<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________ TO _________
COMMISSION FILE NUMBER 0-9756
RIGGS NATIONAL CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 52-1217953
--------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1503 PENNSYLVANIA AVENUE, N.W., WASHINGTON, D.C. 20005
------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(301) 887-6000
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or such shorter period that the registrant was required
to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X . No .
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
COMMON STOCK, $2.50 PAR VALUE 30,583,413 SHARES
- ----------------------------- ----------------------------
(Title of Class) (Outstanding at May 7, 1998)
<PAGE>
RIGGS NATIONAL CORPORATION
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements-Unaudited
Consolidated Statements of Income
Three months ended March 31, 1998 and 1997 3
Consolidated Statements of Condition
March 31, 1998 and 1997, and December 31, 1997 4
Consolidated Statements of Changes in Stockholders' Equity
Three months ended March 31, 1998 and 1997 5
Consolidated Statements of Cash Flows
Three months ended March 31, 1998 and 1997 6
Notes to the Consolidated Financial Statements 7-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-13
Item 3. Quantitative and Qualitative Disclosures About Market Risk 14-15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings None
Item 2. Change in Securities None
Item 3. Defaults Upon Senior Securities None
Item 4. Submission of Matters to a Vote of Security Holders None
Item 5. Other Information None
Item 6. Exhibits and Reports on Form 8-K 16
Signatures 16
-2-
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS-UNAUDITED
RIGGS NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
(UNAUDITED) THREE MONTHS ENDED
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) MARCH 31,
-----------------------------
1998 1997
==================================================================================================================================
<S> <C> <C>
INTEREST INCOME
Interest and Fees on Loans $55,260 $50,204
Interest on Securities Available for Sale 20,885 18,060
Interest on Money Market Assets:
Time Deposits with Other Banks 5,968 2,018
Federal Funds Sold and Reverse Repurchase Agreements 4,819 6,787
- ----------------------------------------------------------------------------------------------------------------------------------
Total Interest on Money Market Assets 10,787 8,805
- ----------------------------------------------------------------------------------------------------------------------------------
Total Interest Income 86,932 77,069
INTEREST EXPENSE
Interest on Deposits:
Savings and NOW Accounts 1,374 1,719
Money Market Deposit Accounts 11,911 12,258
Time Deposits in Domestic Offices 8,998 8,877
Time Deposits in Foreign Offices 7,503 5,525
- ----------------------------------------------------------------------------------------------------------------------------------
Total Interest on Deposits 29,786 28,379
- ----------------------------------------------------------------------------------------------------------------------------------
Interest on Short-Term Borrowings and Long-Term Debt:
Federal Funds Purchased and Repurchase Agreements 4,876 2,695
U.S. Treasury Demand Notes and Other Short-Term Borrowings 217 210
Long-Term Debt 4,368 4,368
- ----------------------------------------------------------------------------------------------------------------------------------
Total Interest on Short-Term Borrowings and Long-Term Debt 9,461 7,273
- ----------------------------------------------------------------------------------------------------------------------------------
Total Interest Expense 39,247 35,652
- ----------------------------------------------------------------------------------------------------------------------------------
Net Interest Income 47,685 41,417
Less: Provision for Loan Losses - -
- ----------------------------------------------------------------------------------------------------------------------------------
Net Interest Income after Provision for Loan Losses 47,685 41,417
NONINTEREST INCOME
Trust Income 11,120 8,646
Service Charges and Fees 9,094 8,688
Other Noninterest Income 2,599 2,305
Securities Gains, Net 5,324 2
- ----------------------------------------------------------------------------------------------------------------------------------
Total Noninterest Income 28,137 19,641
NONINTEREST EXPENSE
Salaries and Employee Benefits 20,639 18,777
Data Processing Services 5,266 4,628
Occupancy, Net 4,517 4,416
Furniture and Equipment 2,562 2,161
Other Real Estate Owned (Income) Expense, Net (51) (147)
Other Noninterest Expense 14,475 13,977
- ----------------------------------------------------------------------------------------------------------------------------------
Total Noninterest Expense 47,408 43,812
- ----------------------------------------------------------------------------------------------------------------------------------
Income before Taxes and Minority Interest 28,414 17,246
Applicable Income Tax Expense 7,792 4,069
Minority Interest in Income of Subsidiaries, Net of Taxes 4,987 2,711
==================================================================================================================================
NET INCOME 15,635 10,466
Dividends on Preferred Stock (2,688) (2,688)
==================================================================================================================================
Net Income Available for Common Stock $12,947 $ 7,778
EARNINGS PER COMMON SHARE- Basic $ .42 $ .26
Diluted .41 .25
DIVIDENDS DECLARED AND PAID PER COMMON SHARE $ .05 $ .05
</TABLE>
-3-
<PAGE>
RIGGS NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION
<TABLE>
<CAPTION>
