisory Fees............... 7,333 6,982 9,458 7,672
Foreign Exchange Income................... 2,262 3,968 4,993 8,194
Interest on Tax Receivable................ -- -- 5,903 --
Other Noninterest Income.................. 6,343 7,727 9,880 8,941
-------- --------- -------- --------
Noninterest Income Excluding Securities
Gains.................................... 67,486 68,123 96,200 92,961
Securities Gains, Net..................... 23,925 34,798 34,213 13,692
-------- --------- -------- --------
Total Noninterest Income.................. $ 91,411 $ 102,921 $130,413 $106,653
======== ========= ======== ========
</TABLE>

NONINTEREST EXPENSE

Nine Months 1993 vs Nine Months 1992

Noninterest expense for the first nine months of 1993 was $223.7 million
compared to $182.4 million for the first nine months of 1992.

Noninterest expense for the first nine months of 1993 included restructuring
expense of $34.6 million, of which $20.8 million related to Riggs AP. The Riggs
AP charge consists of severance of $1.6 million, the writeoff of the foreign
currency translation account associated with Riggs-Washington's investment in
Riggs AP of $11.5 million and $7.7 million of other restructuring expenses. The
$20.8 million restructuring charge included $14.2 million of noncash expenses
for the writeoff of the foreign currency translation account ($11.5 million),
the writeoff of fixed assets ($2.2 million) and the writeoff of goodwill ($500
thousand). The remaining charge of $6.6 million is for severance, excess space
and equipment leases which will be charged against the accrual as the expenses
are incurred. The $13.8 million of restructuring expense related to BankStart
'93 consisted of $7.0 million in consulting fees, $4.0 million in severance
related costs, $1.0 million of occupancy-related costs and $1.8 million of
other costs. These costs represented management's best estimate of the total
costs of implementing BankStart '93 (implementation of which is expected to be
substantially completed by May 1994) and were accrued in the first quarter of
1993. This estimate is evaluated by management on an ongoing basis and, as
adjustments become known, will be revised accordingly.

Other real estate owned expense, net of revenues, was $20.2 million, up $3.2
million over the $17.0 million recorded in the first nine months of 1992. For
the first nine months of 1992, writedowns and disposition-related losses and
expenses associated with the Company's asset-disposition program of $35.2
million were charged to program-related reserves rather than as other real
estate owned expense. Had these losses and expenses been charged as other real
estate owned expense, other real estate owned expense for the first nine months
of 1993 would have decreased $32.0 million compared to the same period in 1992.

Excluding restructuring expenses and other real estate owned expense,
noninterest expense for the first nine months of 1993 was up $3.5 million, or
2.1%, over the $165.4 million reported during the same period in 1992. Salaries
and related benefits were $67.4 million, up $692 thousand or 1.0% from the
first nine months of 1992 due to an increase in medical and life insurance
premiums, pension expense and relocation expenses. Net occupancy expense of
$19.9 million was down $1.7 million or 7.9% due to decreases in rent expense of
$997 thousand, real estate taxes of $669 thousand and repairs of $509 thousand.
These reductions in occupancy expense were partially offset by a $1.1 million
decrease in rental income. Equipment expenses of $8.7 million decreased $944
thousand or 9.8% due to decreases in equipment depreciation of $451 thousand
and a decrease in equipment rentals of $310 thousand.

FDIC insurance of $7.8 million was up $1.2 million as an increase in the
assessment rate more than offset the decrease in the deposit base. Since
January 1, 1993, FDIC insurance premiums have been based on

30
<PAGE>

a risk-based deposit insurance assessment system adopted by the FDIC. See
"Supervision and Regulation." Each institution has been assigned a capital
group and a supervisory subgroup which in turn determines each institution's
assessment rate. Data processing expense of $12.5 million was down $742
thousand from a year earlier. Other noninterest expense, which totalled $52.6
million, was up $5.0 million or 10.5%. Accounting for the majority of the
increase was $3.6 million of writeoffs related to mortgage insurance claims on
other real estate owned in the United Kingdom. Also contributing to this
unfavorable variance were increases in consultant fees of $844 thousand and an
increase in stationery and supplies of $2.1 million.

Noninterest expense for the third quarter of 1993 was $49.3 million compared
to $68.2 million for the third quarter of 1992, a decrease of $18.9 million or
27.7%. Salaries and related benefits of $21.0 million were down $1.2 million or
5.3% due to a decrease in full-time salaries of $2.3 million, which was
partially offset by an increase in pension and insurance expenses and contract
labor. Net occupancy expense of $6.4 million was down $871 thousand or 12.0%
due to decreases in rent expense of $276 thousand, repairs of $231 thousand,
real estate taxes of $228 thousand and depreciation of premises of $103
thousand. The favorable impact of these reductions in occupancy expenses was
partially offset by a decrease in rental income of $172 thousand. Equipment
expenses of $2.6 million decreased $536 thousand or 17.0% primarily due to
decreases in equipment rentals and depreciation. Revenues from other real
estate owned exceeded other real estate owned expense by $731 thousand for the
third quarter of 1993. This compares to other real estate owned expense, net of
revenues, of $13.6 million for the third quarter of 1992. During the third
quarter of 1993, the Corporation recorded gains of $2.2 million on the sale of
other real estate owned and $983 thousand in rent receipts on other real estate
owned. These revenues were partially offset by $2.5 million in writedowns and
other expenses related to other real estate owned. Data processing expense of
$3.9 million was down $187 thousand from a year earlier. FDIC insurance expense
of $2.5 million was up $354 thousand or 16.4% over the third quarter of 1992.
Other noninterest expense, which totaled $13.5 million, was down $2.2 million
or 13.9%.

1992 vs 1991

Noninterest expense for 1992 was $240.7 million, which represented a decline
of $49.6 million or 17.1% below 1991 primarily due to the nonrecurring $49.8
million reserve created in the third quarter of 1991 in connection with the
Company's program to accelerate the disposition of domestic problem commercial
real estate assets. Excluding the $49.8 million provision to create the special
reserve for problem asset dispositions, noninterest expense for 1992 was up
$180 thousand over 1991. Salaries and wages were $74.1 million, down $4.3
million or 5.5% less than 1991 due to staff reductions. The Company's full-time
equivalent employees totalled 2,147 at December 31, 1992, down from 2,187 on
the same date the previous year. Pension and other employee benefits were up
$752 thousand or 5.2% over the previous year due to increases in miscellaneous
benefits, payroll taxes, relocation expenses and placement fees.

Other real estate owned expense of $18.0 million was up $3.6 million over the
$14.4 million reported in 1991. From the fourth quarter of 1991 through the
second quarter of 1992, writedowns and disposition expenses associated with
real estate assets held for accelerated disposition were charged to the reserve
for losses on accelerated disposition of real estate assets rather than to the
other real estate expense category. During the first six months of 1992,
writedowns and disposition related losses and expenses of $35.2 million were
charged to the program-related reserves.

Occupancy expense of $28.4 million was down $1.8 million or 6.0% less than
1991 primarily due to a decrease in property rentals, repairs and services.
Furniture and equipment expense of $15.4 million decreased $1.6 million or 9.2%
as a result of the sale of equipment and the transfer of equipment and leases
under an agreement to outsource computer operations to IBM. Advertising and
public relations expenses were $6.1 million, up $207 thousand or 3.5%. Legal
fees of $5.1 million were down $628 thousand or 10.9%. FDIC insurance expense
was $8.8 million, down $267 thousand or 2.9% as a decrease in deposit base was
substantially offset by an increase in the premium. Data processing expense of
$17.7 million was up $297 thousand primarily due to the computer operations
outsourcing arrangement with IBM. Other noninterest

31
<PAGE>

expense totalled $51.9 million, up $3.9 million or 8.0% over 1991 primarily due
to an increase in interest on delayed funds, interest costs of hedges,
consultant fees and nonrecurring losses on disposal of equipment.

<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
----------------- -----------------
1993 1992 1992 1991
-------- -------- -------- --------
(dollars in thousands)
<S> <C> <C> <C> <C>
Restructuring Expense...................... $ 34,554 $ -- $ -- $ --
Other Real Estate Owned Expense, net....... 20,231 16,986 17,981 14,370
Provision for Losses on Accelerated Dispo-
sition of Real Estate Assets.............. -- -- -- 49,800
Salaries and Wages......................... 53,151 55,270 74,145 78,444
Pensions and Other Employee Benefits....... 14,225 11,414 15,141 14,389
Occupancy Expense of Premises, Net......... 19,917 21,623 28,354 30,152
Furniture and Equipment Expense............ 8,687 9,631 15,419 16,972
Other Noninterest Expense:
Advertising and Public Relations......... 4,509 4,640 6,129 5,922
Legal Fees............................... 3,175 3,316 5,121 5,749
FDIC Insurance Expense................... 7,793 6,627 8,789 9,056
Data Processing Services................. 12,546 13,288 17,684 17,387
Other Noninterest Expenses............... 44,867 39,603 51,918 48,060
-------- -------- -------- --------
Total Noninterest Expense.................. $223,655 $182,398 $240,681 $290,301
======== ======== ======== ========
</TABLE>

In addition to charge-offs, writedowns and the nonaccrual of interest income,
the Company is presently incurring significant costs to address its asset
quality problems. Direct costs associated with problem assets include selling
expense accruals, legal fees, real estate taxes, appraisal fees, property
management fees and insurance. These direct costs, combined with the cost of
maintaining staff specifically assigned to the management of problem assets,
were approximately $19.0 million during 1992 and $13.7 million for the first
nine months of 1993.

TOTAL ASSETS

September 30, 1993 vs December 31, 1992

The decrease in total assets of $405 million from December 31, 1992 to
September 30, 1993 is primarily the result of decreases in deposits. The
restructuring of Riggs AP included exiting the deposit-gathering business in
London and internally funding this subsidiary. Domestic deposits have declined
as a result of lower interest rates.

December 31, 1992 vs December 31, 1991

The decrease in total assets of $458 million was due to the Company seeking
to maintain its regulatory capital ratios and improve liquidity by reducing
assets and shifting a greater proportion of its assets from loans into money
market assets. Such assets generally carry a lower risk-weighting for capital
purposes, although they typically generate lower yields than the Company's
lending activities. During 1992, loans decreased $863 million while liquid
assets increased $356 million.

SECURITIES HELD FOR SALE

September 30, 1993 vs September 30, 1992

Securities Held for Sale totalled $754 million at September 30, 1993 compared
to $143 million at September 30, 1992. In the second quarter of 1992, the
Company sold approximately $344 million of mortgage-backed securities, which
were classified as Held for Sale. The Company recognized pretax gains of

32
<PAGE>

$8.5 million on the second quarter sales and the proceeds were invested in U.S.
Treasury securities. In view of management's intention to use securities as
part of its asset/liability strategy and the possibility that securities could
be sold in response to changes in interest rates or for liquidity purposes,
$487 million of securities, including those purchased with the proceeds from
the sale of mortgage-backed securities, were classified as Held for Sale at
June 30, 1992. During the third quarter of 1992, these securities were sold and
pretax gains of $22.1 million were realized. The proceeds of these sales were
invested in money market assets. In the first quarter of 1993, in view of
management's intention to continue to use securities as part of its
asset/liability strategy and the possibility that securities could be sold in
response to changes in interest rates or for liquidity purposes, $983 million
of securities were classified as Held for Sale and $697 million were
subsequently sold in the second quarter of 1993 for a pretax gain of $25.5
million. Proceeds were used to purchase shorter duration and variable rate
securities classified as held for sale and money market assets. There were no
sales of securities in the third quarter of 1993.

December 31, 1992 vs December 31, 1991

As of December 31, 1992, there were $160 million of U.S. Treasury securities
and Other Securities classified as Held for Sale. The weighted average yield to
maturity of these securities was 3.64% at year-end 1992. The average maturity
on these securities was six months. The "Other Securities" category consisted
of $16.0 million of United Kingdom Government Obligations and $366 thousand of
Nigerian Bonds received in exchange for the Company's Nigerian loans. The
market value of Securities Held for Sale at December 31, 1992 was $161 million,
$1.1 million more than the book value at that date. Unrealized gains were $1.1
million. There were no unrealized losses in the portfolio.

During 1992, proceeds from the sale of Securities Held for Sale totalled
$1.10 billion, as compared to 1991 when no Securities Held for Sale were sold.
Gross gains and losses from the sale of Securities Held for Sale were $39.5
million and $4.7 million, respectively, in 1992.

Securities Held for Sale at December 31, 1991 amounted to $101 million, which
consisted entirely of U.S. Treasury securities. During the first quarter of
1992, these securities were sold at a pretax gain of $4.2 million and the
Company reinvested the proceeds in mortgage-backed securities. In the second
quarter of 1992, the Company sold approximately $344 million of mortgage-backed
securities and $126 million of U.S. Treasury securities, all of which were
classified as Held for Sale. The Company recognized pretax gains of $8.5
million on the second quarter sales and the proceeds were invested in U.S.
Treasury securities. At June 30, 1992, $487 million of securities were
classified as Held for Sale. During the third quarter of 1992, these securities
were sold and pretax gross gains of $26.9 million were realized. The proceeds
of these sales were invested in mortgage-backed securities and money market
assets. Also during the third quarter of 1992, an additional $143 million of
U.S. Treasury securities were classified as Held for Sale. During the fourth
quarter of 1992, $16.0 million of United Kingdom Government securities were
classified as Held for Sale.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1993 DECEMBER 31, 1992
---------------------------- ----------------------------
GROSS GROSS
BOOK UNREALIZED MARKET BOOK UNREALIZED MARKET
VALUE GAINS VALUE VALUE GAINS VALUE
-------- ---------- -------- -------- ---------- --------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury Securi-
ties:
Due within 1 year...... $438,801 $ 189 $438,990 $143,263 $ -- $143,263
Due after 1 but within
5 years............... 99,318 1,057 100,375 -- -- --
Other Securities:
Due after 1 but within
5 years............... 32,624 66 32,690 15,963 1,128 17,091
Due after 10 years..... 183,156 252 183,408 366 -- 366
-------- ------ -------- -------- ------ --------
Total Securities Held
for Sale............... $753,899 $1,564 $755,463 $159,592 $1,128 $160,720
======== ====== ======== ======== ====== ========
</TABLE>

33
<PAGE>

INVESTMENT SECURITIES

September 30, 1993 vs September 30, 1992

Investment securities at September 30, 1993 totalled $538 million, down $114
million from September 30, 1992. The market value of investment securities at
September 30, 1993 was $544.9 million, $6.5 million more than the book value at
that date. Investment securities maturing within one year, one to five years
and over five years were $88.2 million, $29.1 million and $421.1 million,
respectively.

U.S. Treasury securities at September 30, 1993 were $94.6 million, down from
$588.9 million on September 30, 1992. Mortgage-backed securities, which are
collateralized by residential mortgage loans and guaranteed by the Federal
National Mortgage Association ("FNMA") or Federal Home Loan Mortgage
Corporation ("FHLMC"), were $406.5 million at September 30, 1993. There were no
mortgage-backed securities at September 30, 1992. Other securities, which
primarily consist of floating rate notes, preference shares of United Kingdom
companies and Federal Reserve stock, were $35.3 million at September 30, 1993,
down $26.7 million from September 30, 1992.

