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 September 30, 2000
[ ] 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)
(202) 835-4309
--------------
(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 28,380,666
----------------------------- ----------
(Title of Class) (Outstanding at October 31, 2000)
<PAGE>
RIGGS NATIONAL CORPORATION
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements-Unaudited
Consolidated Statements of Income
Three and nine months ended September 30, 2000 and 1999 3
Consolidated Statements of Condition
September 30, 2000 and 1999, and December 31, 1999 4
Consolidated Statements of Changes in Shareholders' Equity
Nine months ended September 30, 2000 and 1999 5
Consolidated Statements of Cash Flows
Nine months ended September 30, 2000 and 1999 6
Notes to the Consolidated Financial Statements 7-12
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13-19
Item 3. Quantitative and Qualitative Disclosures about Market Risk 20-22
PART II.OTHER INFORMATION
Item 1. Legal Proceedings 23
Item 2. Change in Securities 23
Item 3. Defaults Upon Senior Securities 23
Item 4. Submission of Matters to a Vote of Security Holders 23
Item 5. Other Information 23
Item 6. Exhibits and Reports on Form 8-K 23
Signatures 23
2
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS-UNAUDITED
RIGGS NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
(UNAUDITED) SEPTEMBER 30, SEPTEMBER 30,
------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 2000 1999 2000 1999
===================================================================================================================================
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and Fees on Loans $ 58,232 $ 57,699 $ 176,948 $ 171,977
Interest and Dividends on Securities Available for Sale 19,955 19,031 59,872 50,369
Interest on Time Deposits with Other Banks 5,575 4,954 16,671 18,347
Interest on Federal Funds Sold and Reverse Repurchase Agreements 4,603 2,965 14,767 6,292
-----------------------------------------------------------------------------------------------------------------------------------
Total Interest Income 88,365 84,649 268,258 246,985
INTEREST EXPENSE
Interest on Deposits:
Savings and NOW Accounts 482 631 1,670 1,944
Money Market Deposit Accounts 9,982 8,206 29,449 25,153
Time Deposits in Domestic Offices 11,780 10,876 34,886 30,837
Time Deposits in Foreign Offices 9,401 8,172 26,754 24,091
-----------------------------------------------------------------------------------------------------------------------------------
Total Interest on Deposits 31,645 27,885 92,759 82,025
-----------------------------------------------------------------------------------------------------------------------------------
Interest on Short-Term Borrowings and Long-Term Debt:
Repurchase Agreements and Other Short-Term Borrowings 8,058 7,165 25,861 14,961
Long-Term Debt 1,605 2,238 4,815 10,974
-----------------------------------------------------------------------------------------------------------------------------------
Total Interest on Short-Term Borrowings and Long-Term Debt 9,663 9,403 30,676 25,935
-----------------------------------------------------------------------------------------------------------------------------------
Total Interest Expense 41,308 37,288 123,435 107,960
-----------------------------------------------------------------------------------------------------------------------------------
Net Interest Income 47,057 47,361 144,823 139,025
Less: Provision for Loan Losses 16,491 - 17,494 -
-----------------------------------------------------------------------------------------------------------------------------------
Net Interest Income after Provision for Loan Losses 30,566 47,361 127,329 139,025
NONINTEREST INCOME
Trust and Investment Advisory Income 13,790 13,093 41,252 38,383
Service Charges and Fees 10,890 10,289 30,940 29,619
Venture Capital Investment Gains, Net 2,682 - 15,298 -
Gain on Sale of Fixed Assets 45 3,805 56 3,805
Other Noninterest Income 2,667 2,382 7,021 6,339
Securities Gains, Net 3 47 324 1,151
-----------------------------------------------------------------------------------------------------------------------------------
Total Noninterest Income 30,077 29,616 94,891 79,297
NONINTEREST EXPENSE
Salaries and Employee Benefits 25,315 23,318 74,599 67,387
Occupancy, Net 4,950 4,625 14,853 13,846
Data Processing Services 4,949 4,594 15,386 13,877
Furniture and Equipment 3,060 2,575 9,093 7,798
Other Real Estate Owned Expense (Income), Net 27 (116) 4 (78)
Other Noninterest Expense 17,646 16,638 51,472 49,168