(UNAUDITED) MARCH 31, MARCH 31, DECEMBER 31,
(IN THOUSANDS, EXCEPT SHARE AMOUNTS) 1998 1997 1997
===================================================================================================================================
<S> <C> <C> <C>
ASSETS
Cash and Due from Banks $ 146,698 $ 154,128 $ 186,091
Money Market Assets:
Time Deposits with Other Banks 545,448 168,277 241,813
Federal Funds Sold and Reverse Repurchase Agreements 360,000 545,000 549,000
- ---------------------------------------------------------------------------------------------------------------------------------
Total Money Market Assets 905,448 713,277 790,813
Securities Available for Sale (at Market Value) 1,420,342 1,551,597 1,672,550
Loans 2,869,245 2,586,905 2,884,373
Reserve for Loan Losses (52,180) (63,595) (52,381)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Loans 2,817,065 2,523,310 2,831,992
Premises and Equipment, Net 166,364 165,917 165,377
Accrued Interest Receivable 31,109 26,694 38,209
Other Real Estate Owned, Net 4,062 27,320 5,076
Other Assets 145,541 146,403 156,318
=================================================================================================================================
Total $5,636,629 $5,308,646 $5,846,426
LIABILITIES
Deposits:
Noninterest-Bearing Demand Deposits $ 861,648 $ 852,618 $ 982,865
Interest-Bearing Deposits:
Savings and NOW Accounts 371,084 450,461 436,337
Money Market Deposit Accounts 1,382,863 1,484,866 1,492,842
Time Deposits in Domestic Offices 850,858 813,539 867,772
Time Deposits in Foreign Offices 522,697 435,103 518,102
- ---------------------------------------------------------------------------------------------------------------------------------
Total Interest-Bearing Deposits 3,127,502 3,183,969 3,315,053
- ---------------------------------------------------------------------------------------------------------------------------------
Total Deposits 3,989,150 4,036,587 4,297,918
Short-Term Borrowings:
Federal Funds Purchased and Repurchase Agreements 433,160 237,129 327,579
U.S. Treasury Demand Notes and Other Short-Term Borrowings 20,830 21,024 24,929
- ---------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Borrowings 453,990 258,153 352,508
Other Liabilities 177,450 50,121 191,293
Long-Term Debt 191,525 191,525 191,525
- ---------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 4,812,115 4,536,386 5,033,244
GUARANTEED PREFERRED BENEFICIAL INTERESTS IN JUNIOR
SUBORDINATED DEFERRABLE INTEREST DEBENTURES 350,000 350,000 350,000
- ---------------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred Stock-$1.00 Par Value
Shares Authorized - 25,000,000 at March 31, 1998 and 1997, and
December 31, 1997; Liquidation Preference - $25 per share
Shares Issued - Noncumulative Perpetual Series B - 4,000,000 shares
at March 31, 1998 and 1997, and December 31, 1997 4,000 4,000 4,000
Common Stock-$2.50 Par Value
Shares Authorized - 50,000,000 at March 31, 1998 and 1997, and
December 31, 1997
Shares Issued - 31,481,086 at March 31, 1998, 31,275,294 at
March 31, 1997 and 31,461,786 at December 31, 1997 78,703 78,188 78,654
Surplus - Preferred Stock 91,192 91,192 91,192
Surplus - Common Stock 159,315 157,072 159,160
Undivided Profits 164,151 124,942 152,732
Accumulated Other Comprehensive Income (Loss) 876 (9,411) 1,167
Treasury Stock - 900,798 shares at March 31, 1998 and 1997, and
December 31, 1997 (23,723) (23,723) (23,723)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity 474,514 422,260 463,182
=================================================================================================================================
Total $5,636,629 $5,308,646 $5,846,426
</TABLE>
-4-
<PAGE>
RIGGS NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
PREFERRED COMMON ACCUMULATED
STOCK STOCK OTHER TOTAL
$1.00 $2.50 UNDIVIDED COMPREHENSIVE TREASURY STOCKHOLDERS'
PAR PAR SURPLUS PROFITS INCOME (LOSS) STOCK EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996 $ 4,000 $ 78,183 $248,252 $118,682 $ 382 $(23,723) $425,776
Comprehensive Income:
Net Income 10,466 $ 10,466
Other Comprehensive Income
(Loss), Net of Tax: (1)
Unrealized Loss on Securities
Available for Sale, Net of
Reclassification Adjustments (8,006) (8,006)
Foreign Exchange
Translation Adjustments (1,787) (1,787)
-----------------
Total Other Comprehensive
Income (Loss) (9,793)
=================
Total Comprehensive Income $ 673
Issuance of Common Stock for
Stock Option Plans, 1,950 Shares 5 12 17
Cash Dividends -
Series B Preferred Stock,
$.671875 per Share (2,688) (2,688)
Common Stock, $.05 per Share (1,518) (1,518)
====================================================================================================================================
Balance, March 31, 1997 $ 4,000 $ 78,188 $248,264 $124,942 $ (9,411) $(23,723) $422,260
Balance, December 31, 1997 $ 4,000 $ 78,654 $250,352 $152,732 $ 1,167 $(23,723) $463,182
Comprehensive Income:
Net Income 15,635 $ 15,635
Other Comprehensive Income
(Loss), Net of Tax: (1)
Unrealized Loss on Securities
Available for Sale, Net of
Reclassification Adjustments (634) (634)
Foreign Exchange
Translation Adjustments 343 343
-----------------
Total Other Comprehensive
Income (Loss) (291)
=================
Total Comprehensive Income $ 15,344
Issuance of Common Stock for
Stock Option Plans, 19,300 Shares 49 155 204
Cash Dividends -
Series B Preferred Stock,
$.671875 per Share (2,688) (2,688)
Common Stock, $.05 per Share (1,528) (1,528)
====================================================================================================================================
Balance, March 31, 1998 $ 4,000 $ 78,703 $250,507 $164,151 $ 876 $(23,723) $474,514
</TABLE>
[FN]
(1)- See Note 3, "New Financial Accounting Standards," for gross unrealized
gains or losses arising during each period and the tax effect on each
item of comprehensive income.