December 31, 1992 vs December 31, 1991

Investment securities at December 31, 1992 totalled $795 million, up $312
million or 64.4% from December 31, 1991. The increase in investment securities
was a result of the reinvestment of a portion of the proceeds from loan
maturities and payments and problem asset sales. The market value of investment
securities at December 31, 1992 was $804 million, $8.9 million more than the
book value at that date, as $13.7 million in unrealized gains more than offset
$4.8 million in unrealized losses.

U.S. Treasury securities at December 31, 1992 were $580 million, up from $357
million on the same date a year earlier. The weighted average yield to maturity
on these securities was 5.93% at year-end 1992. The average maturity on U.S.
Treasury securities was two years and three months on December 31, 1992,
compared to two years and six months on December 31, 1991. Obligations of
states and political subdivisions at year-end 1992 were $2 million, level with
year-end 1991. Mortgage-backed securities were $174 million at December 31,
1992, compared to $51 million at year-end 1991. The weighted average yield to
maturity on these securities was 6.12% at year-end 1992. The average
contractual maturity of these securities was six years, nine months at December
31, 1992, as compared to twenty-one years, eight months at December 31, 1991.
Other securities were $40 million at December 31, 1992, down $34 million from
year-end 1991. The decline was due to the sale of $13 million of preference
shares and floating rate notes by the Company's United Kingdom subsidiary as
well as a transfer of $16 million of United Kingdom Government securities to
the Held for Sale category. The weighted average yield to maturity on these
securities was 5.76% on December 31, 1992, as compared to 7.66% at December 31,
1991.

BOOK VALUE OF INVESTMENT SECURITIES

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
----------------- --------------------------
1993 1992 1992 1991 1990
-------- -------- -------- -------- --------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
U.S. Treasury Securities.......... $ 94,556 $588,875 $579,576 $356,706 $653,071
Obligations of States and Politi-
cal Subdivisions................. 1,999 1,999 1,999 1,999 17,798
Mortgage-Backed Securities........ 406,509 -- 173,782 51,015 167,768
Other Securities.................. 35,303 61,984 40,036 73,984 122,250
-------- -------- -------- -------- --------
Total Investment Securities....... $538,367 $652,858 $795,393 $483,704 $960,887
======== ======== ======== ======== ========
</TABLE>

LOANS

September 30, 1993 vs September 30, 1992

As of September 30, 1993, loans, net of discount and unearned fees, were
$2.11 billion, down $249 million or 10.6% since September 30, 1992 due to loan
curtailments, particularly with respect to first mortgage loans,

34
<PAGE>

the transfer of loans to the other real estate owned category and weak loan
demand resulting from economic conditions domestically and in the United
Kingdom.

Domestic commercial and financial loans were $340.5 million, down $127.2
million or 27.2% at September 30, 1993 as compared to $467.7 million at
September 30, 1992, principally due to loan curtailments.

Domestic real estate-commercial/construction loans were $394.3 million, down
$66.4 million or 14.4% as a result of transfers to other real estate owned,
charge-offs and curtailments. Domestic real estate-commercial construction
loans were 18.7% of total loans and 8.4% of total assets at September 30, 1993.
Permanent domestic mortgage loans, which were primarily to finance owner-
occupied commercial buildings, represented one-third of real estate-
commercial/construction loans. The remainder of the domestic real estate-
commercial construction portfolio was for the development of commercial
properties, including office buildings, warehouses, shopping centers and
hotels. Approximately 99.6% of the Company's domestic real estate-
commercial/construction loans were secured by properties located in the
Baltimore-Washington, D.C.-Richmond corridor, with the overwhelming majority
concentrated in the Washington, D.C. metropolitan area.

Residential mortgage loans totaled $747.9 million at September 30, 1993, up
$182.3 million or 32.2% over September 30, 1992. Home equity loans, which are
floating rate loans secured by first or second trusts on single-family
residential properties, decreased $36.9 million or 12.7% to $253.7 million at
September 30, 1993. Consumer loans were $88.4 million, down $30.8 million or
25.8% from September 30, 1992.

The Company has recently purchased, or agreed to purchase, in the open market
approximately $520 million of residential mortgage loans. Substantially all of
these loans were recently originated, have original maturities of 15 or 30
years, bear interest at fixed rates and are secured by properties located in
various regions throughout the United States. See "Recent Developments--
Financial Difficulties and Recent Strategic Initiatives--Further Revenue
Enhancements: Increased Loan to Deposit Ratio."

Foreign loans were $281.8 million, down $175.4 million or 38.4% from the
September 30, 1992. Sterling denominated loans made in the United Kingdom by
the London Operations were $228.3 million or 81.0% of the Company's foreign
loans at September 30, 1993.

December 31, 1992 vs December 31, 1991

Total loans at December 31, 1992 were $2.14 billion, $855 million or 28.6%
below the $2.99 billion of loans reported on the same date in the previous year
as a result of loan payments, limited opportunities for quality loan growth,
and the transfer of loans to other real estate owned.

Commercial and financial loans were down $163 million or 30.6% principally
due to loan curtailments.

Domestic real estate-commercial/construction loans were $500 million, down
$106 million or 17.5% as a result of transfers to other real estate owned,
charge-offs and curtailments. Real estate-commercial/
construction is the only industry concentration in excess of 10% of year-end
loans. Domestic real estate-commercial construction loans were 23.4% of total
loans and 9.8% of total assets at December 31, 1992. As of year-end 1992,
$105.7 million or 21.1% of these loans were classified as nonaccrual. In view
of current market conditions, the Company has significantly curtailed new real
estate-commercial/construction lending during the past three years.

Approximately 21.7% of the Company's domestic real estate-
commercial/construction loan portfolio at December 31, 1992 was for the
development of single-family residential properties. Permanent domestic
mortgage loans represented 21.2% of real estate-commercial/construction loans.
The remainder of the domestic real estate-commercial construction portfolio at
that date was for the development of commercial

35
<PAGE>

properties, including office buildings, warehouses, shopping centers and
hotels. Approximately 95.7% of the Company's domestic real estate-
commercial/construction loans at December 31, 1992 were secured by properties
located in the Baltimore-Washington, D.C.-Richmond corridor, with the
overwhelming majority concentrated in the Washington, D.C. metropolitan area.

Residential mortgage loans totalled $529 million at December 31, 1992, a
decrease of $196 million or 27.0% from December 31, 1991. The decline was due
to a high volume of prepayments which were caused by refinancings due to
declining interest rates. Residential mortgage loans, which represent 24.8% of
the Company's loan portfolio, are recognized as being higher quality than other
categories of loans as they are secured by first trusts on the primary
residence of the borrowers and underwritten based upon both appraised home
values and borrower incomes. The Company generally requires full documentation
and adherence to customary underwriting criteria including a maximum 80% loan
to value ratio. Essentially all of the Company's residential lending activity
is in the Washington, D.C. metropolitan area. The historical charge-off figures
attest to the quality of these loans as total charge-offs during the last five
years totalled only $217,000. At September 30, 1993, approximately 52.3% of the
total residential mortgage loans were adjustable rate instruments. While there
are limitations on the amount that the interest rate can increase or decrease
at each interval and over the life of the loan, the adjustable feature of these
loans provides the Company a degree of protection against the impact of
interest rate fluctuations on funding costs.

Home equity loans, which are floating rate loans secured by first or second
trusts on single-family residential properties, decreased $49 million or 15.4%
to $272 million at December 31, 1992. This decrease was primarily attributable
to prepayments associated with refinancings. Home equity loans are originated
with essentially the same standards employed in the underwriting of the
Company's residential mortgage loans.

Consumer loans were $107 million at December 31, 1992, down $51 million or
32.4% from year end 1991. The Company's consumer credit portfolio consists
principally of installment loans for personal expenditures and student loans.

Foreign loans were $364 million at December 31, 1992, down $297 million or
45.0% from December 31, 1991. Sterling denominated loans made in the United
Kingdom by Riggs AP were $293 million or 80.4% of the Company's foreign loans
at December 31, 1992. Approximately 39% of the decline in the foreign loan
portfolio was due to repayments, 26% was due to exchange rate fluctuation, 24%
related to transfers to other real estate owned and 11% related to charge-offs.
Riggs AP's lending activities have been reduced due to weak economic conditions
in the United Kingdom. Riggs AP's loan portfolio at December 31, 1992 consisted
of $187 million of commercial property loans which are secured by leased
properties and $105 million of corporate loans. At year-end 1992, Riggs AP's
commercial property loans were down $139 million or 42.6% and its corporate
loans were down $122 million or 53.6% from year-end 1991.

Riggs AP's commercial property loans are diversified by project type and
geographic location and have maturities ranging from 3 to 5 years. Vacancy
rates on the properties securing these loans have increased due to weak
economic conditions in the United Kingdom. At June 30, 1992, Riggs AP's $88.9
million of nonperforming assets were transferred to Riggs-Washington and the
Company. These assets were transferred at book value, net of related reserves,
and are serviced by Riggs AP. During the last six months of 1992, the
transferred assets were reduced $45.2 million or 51% as a result of sales,
writedowns and exchange rate fluctuations. As of year-end 1992 an additional
$15.2 million of Riggs AP's loans were placed on nonperforming status including
approximately $4 million or 2.2% of its remaining commercial property loans, as
the borrowers were not able to fully support debt service.

36
<PAGE>

PERIOD-END LOANS

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
--------------------- ------------------------------------------------------
1993 1992 1992 1991 1990 1989 1988
---------- ---------- ---------- ---------- ---------- ---------- ----------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Domestic:
Commercial and Finan-
cial.................. $ 340,477 $ 467,675 $ 369,447 $ 532,068 $ 805,319 $ 962,452 $1,223,419
Real Estate-Commercial/
Construction.......... 394,267 460,639 500,073 606,094 760,974 820,515 835,803
Residential Mortgage... 747,863 565,593 529,163 724,842 840,403 845,412 455,681
Home Equity............ 253,667 290,560 272,225 321,690 341,100 276,220 235,370
Consumer............... 88,428 119,199 107,382 158,872 249,124 278,463 270,557
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Domestic.......... 1,824,702 1,903,666 1,778,290 2,343,566 2,996,920 3,183,062 3,020,830
Foreign:
Governments and
Official Institutions. 26,883 26,083 29,319 27,377 30,477 46,545 53,960
Banks and Other
Financial
Institutions.......... 17,502 30,425 24,734 28,481 65,722 80,438 107,308
Commercial and
Industrial and
Commercial Property... 222,501 385,665 283,775 581,499 689,137 500,265 386,236
Other.................. 14,896 15,051 25,948 23,886 33,228 29,304 21,674
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Foreign........... 281,782 457,224 363,776 661,243 818,564 656,552 569,178
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Loans............. 2,106,484 2,360,890 2,142,066 3,004,809 3,815,484 3,839,614 3,590,008
Less: Unearned Discount
and Net Deferred Fees.. 912 6,281 4,360 12,116 24,228 30,854 27,177
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Loans, Net of Un-
earned Discount and Net
Deferred Fees.......... 2,105,572 2,354,609 2,137,706 2,992,693 3,791,256 3,808,760 3,562,831
Less: Reserve for Loan
Losses................. 80,869 74,520 83,307 103,674 108,887 39,863 49,038
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Loans, Net........ $2,024,703 $2,280,089 $2,054,399 $2,889,019 $3,682,369 $3,768,897 $3,513,793
========== ========== ========== ========== ========== ========== ==========
</TABLE>

NONPERFORMING ASSETS AND PAST DUE LOANS

September 30, 1993 vs September 30, 1992

Nonperforming assets, which include nonaccrual loans, renegotiated loans and
other real estate owned, net, totalled $271.0 million at September 30, 1993, a
decrease of $28.7 million from the $299.7 million reported at September 30,
1992, and a decrease of $34.8 million from the $305.8 million reported at
December 31, 1992.

In light of current economic conditions domestically and in the United
Kingdom and the possibility of further deterioration in commercial real estate
values in the Baltimore-Washington, D.C.-Richmond corridor, nonperforming
assets may continue to rise. The extent to which additional loans will move to
nonperforming status will depend, among other factors, on whether economic
conditions continue to deteriorate domestically and in the United Kingdom. The
level of nonperforming assets also will depend on the extent to which non-
performing assets return to performing status.

At September 30, 1993, nonaccrual loans, including both domestic and foreign
loans, were $148.8 million or 7.1% of outstanding loans compared to $150.7
million or 6.4% of outstanding loans at September 30, 1992 and $162.1 million
or 7.6% of outstanding loans at December 31, 1992. This decrease was primarily
due to a decrease in domestic nonaccrual loans from $113.1 million at September
30, 1992 to $85.3 million at September 30, 1993. Of the $63.6 million of
foreign nonaccrual loans at September 30, 1993, $33.5 million related to
nonaccrual real estate-commercial mortgage loans at the United Kingdom offices.

The decrease of $13.3 million in nonaccrual loans between December 31, 1992
and September 30, 1993 is attributable to sales and repayments of $27.1 million
combined with transfers to other real estate owned of

37
<PAGE>

nonaccrual loans totalling $55.2 million, which more than offset net additions
to nonaccrual loans of $69.0 million during the period. Nonaccrual foreign
loans increased $26.0 million during the nine month period ended September 30,
1993. This increase is attributable to net increases in nonperforming loans and
deteriorating credits in the United Kingdom portfolio, which was adversely
affected by several factors such as: unfavorable reports by court-appointed
receivers on two commercial properties, borrowers experiencing reduced cash
flows from the ongoing soft commercial property market and external and
internal evaluations of United Kingdom assets reflecting more conservative
assumptions due to ongoing concerns about the United Kingdom economy.

Renegotiated loans totalled $9.4 million at September 30, 1993 compared to
$14.5 million at September 30, 1992 and $11.8 million at December 31, 1992. The
domestic renegotiated loans consisted entirely of commercial real estate loans
which were renegotiated to provide a reduction or deferral of interest or
principal as a result of a deterioration in the financial position of the
borrower.

Other real estate owned, net ("OREO"), which is property acquired through
foreclosure, or deemed to have been acquired through foreclosure ("in substance
foreclosure" or "ISF") or by acceptance of a deed in lieu of foreclosure, was
$112.7 million at September 30, 1993, down from $134.5 million at September 30,
1992 and $131.9 million at December 31, 1992.

Past due loans, on which the Company is accruing interest as they are well
secured and in the process of collection, were $4.2 million at September 30,
1993, compared to $1.6 million at September 30, 1992 and $1.4 million at
December 31, 1992. At September 30, 1993, the Company had identified
approximately $18.7 million in potential problem loans currently performing and
therefore not included as nonaccrual or past due. Potential problem loans
represent loans which are currently performing but which management believes
may become nonaccrual or past due in the foreseeable future. These loans
consist of approximately $5.3 million of domestic loans, principally commercial
real estate loans, and approximately $13.4 million of commercial property and
corporate loans in the United Kingdom.

December 31, 1992 vs December 31, 1991

At December 31, 1992, nonaccrual loans were $162.1 million or 7.6% of
outstanding loans as compared to $231.8 million or 7.8% of outstanding loans at
December 31, 1991. This decrease is primarily due to the accelerated
disposition of real estate assets as well as a decrease in foreign nonaccrual
loans from $78.9 million to $44.9 million. Of the $44.9 million of foreign
nonaccrual loans at December 31, 1992, $23.5 million relates to nonaccrual real
estate-commercial loans at the Company's London Operations, which are secured
by properties located in the United Kingdom. The decrease in foreign nonaccrual
loans is attributable to the transfer of $29.3 million of nonaccrual loans to
other real estate owned. Included in year-end 1992 foreign nonaccrual loans was
a $15 million loan originated at Riggs-Washington.