-----------------------------------------------------------------------------------------------------------------------------------
Total Noninterest Expense 55,947 51,634 165,407 151,998
-----------------------------------------------------------------------------------------------------------------------------------
Income before Taxes, Minority Interest and Extraordinary Loss 4,696 25,343 56,813 66,324
Applicable Income Tax Expense 3,600 8,089 22,155 21,807
Minority Interest in Income of Subsidiaries, Net of Taxes 5,348 4,987 17,028 14,960
===================================================================================================================================
Income (Loss) before Extraordinary Loss $ (4,252) $ 12,267 $ 17,630 $ 29,557
Extraordinary Loss, Net of Taxes - (5,061) - (5,061)
===================================================================================================================================
Net Income (Loss) $ (4,252) $ 7,206 $ 17,630 $ 24,496
EARNINGS PER SHARE- Basic before Extraordinary Loss $ (0.15) $ .43 $ .62 $ 1.04
Diluted before Extraordinary Loss (0.15) .42 .62 1.01
EARNINGS PER SHARE- Basic $ (0.15) $ .25 $ .62 $ .86
Diluted (0.15) .25 .62 .84
DIVIDENDS DECLARED AND PAID PER SHARE $ .05 $ .05 $ .15 $ .15
</TABLE>
3
<PAGE>
RIGGS NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION
<TABLE>
<CAPTION>
(UNAUDITED) SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
(IN THOUSANDS, EXCEPT SHARE AMOUNTS) 2000 1999 1999
=======================================================================================================================
<S> <C> <C> <C>
ASSETS
Cash and Due from Banks $ 143,373 $ 145,518 $ 149,712
Federal Funds Sold and Reverse Repurchase Agreements 150,000 253,000 346,000
-----------------------------------------------------------------------------------------------------------------------
Total Cash and Cash Equivalents 293,373 398,518 495,712
Time Deposits with Other Banks 379,052 376,554 413,528
Securities Available for Sale (at Market Value) 1,283,171 1,298,251 1,289,884
Venture Capital Investments 82,775 - 39,525
Loans 3,034,839 3,250,797 3,201,981
Reserve for Loan Losses (37,147) (51,379) (41,455)
-----------------------------------------------------------------------------------------------------------------------
Total Net Loans 2,997,692 3,199,418 3,160,526
Premises and Equipment, Net 199,726 201,841 202,840
Other Real Estate Owned 1,133 908 908
Other Assets 236,239 234,365 227,226
=======================================================================================================================
Total Assets $5,473,161 $5,709,855 $5,830,149
LIABILITIES
Deposits:
Noninterest-Bearing Demand Deposits $ 610,060 $ 641,209 $ 729,030
Interest-Bearing Deposits:
Savings and NOW Accounts 272,438 344,315 395,024
Money Market Deposit Accounts 1,709,724 1,503,612 1,489,690
Time Deposits in Domestic Offices 916,511 956,514 1,068,920
Time Deposits in Foreign Offices 568,435 643,352 492,669
-----------------------------------------------------------------------------------------------------------------------
Total Interest-Bearing Deposits 3,467,108 3,447,793 3,446,303
-----------------------------------------------------------------------------------------------------------------------
Total Deposits 4,077,168 4,089,002 4,175,333
Repurchase Agreements and Other Short-Term Borrowings 492,602 786,170 832,202
Other Liabilities 121,682 75,036 68,376
Long-Term Debt 66,525 66,525 66,525
-----------------------------------------------------------------------------------------------------------------------
Total Liabilities 4,757,977 5,016,733 5,142,436
GUARANTEED PREFERRED BENEFICIAL INTERESTS IN JUNIOR
SUBORDINATED DEFERRABLE INTEREST DEBENTURES 350,000 350,000 350,000
=======================================================================================================================
SHAREHOLDERS' EQUITY
Common Stock-$2.50 Par Value
Shares Authorized - 50,000,000 at September 30, 2000 and 1999, and
December 31, 1999
Shares Issued - 31,681,464 at September 30, 2000, 31,612,995 at
September 30, 1999 and 31,615,495 at December 31, 1999 79,204 79,032 79,039
Surplus - Common Stock 162,004 161,418 161,439
Undivided Profits 224,063 205,001 210,682
Accumulated Other Comprehensive Loss (28,730) (30,972) (42,090)
Treasury Stock - 3,300,798 shares at September 30, 2000 and 1999, and
December 31, 1999 (71,357) (71,357) (71,357)
-----------------------------------------------------------------------------------------------------------------------
Total Shareholders' Equity 365,184 343,122 337,713