</FN>
-5-
<PAGE>
RIGGS NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS) THREE MONTHS ENDED
MARCH 31,
-----------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1998 1997
=============================================================================================================================
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 15,635 $ 10,466
Adjustments to Reconcile Net Income to Cash
Provided By Operating Activities:
Provision for Loan Losses - -
Provision for Other Real Estate Owned Writedowns 300 -
Depreciation Expense and Amortization of Leasehold Improvements 2,841 2,843
Gains on Sale of Securities Available for Sale (5,324) (2)
Gains on Sale of Other Real Estate Owned (276) (218)
Decrease in Accrued Interest Receivable 7,100 3,348
Decrease in Other Assets 11,289 667
Decrease in Other Liabilities (13,843) (11,761)
- -----------------------------------------------------------------------------------------------------------------------------
Total Adjustments 2,087 (5,123)
- -----------------------------------------------------------------------------------------------------------------------------
Net Cash Provided By Operating Activities 17,722 5,343
- -----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (Increase) Decrease In Time Deposits with Other Banks (303,635) 112,849
Proceeds from Maturities and Other Payments
of Securities Available for Sale 1,256,512 1,590,661
Proceeds from Sale of Securities Available for Sale 652,586 -
Purchase of Securities Available for Sale (1,652,712) (1,992,087)
Net Decrease in Loans 14,701 50,697
Proceeds from Sale and Other Payments of Other Real Estate Owned 991 1,081
Net Increase in Premises and Equipment (3,828) (2,686)
Other, Net 225 (721)
- -----------------------------------------------------------------------------------------------------------------------------
Net Cash Used In Investing Activities (35,160) (240,206)
- -----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (Decrease) Increase in:
Demand, NOW, Savings and Money Market Deposit Accounts (296,449) (66,004)
Time Deposits (12,319) 51,908
Federal Funds Purchased and Repurchase Agreements 105,581 (37)
U.S. Treasury Demand Notes and Other Short-Term Borrowings (4,099) 2,956
Proceeds From the Issuance of Common Stock 204 17
Proceeds from Preferred Stock of Subsidiaries - 200,000
Dividend Payments - Preferred (2,688) (2,688)
- Common (1,528) (1,518)
- -----------------------------------------------------------------------------------------------------------------------------
Net Cash (Used in) Provided by Financing Activities (211,298) 184,634
- -----------------------------------------------------------------------------------------------------------------------------
Effect of Exchange Rate Changes 343 (1,787)
- -----------------------------------------------------------------------------------------------------------------------------
Net Decrease in Cash and Cash Equivalents (228,393) (52,016)
Cash and Cash Equivalents at Beginning of Period 735,091 751,144
=============================================================================================================================
Cash and Cash Equivalents at End of Period $ 506,698 $ 699,128
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES:
NONCASH ACTIVITIES:
Loans Transferred to Other Real Estate Owned $ - $ 82
CASH PAID DURING THE YEAR FOR:
Interest Paid (Net of Amount Capitalized) $ 40,082 $ 36,173
Income Tax Payments 5 5
</TABLE>
-6-
<PAGE>
RIGGS NATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
NOTE 1. BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited financial statements
contain all normal recurring adjustments necessary for a fair presentation of
the interim period results, in conformity with generally accepted accounting
principles applied on a consistent basis and which require the use of management
estimates. These statements should be read in conjunction with the financial
statements and accompanying notes included in the Corporation's Annual Report on
Form 10-K for the year ended December 31, 1997. Certain reclassifications have
been made to prior-period amounts to conform with the current year's
presentation. The results of operations for the first three months of 1998 are
not necessarily indicative of the results to be expected for the full 1998 year.
NOTE 2. EARNINGS PER COMMON SHARE
In March 1997, Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings Per Share" was issued and supersedes Accounting Principles Board
Opinion ("APB") No. 15. Basic earnings per share is calculated by dividing net
income, after deduction for preferred stock dividends, by the weighted-average
number of shares of common stock. Diluted earnings per share is calculated by
dividing net income, after deduction for preferred stock dividends, by the
weighted-average number of shares of common stock and common stock equivalents,
unless determined to be anti-dilutive.
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 1998 MARCH 31, 1997
---------------------------------- ----------------------------------
BASIC DILUTED BASIC DILUTED
EPS EPS EPS EPS
----------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Net Income $15,635 $15,635 $10,466 $10,466
Dividends on Preferred Stock (2,688) (2,688) (2,688) (2,688)
----------------- ---------------- ----------------- ----------------
Income Available to Common Shareholders $12,947 $12,947 $ 7,778 $ 7,778
Weighted-Average Shares Outstanding 30,571,990 30,571,990 30,373,168 30,373,168
Weighted-Average Dilutive Effect
of Stock Option Plans n/a 1,064,840 n/a 1,097,119
----------------- ---------------- ----------------- ----------------
Adjusted Weighted-Average Shares Outstanding 30,571,990 31,636,830 30,373,168 31,470,287
BASIC EPS $ .42 $ .26
DILUTED EPS $ .41 $ .25
</TABLE>
NOTE 3. NEW FINANCIAL ACCOUNTING STANDARDS
In June 1997, SFAS Nos. 130 and 131 were issued--"Reporting Comprehensive
Income" and "Disclosures about Segments of an Enterprise and Related
Information," respectively. SFAS No. 130 requires that certain financial
activity typically disclosed in stockholders' equity be reported in the
financial statements as an adjustment to net income in determining comprehensive
income. Items applicable to the Corporation include activity in foreign exchange
translation adjustments and gain/loss on securities available for sale. Items
identified as comprehensive income are reported in the statement of condition
and the statement of changes in stockholders' equity, under separate captions.
The table on the following page specifies the tax (provision)/benefit related to
each component of comprehensive income along with the unrealized gains/(losses)
arising during the period. SFAS No. 130 was effective for the Corporation on
January 1, 1998, including the restatement of prior periods reported consistent
with this pronouncement. The Corporation did not experience any material effect
on its financial position or results of operations from the implementation of
SFAS No. 130.