At December 31, 1992, the Company had renegotiated loans totalling $11.8
million as compared to no loans classified as renegotiated at December 31,
1991. The renegotiated loans consisted entirely of domestic commercial real
estate loans which were renegotiated to provide a reduction or deferral of
interest or principal as a result of a deterioration in the financial position
of the borrower.

Other real estate owned (net of reserves), was $131.9 million at December 31,
1992, up $106.4 million from $25.5 million at December 31, 1991. At December
31, 1991, the Company had other real estate owned

38
<PAGE>

(net of reserves) of $99.3 million including real estate assets subject to
accelerated disposition (net of reserves) of $73.7 million.

Past due loans, on which the Company is accruing interest as they are well
secured and in the process of collection, were $1.4 million at December 31,
1992 compared to $3.5 million at year-end 1991. At December 31, 1992, the
Company had identified approximately $41.6 million in potential problem loans.

NONPERFORMING ASSETS AND PAST DUE LOANS

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
---------------------- ----------------------------------------------------------
1993 1992 1992 1991 1990 1989 1988
---------- ---------- ---------- ---------- ---------- ---------- ----------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Nonperforming Assets:
Nonaccrual Loans: (1)
Domestic............... $ 85,256 $ 113,068 $ 117,182 $ 137,340 $ 137,544 $ 3,313 $ 19,068
Foreign................ 63,571 37,636 44,892 78,855 21,245 1,191 5,048
Subject to Accelerated
Disposition, Net (3).. -- -- -- 15,641 -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Nonaccrual Loans.. 148,827 150,704 162,074 231,836 158,789 4,504 24,116
Renegotiated Loans: (2)
Domestic............... 8,533 14,516 11,806 -- -- -- 834
Foreign................ 914 -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Renegotiated
Loans.................. 9,447 14,516 11,806 -- -- -- 834
Other Real Estate Owned,
Net:
Domestic............... 99,870 92,965 97,592 21,316 120,154 37,919 737
Foreign................ 12,862 41,485 34,300 4,211 53 44 50
Subject to Accelerated
Disposition, Net (3).. -- -- -- 73,748 -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Other Real Estate
Owned, Net............. 112,732 134,450 131,892 99,275 120,207 37,963 787
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Nonperforming As-
sets, Net.............. $ 271,006 $ 299,670 $ 305,772 $ 331,111 $ 278,996 $ 42,467 $ 25,737
========== ========== ========== ========== ========== ========== ==========
Total Loans, Net of Un-
earned Discount and Net
Deferred Fees.......... $2,105,572 $2,354,609 $2,137,706 $2,992,693 $3,791,256 $3,808,760 $3,562,831
Ratio of Nonaccrual
Loans to Total Loans.. 7.07% 6.40% 7.58% 7.75% 4.19% 0.12% 0.68%
Ratio of Nonperforming
Assets to Total Loans
and Other Real
Estate Owned, Net..... 12.22% 12.04% 13.47% 10.71% 7.13% 1.10% 0.72%
Past Due Loans: (4)
Domestic............... $ 4,214 $ 1,567 $ 1,369 $ 2,743 $ 46,756 $ 12,258 $ 6,458
Foreign................ 31 15 55 790 8,733 -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Past Due Loans.... $ 4,245 $ 1,582 $ 1,424 $ 3,533 $ 55,489 $ 12,258 $ 6,458
========== ========== ========== ========== ========== ========== ==========
</TABLE>
- --------
(1) Loans that are in default in either principal or interest for 90 days or
more that are not well secured and in the process of collection.
(2) Loans for which terms have been renegotiated to provide a reduction or
deferral of interest or principal as a result of a deterioration in the
financial position of the borrower in accordance with Financial Accounting
Standards Board Statement No. 15. Extensions of loans, at market terms,
are not considered renegotiated for purposes of this Schedule.
(3) Balances are net of reserves of $10,134 and $36,644 related to loans and
other real estate owned, respectively, held for accelerated disposition.
(4) Loans contractually past due 90 days or more in principal or interest
which are well secured and in the process of collection and, accordingly,
are not classified as either nonaccrual or renegotiated.

During the 12 month period ended September 30, 1993, the ratio of
nonperforming assets to total loans and other real estate owned, net,
increased from 12.04% to 12.22%. This increase is principally due to the 10.6%
decline in total loans from $2.35 billion to $2.11 billion over the same
period. As presented in the table above, the dollar level of nonperforming
assets decreased 9.6% over the same 12 month period.

39
<PAGE>

PROVISION AND RESERVE FOR LOAN LOSSES

The Company's banking subsidiaries maintain reserves for loan losses which
are available to absorb potential losses in the current loan portfolio. The
reserve for loan losses is increased by loan loss provisions and recoveries on
charged-off loans, and is reduced by loan charge-offs. The Company determines
its reserve requirements based upon an analysis of risk factors affecting the
entire loan portfolio and specific reviews of individual loans. The Company's
loan loss reserve methodology is a formal process that is primarily dependent
on the risk ratings assigned to each of the Company's loans, including
commercial real estate, corporate, and other large balance, non-homogenous
loans. The Company's loan officers risk rate the loans for which they are
responsible. In addition, the Company's loan review department periodically
independently reviews and risk rates these loans and has authority to downgrade
credits if it concludes that a more severe risk rating is appropriate.

The Company's 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 Company's reserve for loan losses is
determined quarterly by evaluating loans individually and pools of similar type
loans, taking into consideration the primary source of repayment, the liquidity
and financial condition of the borrowers and guarantors, and general economic
conditions and other factors that exist as of the determination date. In
addition, the Company prepares a migration analysis of charge-offs over the
prior three years in order to assist in the process of estimating inherent
losses for different categories of risk rated credits. The Company's actual
charge-off experience is then adjusted for judgmental factors such as trends in
delinquencies, nonaccrual loans and charge-offs, volume, maturity and
composition of the portfolio, effects of changes in lending policies, economic
trends and credit concentration considerations. From these analyses and related
information, the Company determines reserve percentages by risk rating for each
loan portfolio type (including, for example, commercial real estate,
residential construction and corporate loans). These estimated reserve
percentages are applied to the portfolio. The resultant amount is then
subjected to an overall reasonableness test by evaluating such factors as
annual charge-off experience and loan loss reserve coverage.

All significant criticized loans are reviewed by the Loan Loss Reserve
Committee on a quarterly basis to insure their classification is accurate.
General allocations are made for all loans and legal contingencies including
the consideration of specific reserve requirements for individual loans, if
appropriate. The allocations are designed to be sufficient to cover any losses
inherent in the portfolio. Identifiable and quantifiable losses are charged-off
against the reserve for loan losses.

On a quarterly basis, the Loan Loss Reserve Committee also evaluates the
adequacy of the reserve for loan losses. The Audit Committee of each of the
Boards of Directors of the Company's subsidiary banks reviews management's
determination of the adequacy of the reserve for loan losses. The loan
portfolio is continuously monitored by management to identify loans requiring
particular attention.

Nine Months 1993 vs Nine Months 1992

Provisions for loan losses totalled $59.1 million during the first nine
months of 1993 compared with $23.5 million for the first nine months of 1992.
Approximately $29.6 million of the $59.1 million of provisions were taken for
loans originated in the United Kingdom, as severe recessionary conditions there
led to deterioration in the corporate and commercial property loan portfolios.
The remaining provisions related primarily to domestic commercial real estate
loans.

Provisions for loan losses totaled $2.0 million for the third quarter of 1993
compared to $5.5 million for the third quarter of 1992. The 1993 provisions for
loan losses were primarily for domestic commercial real estate loans.

Net charge-offs during the first nine months of 1993 were $61.6 million, up
from $51.1 million of net charge-offs during the first nine months of 1992.
Charge-offs for the first nine months of 1993 primarily related to domestic
commercial real estate loans. The remainder of the charge-offs related to
corporate and

40
<PAGE>

commercial property loans in the United Kingdom. As of June 30, 1993, 100% of
the portions of the loans classified as doubtful for regulatory purposes were
charged off. Previously, it had been the Company's policy to provide reserves
against, rather than to charge-off the doubtful portion of credits.

Net charge-offs during the third quarter of 1993 were $4.2 million compared
to net charge-offs of $9.4 million during the third quarter of 1992. In the
third quarter 1993, the Corporation charged off $4.0 million of an
international loan which is in the process of being restructured. There were no
charge-offs in the Corporation's London operations during the third quarter of
1993.

The reserve for loan losses was $80.9 million or 3.84% of outstanding loans
at September 30, 1993 compared to a reserve balance of $74.5 million or 3.16%
of outstanding loans at September 30, 1992. The Company's coverage ratio was
49.8% at September 30, 1993 compared to 44.7% at September 30, 1992. The
coverage ratio is calculated by dividing total reserves by nonaccrual,
renegotiated and past due loans. At September 30, 1993, 47.5% of the Company's
loan portfolio consisted of residential mortgage and home equity loans. These
loans require minimal reserves based upon the Company's favorable loss
experience. Further, the Company has no credit card loans in its portfolio.
Credit card loans, which require relatively high levels of reserves based on
loss experience, will inflate an institution's coverage ratio as such loans are
typically charged-off rather than classified as nonaccrual or past due.
Finally, the coverage ratio does not account for the existence of collateral
which limits the risk of principal loss on nonaccrual and past due loans. At
September 30, 1993, 66.2% of the Company's nonaccrual, renegotiated and past
due loans were partially or fully secured by commercial real estate.

In light of current conditions domestically and in the United Kingdom, and
the possibility of further deterioration in commercial real estate values in
the Washington, D.C. area and the United Kingdom and increases in interest
rates in the United Kingdom, significant additional provisions and writedowns
are possible and nonperforming assets (as well as the cost of carrying
nonperforming assets) could increase. However, given the uncertainties created
by current economic conditions both in the United Kingdom and domestically,
additional provisions and writedowns could not be reasonably estimated at
September 30, 1993 and the extent to which they may be required will depend on
future economic conditions and their impact on specific borrowers' operations
and liquidity.

1992 vs 1991

Provisions for loan losses totalled $49.8 million for 1992 as compared to
$43.5 million for 1991. Domestic provisions in 1992 of $22.9 million were taken
primarily in recognition of further deterioration in commercial and residential
property development loans and deterioration in a foreign loan which was
originated by Riggs-Washington. Provisions for loans originated in the United
Kingdom were $26.9 million as weak economic conditions in the United Kingdom
resulted in further deterioration in several unrelated corporate loans,
including loans to financial institutions and loans to finance operating
commercial properties which have experienced a rise in vacancy rates.

Net charge-offs were $67.0 million or 2.64% of average loans during 1992
compared to $35.6 million or 1.05% of average loans during 1991.

The reserve for loan losses was $83.3 million or 3.90% of outstanding loans
at December 31, 1992 as compared with $103.7 million or 3.46% of outstanding
loans at December 31, 1991.

The Company's ratio of reserves to nonperforming, renegotiated and past due
loans was 47.5% at December 31, 1992 compared to 44.05% at December 31, 1991.

41
<PAGE>

RESERVE FOR LOAN LOSSES AND SUMMARY OF CHARGE-OFFS AND RECOVERIES

<TABLE>
<CAPTION>
NINE MONTHS ENDED TWELVE MONTHS ENDED
SEPTEMBER 30, DECEMBER 31,
---------------------- ----------------------------------------------------------
1993 1992 1992 1991 1990 1989 1988
---------- ---------- ---------- ---------- ---------- ---------- ----------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, Beginning of the
Period................... $ 83,307 $ 103,674 $ 103,674 $ 108,887 $ 39,863 $ 49,038 $ 66,415
Additions:
Provision for Loan Loss-
es...................... 59,141 23,462 49,789 43,525 105,508 5,588 1,176
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Additions.......... 59,141 23,462 49,789 43,525 105,508 5,588 1,176
Deductions:
Loans Charged-Off:
Commercial and Financial. 4,579 2,316 3,156 7,457 11,643 4,040 1,672
Real Estate-
Commercial/Construction. 33,161 18,956 30,604 14,281 20,429 3,878 --
Residential Mortgage..... 33 133 190 25 -- -- 2
Home Equity.............. 146 123 350 450 639 320 --
Consumer................. 1,652 2,064 2,745 3,864 2,430 1,759 1,203
Foreign.................. 24,481 29,410 35,233 13,172 3,185 5,294 19,173
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Charge-Offs........ 64,052 53,002 72,278 39,249 38,326 15,291 22,050
Recoveries on Charged-Off
Loans:
Commercial and Financial. 303 468 616 1,033 220 168 500
Real Estate-
Commercial/Construction 230 315 3,172 -- -- -- --
Residential Mortgage..... 124 14 15 14 14 -- --
Home Equity.............. -- -- -- 26 -- -- --
Consumer................. 791 996 1,231 908 547 417 348
Foreign.................. 1,009 147 279 1,678 84 454 2,771
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Recoveries on
Charged-Off Loans....... 2,457 1,940 5,313 3,659 865 1,039 3,619
Net Charge-Offs........... 61,595 51,062 66,965 35,590 37,461 14,252 18,431
Reserve Transferred to
Real Estate Assets Sub-
ject to Accelerated
Disposition.............. -- -- -- 13,165 -- -- --
Foreign Exchange Transla-
tion
Adjustments.............. 16 (1,554) (3,191) 17 977 (511) (122)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Balance, End of the Peri-
od....................... $ 80,869 $ 74,520 $ 83,307 $ 103,674 $ 108,887 $ 39,863 $ 49,038
========== ========== ========== ========== ========== ========== ==========
Average Loans............. $2,112,403 $2,642,263 $2,540,478 $3,392,994 $4,041,756 $3,715,369 $3,349,464
Ratio of Net Charge-Offs
to Average Loans......... 2.92% 1.93% 2.64% 1.05% .93% .38% .55%
Ratio of Reserve for Loan
Losses to Outstanding
Loans.................... 3.84% 3.16% 3.90% 3.46% 2.87% 1.05% 1.38%
</TABLE>

DEPOSITS AND BORROWED FUNDS

September 30, 1993 vs September 30, 1992

Total deposits at September 30, 1993 were $3.93 billion compared to $4.63
billion at September 30, 1992, down $696 million or 15.0% as a result of
reductions in wholesale funding sources and a decline in demand for
certificates of deposits in a lower interest rate environment. Average deposits
during the first nine months of 1993 were $4.3 billion, down $366 million or
7.8% below the $4.7 billion averaged during the first nine months of 1992. The
majority of the decline in average deposits was due to a decrease in time
deposits in foreign offices of $207 million or 27.3%. Deposits in domestic
offices averaged $3.8 billion, a decrease of $158 million or 4.1% from the
first nine months of 1992. Average core deposits (total deposits in domestic
offices, excluding negotiable certificates of deposits) were $3.7 billion, down
$165 million or 4.2% from the first nine months of 1992. Average savings and
NOW accounts were $924 million, up $71 million or 8.4% over the first nine
months of 1992. The increase in savings and NOW accounts was partially offset
by decreases in

42
<PAGE>

demand deposits and investment certificates of deposit. Average demand deposits
were $835 million, down $11 million from the first nine months of 1992. Money
market deposits averaged $1.2 billion, a slight decrease of $22 million or 1.9%
below the first nine months of 1992. Time deposits in domestic offices averaged
$829 million, a decrease of $194 million or 19.0%.