=======================================================================================================================
Total Liabilities and Shareholders' Equity $5,473,161 $5,709,855 $5,830,149
</TABLE>
4
<PAGE>
RIGGS NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
COMMON ACCUMULATED
STOCK OTHER TOTAL
$2.50 UNDIVIDED COMPREHENSIVE TREASURY SHAREHOLDERS'
PAR SURPLUS PROFITS INCOME (LOSS) STOCK EQUITY
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1998 $ 78,888 $160,760 $ 184,794 $ (2,548) $ (29,166) $ 392,728
Comprehensive Income:
Net Income 24,496 24,496
Other Comprehensive Income
(Loss), Net of Tax: (1)
Unrealized Gain (Loss) on
Securities Available for Sale, Net
of Reclassification Adjustments (27,890) (27,890)
Foreign Exchange
Translation Adjustments (534) (534)
------------
Total Other Comprehensive
Income (Loss) (28,424)
============
Total Comprehensive Income (Loss) (3,928)
Issuance of Common Stock for
Stock Option Plans-57,650 Shares 144 658 802
Cash Dividends -
Common Stock, $.15 per Share (4,289) (4,289)
Common Stock Repurchase-
2,125,000 shares (42,191) (42,191)
===================================================================================================================================
Balance, September 30, 1999 $ 79,032 $161,418 $ 205,001 $ (30,972) $ (71,357) $ 343,122
Balance, December 31, 1999 $ 79,039 $161,439 $ 210,682 $ (42,090) $ (71,357) $ 337,713
Comprehensive Income:
Net Income 17,630 17,630
Other Comprehensive Income
(Loss), Net of Tax: (1)
Unrealized Gain (Loss) on
Securities Available for Sale, Net
of Reclassification Adjustments 15,750 15,750
Foreign Exchange
Translation Adjustments (2,390) (2,390)
------------
Total Other Comprehensive
Income (Loss) 13,360
============
Total Comprehensive Income (Loss) 30,990
Issuance of Common Stock for
Stock Option Plans-65,969 Shares 165 565 730
Cash Dividends -
Common Stock, $.15 per Share (4,249) (4,249)
===================================================================================================================================
Balance, September 30, 2000 $ 79,204 $162,004 $ 224,063 $ (28,730) $ (71,357) $ 365,184
</TABLE>
(1) - See Notes to the Financial Statements for gross unrealized gains or losses
arising during each period and the tax effect on each item of comprehensive
income.
5
<PAGE>
RIGGS NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(UNAUDITED)
(IN THOUSANDS) NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
2000 1999
===================================================================================================================================
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 17,630 $ 24,496
Adjustments to Reconcile Net Income to Cash
Provided By Operating Activities:
Provision for Loan Losses 17,494 -
Provision for Other Real Estate Owned Writedowns - 16
Depreciation Expense and Amortization of Leasehold Improvements 10,427 8,716
Gains on Sale of Securities Available for Sale (324) (1,151)
Gains on Sale of Other Real Estate Owned - (61)
Increase in Other Assets (17,493) (22,359)
Increase in Other Liabilities 53,306 26,186
-----------------------------------------------------------------------------------------------------------------------------------
Total Adjustments 63,410 11,347
-----------------------------------------------------------------------------------------------------------------------------------
Net Cash Provided By Operating Activities 81,040 35,843
-----------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net Decrease In Time Deposits with Other Banks 34,476 319,627
Principal Collections and Maturities of Securities Available for Sale 899,171 2,898,637
Proceeds from Sales of Securities Available for Sale 212,046 81,337
Purchases of Securities Available for Sale (1,079,950) (3,349,254)
Net Decrease in Loans 145,705 4,356
Net Increase in Venture Capital Investments (43,250) -
Proceeds from Sale and Other Payments of Other Real Estate Owned - 816
Net Increase in Premises and Equipment (7,313) (7,486)
Other, Net (590) (93)
-----------------------------------------------------------------------------------------------------------------------------------
Net Cash Provided By (Used In) Investing Activities 160,295 (52,060)
-----------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (Decrease) Increase in:
Demand, NOW, Savings and Money Market Deposit Accounts (21,522) (91,890)
Time Deposits (76,643) 36,044
Repurchase Agreements and Other Short-Term Borrowings (339,600) 411,790
Repayment of Long-Term Debt - (125,000)
Proceeds from the Issuance of Common Stock 730 802
Dividend Payments - Common (4,249) (4,289)
Repurchase of Common Shares - (42,191)