-7-
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
NOTE 3. NEW FINANCIAL ACCOUNTING STANDARDS, CONTINUED
OTHER COMPREHENSIVE INCOME (LOSS)
<TABLE>
<CAPTION>
BEFORE- TAX
TAX (EXPENSE)/ NET-OF-TAX
AMOUNT BENEFIT AMOUNT
================================================================================= ============= ============= =============
THREE MONTHS ENDED MARCH 31, 1998:
<S> <C> <C> <C>
Foreign Currency Translation Adjustments $ 528 $ (185) $ 343
Unrealized Gains (Losses) on Securities:
Unrealized Holding Gains (Losses) Arising During Period 4,349 (1,522) 2,827
Less: Reclassification Adjustment for (Gains) Losses Realized in Net Income (5,324) 1,863 (3,461)
- --------------------------------------------------------------------------------- ------------- ------------- -------------
Net Unrealized Gains (Losses) (975) 341 (634)
================================================================================= ============= ============= =============
Other Comprehensive Income (Loss) $ (447) $ 156 $ (291)
THREE MONTHS ENDED MARCH 31, 1997:
Foreign Currency Translation Adjustments $ (2,749) $ 962 $ (1,787)
Unrealized Gains (Losses) on Securities:
Unrealized Holding Gains (Losses) Arising During Period (12,315) 4,310 (8,005)
Less: Reclassification Adjustment for (Gains) Losses Realized in Net Income (2) 1 (1)
- --------------------------------------------------------------------------------- ------------- ------------- -------------
Net Unrealized Gains (Losses) (12,317) 4,311 (8,006)
================================================================================= ============= ============= =============
Other Comprehensive Income (Loss) $(15,066) $ 5,273 $ (9,793)
</TABLE>
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BALANCES
<TABLE>
<CAPTION>
FOREIGN UNREALIZED ACCUMULATED
CURRENCY GAINS/(LOSS) OTHER
TRANSLATION ON COMPREHENSIVE
ADJUSTMENTS SECURITIES INCOME (LOSS)
================================================================================= =============== ============== ==================
THREE MONTHS ENDED MARCH 31, 1998:
<S> <C> <C> <C>
Balance, December 31, 1997 $ (872) $ 2,039 $ 1,167
Current-Period Change 343 (634) (291)
================================================================================= =============== ============== ==================
Balance, March 31, 1998 $ (529) $ 1,405 $ 876
THREE MONTHS ENDED MARCH 31, 1997:
Balance, December 31, 1996 $ 1,111 $ (729) $ 382
Current-Period Change (1,787) (8,006) (9,793)
================================================================================= =============== ============== ==================
Balance, March 31, 1997 $ (676) $(8,735) $(9,411)
</TABLE>
SFAS No. 131 requires the reporting of selected segmented information in
quarterly and annual reports. Information from operating segments is derived
from methods used by the Corporation's management to allocate resources and
measure performance. The Corporation is required to disclose profit/loss,
revenues and assets for each segment identified, including reconciliations of
these items to consolidated totals. The Corporation is also required to disclose
the basis for identifying the segments and the types of products and services
within each segment. SFAS No. 131 is effective for the Corporation for the year
ended December 31, 1998, and quarterly beginning in 1999, including the
restatement of prior periods reported consistent with this pronouncement, if
practical. The Corporation does not anticipate any material impact from the
implementation of SFAS No. 131.
In February 1998, SFAS No. 132, "Employers' Disclosures about Pensions and
Other Postretirement Benefits-an amendment of FASB Statements No. 87, 88, and
106" was issued. SFAS No. 132 revises employers' disclosures about pension and
other postretirement benefit plans. It standardizes the disclosure requirements
for pensions and other postretirement benefits and requires additional
information on changes in the benefit obligations and fair values of plan assets
in the Corporation's 1998 year-end financial statements. SFAS No. 132 also
eliminates certain disclosures which were required by SFAS Nos. 87, "Employers'
Accounting for Pensions," No. 88, "Employers' Accounting for Settlement and
Curtailments of Defined Benefit Pension Plans and for Termination Benefits," and
No. 106, "Employers' Accounting for Postretirement Benefits Other than
Pensions." SFAS No. 132 was effective for the Corporation on January 1, 1998.
The Corporation did not experience any material impact from the implementation
of SFAS No. 132.
-8-
<PAGE>
RIGGS NATIONAL CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Corporation reported consolidated net income of $15.6 million ($.41 per
diluted share) for the first quarter of 1998, a 49% increase of $5.1 million
compared with net income of $10.5 million ($.25 per diluted share) for the same
quarter a year earlier. The increase from the prior year's quarter was primarily
the result of $5.3 million in securities gains. Excluding these gains, income
before taxes and minority interest for the first quarter of 1998 was $23.1
million compared with $17.2 million for the same period a year earlier, a 34%
increase of $5.9 million.
NET INTEREST INCOME
Net interest income on a tax-equivalent basis (net interest income plus an
amount equal to the tax savings on tax-exempt interest) totaled $48.5 million in
the first quarter of 1998, increasing $6.2 million from the first quarter of
1997. The increase from the prior year's quarter was primarily the result of
favorable increases in average earning assets over increases in average
interest-bearing funds between the periods, stemming primarily from $200 million
in proceeds received from Trust Preferred Securities issued and sold in March
1997.
NET INTEREST INCOME CHANGES (1)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 1998 VS 1997
----------------------------------
DUE TO DUE TO TOTAL
(IN THOUSANDS) RATE VOLUME CHANGE
=====================================================================================================================
Interest Income:
<S> <C> <C> <C>
Loans, Including Fees $ 323 $ 4,721 $ 5,044
Securities Available for Sale 836 1,933 2,769
Time Deposits with Other Banks 173 3,777 3,950
Federal Funds Sold and Reverse
Repurchase Agreements 290 (2,258) (1,968)
- ---------------------------------------------------------------------------------------------------------------------
Total Interest Income 1,622 8,173 9,795
Interest Expense:
Interest-Bearing Deposits 67 1,340 1,407
Federal Funds Purchased and
Repurchase Agreements 70 2,111 2,181
U.S. Treasury Demand Notes and Other
Short-Term Borrowings 6 1 7
Long-Term Debt - - -
- ---------------------------------------------------------------------------------------------------------------------
Total Interest Expense 143 3,452 3,595
=====================================================================================================================
Net Interest Income $1,479 $ 4,721 $ 6,200
</TABLE>
[FN]
(1) - The dollar amount of changes in interest income and interest expense
attributable to changes in rate/volume (change in rate multiplied by
change in volume) has been allocated between rate and volume variances
based on the percentage relationship of such variances to each
other. Income and rates are computed on a tax-equivalent basis using a
Federal income tax rate of 35% and local tax rates as applicable.