The following table reflects the balances and maturities for the Company's
time deposits in domestic offices of $100 thousand or more.

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
----------------- -----------------
1993 1992 1992 1991
(dollars in thousands) -------- -------- -------- --------
<S> <C> <C> <C> <C>
Certificates of Deposit:
Due within three months.................... $ 97,444 $262,172 $100,483 $228,626
Three to six months........................ 36,907 48,219 44,569 71,835
Six to twelve months....................... 26,349 25,645 22,502 30,858
Over twelve months......................... 12,157 10,477 10,637 10,492
-------- -------- -------- --------
Total..................................... $172,857 $346,513 $178,191 $341,811
======== ======== ======== ========
</TABLE>

Borrowed funds, which includes Federal funds purchased and repurchase
agreements, U.S. Treasury demand notes and other borrowed funds, averaged $244
million during the first nine months of 1993, up $106 million over the $138
million averaged during the first nine months of 1992. Average Federal funds
purchased and repurchase agreements were up $73 million. U.S. Treasury and
other borrowings were up $33 million compared to the previous year.

Long-term debt totalling $213 million was level with September 30, 1992.

December 31, 1992 vs December 31, 1991

Total deposits at December 31, 1992 were $4.44 billion as compared to $4.91
billion at year-end 1991, down $475 million or 9.7%. At December 31, 1992,
foreign time deposits and time deposits in domestic offices were down $311
million and $306 million, respectively, from December 31, 1991.

Average deposits during 1992 were $4.64 billion, down $653 million or 12.3%
below the $5.30 billion averaged during 1991. The majority of the decline in
average deposits was due to a decrease in time deposits in foreign offices of
$433 million or 37.2% as liquid assets were used to reduce wholesale funding
sources. Deposits in domestic offices averaged $3.91 billion, a decrease of
$219 million or 5.3% from 1991. Average core deposits (total deposits in
domestic offices, excluding negotiable certificates of deposits) were $3.89
billion, down $207 million or 5.0% from 1991. Average savings and NOW accounts
were $866 million, up $97 million or 12.6% over 1991 levels. The increase in
savings and NOW accounts was partially offset by decreases in demand deposits,
money market accounts and investment certificates of deposit. Average demand
deposits were $846 million, down $66 million from the 1991 average. Money
market deposits averaged $1.22 billion, a decrease of $57 million or 4.4% below
the 1991 average. Time deposits in domestic offices averaged $991 million, a
decrease of $191 million or 16.2%. Average negotiable certificates of deposit
in domestic offices, which are included in time deposits in domestic offices,
decreased $12 million between 1992 and 1991.

Borrowed funds averaged $128 million during 1992, down $63 million below the
$191 million averaged during 1991. Average Federal funds purchased and
repurchase agreements were down $12 million. U.S. Treasury and other borrowings
were down $51 million compared to last year. These decreases were the result of
the Company's efforts to reduce assets and liabilities as part of its strategy
to improve its leverage capital ratio.

43
<PAGE>

AVERAGE DEPOSITS AND BORROWED FUNDS

<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, TWELVE MONTHS ENDED DECEMBER 31,
---------------------------------- ----------------------------------------------------
1993 1992 1992 1991 1990
---------------- ---------------- ---------------- ---------------- ----------------
AVERAGE AVERAGES AVERAGE AVERAGES AVERAGE
BALANCES RATES BALANCES RATES BALANCES RATES BALANCES RATES BALANCES RATES
---------- ----- ---------- ----- ---------- ----- ---------- ----- ---------- -----
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Deposits in Domestic
Offices:
Noninterest-Bearing
Demand Deposits....... $ 821,416 $ 835,009 $ 834,300 $ 902,513 $ 832,907
Savings and NOW
Accounts.............. 924,139 2.12% 852,698 3.27% 865,608 3.09% 768,866 4.10% 627,860 4.88%
Money Market Deposits.. 1,183,198 2.49% 1,205,564 3.66% 1,220,784 3.45% 1,277,606 5.10% 1,328,464 6.26%
Other Core Deposits.... 805,235 3.41% 1,005,729 4.38% 972,841 4.21% 1,151,432 6.80% 1,168,254 8.15%
---------- ---- ---------- ----- ---------- ----- ---------- ----- ---------- -----
Total Average Core
Deposits............... 3,733,988 3,899,000 3,893,533 4,100,417 3,957,485
Negotiable Certificates
of Deposit............. 23,930 5.66% 17,383 11.99% 18,290 9.94% 30,727 6.41% 59,353 7.25%
---------- ---- ---------- ----- ---------- ----- ---------- ----- ---------- -----
Total Average Deposits
in Domestic Offices.... $3,757,918 $3,916,383 $3,911,823 $4,131,144 $4,016,838
Deposits in Foreign
Offices:*
Noninterest-Bearing
Demand Deposits....... 13,289 11,107 11,284 8,907 7,579
Interest-Bearing Bank
Deposits.............. 158,800 9.97% 254,198 14.61% 234,490 13.57% 377,240 13.59% 699,074 13.36%
Negotiable Certificates
of Deposit............ 22,972 6.41% 48,748 10.50% 51,640 9.86% 94,208 11.85% 176,393 12.38%
Interest-Bearing Non-
Bank Deposits......... 356,893 3.11% 445,534 5.20% 434,174 4.99% 684,529 7.51% 817,365 9.85%
---------- ---- ---------- ----- ---------- ----- ---------- ----- ---------- -----
Total Average Deposits
in Foreign Offices..... 551,954 759,587 731,588 1,164,884 1,700,411
---------- ---------- ---------- ---------- ----------
Total Average Deposits.. $4,309,872 $4,675,970 $4,643,411 $5,296,028 $5,717,249
========== ========== ========== ========== ==========
Borrowed Funds:
Federal Funds Purchased
and Repurchase
Agreements............ $ 169,962 2.69% $ 97,154 2.94% $ 87,339 2.86% $ 99,120 5.10% $ 337,824 7.79%
U.S. Treasury Demand
Notes and Other
Borrowed Funds........ 74,096 2.80% 40,728 3.27% 40,235 3.18% 91,395 5.39% 174,524 7.01%
---------- ---- ---------- ----- ---------- ----- ---------- ----- ---------- -----
Total Average Borrowed
Funds.................. $ 244,058 $ 137,882 $ 127,574 $ 190,515 $ 512,348
========== ========== ========== ========== ==========
</TABLE>
- --------
* The majority of interest-bearing deposits in foreign offices are denominated
in amounts of $100 thousand or more.

CAPITAL RESOURCES

Under the Federal Reserve Board's risk-based capital guidelines, bank holding
companies are required to meet a minimum ratio of qualifying total (combined
Tier 1 and Tier 2) capital to risk-weighted assets of 8.00%, at least half of
which must be comprised of core (Tier 1) capital elements. The Company's total
and core capital ratios were 11.01% and 5.78% at September 30, 1993 as compared
to 14.70% and 8.31% at December 31, 1992 and 15.05% and 8.60% at September 30,
1992.

44
<PAGE>

The Federal Reserve Board has established an additional capital adequacy
guideline referred to as the leverage ratio, which measures the ratio of Tier
1 capital to average quarterly assets. The most highly rated bank holding
companies which are not contemplating or experiencing significant growth are
required to maintain a minimum leverage ratio of 3.00%. However, most bank
holding companies, including the Company, 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 company's asset
quality, earnings performance, interest-rate risk and liquidity. The Federal
Reserve Board has not advised the Company of a specific minimum leverage ratio
requirement applicable to the Company.

As a result of the losses incurred in the fourth quarter of 1992 and the
first nine months of 1993, which were attributable to provisions and
writedowns, including those associated with the Company's restructuring plan
announced in the second quarter of 1993, the Company's leverage ratio
decreased from 4.97% at June 30, 1992 to 4.60% at December 31, 1992 and 3.02%
at September 30, 1993. In a capital plan submitted to the Reserve Bank, the
Company indicated that it would seek to achieve a leverage ratio of
approximately 5.0% by December 31, 1993. After giving effect to the October
Equity Sale (see "Recent Developments--October Equity Sale"), the Company's
leverage ratio as of September 30, 1993 on a pro forma basis was 5.73%. The
Memorandum of Understanding does not require the Company's capital plans to be
approved by the Reserve Bank; however, the Company's plans were submitted to
and reviewed without objection by the Reserve Bank.

The Company's policy is to ensure that its bank subsidiaries are capitalized
in accordance with regulatory guidelines. The three national bank subsidiaries
of the Company are subject to minimum capital ratios prescribed by the OCC
which are the same as those of the Federal Reserve Board. Pursuant to the
Written Agreement, Riggs-Washington has committed to the OCC to maintain a
leverage ratio of 5.00%, a Tier 1 to risk-weighted asset ratio of 6.00% and a
total capital to risk-weighted assets ratio of 10.00%. Riggs-Washington's
ratios were 5.69%, 11.04%, and 12.31%, respectively, at September 30, 1993.

The following table reflects the actual and required minimum ratios for the
Company and its national banking subsidiaries based upon fully phased-in
capital requirements.

CAPITAL RATIOS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
REQUIRED SEPTEMBER 30, -------------- --------------
MINIMUM 1993 1993 1992 1992 1991
-------- --------------- ------ ------ ------ ------
AS ADJUSTED
FOR THE OCTOBER
EQUITY SALE(1)
---------------
<S> <C> <C> <C> <C> <C> <C>
LEVERAGE RATIO:(2)
Riggs National Corpo-
ration............... 3.00% 5.73% 3.02% 4.93% 4.60% 3.57%
Riggs-Washington...... 5.00 5.69 5.69 6.32 6.32 5.79
Riggs-Virginia........ 3.00 8.80 8.80 8.30 8.42 7.83
Riggs-Maryland........ 3.00 6.57 6.57 6.44 6.20 6.70
TIER 1:
Riggs National Corpo-
ration............... 4.00 10.85 5.78 8.60 8.31 5.23
Riggs-Washington...... 6.00 11.04 11.04 10.88 11.29 8.36
Riggs-Virginia........ 4.00 16.43 16.43 16.71 16.80 14.32
Riggs-Maryland........ 4.00 11.13 11.13 11.70 11.73 11.23
COMBINED TIER 1 AND TIER
2:
Riggs National Corpo-
ration............... 8.00 16.98 11.01 15.05 14.70 10.46
Riggs-Washington...... 10.00 12.31 12.31 12.15 12.56 9.64
Riggs-Virginia........ 8.00 17.68 17.68 17.97 18.05 16.42
Riggs-Maryland........ 8.00 12.37 12.37 12.96 12.98 12.48
</TABLE>
- --------
(1) Adjusted to give effect to the October Equity Sale and the investment of
the net proceeds thereof (approximately $132 million) in short-term money
market assets, which have been risk-weighted at 20% for purposes of
capital ratio calculations. No effect is given to the sale of any Debt
Securities or the redemption of any outstanding subordinated debt of the
Company.
(2) Most bank holding companies and national banks, including the Company and
the Company's national bank subsidiaries, are expected to maintain an
additional cushion of at least 100 to 200 basis points above the 3.00%
minimum. Under the terms of the Written Agreement, Riggs-Washington has
committed to the OCC to maintain a leverage ratio of 5.00%.

45
<PAGE>

MANAGEMENT

The table below sets forth certain information with respect to the executive
officers of the Company and certain executive officers of Riggs-Washington:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Joe L. Allbritton............... 68 Chairman of the Board and Chief Executive
Officer of the Company and Chairman of the
Board of Riggs-Washington
Paul M. Homan................... 53 Vice Chairman of the Board of the Company
and President and Chief Executive Officer
of Riggs-Washington
Timothy C. Coughlin............. 51 President of the Company
John L. Davis................... 52 Chief Financial Officer of the Company and
Senior Vice President and Chief Financial
Officer of Riggs-Washington
David Lesser.................... 38 General Counsel of the Company and
Executive Vice President and General
Counsel of Riggs-Washington
Alexander C. Baker.............. 47 Secretary of the Company and Senior Vice
President, Trust Officer and Secretary of
Riggs-Washington
Randall R. Reeves............... 46 Senior Executive Vice President and Chief
Credit Officer and Head of Special Assets
Group of Riggs-Washington
Joseph W. Barr.................. 44 Executive Vice President of Riggs-
Washington--Head of Retail Banking
Fred L. Bollerer................ 51 Executive Vice President of Riggs-
Washington--Head of General Banking Group
Paul Cushman, III............... 33 Executive Vice President of Riggs-
Washington--Head of International Banking
Group
George W. Grosz................. 55 Executive Vice President of Riggs-
Washington-- Head of Financial Services
Group
Gloria A. Lembo................. 44 Executive Vice President of Riggs-
Washington--Head of Technology Services
Group
S. Dean Lesiak.................. 41 Executive Vice President of Riggs-
Washington--Head of Risk Management
</TABLE>

EXPERIENCE OF MANAGEMENT

JOE L. ALLBRITTON has been Chairman of the Board and Chief Executive Officer
of the Company since 1981. He has served as Chairman of the Board of Riggs-
Washington since 1983 and was the Chief Executive Officer of Riggs-Washington
from 1982 to June 1993. Mr. Allbritton was the beneficial owner of
approximately 33% of the Common Stock of the Company as of September 20, 1993.
He also serves as Chairman of the Board of, and is the owner of, Perpetual
Corporation, Westfield News Advertiser, Inc. and University Bancshares.

PAUL M. HOMAN was appointed President and Chief Executive Officer of Riggs-
Washington and Vice Chairman of the Company in June 1993. See "Recent
Developments--Recent Strategic Initiatives." Mr. Homan served as president and
chief executive officer of First Florida Banks, Inc. of Tampa from August 1991
through December 1992 before returning to serve as principal of Homan &
Associates, a bank consulting firm which he founded in 1987. Mr. Homan served
as senior adviser to the Comptroller of the Currency in 1990 and 1991, as
executive vice president of Continental Bank Corporation from 1985 to 1987 and
as

46
<PAGE>

chairman and chief executive officer of Nevada National Bank from 1983 to 1985.
Mr. Homan also worked at the OCC from 1966 to 1983, rising to the position of
senior deputy controller for bank supervision, the OCC's top career position.

TIMOTHY C. COUGHLIN has served as President of the Company since 1992. He
served as President and Chief Operating Officer of Riggs-Washington from 1983
to 1992. He has been a Director of the Company since 1988 and a Director of
Riggs-Washington since 1983.

JOHN L. DAVIS joined the Company in June 1993 and is Chief Financial Officer
of the Company and Senior Vice President and Chief Financial Officer of Riggs-
Washington. Mr. Davis served as Senior Vice President and Controller of First
Florida Bank, N.A. from 1990 to 1992 and as Senior Vice President and Chief
Financial Officer of First Union National Bank of Georgia from 1987 to 1990.

DAVID LESSER has served as General Counsel of the Company and Executive Vice
President and General Counsel of Riggs-Washington since 1987.

ALEXANDER C. BAKER has served as Secretary of the Company and as Secretary of
Riggs-Washington since 1992 and as Senior Vice President and Trust Officer of
Riggs-Washington since 1987.

RANDALL R. REEVES has served as Senior Executive Vice President and Chief
Credit Officer of Riggs-Washington since 1991. Mr. Reeves was President and
Chief Executive Officer of University Bancshares, Inc. from 1985 to 1992.