</FN>
-9-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
AVERAGE CONSOLIDATED STATEMENTS OF CONDITION AND RATES
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 1998 MARCH 31, 1997
---------------------------------- -----------------------------------
(TAX-EQUIVALENT BASIS) (1) AVERAGE INCOME/ AVERAGE INCOME/
(IN THOUSANDS) BALANCE EXPENSE RATE BALANCE EXPENSE RATE
==============================================================================================================================
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Loans, Including Fees (2) $2,836,563 $55,522 7.94 % $2,610,300 $50,478 7.84 %
Securities Available for Sale (3) 1,396,095 21,447 6.23 1,268,231 18,678 5.97
Time Deposits with Other Banks 459,421 5,968 5.27 167,760 2,018 4.88
Federal Funds Sold and Reverse Repurchase Agreements 349,729 4,819 5.59 514,552 6,787 5.35
- ---------------------------------------------------------------------------------------------------------------------------------
Total Earning Assets and Average Rate Earned 5,041,808 87,756 7.06 4,560,843 77,961 6.93
Reserve for Loan Losses (52,446) (63,683)
Cash and Due from Banks 155,630 163,955
Other Assets 355,346 361,080
==============================================================================================================================
Total Assets $5,500,338 $5,022,195
LIABILITIES, MINORITY INTEREST AND
STOCKHOLDERS' EQUITY
Interest-Bearing Deposits $3,175,472 $29,786 3.80 % $3,114,964 $28,379 3.69 %
Federal Funds Purchased and Repurchase Agreements 385,756 4,876 5.13 218,385 2,695 5.00
U.S. Treasury Demand Notes and
Other Short-Term Borrowings 16,941 217 5.19 16,873 210 5.05
Long-Term Debt 191,525 4,368 9.25 191,525 4,368 9.25
- ------------------------------------------------------------------------------------------------------------------------------
Total Interest-Bearing Funds and Average Rate Paid 3,769,694 39,247 4.22 3,541,747 35,652 4.08
Demand Deposits 850,627 811,351
Other Liabilities 63,351 50,168
Minority Interest in Preferred Stock of Subsidiaries 350,000 194,444
Stockholders' Equity 466,666 424,485
==============================================================================================================================
Total Liabilities, Minority Interest and
Stockholders' Equity $5,500,338 $5,022,195
==============================================================================================================================
NET INTEREST INCOME AND SPREAD $48,509 2.84 % $42,309 2.85 %
==============================================================================================================================
NET INTEREST MARGIN ON EARNING ASSETS 3.90 % 3.76 %
</TABLE>
[FN]
(1) - Income and rates are computed on a tax-equivalent basis using a Federal
income tax rate of 35% and local tax rates as applicable.
(2) - Nonperforming loans are included in average balances used to determine
rates.
(3) - The averages and rates for the securities available for sale portfolio are
based on amortized cost.
</FN>
NONINTEREST INCOME
Noninterest income for the first quarter of 1998 totaled $28.1 million, a 43%
increase of $8.5 million above $19.6 million for the same period a year earlier.
Excluding $5.3 million of nonrecurring securities gains, noninterest income
during the first quarter of 1998 was $22.8 million, up $3.2 million or 16% from
a year ago, primarily due to continued growth in income related to fees from
trust and investment advisory services.
NONINTEREST EXPENSE
Noninterest expense for the first quarter of 1998 was $47.4 million compared to
$43.8 million reported in the first quarter of 1997, up $3.6 million due
primarily to increased salary and performance-based compensation expense and
costs associated with improvements in the Corporation's information
technologies.
-10-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
FINANCIAL CONDITION
SECURITIES
Securities available for sale totaled $1.42 billion at March 31, 1998, compared
to $1.67 billion at year-end 1997, and $1.55 billion at March 31, 1997. The
current quarter's activity included purchases of securities available for sale
totaling $1.65 billion, which were more than offset by maturities and sales of
securities available for sale totaling $1.26 billion and $652.6 million,
respectively. The weighted-average maturities and yields for the portfolio,
adjusted for anticipated prepayments, were approximately 2.0 years and 5.95%,
respectively, at March 31, 1998.
<TABLE>
<CAPTION>
MARCH 31, 1998 MARCH 31, 1997 DECEMBER 31, 1997
-------------------------------- ------------------------------ --------------------------------
AMORTIZED MARKET/ AMORTIZED MARKET/ AMORTIZED MARKET/
AVAILABLE FOR SALE COST BOOK VALUE COST BOOK VALUE COST BOOK VALUE
================================================================================================================================
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury Securities $ 404,512 $ 404,382 $ 962,302 $ 951,296 $ 504,990 $ 506,721
Government Agencies Securities 769,245 769,194 571,512 569,086 966,277 966,456
Mortgage-Backed Securities 204,906 204,723 1,907 1,900 156,997 157,026
Other Securities 39,689 42,043 29,315 29,315 41,150 42,347
================================================================================================================================
Total $1,418,352 $1,420,342 $1,565,036 $1,551,597 $1,669,414 $1,672,550
</TABLE>
LOANS
At March 31, 1998, total loans outstanding amounted to $2.87 billion, decreasing
$15.1 million from the December 31, 1997 total of $2.88 billion. The decrease in
loans from December 31, 1997, was primarily attributed to decreases in real
estate-commercial/construction loans of $14.5 million, residential mortgage
loans of $22.6 million, consumer loans of $12.3 million, and foreign loans of
$15.4 million, mostly offset by an increase of $53.8 million in commercial and
financial loans.
<TABLE>
<CAPTION>
MARCH 31, MARCH 31, DECEMBER 31,
(IN THOUSANDS) 1998 1997 1997
================================================================================================================
<S> <C> <C> <C>
Commercial and Financial $ 583,733 $ 410,955 $ 529,894
Real Estate - Commercial/Construction 395,464 327,775 410,011
Residential Mortgage 1,133,915 1,213,237 1,156,493
Home Equity 314,451 286,239 317,669
Consumer 66,602 73,815 78,932
Foreign 374,246 271,460 389,632
- ----------------------------------------------------------------------------------------------------------------
Loans 2,868,411 2,583,481 2,882,631
Unamortized Premium (Unearned
Discount/Net Deferred Fees) 834 3,424 1,742
================================================================================================================
Total Loans $2,869,245 $2,586,905 $2,884,373
</TABLE>
-11-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
ASSET QUALITY
NONPERFORMING ASSETS
Nonperforming assets, which include nonaccrual loans, renegotiated loans and
other real estate owned (net of reserves), totaled $16.5 million at March 31,
1998, a $7.5 million (83%) increase from the year-end 1997 total of $9.0 million
and a $17.8 million (52%) decrease from the March 31, 1997 total. The increase
from year-end 1997 was primarily due to the addition of a commercial real estate
loan for $9.8 million, partially offset by paydowns and sales of 2.0 million and
charge-offs of $341 thousand. The increase in nonaccrual loans from year-end was
due to the aforementioned commercial real estate loan for $9.8 million,
partially offset by paydowns of $1.3 million. The decrease in other real estate
owned, net of reserves, during the first three months of 1998 was the result of
paydowns and sales of $715 thousand and charge-offs of $300 thousand.