JOSEPH W. BARR joined the Company as Executive Vice President in charge of
Retail Banking in June 1993. He served as Executive Vice President in charge of
Retail Banking at First American Metro Corp. from 1992 to June 1993 and as
Executive Vice President in charge of Community Banking at Perpetual Savings
Bank, F.S.B. from 1989 to 1992.

FRED L. BOLLERER joined Riggs-Washington as Executive Vice President in
charge of the General Banking Group in October 1993. During 1988 and 1989, Mr.
Bollerer was the President and Chief Operating Officer of First American, N.A.
of Washington, D.C. From 1989 to 1993, Mr. Bollerer was the Chairman and Chief
Executive Officer of First American Metro Corp.

PAUL CUSHMAN, III has served as Executive Vice President of Riggs-Washington
in charge of the International Banking Group since 1992. He was Senior Vice
President of Riggs-Washington from 1989 to 1992 and Vice President of Riggs-
Washington from 1987 to 1989.

GEORGE W. GROSZ has served as Executive Vice President of Riggs-Washington in
charge of the Financial Services Group, which includes the Trust and Investment
Department and the Private Banking Division, since 1987. He was a Director of
Riggs-Washington from 1989 to 1993.

GLORIA A. LEMBO has served as Executive Vice President in charge of the
Technology Services Group of Riggs-Washington since August 1993. She has been a
Senior Vice President since 1988 with various responsibilities for Deposit
Operations, Corporate Operations, Commercial Real Estate Operations and Loan
Operations.

S. DEAN LESIAK joined the Company in July 1993 as Executive Vice President of
Riggs-Washington in charge of Risk Management. He served as Chief Compliance
Officer of First Florida Banks, Inc. from 1991 to 1993 and also as Senior Vice
President--Senior Credit Policy Officer of First Florida Banks, Inc. from 1988
to 1991. Mr. Lesiak also served as a National Bank Examiner at the OCC for over
ten years.

CONTRACT OF NEW CHIEF EXECUTIVE OFFICER OF RIGGS-WASHINGTON

In June 1993, the Company entered into a three year contract with Paul Homan
to serve as Vice Chairman of the Company and as President and Chief Executive
Officer of Riggs-Washington. Mr. Homan

47
<PAGE>

will receive a base salary of $650,000 per year with an annual performance
bonus of $300,000 payable in 1995 and 1996 if certain performance goals for the
prior year are met and the Company and Riggs-Washington achieve substantial
compliance with their respective regulatory understandings and agreements. Mr.
Homan shall be deemed to have satisfied the performance goal for 1994 if the
Company achieves a return on average assets of 50 basis points for the year
ended December 31, 1994 and for 1995 if the Company achieves a return on
average assets of 75 basis points for the year ended December 31, 1995. Mr.
Homan also received options to purchase 400,000 shares of Common Stock at
$8.125 per share. The options are not exercisable until the earlier of: (1)
June 9, 1998, (2) a "change of control" of the Company as defined in the
Company's 1993 Stock Option Plan and (3) the date on which the reported closing
price of the Common Stock has been at least $12 per share on ninety percent of
the trading days during any rolling six-month period.

PRINCIPAL STOCKHOLDER

At November 15, 1993, there were 30,222,014 shares of Common Stock of the
Company outstanding and eligible to vote. At such date, Mr. Joe L. Allbritton,
Chairman of the Board and Chief Executive Officer of the Company, beneficially
owned 9,970,489 shares of Common Stock representing 33.0% of the outstanding
shares of Common Stock.

Mr. Allbritton has sole voting and investment power with regard to 6,920,489
of these shares. Under federal securities laws, he is deemed to share voting
and investment power with regard to 470,000 shares with Allwin, Inc., which is
wholly owned by Mr. Allbritton. In addition, Mr. Allbritton may be deemed to
share voting and investment power with regard to 1,250,000 shares owned by a
charitable foundation of which Mr. Allbritton, Mrs. Allbritton and their son
are the trustees although the assets of the foundation may not be used for
their benefit and all investment decisions must by law be made with regard to
the charitable interests of the foundation. Mr. Allbritton disclaims beneficial
ownership of 1,732 shares owned by Mrs. Barbara B. Allbritton, a director of
the Company, member of the Executive Committee of the Board of Directors and
wife of Joe L. Allbritton, and 31,110 shares held for the benefit of their son
by a trust of which Riggs-Washington is one of three trustees. As described
below, Mr. Allbritton has shared voting and investment power with regard to the
1,330,000 shares of Common Stock purchased by Mrs. Allbritton in the October
Equity Sale.

The shares of Common Stock owned directly by Mr. Allbritton are pledged to
secure a loan with a commercial bank. Should an event of default set forth in
the related loan agreement (which contains standard default provisions) occur,
the lending bank may be able to sell or transfer the shares depending on the
circumstances. In the absence of such an event of default, Mr. Allbritton
retains the right to receive the dividends and the power to vote the shares.
For a more complete description of the loan, including default provisions, see
the Schedule 13D and amendments thereto filed by Mr. Allbritton with the
Commission.

Mrs. Allbritton purchased 1,330,000 shares of Common Stock in the October
Equity Sale (the "Shares") on the same terms as other investors that purchased
Common Stock in the transaction. Mrs. Allbritton owns an additional 1,732
shares. Mrs. Allbritton has granted to Mr. Allbritton an irrevocable proxy to
vote the Shares and has agreed not to sell the Shares free of the proxy except
in limited market transactions, although she is not restricted from pledging
the Shares. Mrs. Allbritton disclaims beneficial ownership of the 7,390,489
shares beneficially owned by Mr. Allbritton directly or indirectly through
Allwin, Inc. as described above.

As of November 15, 1993, taking into account the October Equity Sale, Mrs.
Allbritton beneficially owned 1,331,732 shares of Common Stock or 4.4% of the
total number of shares of Common Stock outstanding or 8.6% if the 1,250,000
shares owned by the charitable foundation described above, over which she
shares voting and investment power, are included (excluding the 31,110 shares
held in trust for her son as described above). The shares purchased by Mrs.
Allbritton in the October Equity Sale are covered by a shelf registration
statement recently filed by the Company with the Commission and, when such
registration

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statement becomes effective, may be freely resold, subject to the agreement
with Mr. Allbritton described above. She has agreed with the Company and the
placement agents from the October Equity Sale, however, not to sell any such
shares prior to April 19, 1994, except to members of her immediate family or to
certain family-affiliated or charitable entities; provided that such agreement
does not prohibit Mrs. Allbritton from pledging such shares as collateral
security for a loan made by a lender in the ordinary course of its business,
nor does it prohibit such lender from foreclosing or otherwise realizing on
such collateral.

The Company knows of no other stockholder who beneficially owns more than
five percent of its common stock.

SUPERVISION AND REGULATION

GENERAL

The Company and certain of its subsidiaries are subject to the supervision of
and regulation by the Federal Reserve Board under the BHCA. The Company's
national banking subsidiaries and their subsidiaries are subject to the
supervision of and regulation by the OCC under the National Bank Act. Other
federal, state, and foreign laws govern many aspects of the businesses of the
Company and its subsidiaries. Generally, bank holding companies and banks are
subject to a comprehensive regulatory structure.

Under the BHCA, bank holding companies may not directly or indirectly acquire
the ownership or control of five percent or more of the voting shares or
substantially all of the assets of any company, including a bank, without the
prior approval of the Federal Reserve Board. The BHCA also restricts the types
of activities in which a bank holding company and its subsidiaries may engage.
Generally, activities are limited to banking and activities found by the
Federal Reserve Board to be so closely related to banking as to be a proper
incident thereto. In addition, the BHCA prohibits the Federal Reserve Board
from approving an application by a bank holding company to acquire shares of a
bank or bank holding company located outside the acquiror's principal state of
operations unless such an acquisition is specifically authorized by statute in
the state in which the bank or bank holding company whose shares are to be
acquired is located. Most states have adopted statutes permitting an out-of-
state bank holding company to acquire in-state banks and bank holding
companies, but in many cases only if the state in which the acquiring company
is located permits reciprocal acquisitions of its banks and bank holding
companies and in some cases subject to geographic restrictions. The District of
Columbia has authorized banks and bank holding companies within a thirteen-
state region in the Southeastern United States to acquire banks within the
District of Columbia subject to certain reciprocity and other requirements.
Banks and bank holding companies outside this region may also acquire banks
within the District of Columbia provided they make substantial financial
commitments to the District of Columbia; it has not been established whether
the District of Columbia statute satisfies the reciprocity requirements of
states outside the thirteen-state region.

The Company and its bank subsidiaries are required to maintain minimum levels
of qualifying capital under the Federal Reserve Board's and the OCC's capital
guidelines. For full discussion of these guidelines, see "Management Discussion
and Analysis of Financial Condition and Results of Operations--Capital
Resources."

REGULATORY DEVELOPMENTS

On May 14, 1993, the Company entered into the Memorandum of Understanding
with the Federal Reserve Bank of Richmond and Riggs-Washington entered into the
Written Agreement with the OCC. The Written Agreement and the Memorandum of
Understanding were the result of regulatory concern over financial and
operational weaknesses and continued losses primarily related to the Company's
domestic and United Kingdom commercial real estate exposure.

Under the terms of the Memorandum of Understanding, the Company will notify
the Reserve Bank in advance of dividend declarations, the issuance and
redemption of long-term debt and use of cash assets in

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certain circumstances. Pursuant to the Memorandum of Understanding, the Company
has notified the Reserve Bank of the proposed issuance of Debt Securities and
the use of the net proceeds thereof to redeem outstanding subordinated notes of
the Company. The Reserve Bank has advised the Company that it has no objection
to the proposed issuance of Debt Securities or redemption of such outstanding
subordinated notes. Under the terms of the Memorandum of Understanding, the
Company will also submit plans and reports to the Reserve Bank relating to
capital, asset quality, loan loss reserves and operations, including
contingency measures if projected operational results do not occur. In
addition, the Audit Committee of the Company's Board of Directors will review
and submit a report to the Reserve Bank on the adequacy of data submitted to it
and the Board, and the Company has appointed a compliance committee of
Directors to monitor performance under the Memorandum of Understanding.

In accordance with the terms of the Written Agreement, Riggs-Washington has
appointed a committee of its Board of Directors to monitor and coordinate
compliance with the agreement, implement recommendations previously made by an
independent management consultant, and continue to implement the action plan
and work plan adopted by Riggs-Washington. Riggs-Washington has met a number of
the requirements of the agreement, including filing amended call reports,
adopting policies and procedures relating to the preparation of call reports,
adopting a capital plan which has been approved by the OCC that requires, among
other things, a minimum total risk-based capital ratio of 10.00%, a minimum
Tier 1 risk-based capital ratio of 6.00% and a minimum leverage ratio of 5.00%,
submitting for review by the OCC the results of BankStart '93, and appointing a
president and chief executive officer.

RECENT BANKING LEGISLATION

Pursuant to the Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), in September 1992, the FDIC issued regulations to implement a risk-
based deposit insurance assessment system under which the assessment rate for
an insured depository institution varies according to the level of risk
incurred in its activities. An institution's risk category is based partly upon
whether the institution is well capitalized, adequately capitalized or less
than adequately capitalized. In addition, each insured institution is assigned
to one of the following "supervisory subgroups": "healthy"; "supervisory
concern"; or "substantial supervisory concern." Based on its capital category
and supervisory subgroup, each insured institution is assigned an annual FDIC
assessment rate, which currently varies between $.23 and $.31 per $100 of
deposits. The new rates were effective for the semi-annual assessment period
beginning January 1, 1993. The Company anticipates that insurance premiums for
its three insured banking subsidiaries will rise by approximately $1.5 million
during 1993 as a result of the new assessment schedule.

FDICIA contains numerous other provisions. Among other things, FDICIA
requires the federal banking agencies to take "prompt corrective action" in
respect of depository institutions that do not meet minimum capital
requirements. FDICIA required each Federal banking agency, including the OCC,
to specify within nine months after the date of enactment of the statute, by
regulation, the levels at which an insured institution would be considered
"well capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized" and "critically undercapitalized." In October
1992, each of the Federal banking agencies, including the OCC, issued uniform
final regulations defining such capital levels. Under these regulations, a bank
is considered "well capitalized" if it has (i) a total risk-based capital ratio
of 10 percent or greater, (ii) a Tier 1 risk-based capital ratio of 6 percent
or greater, (iii) a leverage ratio of 5 percent or greater and (iv) is not
subject to any order or written directive to meet and maintain a specific
capital level. An "adequately capitalized" bank is defined as one that has (i)
a total risk-based capital ratio of 8 percent or greater, (ii) a Tier 1 risk-
based capital ratio of 4 percent or greater and (iii) a leverage ratio of 4
percent or greater (or 3 percent or greater in the case of a bank with the
highest composite regulatory examination rating). A bank is considered (A)
"undercapitalized" if it has (i) a total risk-based capital ratio of less than
8 percent, (ii) a Tier 1 risk-based capital ratio of less than 4 percent or
(iii) a leverage ratio of less than 4 percent (or 3 percent in the case of a
bank with the highest composite regulatory examination rating); (B)
"significantly undercapitalized" if the bank has (i) a total risk-based capital
ratio of less than 6 percent, (ii) a Tier 1 risk-based capital ratio of less
than 3 percent or (iii) a leverage ratio of less than 3 percent; and

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(C) "critically undercapitalized" if the bank has a ratio of tangible equity
to total assets of equal to or less than 2 percent. Under these standards,
Riggs-Washington is deemed to be "adequately capitalized" and each of Riggs-
Maryland and Riggs-Virginia is deemed to be "well-capitalized". The applicable
federal bank regulator for a depository institution may, under certain
circumstances, reclassify a "well capitalized" institution as "adequately
capitalized" or require an "adequately capitalized" or "undercapitalized"
institution to comply with supervisory actions as if it were in the next lower
category. Such a reclassification may be made if the regulatory agency
determines that the institution is in an unsafe or unsound condition (which
could include unsatisfactory examination ratings). A summary of applicable
regulatory capital ratios and the minimums required by the OCC under its
capital guidelines for Riggs-Washington, Riggs-Virginia and Riggs- Maryland on
a historical basis are shown above under "Management's Discussion and Analysis
of Financial Condition and Operating Results--Capital Ratios."

FDICIA generally prohibits a depository institution from making any capital
distribution (including payment of a dividend) or paying any management fee to
its holding company if the depository institution would thereafter be
undercapitalized. Undercapitalized depository institutions are subject to
increased regulatory monitoring and growth limitations and are required to
submit capital restoration plans. A depository institution's holding company
must guarantee that capital plan in order for it to be accepted by the
regulators, up to an amount equal to the lesser of 5% of the depository
institution's assets at the time it becomes undercapitalized or the amount
needed to comply with the plan. The federal banking agencies may not accept a
capital plan without determining, among other things, that the plan is based
on realistic assumptions and is likely to succeed in restoring the depository
institution's capital. If a depository institution fails to submit an
acceptable plan, it is treated as if it is significantly undercapitalized.