PAST-DUE AND POTENTIAL PROBLEM LOANS
Past-due loans consist predominantly of residential real estate and consumer
loans that are well-secured and in the process of collection and that are
accruing interest. Past-due loans increased $4.1 million during the first three
months of 1998 to $11.4 million, and increased $7.0 million from March 31, 1997.
These increases were predominately residential, single-family past-due loans. At
March 31, 1998, the Corporation had identified $246 thousand in potential
problem loans that are currently performing but that management believes have
certain attributes that may lead to nonaccrual or past due status in the
foreseeable future. These loans consisted entirely of domestic consumer loans.
NONPERFORMING ASSETS AND PAST-DUE LOANS
<TABLE>
<CAPTION>
MARCH 31, MARCH 31, DECEMBER 31,
(IN THOUSANDS) 1998 1997 1997
======================================================================================================================
NONPERFORMING ASSETS:
<S> <C> <C> <C>
Nonaccrual Loans (1) $12,314 $ 6,785 $ 3,793
Renegotiated Loans (2) 85 120 101
Other Real Estate Owned, Net 4,062 27,320 5,076
======================================================================================================================
Total Nonperforming Assets $16,461 $34,225 $ 8,970
PAST-DUE LOANS (3) $11,412 $ 4,437 $ 7,279
</TABLE>
[FN]
(1) - Loans (other than consumer) 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, or that are, in management's opinion, doubtful as to the
collectibility of either interest or principal.
(2) - Loans for which terms have been renegotiated to provide a reduction of
interest or principal as a result of a deterioration in the financial
position of the borrower. Renegotiated loans do not include $9.8 million
in loans renegotiated at market terms that have performed in accordance
with their respective renegotiated terms.
(3) - Loans contractually past due 90 days or more in principal or interest that
are well-secured and in the process of collection.
</FN>
DEPOSITS
Deposits are the primary and most stable source of funds for the Corporation.
Deposits totaled $3.99 billion at March 31, 1998, decreasing $308.8 million (7%)
from the December 31, 1997 deposit total. The decrease from the year-end balance
was almost entirely due to decreases in money market deposit accounts of $110.0
million, demand deposits of $121.2 million, and savings and NOW accounts of
$65.3 million.
-12-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings increased by $101.5 million, or 29%, from the year-end
1997 balance. Short-term borrowings are an additional source of funds that the
Corporation has utilized to meet certain asset/liability and daily cash
management objectives. The increase in short-term borrowings from year-end was
primarily due to increases in repurchase agreements, which are a funding vehicle
for the Corporation. Short-term borrowings are used to help the Corporation
generate cash and maintain adequate levels of liquidity.
<TABLE>
<CAPTION>
MARCH 31, MARCH 31, DECEMBER 31,
(IN THOUSANDS) 1998 1997 1997
============================================================ ============= ==== =============== === ================
<S> <C> <C> <C>
Federal Funds Purchased and Repurchase Agreements $433,160 $237,129 $327,579
U.S. Treasury Demand Notes and Other Borrowed Funds 20,830 21,024 24,929
- ------------------------------------------------------------ ------------- ---- --------------- --- ----------------
Total Short-Term Borrowings 453,990 258,153 352,508
Subordinated Debentures due 2009 66,525 66,525 66,525
Subordinated Notes due 2006 125,000 125,000 125,000
- ------------------------------------------------------------ ------------- ---- --------------- --- ----------------
Total Long-Term Debt 191,525 191,525 191,525
============================================================ ============= ==== =============== === ================
Total Short-Term Borrowings and Long-Term Debt $645,515 $449,678 $544,033
</TABLE>
LIQUIDITY
The Corporation seeks to maintain sufficient liquidity to meet the needs of
depositors, borrowers and creditors at a reasonable cost and without undue
stress on the operations of the Corporation and its banking subsidiaries. The
Corporation's Asset/Liability Committee actively analyzes and manages liquidity
in coordination with other areas of the organization (see "Sensitivity to Market
Risk"). At March 31, 1998, the Corporation's liquid assets, on a consolidated
basis, which include cash and due from banks, U.S. Treasury securities,
Government obligations and other securities, federal funds sold, reverse
repurchase agreements and time deposits at other banks, totaled $2.47 billion
(44% of total assets). This compares with $2.65 billion (45%) at December 31,
1997, and $2.42 billion (46%) at March 31, 1997. This consistent liquidity
position is maintained by a stable source of funds from the Corporation's core
deposit relationships. Additionally, the Corporation has other sources of funds,
such as short-term borrowings and advances available through its membership in
the Federal Home Loan Bank of Atlanta.
STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL
Total stockholders' equity at March 31, 1998 was $474.5 million, an increase of
$11.3 million from the year-end 1997 total and up $52.3 million from March 31,
1997. The increase from year-end 1997 was the result of net earnings of $15.6
million, partially offset by dividends on preferred and common stock of $4.2
million in the aggregate. Book value per common share was $12.40 as of March 31,
1998 compared to $12.04 at year-end 1997 and $10.77 at March 31, 1997. Below are
the capital ratios of the Corporation and its banking subsidiary, Riggs Bank
National Association (Riggs Bank N.A.) at March 31, 1998 and 1997, and December
31, 1997.