Significantly or critically undercapitalized institutions and
undercapitalized institutions that do not submit and comply with capital
restoration plans acceptable to the applicable Federal banking agency will be
subject to one or more of the following sanctions: (i) forced sale of shares
to raise capital or, where grounds exist for the appointment of a receiver or
conservator, a forced merger; (ii) restrictions on transactions with
affiliates; (iii) limitations on interest rates paid on deposits; (iv) further
restrictions on growth or required shrinkage; (v) replacement of directors or
senior executive officers, subject to certain grandfather provisions for those
elected prior to the enactment of FDICIA; (vi) prohibitions on the receipt of
correspondent deposits; (vii) restrictions on capital distributions by the
holding companies of such institutions; (viii) required divestiture of
subsidiaries by the institution; or (ix) other restrictions, as determined by
the regulator. In addition, the compensation of executive officers would be
frozen at the level in effect when the institution failed to meet the capital
standards. A forced sale of shares or merger, restrictions on affiliate
transactions and restrictions on rates paid on deposits would be required to
be imposed by the primary federal regulator unless that regulator determined
that they would not further capital improvement.

FDICIA generally requires the appointment of a conservator or receiver
within 90 days after a depository institution becomes critically
undercapitalized, unless the FDIC and the institution's primary federal
regulator jointly determine that another course of action would better protect
the federal deposit insurance fund. FDICIA also provides that the board of
directors of an insured depository institution will not be liable to the
institution's shareholders or creditors for consenting in good faith to the
appointment of a receiver or conservator for the institution or to an
acquisition or merger of the institution required by the regulators.

Under the FDIC's final regulations governing the receipt of brokered
deposits, a bank cannot accept brokered deposits unless (i) it is "well
capitalized" or (ii) it is "adequately capitalized" and receives a waiver from
the FDIC. In addition, a bank that is not well capitalized may not offer rates
of interest on deposits that are more than 75 basis points above prevailing
rates. Also, "pass through" deposit insurance is not available for deposits of
certain employee benefit plans in banks that do not meet all minimum capital
requirements. As mentioned above, under the current regulations, Riggs-
Washington is "adequately capitalized" and each of Riggs-Maryland and Riggs-
Virginia is "well capitalized." Riggs-Washington does not solicit brokered
deposits and, accordingly, the Company does not believe that the regulations
will have

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an adverse effect on its operations. However, Riggs-Washington has received a
waiver from the FDIC to provide pass-through deposit insurance to employee
benefit plans held in the Trust Department.

Among FDICIA's numerous other provisions are new reporting requirements,
termination of the "too big to fail" doctrine except in special cases,
limitations on the FDIC's ability to pay deposits at foreign branches and
provisions requiring federal banking agencies to promulgate regulations and
specify standards in numerous areas of bank operations, including interest rate
exposure, asset growth, internal controls, credit underwriting, executive
officer and director compensation, real estate construction financing,
additional review of capital standards, interbank liabilities and other
operational and managerial standards as the agencies determine appropriate.
These regulations have increased and may continue to increase the cost of and
the regulatory burden associated with the banking business.

CROSS-GUARANTY LIABILITY

The Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA") provides for "cross-guarantees" by insured depository institutions
that are commonly controlled. Pursuant to these cross-guarantee provisions, an
insured depository institution is required to reimburse the FDIC for any loss
suffered by either the Bank Insurance Fund ("BIF") or the Savings Association
Insurance Fund ("SAIF") as a result of the default of a commonly controlled
insured depository institution or for any assistance provided to such an
insured depository institution in danger of default. The FDIC may decline to
enforce the cross-guarantee provisions if it determines that a waiver is in the
best interest of the SAIF or the BIF or both. The FDIC's claim for damages is
superior to claims of stockholders of the insured depository institution or its
holding company but is subordinate to claims of depositors, secured creditors
and holders of subordinated debt (other than affiliates) of the commonly
controlled insured depository institution. The Company's bank subsidiaries are
subject to these cross-guarantee provisions. As a result, any loss suffered by
the FDIC in respect of any of the Company's bank subsidiaries would likely
result in assertion of the cross-guarantee provisions, the assessment of such
estimated losses against the Company's other bank subsidiaries and a potential
loss of the Company's investment in such subsidiaries (and ultimately
shareholders' investment in the Company).

RESTRICTIONS ON DIVIDENDS AND TRANSACTIONS WITH BANK SUBSIDIARIES

Under Federal Reserve Board policy, a bank holding company should generally
not pay dividends on its stock that exceed operating earnings. In addition, the
Federal Reserve Board may prohibit payment of a dividend if the Federal Reserve
Board deems such a payment to be an unsafe and unsound banking practice.

As national banks subject to the supervision and examination of the OCC,
Riggs-Washington, Riggs-Virginia and Riggs-Maryland are subject to legal
limitations on the source and amount of dividends they are permitted to pay to
the Company. A national bank may pay dividends only to the extent that retained
net profits (including the portion transferred to surplus) exceed bad debts (as
defined by regulation). Moreover, unless a national bank's surplus fund equals
its common capital, dividends may be paid only after 10 percent of its net
profits (as defined) for the specified preceding period have been transferred
to the bank's surplus fund. In addition, prior approval of the OCC is required
if the total of all dividends declared by a national bank in any calendar year
will exceed the sum of that bank's net profits (as defined) for that year and
its retained net profits for the preceding two calendar years, less any
required transfers to either surplus or any fund for retirement of any
preferred stock. The payments of dividends by the Company's national bank
subsidiaries may also be affected by other factors, such as requirements for
the maintenance of adequate capital. See "Risk Factors and Special
Considerations--Holding Company Liquidity." In addition, the OCC is authorized
to determine under certain circumstances relating to the financial condition of
a national bank whether the payment of dividends would be an unsafe or unsound
practice and to prohibit payment thereof. The Written Agreement requires that
Riggs-Washington notify the OCC before paying any dividends to the Company.

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There are legal restrictions on the extent to which the Company and certain
of its non-bank subsidiaries may borrow or otherwise obtain credit from Riggs-
Washington, Riggs-Virginia and Riggs-Maryland. Subject to certain limited
exceptions, a bank subsidiary may not extend credit to the Company or to any
other affiliate (as defined) in an amount which exceeds 10% of its capital
stock and surplus and may not extend credit in the aggregate to such affiliates
in an amount which exceeds 20% of its capital stock and surplus. Further, there
are legal requirements as to the type, amount and quality of collateral which
must secure such extensions of credit by these banks to the Company or to other
affiliates. Finally, extensions of credit and other transactions between the
bank subsidiary and the Company or other affiliates must be on terms and under
circumstances, including credit standards, that are substantially the same or
at least as favorable to such bank as those prevailing at the time for
comparable transactions with non-affiliated companies.

Under Federal Reserve Board policy, bank holding companies are expected to
act as a source of financial strength to their subsidiary banks and to commit
resources to support such banks in circumstances where a bank holding company
might not do so absent such policy. In addition, any capital loans by a bank
holding company to any of its subsidiary banks are subordinate in right of
payment to deposits and to certain other indebtedness of such subsidiary bank.
In the event of a bank holding company's bankruptcy, any commitment by the bank
holding company to a federal bank regulatory agency to maintain the capital of
a subsidiary bank will be assumed by the bankruptcy trustee and entitled to a
priority of payment.

Because the Company is a holding company, its right to participate in the
assets of any subsidiary upon the latter's liquidation or reorganization will
be subject to the prior claims of the subsidiary's creditors (including
depositors in the case of bank subsidiaries) except to the extent that the
Company may itself be a creditor with recognized claims against the subsidiary.

Omnibus Budget Reconciliation Act of 1993

The recently enacted Omnibus Budget Reconciliation Act of 1993 included a so-
called depositor preference provision. Under the provision, in the event of a
liquidation of an insured bank, claims of depositors and their subrogees,
including the FDIC in respect of the payment of insured deposits, would be
entitled to a preference over all other claimants against the bank, including
senior creditors other than depositors. To date, the Company's bank
subsidiaries have not experienced a negative impact from this provision, but
the Company is unable to predict whether it will have a negative impact in the
future.

DESCRIPTION OF THE DEBT SECURITIES

The Debt Securities are to be issued under an Indenture (the "Indenture")
between the Company and The Bank of New York, as Trustee (the "Trustee"). A
copy of the form of the Indenture is filed as an exhibit to the Registration
Statement of which this Prospectus is a part. See "Available Information."
Specific terms of Offered Debt Securities sold in each offering will be
described in the Prospectus Supplement relating thereto. The following
summaries of certain provisions of the Indenture and the Debt Securities do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all of the provisions of the Indenture, including the
definition therein of certain terms, and, in the case of any particular Offered
Debt Securities, the description of the terms thereof in the applicable
Prospectus Supplement. Wherever particular sections or defined terms of the
Indenture are referred to herein or in a Prospectus Supplement, it is intended
that such sections or defined terms shall be incorporated by reference herein
or therein, as the case may be. References in this section entitled
"Description of the Debt Securities" to the "Company" mean only Riggs National
Corporation and not its subsidiaries.

GENERAL

The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provides that Debt Securities may
be issued from time to time in one or more separate series. In addition, Debt
Securities issued at different times in different offerings may constitute part
of a single series.

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Unless otherwise indicated in the relevant Prospectus Supplement, the Debt
Securities will be unsecured and subordinated in right of payment to all
existing and future Senior Indebtedness (as defined below) of the Company and,
in certain circumstances, to all existing and future Other Financial
Obligations (as defined below) of the Company. See "--Subordination." At
September 30, 1993, the Company had no Senior Indebtedness and no Other
Financial Obligations outstanding. The Debt Securities are also effectively
subordinate in right of payment to all existing and future indebtedness of the
Company's subsidiaries. The Indenture does not limit or prohibit the incurrence
of additional indebtedness (including additional Senior Indebtedness or Other
Financial Obligations) by the Company, or the issuance of additional
indebtedness by its subsidiaries, nor does the Indenture contain provisions
which would protect the Holders of, or owners of beneficial interests in, the
Debt Securities against a sudden decline in credit quality resulting from
takeovers, recapitalizations or other similar restructurings.

Unless otherwise indicated in the relevant Prospectus Supplement, payment of
the principal of the Debt Securities may be accelerated only in the case of
certain events involving the bankruptcy, insolvency or reorganization of the
Company. There is no right of acceleration in the case of a default in the
performance of any obligation of the Company under the Indenture or the Debt
Securities, including any obligation to pay principal or interest on the Debt
Securities. See "--Events of Default and Limited Rights of Acceleration."

The Prospectus Supplement will set forth the price or prices at which the
Offered Debt Securities will be issued and will describe the following terms of
the Offered Debt Securities: (1) the title of the Offered Debt Securities; (2)
any limit on the aggregate principal amount of the Offered Debt Securities; (3)
whether the Offered Debt Securities are convertible into Common Stock, or cash
in lieu thereof, and if so, the terms and conditions upon which such conversion
will be effected, including the initial conversion price or conversion rate and
other conversion provisions; (4) the date or dates on which the Offered Debt
Securities will mature; (5) the rate or rates per annum at which the Offered
Debt Securities will bear interest, if any, or the manner in which such rates
will be determined and the date from which such interest, if any, will accrue;
(6) the Interest Payment Dates on which such interest (if any) on the Offered
Debt Securities will be payable and the Regular Record Dates for such Interest
Payment Dates; (7) the currency or currency unit, if other than United States
dollars, of payment of principal of, and premium and interest, if any, on the
Offered Debt Securities; (8) whether the Offered Securities will be represented
in whole or in part by one or more Global Securities; (9) any mandatory or
optional sinking fund or analogous provisions; (10) any additions to, or
modifications or deletions of, any Events of Default or covenants and the
remedies with respect thereto provided for with respect to the Offered Debt
Securities; (11) any redemption terms; (12) if other than the principal amount
thereof, the portion of the principal amount of the Offered Debt Securities
payable upon acceleration of the maturity thereof; and (13) any other specific
terms of the Offered Debt Securities.

Unless otherwise specified in the Prospectus Supplement, principal of, and
premium and interest, if any, on, the Offered Debt Securities will be payable
at the office or agency of the Company maintained for that purpose in the
Borough of Manhattan, the City of New York, and the Offered Debt Securities may
be surrendered for transfer or exchange at said office or agency; provided that
payment of interest, if any, may be made at the option of the Company by check
mailed to the address of the person entitled thereto as it appears in the
register for the Offered Debt Securities on the Regular Record Date for such
interest. (Sections 3.1, 3.7 and 10.2) The office of the Trustee in the Borough
of Manhattan, the City of New York, will initially be designated such office or
agency.

FORM, EXCHANGE & TRANSFER

The Debt Securities will be issued only in fully registered form without
coupons and, unless otherwise indicated in the Prospectus Supplement, if
denominated in United States dollars, will be issued in denominations of $1,000
and any integral multiple thereof. At the option of the Holder, subject to the
terms of the Indenture and the limitations applicable to Global Securities,
Debt Securities of each series will be

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exchangeable for other Debt Securities of the same series of any authorized
denomination and of a like tenor and aggregate principal amount. (Section 3.5)

Subject to the terms of the Indenture and the limitations applicable to
Global Securities, Debt Securities may be presented for exchange as provided
above or for registration of transfer (duly endorsed or with the form of
transfer endorsed thereon duly executed) at the office of the Security
Registrar or at the office of any transfer agent designated by the Company for
such purpose. No service charge will be made for any transfer or exchange of
the Debt Securities, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

If Debt Securities of any series are to be redeemed in part, the Company will
not be required (i) to issue, register the transfer of or exchange any Debt
Security of any series during a period beginning at the opening of business 15
days before the date of the mailing of a notice of redemption of any Debt
Securities of that series selected for redemption and ending at the close of
business on the date of such mailing or (ii) to register the transfer of or
exchange any Debt Security so selected for redemption in whole or in part,
except the unredeemed portion of Debt Securities being redeemed in part.
(Sections 3.2 and 3.5) Offered Debt Securities may also be represented by one
or more Global Securities. See "--Global Securities."

All moneys paid by the Company to the Trustee or any Paying Agent for the
payment of principal of or any premium or interest on any Debt Security which
remain unclaimed for two years after such principal, premium or interest shall
have become due and payable may be repaid to the Company and thereafter the
Holder of such Debt Security shall look only to the Company for payment
thereof. (Section 10.3)

If any Offered Debt Securities are payable in a currency or currency unit
other than United States dollars, special federal income tax and other
considerations applicable to such Debt Securities will be described in the
Prospectus Supplement relating thereto.

The Debt Securities may be issued as Original Issue Discount Securities
(bearing no interest or bearing interest at a rate which at the time of issue
is below market rates) to be sold at a substantial discount below their
principal amount. If any Debt Securities are issued as Original Issue Discount
Securities, special federal income tax and other considerations applicable to
such Debt Securities may be described in the Prospectus Supplement relating
thereto.

GLOBAL SECURITIES

If indicated in the applicable Prospectus Supplement, any Offered Debt
Securities may be issued in the form of one or more Global Securities
registered in the name of the Depository or a nominee thereof. Except as
described herein or in the applicable Prospectus Supplement, Offered Debt
Securities in definitive form will not be issued in exchange for any Global
Security. A Global Security may not be transferred by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any nominee to a
successor of the Depository or a nominee of such successor unless (i) the
Depository has notified the Company that it is unwilling or unable to continue
as Depository for such Global Security or has ceased to be qualified to act as
such as required by the Indenture and a successor is not appointed by the
Company within 90 days, (ii) there shall have occurred and be continuing an
Event of Default with respect to the Debt Securities represented by such Global
Security or (iii) there shall exist such circumstances, if any, in addition to
or in lieu of those described above as may be described in the applicable
Prospectus Supplement. (Sections 2.4 and 3.5). Upon the occurrence of any of
the foregoing events, the Company will issue Debt Securities in definitive form
upon registration of transfer of,

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or in exchange for, such Global Security. In addition, the Company may at any
time and in its sole discretion determine that any Debt Securities represented
by a Global Security shall no longer be represented by a Global Security and,
in such event, will issue Debt Securities in definitive form in exchange for
the entire principal amount of such Global Security. (Section 3.5) All
securities issued in exchange for a Global Security or any portion thereof will
be registered in such names as the Depository may direct.