<TABLE>
<CAPTION>
MARCH 31, MARCH 31, DECEMBER 31, REQUIRED
1998 1997 1997 MINIMUMS
====================================================================================================================
RIGGS NATIONAL CORPORATION:
<S> <C> <C> <C> <C>
Tier I 18.91% 19.93% 18.45% 4.00%
Combined Tier I and Tier II 31.84 35.50 31.52 8.00
Leverage 11.33 11.16 11.15 4.00
RIGGS BANK N.A.:
Tier I 13.02 15.05 14.35 4.00
Combined Tier I and Tier II 14.28 16.32 15.60 8.00
Leverage 8.08 8.39 8.64 4.00
</TABLE>
-13-
<PAGE>
RIGGS NATIONAL CORPORATION
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
SENSITIVITY TO MARKET RISK
The Corporation is exposed to various market risks. It has determined that
interest-rate risk has a material impact on the Corporation's financial
performance, and as such has established the Asset/Liability Committee ("ALCO")
to manage interest-rate risk. The role of this committee is to prudently manage
the asset/liability mix of the Corporation to provide a stable net interest
margin while maintaining liquidity and capital. This entails the management of
the overall risk of the Corporation in conjunction with the acquisition and
deployment of funds based upon the Committee's view of both current and
prospective market and economic conditions.
The Corporation manages its interest-rate risk through the use of an income
simulation model, which forecasts the impact on net interest income of a variety
of different interest rate scenarios. A "most likely" interest rate scenario is
forecasted based upon an analysis of current market conditions and expectations.
The model then evaluates the impact on net interest income of rates moving
significantly higher or lower than the "most likely" scenario. The results are
compared to risk tolerance limits set by corporate policy. The model's results
as of March 31, 1998 are shown in the table below. Current policy establishes
limits for possible changes in net interest income for 12 and 36 month horizons.
The interest rate scenarios monitored by ALCO are based upon a 100 basis point
(1%) gradual increase or decrease in rates (versus the "most likely" scenario)
over a 12-month time period and a 300 basis point (3%) gradual increase or
decrease in rates (versus the "most likely" scenario) over a 36-month time
period.
At March 31, 1998, the forecasted impact of rates rising or falling 100 basis
points versus the "most likely" scenario over a 12-month time period was a
change in net interest income not exceeding 2%. For a 300 basis point movement
in rates versus the "most likely" scenario over a 36-month period, the impact on
net interest income did not exceed 6%. The results of the simulation for March
31, 1998 indicated that the Corporation maintained an asset sensitive position,
and was well insulated against interest rates moving significantly in either
direction.
In managing the Corporation's interest-rate risk, ALCO uses financial derivative
instruments, such as interest-rate swaps, caps, floors, collars, futures, and
options. Financial derivatives are employed to assist in the management and/or
reduction of the interest-rate risk of the Corporation, and can effectively
alter the sensitivity of segments of the statement of condition for specified
periods of time. All of these instruments are considered off-balance-sheet, as
they do not materially affect the level of assets or liabilities of the
Corporation. Along with the financial derivative instruments mentioned above,
the income simulation model includes short-term financial instruments,
investment securities, loans, deposits, and other borrowings. Interest-rate risk
management strategies are discussed and approved by ALCO prior to
implementation.
INTEREST-RATE SENSITIVITY ANALYSIS (1)
<TABLE>
<CAPTION>
MOVEMENTS IN INTEREST RATES FROM MARCH 31, 1998
==================================================== =====================================================================
SIMULATED IMPACT OVER NEXT SIMULATED IMPACT OVER NEXT
TWELVE MONTHS THIRTY-SIX MONTHS
- ---------------------------------------------------- ---------------------------------- ----------------------------------
(IN THOUSANDS) +100BP -100BP +300BP -300BP
- ---------------------------------------------------- ----------------- ---------------- ----------------- ----------------
Simulated Impact Compared With a
"Most Likely" Scenario:
<S> <C> <C> <C> <C>
Net Interest Income Increase/(Decrease) 1.8 % (1.0)% 5.4 % (1.6)%
Net Interest Income Increase/(Decrease) $ 3,340 $ (1,791) $ 31,029 $ (9,255)
</TABLE>
[FN]
(1)-Key Assumptions:
Assumptions with respect to the model's projections of the effect of changes
in interest rates on Net Interest Income include:
1. Target balances for various asset and liability classes, which are
solicited from the management of the various units of the Corporation.
2. Interest rate scenarios which are generated by ALCO for the "most likely"
scenario and are dictated by policy for the alternative scenarios.
3. Spread relationships between various interest rate indices, which are
generated by the analysis of historical relationships and ALCO consensus.
4. Assumptions about the effect of embedded options and prepayment speeds:
instruments that are callable are assumed to be called at the first
opportunity if an interest rate scenario makes it advantageous for the
owner of the call to do so. Prepayment assumptions for mortgage products
are derived from accepted industry sources.
5. Reinvestment rates for funds replacing assets or liabilities that are
assumed (through early withdrawal, prepayment, calls, etc.) to run off the
balance sheet, which are generated by the spread relationships.
6. Maturity strategies with respect to assets and liabilities, which are
solicited from the management of the various units of the Corporation.
</FN>
-14-
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK,
CONTINUED
SENSITIVITY TO MARKET RISK, CONTINUED
Management finds that the methodologies discussed above provide a meaningful
representation of the Corporation's interest-rate and market risk sensitivity,
though factors other than changes in the interest rate environment, such as
levels of non-earning assets, and changes in the composition of earning assets,
may affect net interest income. Management believes its current interest-rate
sensitivity level is appropriate, considering the Corporation's economic outlook
and conservative approach taken in the review and monitoring of the
Corporation's sensitivity position. No material changes have taken place since
December 31, 1997.
COMMITMENTS AND CONTINGENT LIABILITIES
Outstanding commitments and contingent liabilities that do not appear in the
consolidated financial statements at March 31, 1998 and 1997, and December 31,
1997 are detailed in the table below. At December 31, 1997, the Corporation's
financial derivative instruments included a $200 million (notional principal
balance) interest-rate swap agreement, entered into in July 1993, to hedge money
market assets against the possibility of declining interest rates that entailed
the receipt of a fixed rate and payment of a floating rate. This swap agreement,
which was due to mature in July 1998, was terminated by the Corporation in March
1998 with an aggregate net interest expense of $368 thousand recognized in 1998.