Ownership of beneficial interests in a Global Security will be limited to
persons that have accounts with the Depository or its nominee ("Participants")
or persons that may hold interests through Participants. The Company expects
that upon the issuance of a Global Security, the Depository will credit, on its
book-entry registration and transfer system, the Participants' accounts with
the respective principal amounts of the Offered Debt Securities represented by
such Global Security. The accounts to be credited will be designated by the
underwriters or agents engaging in the distribution of the Offered Debt
Securities. Ownership of beneficial interests in each Global Security will be
shown on, and the transfer of such ownership interests will be effected only
through, records maintained by the Depository or its nominee (with respect to
interests of Participants) and on the records of Participants (with respect to
interests of persons held through Participants). The laws of some states may
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the ability
to own, transfer or pledge beneficial interests in a Global Security.

So long as the Depository or its nominee is the registered owner of a Global
Security, the Depository or its nominee, as the case may be, will be considered
the sole owner or Holder of the Offered Debt Securities represented by such
Global Security for all purposes under the Indenture. (Section 3.8)
Accordingly, each person owning a beneficial interest in a Global Security must
rely on the procedures of the Depository and, if such person is not a
Participant, on the procedures of the Participant through which such person
owns its interest, to exercise any rights of a Holder under the Indenture, and
these procedures may change from time to time. The Company understands that
under existing industry practices, in the event the Company requests any action
of Holders or an owner of a beneficial interest in a Global Security desires to
take any action which a Holder is entitled to take under the Indenture, the
Depository would authorize the Participants holding the relevant beneficial
interests to take such action, and such Participants would authorize beneficial
owners owning through such Participants to take such action or would otherwise
act upon the instructions of beneficial owners owning through them.

Payment of principal of, and any premium or interest on, any Debt Securities
represented by a Global Security will be made to the Depository or its nominee,
as the registered owner of such Global Security. The Company expects that upon
receipt of any payment of principal of, or interest on, a Global Security, the
Depository will immediately credit Participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Security as shown on the records of the Depository.
Payments by Participants to owners of beneficial interests in such Global
Security held through such Participants will be the responsibility of such
Participants, as is now the case with securities held for the accounts of
customers registered in "street name." None of the Company, the Trustee, any
Paying Agent or any other agent of the Company or the Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in any such Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.

The Depository has advised the Company as follows: it is a limited-purpose
trust company organized under the laws of the State of New York, a member of
the Federal Reserve System, a "clearing corporation" within the meaning of the
New York Uniform Commercial Code and a "clearing agency" registered pursuant to
the provisions of Section 17A of the Exchange Act. The Depository was created
to hold securities for Participants and to facilitate the clearance and
settlement of securities transactions between Participants in such securities
through electronic book-entry changes in accounts of Participants. Participants
include securities brokers and dealers, banks and trust companies, clearing
corporations and certain other organizations. Access to the Depository's system
is also available to others such as banks, brokers, dealers

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and trust companies that clear through or maintain a custodial relationship
with a Participant, either directly or indirectly ("Indirect Participants").
Persons who are not Participants may beneficially own securities held by the
Depository only through Participants or Indirect Participants.

Secondary trading in notes and debentures of corporate issuers is generally
settled in clearing-house or next-day funds. In contrast, beneficial interests
in a Global Security, in some cases, may trade in the Depository's same-day
funds settlement system, in which secondary market trading activity in those
beneficial interests would be required by the Depository to settle in
immediately available funds. There is no assurance as to the effect, if any,
that settlement in immediately available funds would have on trading activity
in such beneficial interests. Also, settlement for purchases of beneficial
interests in a Global Security upon the original issuance thereof may be
required to be made in immediately available funds.

SUBORDINATION

The Debt Securities will be expressly subordinated in right of payment, to
the extent set forth in the Indenture, to all Senior Indebtedness. (Section
13.1) In certain events of insolvency, the Debt Securities will, to the extent
set forth in the Indenture, also be effectively subordinated in right of
payment to the prior payment of all Other Financial Obligations. (Section
13.15)

If the Company shall default (and during the continuation of any such default
beyond any applicable grace period) in the payment of any principal of, or
premium or interest on, any Senior Indebtedness when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration of acceleration or otherwise, or if any event of default with
respect to Senior Indebtedness shall have occurred and be continuing permitting
the holders thereof (or a trustee on behalf of such holders) to accelerate the
maturity thereof, or any judicial proceeding shall be pending with respect to
any such default in payment or event of default then, unless and until such
default or event of default shall have been cured or waived or shall have
ceased to exist and any such acceleration shall have been rescinded or
annulled, or such judicial proceeding shall be no longer pending, no payment
shall be made by the Company on account of principal of or premium or interest
on the Debt Securities, or on account of the purchase or other acquisition of
any of the Debt Securities other than payment made in Common Stock (or cash in
lieu of fractional shares thereof) upon conversion pursuant to the Indenture.
In the event that any Debt Securities are declared due and payable before their
Stated Maturity, holders of Senior Indebtedness will be entitled to be paid in
full (or provision shall be made for such payment in cash) before any payment
may be made on account or in respect of the Debt Securities other than payment
made in Common Stock (or cash in lieu of fractional shares thereof) upon
conversion pursuant to the Indenture. If the Company makes any payment to the
Trustee or to or on behalf of any Holder of Debt Securities prohibited by the
provisions described above, such payment must be paid over to the Company.
(Sections 13.3 and 13.4) "Senior Indebtedness" of the Company means the
principal of, premium, if any, and interest on all indebtedness for money
borrowed or purchased by the Company, or borrowed or purchased by another and
guaranteed by the Company (including any deferred obligation for the payment of
the purchase price of property or assets evidenced by a note or similar
agreement and any obligation to pay rent or other amounts under a capitalized
lease obligation), whether outstanding on the date of execution of the
Indenture or subsequently created, assumed or incurred, and any amendments,
renewals, extensions, modifications and refundings of any such Senior
Indebtedness, other than (i) the Floating Rate Subordinated Notes, the
Subordinated Capital Notes and the Company's 9.65% Subordinated Debentures due
2009, (ii) such other indebtedness as by its terms is expressly stated not to
be superior in right of payment or to rank pari passu in right of payment to
the Debt Securities and (iii) the Debt Securities. (Section 1.1)

In the event of any insolvency, bankruptcy, receivership, reorganization,
assignment for the benefit of creditors, marshalling of assets and liabilities
or similar proceedings relating to, or any liquidation, dissolution or winding-
up of, the Company, whether voluntary or involuntary, all obligations of the
Company to holders of Senior Indebtedness shall be entitled to be paid in full
(or provision shall be made for such payment in

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money or money's worth) before any payment shall be made on account of the
principal of or premium or interest on the Debt Securities. In the event of any
such proceeding, if any payment by or distribution of assets of the Company of
any kind or character, whether in cash, property or securities (other than
shares of stock of the Company as reorganized or readjusted, or securities of
the Company or any other corporation provided for by a plan of reorganization
or readjustment, in each case, the payment of which is subordinate, at least to
the extent provided in the subordination provisions with respect to the Debt
Securities, to the payment of all Senior Indebtedness at the time outstanding),
shall be received by the Trustee or by or on behalf of the Holders of the Debt
Securities before all Senior Indebtedness is paid in full or payment therefor
is provided for, such payment or distribution shall be held (in trust if
received by the Holders of the Debt Securities) for the benefit of the holders
of such Senior Indebtedness and shall be paid over to the trustee in bankruptcy
or other Person making payment or distribution of the assets of the Company for
application to the payment of all Senior Indebtedness remaining unpaid until
all such Senior Indebtedness shall have been paid in full, after giving effect
to any concurrent payment or distribution to the holders of such Senior
Indebtedness. (Section 13.2) If, upon any such payment or distribution of
assets to creditors, there remain, after giving effect to such subordination
provisions in favor of the holders of Senior Indebtedness, any amounts of cash,
property or securities available for payment or distribution in respect of the
Debt Securities (as defined in the Indenture, "Excess Proceeds") and if, at
such time, any person entitled to payment pursuant to the terms of Other
Financial Obligations has not received payment in full of all amounts due or to
become due on or in respect of such Other Financial Obligations, then such
Excess Proceeds shall first be applied to pay or provide for the payment in
full of such Other Financial Obligations before any payment or distribution may
be made in respect of the Debt Securities. (Section 13.15) Payments or
distributions received by the Trustee or by or on behalf of any Holder in
contravention of the provisions described above must be paid over to the
trustee in bankruptcy or other Person making payment or distribution of the
assets of the Company. The term "Other Financial Obligations," as defined in
the Indenture, includes all obligations of the Company (including guarantees of
obligations of others), whether outstanding on the date of execution of
the Indenture or subsequently created, assumed or incurred, to make payment
pursuant to the terms of financial instruments, such as: (i) securities
contracts and currency and foreign exchange contracts, and (ii) derivative
instruments, such as swap agreements (including interest rate and currency and
foreign exchange rate swap agreements), cap agreements, floor agreements,
collar agreements, interest rate agreements, foreign exchange agreements,
options, commodity futures contracts and commodity options contracts, other
than (x) obligations on account of Senior Indebtedness and (y) obligations on
account of indebtedness for money borrowed which by their terms expressly ranks
pari passu with or subordinate to the Debt Securities. (Section 1.1)

By reason of such subordination, in the event of the bankruptcy or insolvency
of the Company or similar event, whether before or after maturity of the Debt
Securities, holders of Senior Indebtedness or of Other Financial Obligations
may receive more, ratably, and Holders of the Debt Securities having a claim
pursuant to the Debt Securities may receive less, ratably, than creditors of
the Company who do not hold Senior Indebtedness, Other Financial Obligations or
Debt Securities.

In addition, in the event of the insolvency, bankruptcy, receivership,
conservatorship or reorganization of the Company, the claims of the Holders of
the Debt Securities would be subject as to enforcement to the broad equity
power of a Federal bankruptcy court, and to the determination by that court of
the nature of the rights of the Holders.

CONSOLIDATION, MERGER, SALE OR CONVEYANCE

The Company may not consolidate with or merge into, or convey, transfer or
lease its properties and assets substantially as an entirety to, any person (a
"successor person"), and may not permit any person to merge into, or convey,
transfer or lease its properties and assets substantially as an entirety to,
the Company, unless (i) the successor person (if any) is a corporation,
partnership, trust or other entity organized and validly existing under the
laws of any domestic jurisdiction and expressly assumes the Company's
obligations on the

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Debt Securities and under the Indenture, (ii) immediately after giving effect
to the transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have happened
and be continuing and (iii) certain other conditions are met. Notwithstanding
the foregoing, the Company may, without the consent of any Holder of the Debt
Securities of any series, convey or transfer its assets substantially as an
entirety to any person in connection with a transfer that is assisted by a
Federal bank regulatory authority and in such case the Company's obligations
under the Indenture need not be assumed by the entity acquiring such assets.
(Section 8.1)

EVENTS OF DEFAULT AND LIMITED RIGHTS OF ACCELERATION

Unless otherwise provided in the applicable Prospectus Supplement, pursuant
to the Indenture, an Event of Default with respect to the Debt Securities of
any series is defined as any one of the following events: (a) default for 30
days in the payment of any interest upon any Debt Security of such series when
it becomes due and payable; (b) default in the payment of the principal of any
Debt Security of such series at its maturity; (c) default in the deposit of any
sinking fund payment, when and as due by the terms of the Debt Securities of
such series; (d) default in the performance, or breach, of any covenant or
warranty of the Company in the Indenture (other than a covenant or warranty
included in the Indenture solely for the benefit of Debt Securities of another
series) which continues for 60 days after the Holders of at least 25% in
principal amount of Outstanding Debt Securities of such series have given
written notice as provided in the Indenture; and (e) certain events of
bankruptcy, insolvency or reorganization of the Company. (Section 5.1)

If an Event of Default of a type set forth in clause (e) above with respect
to the Debt Securities of any series at the time Outstanding occurs and is
continuing, either the Trustee or the Holders of at least 25% in principal
amount of the Outstanding Debt Securities of that series may declare the
principal amount (or, if the Debt Securities of that series are Original Issue
Discount Securities, such portion of that principal amount as may be specified
in the terms of that series) of all the Debt Securities of such series to be
due and payable immediately. At any time after a declaration of acceleration
with respect to the Debt Securities of any series has been made, but before a
judgment or decree for payment of the money due based on such acceleration has
been obtained, the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of such series may, under certain circumstances,
rescind and annul such acceleration. (Section 5.2)

The Indenture does not provide for any right of acceleration of the payment
of the principal of the Debt Securities of any series upon a default in the
payment of principal, premium or interest or a default in the performance of
any covenant or agreement in the Debt Securities of such or any other series or
in the Indenture. Accordingly, the Trustee and the Holders of Debt Securities
of any series will not be entitled to accelerate the maturity of such Debt
Securities upon the occurrence of any of the Events of Default with respect
thereto described above, except for those described in clause (e) above. If a
default in the payment of principal, premium or interest or in the performance
of any covenant or agreement in the Debt Securities of any series or in the
Indenture occurs, the Trustee may, subject to certain limitations and
conditions, seek to enforce payment of such principal, premium or interest on
such Debt Securities, or the performance of such covenant or agreement.
(Section 5.3)

The Indenture provides that, subject to the duty of the Trustee during the
continuance of an Event of Default with respect to the Debt Securities of any
series to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders of such Debt Securities, unless such
Holders shall have offered to the Trustee reasonable indemnity. (Section 6.3)
Subject to certain limitations, the Holders of a majority in principal amount
of the Outstanding Debt Securities of any series will have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Debt Securities of such series. (Section 5.12) The
right of a Holder of any Debt Security to institute a proceeding with respect
to the Indenture is subject to certain conditions precedent, but each Holder
has an absolute and unconditional right to receive payment of principal

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of and any premium and any interest when due and to institute suit for the
enforcement of any such payment. (Sections 5.7 and 5.8)

The Company is required to furnish to the Trustee annually a statement as to
the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance. (Sections 1.2 and 10.4)
The Trustee may withhold notice to Holders of Debt Securities of any series of
any default (except in payment of principal, premium or interest on such Debt
Securities) if it in good faith determines that it is in the interests of such
Holders to do so.