<TABLE>
<CAPTION>
CONTRACTUAL OR NOTIONAL VALUE
-----------------------------------------------
MARCH 31, MARCH 31, DECEMBER 31,
1998 1997 1997
==========================================================================================================
<S> <C> <C> <C>
Commitments to Extend Credit $959,673 $870,009 $873,794
Letters of Credit 147,977 138,807 132,770
Derivative Instruments:
Foreign Exchange Contracts:
Commitments to Purchase $130,009 $ 78,426 $111,215
Commitments to Sell 211,092 177,414 190,324
Interest-Rate Swap Agreements 86,916 350,511 351,489
Interest-Rate Option Contracts:
Corridors -- 100,000 --
Caps 656 635 642
</TABLE>
The Corporation's interest-rate swap and options contract activity for the
quarter ended March 31, 1998, is as follows:
<TABLE>
<CAPTION>
BALANCE BALANCE
DECEMBER 31, MARCH 31,
1997 ADDITIONS MATURITIES TERMINATIONS 1998
================================= ==== === ================ ============= ============= ================= =============
Interest-Rate Swaps:
<S> <C> <C> <C> <C> <C>
Receive fixed/pay variable $250,000 $ -- $ -- $250,000 $ --
Receive variable/pay fixed 50,000 -- 25,000 -- 25,000
For Customers 52,131 10,441 -- -- 62,572
================================= ==== === ================ ============= ============= ================= =============
Total $352,131 $ 10,441 $ 25,000 $250,000 $ 87,572
</TABLE>
-------------------------------------------------------------------
THIS QUARTERLY REPORT ON FORM 10-Q, INCLUDING THE MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, AND THE QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK, CONTAINS FORWARD-LOOKING
STATEMENTS, AS DEFINED IN SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934,
THAT INVOLVE RISK AND UNCERTAINTY. IN ORDER TO COMPLY WITH THE TERMS OF THE SAFE
HARBOR, THE CORPORATION NOTES THAT A VARIETY OF FACTORS COULD CAUSE THE
CORPORATION'S ACTUAL RESULTS AND EXPERIENCES TO DIFFER MATERIALLY FROM THE
ANTICIPATED RESULTS OR OTHER EXPECTATIONS EXPRESSED IN THE CORPORATION'S
FORWARD-LOOKING STATEMENTS. THESE FACTORS INCLUDE, BUT ARE NOT LIMITED TO,
CERTAIN RISKS AND UNCERTAINTIES THAT MAY AFFECT THE OPERATIONS, PERFORMANCE,
DEVELOPMENT, GROWTH PROJECTIONS AND RESULTS OF THE CORPORATION'S BUSINESS SUCH
AS, THE GROWTH OF THE ECONOMY, INTEREST RATE MOVEMENTS, TIMELY DEVELOPMENT BY
THE CORPORATION OF TECHNOLOGY ENHANCEMENTS FOR ITS PRODUCTS AND OPERATING
SYSTEMS, THE IMPACT OF COMPETITIVE PRODUCTS, SERVICES AND PRICING, CUSTOMER
BUSINESS REQUIREMENTS, CONGRESSIONAL LEGISLATION AND SIMILAR MATTERS. READERS OF
THIS REPORT ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON FORWARD-LOOKING
STATEMENTS WHICH ARE SUBJECT TO INFLUENCE BY THE NAMED RISK FACTORS AND
UNANTICIPATED FUTURE EVENTS. ACTUAL RESULTS, ACCORDINGLY, MAY DIFFER MATERIALLY
FROM MANAGEMENT EXPECTATIONS.
-15-
<PAGE>
RIGGS NATIONAL CORPORATION
EXHIBITS AND SIGNATURES
PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
--------
The following exhibit is furnished to this Form 10-Q:
(27) Financial Data Schedule
(B) REPORTS ON FORM 8-K
-------------------
On March 31, 1998, the Corporation filed a Form 8-K regarding
its Form 10-K for the fiscal year ended December 31, 1997,
filed March 20, 1998, to include the Consent of Independent
Accountants, Exhibit 23.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
RIGGS NATIONAL CORPORATION
Date: May 8, 1998 /s/ TIMOTHY C. COUGHLIN
-------------------------- --------------------------------
Timothy C. Coughlin
President
Date: May 8, 1998 /s/ JOHN L. DAVIS
--------------------------- --------------------------------
John L. Davis
Chief Financial Officer
(Principal Financial and
Accounting Officer)
-16-
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
=============== ===============================================================
(27) Financial Data Schedule
Exhibits omitted are not required or not applicable.
-17-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FORM 10-Q DATED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000350847
<NAME> RIGGS NATIONAL CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 146,698
<INT-BEARING-DEPOSITS> 545,448
<FED-FUNDS-SOLD> 360,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,420,342
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 2,869,245
<ALLOWANCE> 52,180
<TOTAL-ASSETS> 5,636,629
<DEPOSITS> 3,989,150
<SHORT-TERM> 453,990
<LIABILITIES-OTHER> 177,450
<LONG-TERM> 191,525
<COMMON> 78,703
0
4,000
<OTHER-SE> 391,811
<TOTAL-LIABILITIES-AND-EQUITY> 5,636,629
<INTEREST-LOAN> 55,260
<INTEREST-INVEST> 20,885
<INTEREST-OTHER> 10,787
<INTEREST-TOTAL> 86,932
<INTEREST-DEPOSIT> 29,786
<INTEREST-EXPENSE> 39,247
<INTEREST-INCOME-NET> 47,685
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 5,324
<EXPENSE-OTHER> 47,408
<INCOME-PRETAX> 28,414
<INCOME-PRE-EXTRAORDINARY> 28,414
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,635
<EPS-PRIMARY> .42
<EPS-DILUTED> .41
<YIELD-ACTUAL> 3.90
<LOANS-NON> 12,314
<LOANS-PAST> 11,412
<LOANS-TROUBLED> 85
<LOANS-PROBLEM> 246
<ALLOWANCE-OPEN> 52,381
<CHARGE-OFFS> 824
<RECOVERIES> 397
<ALLOWANCE-CLOSE> 52,180
<ALLOWANCE-DOMESTIC> 41,782
<ALLOWANCE-FOREIGN> 10,398
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