DEFEASANCE AND COVENANT DEFEASANCE

Defeasance and Discharge. Unless otherwise provided in the applicable
Prospectus Supplement, the Company may, at its option and at any time, be
discharged from all its obligations, and the provisions of Article Thirteen
relating to subordination will cease to be effective, with respect to any
Offered Debt Securities (except for certain obligations to exchange or register
the transfer of Debt Securities, to replace stolen, lost or mutilated Debt
Securities, to maintain paying agencies, to hold moneys for payment in trust
and to effect conversion of Convertible Debt Securities (as defined below))
upon the deposit in trust for the benefit of the Holders of such Offered Debt
Securities of (a) money or (b) certain U.S. Government Obligations which,
through the payment of principal and interest in respect thereof in accordance
with their terms, will provide money in an amount sufficient to pay the
principal of and any premium and interest on such Offered Debt Securities on
their stated maturity in accordance with the terms of the Indenture and such
Offered Debt Securities or (c) a combination thereof subject to certain
requirements. Such defeasance or discharge may occur only if, among other
things, the Company has delivered to the Trustee an Opinion of Counsel to the
effect that the Company has received from, or there has been published by, the
United States Internal Revenue Service a ruling, or there has been a change in
tax law, in either case to the effect that Holders of such Offered Debt
Securities will not recognize gain or loss for federal income tax purposes as a
result of such defeasance and will be subject to federal income tax on the same
amount, in the same manner and at the same times as would have been the case if
such defeasance was not to occur. (Sections 14.2 and 14.4)

Defeasance of Certain Covenants. Unless otherwise provided in the applicable
Prospectus Supplement, the Company may, at its option and at any time, omit to
comply with certain restrictive covenants in the Indenture relating to the
maintenance of properties and the payment of taxes (as well as any other
restrictive covenants in the Indenture that may be described in the applicable
Prospectus Supplement), whereafter the occurrence of certain Events of Default,
which are described above in clause (d) (with respect to any such restrictive
covenants) and clause (e) under "Events of Default" (as well as any other
Events of Default that may be described in the applicable Prospectus
Supplement) will be deemed not to be or result in an Event of Default and the
provisions of Article Thirteen relating to subordination will cease to be
effective, in each case with respect to any Offered Debt Securities. The
Company, in order to exercise such option with respect to any Offered Debt
Securities, will be required to deposit in trust for the benefit of the Holders
of such Offered Debt Securities of (a) money or (b) certain U.S. Government
Obligations which, through the payment of principal and interest in respect
thereof in accordance with their terms, will provide money in an amount
sufficient to pay the principal of and any premium and interest on such Offered
Debt Securities on their stated maturity accordance with the terms of the
Indenture and such Offered Debt Securities or (c) a combination thereof subject
to certain requirements. The Company will also be required, among other things,
to deliver to the Trustee an Opinion of Counsel to the effect that Holders of
such Offered Debt Securities will not recognize gain or loss for federal income
tax purposes as a result of such defeasance and will be subject to federal
income tax on the same amount, in the same manner and at the same times as
would have been the case if such defeasance was not to occur. In the event the
Company exercises this option with respect to any Offered Debt Securities and
such Offered Debt Securities were declared due and payable because of the
occurrence of any Event of Default described in clause (e) under "Events of
Default" the amount of money and U.S. Government Obligations so deposited in
trust would be sufficient to pay amounts due on such Offered Debt Securities at
the time of their stated maturity but may not be sufficient to pay amounts due
on such Offered

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Debt Securities upon any acceleration resulting from such Event of Default. In
such case, the Company would remain liable for such payments. (Sections 14.3
and 14.4)

MODIFICATION AND WAIVER

The Indenture provides that the Company and the Trustee may enter into a
supplemental indenture to amend the Indenture or any Debt Securities without
the consent of any Holder of any Debt Security: (1) to evidence the succession
of another Person to the Company and the assumption by such successor of the
Company's covenants in the Indenture and any Debt Securities; (2) to add to the
covenants of the Company further covenants, restrictions or conditions for the
benefit of the Holders of any Debt Securities; (3) to add to, change or
eliminate any of the provisions of the Indenture, provided, however, that any
such addition, change or elimination (i) does not apply to any Debt Security
created prior to the execution of such supplemental indenture and entitled to
the benefit of such provision nor modify the rights of the Holder of any such
Debt Security with respect to such provision or (ii) becomes effective only
when there is no such Debt Security Outstanding; (4) to add to, change or
eliminate any of the provisions relating to subordination of the Debt
Securities, provided that any such addition, change or elimination does not
adversely effect the rights of any Holder of Debt Securities in any material
respect; (5) to add to or change any of the provisions of the Indenture
necessary to permit or facilitate the issuance of Debt Securities in bearer or
uncertificated form; (6) to provide for the terms and conditions of conversion
into securities or other property of any Debt Securities that are so
convertible to the extent such terms and conditions differ from those in the
Indenture; (7) to establish the form or terms of Debt Securities of any series
in certain circumstances; (8) to secure any Debt Securities; (9) to evidence
and provide for the acceptance of appointment by a successor trustee or to add
to or change any of the provisions of the Indenture necessary to provide for or
facilitate the administration of the trust by more than one Trustee; (10) to
cure any ambiguity, defect or inconsistency or to make such other provision in
regard to matters or questions arising under the Indenture which do not
adversely affect the interests of the Holders of the Debt Securities of any
series in any material respect; or (11) to add any additional Events of Default
for the benefit of the Holders of any Debt Securities. (Section 9.1)

In addition to the foregoing, modifications and amendments of the Indenture
with respect to Debt Securities of any series may be made by the Company and
the Trustee with the consent of the Holders of a majority in principal amount
of Outstanding Debt Securities of such series, provided, however, that no such
modification or amendment may, without the consent of the Holder of each
Outstanding Debt Security affected thereby, (a) change the stated maturity date
of the principal of, or any installment of interest on, any Debt Security, (b)
reduce the principal amount of, or any premium or interest on, any Debt
Security, (c) reduce the amount of principal of any Debt Securities payable
upon the acceleration of the Maturity thereof, (d) change the place or currency
of payment of principal of, or premium or interest on, any Debt Security, (e)
impair the right to institute suit for the enforcement of any such payment on
or with respect to any Debt Security when due, (f) modify the provisions of the
Indenture with respect to the subordination of Debt Securities in a manner
adverse to the Holders or (g) reduce the percentage of the principal amount of
Outstanding Debt Securities of any series the consent of whose Holders is
required for modification or amendment of the Indenture or for any waiver.
(Section 9.2)

The Holders of a majority in principal amount of Outstanding Debt Securities
may, on behalf of all Holders of Debt Securities of such series, waive, insofar
as the Debt Securities of such series are concerned, compliance by the Company
with certain restrictive provisions of the Indenture. (Section 10.8) The
Holders of a majority in principal amount of the Outstanding Debt Securities of
any series may, on behalf of all Holders of Debt Securities of such series,
waive any past default under the Indenture with respect to the Debt Securities
of such series except a default in the payment of principal of, or any premium
or interest, or in respect of a provision which under the Indenture cannot be
modified or amended without the consent of the Holder of each Outstanding Debt
Security affected thereby. (Section 5.13)

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The Company may, in the circumstances permitted by the Trust Indenture Act of
1939, fix any day as the record date for the purpose of determining the Holders
of Debt Securities of any series entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote
on any action, authorized or permitted to be given or taken by Holders of Debt
Securities of such series. (Section 1.4)

CONVERSION

If any of the Offered Debt Securities are convertible into shares of Common
Stock ("Convertible Debt Securities"), specific terms with respect to such
Convertible Debt Securities, including the conversion price, will be set forth
in the Prospectus Supplement relating thereto. Convertible Debt Securities may
be presented for conversion to the conversion agent identified in the
Prospectus Supplement. Unless otherwise indicated in the applicable Prospectus
Supplement, the following provisions will generally apply to such Convertible
Debt Securities.

The Convertible Debt Securities shall be convertible into the number of
shares of Common Stock obtained by dividing the principal amount so to be
converted by the conversion price. The right to convert a Convertible Debt
Security, or portion thereof, shall begin on the date of issuance of such
Convertibled Debt Security and shall terminate on the maturity of such
Convertible Debt Security. The right to convert a Convertible Debt Security, or
portion thereof, called for redemption or delivered for repurchase shall
terminate on the redemption date or repurchase date. (Section 15.2)

Convertible Debt Securities surrendered for conversion during the period from
any record date for such Convertible Debt Securities to the related interest
payment date (except Convertible Debt Securities called for redemption within
such period) shall be accompanied by payment of an amount equal to the interest
payable on the principal amount of the Convertible Debt Security being
surrendered for conversion. No other payment or adjustment shall be made for
interest or dividends upon conversion. (Section 15.3) Cash will be paid in lieu
of the issuance of fractional shares of Common Stock upon conversion based on
the market price (determined in accordance with the Indenture) of the Common
Stock. (Section 15.4)

The conversion price shall be adjusted, with certain exceptions, in the event
of (a) dividends (and other distributions) on the Common Stock payable in
shares of Common Stock, (b) the issuance to all holders of Common Stock of
rights, options or warrants entitling them to subscribe for or purchase Common
Stock at less than the current market price of the Common Stock, (c)
distribution to all holders of the Common Stock of evidences of indebtedness,
equity securities other than Common Stock or assets (other than cash paid from
retained earnings of the Company), and (d) distribution to all holders of
Common Stock of rights, options or warrants to subscribe for or purchase for
securities (other than those referred to in subsection (b) above). In addition
to the foregoing adjustments, the Company will be permitted to make such
reductions in conversion price as it considers to be advisable in order that
any stock dividend, subdivision of shares, distribution rights or warrants to
purchase stock or securities, or distribution of other assets (other than cash
dividends made by the Company) will not be taxable. (Section 15.5)

No adjustments in the conversion price shall be required unless such an
adjustment would require an increase or decrease of at least 1% of the
conversion price; provided that any adjustment that would otherwise be required
to be made shall be carried forward and taken into account in any subsequent
adjustment.

In the case of any consolidation or merger of the Company with or into any
other Person (with certain exceptions) or any sale or transfer of all or
substantially all the assets of the Company, the holder of Convertible Debt
Securities, after the consolidation, merger, sale or transfer, will have the
right to convert such Convertible Debt Securities only into the kind and amount
of securities, cash or other property which the holder would have been entitled
to receive upon such consolidation, merger, sale or transfer, if the holder had
held such Common Stock issuable upon conversion of such Convertible Debt
Securities immediately prior to such consolidation, merger, sale or transfer.
(Section 15.5)

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GOVERNING LAW

The Indenture and the Debt Securities will be governed by and construed in
accordance with the laws of the State of New York.

INFORMATION CONCERNING THE TRUSTEE

The Company and its subsidiaries maintain deposit accounts and conduct other
banking transactions with the Trustee in the ordinary course of business.

PLAN OF DISTRIBUTION

The Company may sell Debt Securities to one or more underwriters (which may
include Dillon, Read & Co. Inc. and Friedman, Billings, Ramsey & Co., Inc.) for
public offering and sale by them or may sell Debt Securities to investors
either directly or through agents. Any such underwriter or agent involved in
the offer and sale of the Offered Debt Securities will be named in the
applicable Prospectus Supplement.

Underwriters may offer and sell the Offered Debt Securities at a fixed price
or prices, which may be changed, or from time to time at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. In connection with the sale of the Offered Debt
Securities, underwriters may be deemed to have received compensation from the
Company in the form of underwriting discounts or commissions and may also
receive commissions from purchasers of the Offered Debt Securities for whom
they may act as agent. Underwriters may sell the Offered Debt Securities to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they may act as agent.

Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of the Offered Debt Securities, and any
discounts, concessions or commissions allowed by underwriters to participating
dealers, will be set forth in the applicable Prospectus Supplement.
Underwriters, dealers and agents participating in the distribution of the
Offered Debt Securities may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on resale of the
Offered Debt Securities may be deemed to be underwriting discounts and
commissions under the Securities Act. Underwriters, dealers and agents may be
entitled, under agreements entered into with the Company, to indemnification
against and contribution toward certain civil liabilities, including
liabilities under the Securities Act.

Unless otherwise specified in the applicable Prospectus Supplement, each
offering of Offered Debt Securities will be a new issue of securities with no
established trading market. Any underwriters to whom Offered Debt Securities
are sold by the Company for public offering and sale may make a market in such
Offered Debt Securities, but such underwriters will not be obligated to do so
and may discontinue any market making at any time without notice. No assurance
can be given as to the liquidity of the trading market for any Offered Debt
Securities.

Certain of the underwriters and their associates may be customers of, engage
in transactions with and perform services for the Company or its subsidiaries
in the ordinary course of business.

VALIDITY OF THE DEBT SECURITIES

The validity of the Debt Securities will be passed upon for the Company by
David Lesser, General Counsel of the Company, and by Sullivan & Cromwell, New
York, New York, and unless otherwise indicated in the applicable Prospectus
Supplement, for any underwriters or agents by Simpson Thacher & Bartlett (a
partnership which includes professional corporations), New York, New York.
Sullivan & Cromwell and Simpson Thacher & Bartlett will rely as to the due
incorporation of the Company upon the opinion of Mr. Lesser. As of the date of
this Prospectus, Mr. Lesser owned or held options to purchase 21,000 shares of
Common Stock, and he held an additional 1,000 shares of Common Stock as
custodian for his minor son.

63
<PAGE>

EXPERTS

The consolidated financial statements of the Company as of December 31, 1992
and 1991 and for the years ended December 31, 1992, 1991 and 1990, incorporated
by reference in this Prospectus, have been audited by Arthur Andersen & Co.,
independent public accountants, as stated in their report with respect thereto,
which is incorporated by reference herein upon the authority of said firm as
experts in giving said reports. With respect to the financial statements of
Riggs AP, an indirect, wholly owned subsidiary of the Company, as of December
31, 1992 and 1991 and for the years ended December 31, 1992, 1991 and 1990,
Arthur Andersen & Co. has based its report referred to above, as stated in such
report, solely on the report of Ernst & Young Chartered Accountants,
independent auditors, with respect to such financial statements of Riggs AP
given upon the authority of such firm as experts in accounting and auditing.
The report of Ernst & Young Chartered Accountants with respect to such
financial statements is incorporated herein by reference.

64
<PAGE>

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No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained or incorporated by
reference in this Prospectus Supplement or the Prospectus and, if given or
made, such information or representation must not be relied upon as having
been authorized by the Company or by the Underwriters. This Prospectus
Supplement and the Prospectus do not constitute an offer to sell or a
solicitation of an offer to buy the Subordinated Notes offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. Neither the delivery of this Prospectus
Supplement or Prospectus nor any sale made hereunder or thereunder shall under
any circumstances create an implication that there has been no change in the
affairs of the Company since the date hereof or that the other information
contained herein or therein is correct as of any time subsequent to the date
hereof.

-----------------

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
Prospectus Supplement
<S> <C>
Recent Develop-
ments......... S-2
Description of
the Subordi-
nated Notes... S-4
Underwriting... S-5
Prospectus
Available In-
formation..... 2
Incorporation
of Certain
Documents by
Reference..... 2
Prospectus Sum-
mary.......... 3
Risk Factors
and Special
Considerations. 7
The Company.... 12
Recent Develop-
ments......... 13
Use of Pro-
ceeds......... 19
Capitalization. 20
Selected Con-
solidated Fi-
nancial
Information... 21
Management's
Discussion and
Analysis of
Financial Con-
dition and Re-
sults of
Operations.... 23
Management..... 46
Principal
Stockholder... 48
Supervision and
Regulation.... 49
Description of
the Debt Secu-
rities........ 53
Plan of Distri-
bution........ 63
Validity of the
Debt Securi-
ties.......... 63
Experts........ 64
</TABLE>

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(LOGO OF RIGGS NATIONAL CORPORATION APPEARS HERE)

RIGGS NATIONAL CORPORATION

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$125,000,000

% SUBORDINATED NOTES DUE 2006

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PROSPECTUS SUPPLEMENT

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DILLON, READ & CO. INC.

FRIEDMAN, BILLINGS, RAMSEY & CO., INC.

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