-----------------------------------------------------------------------------------------------------------------------------------
Net Cash (Used In) Provided By Financing Activities (441,284) 185,266
-----------------------------------------------------------------------------------------------------------------------------------
Effect of Exchange Rate Changes (2,390) (534)
-----------------------------------------------------------------------------------------------------------------------------------
Net (Decrease) Increase in Cash and Cash Equivalents (202,339) 168,515
Cash and Cash Equivalents at Beginning of Period 495,712 230,003
===================================================================================================================================
Cash and Cash Equivalents at End of Period $ 293,373 $ 398,518
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES:
NONCASH ACTIVITIES:
Loans Transferred to Other Real Estate Owned $ 225 $ -
CASH PAID DURING THE YEAR FOR:
Interest Paid (Net of Amount Capitalized) $ 124,047 $ 109,700
Income Tax Payments 7,198 128
</TABLE>
6
<PAGE>
RIGGS NATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
NOTE 1. BASIS OF PRESENTATION
In our opinion, 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 estimates. These
statements should be read in conjunction with the financial statements and
accompanying notes included in our Annual Report on Form 10-K for the year ended
December 31, 1999. Certain reclassifications have been made to prior-period
amounts to conform with the current period's presentation. The results of
operations for the first nine months of 2000 are not necessarily indicative of
the results to be expected for the full 2000 year.
NOTE 2. EARNINGS PER SHARE
Earnings per share computations are as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999
================================================
BASIC DILUTED BASIC DILUTED
EPS EPS EPS EPS
================================================
<S> <C> <C> <C> <C>
Income before Extraordinary Loss $ 17,630 $ 17,630 $ 29,557 $ 29,557
Extraordinary Loss, Net of Tax - - (5,061) (5,061)
------------------------------------------------
Net Income Available to Common Shareholders $ 17,630 $ 17,630 $ 24,496 $ 24,496
Weighted-Average Shares Outstanding 28,337,017 28,337,017 28,514,728 28,514,728
Weighted-Average Dilutive Effect
of Stock Option Plans n/a 112,932 n/a 607,025
------------------------------------------------
Adjusted Weighted-Average Shares Outstanding 28,337,017 28,449,949 28,514,728 29,121,753
Basic EPS before Extraordinary Loss $ .62 $ 1.04
Diluted EPS before Extraordinary Loss $ .62 $ 1.01
Basic EPS $ .62 $ .86
Diluted EPS $ .62 $ .84
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999
================================================
BASIC DILUTED BASIC DILUTED
EPS EPS EPS EPS
------------------------------------------------
Income Before Extraordinary Loss $ (4,252) $ (4,252) $ 12,267 $ 12,267
Extraordinary Loss, Net of Tax - - (5,061) (5,061)
------------------------------------------------
Income Available to Common Shareholders $ (4,252) $ (4,252) $ 7,206 $ 7,206
Weighted-Average Shares Outstanding 28,363,275 28,363,275 28,300,240 28,300,240
Weighted-Average Dilutive Effect
of Stock Option Plans n/a 132,279 n/a 632,275
------------------------------------------------
Adjusted Weighted-Average Shares Outstanding 28,363,275 28,495,554 28,300,240 28,932,515
Basic EPS before Extraordinary Loss $ (.15) $ .43
Diluted EPS before Extraordinary Loss $ (.15) $ .42
Basic EPS $ (.15) $ .25
Diluted EPS $ (.15) $ .25
</TABLE>
7
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
NOTE 3. OTHER COMPREHENSIVE INCOME
OTHER COMPREHENSIVE INCOME (LOSS)
<TABLE>
<CAPTION>
BEFORE - TAX
TAX (EXPENSE) NET-OF-TAX
AMOUNT BENEFIT AMOUNT
===================================================================================================================================
<S> <C> <C> <C>
NINE MONTHS ENDED SEPTEMBER 30, 2000:
Foreign Currency Translation Adjustments $ (3,677) $ 1,287 $ (2,390)
Unrealized Gains (Losses) on Securities:
Unrealized Holding Gains (Losses) Arising During Period 24,554 (8,593) 15,961
Less: Reclassification Adjustment for (Gains) Losses Realized in Net Income (324) 113 (211)
-----------------------------------------------------------------------------------------------------------------------------------
Net Unrealized Gains (Losses) 24,230 (8,480) 15,750
===================================================================================================================================
Other Comprehensive Income (Loss) $ 20,553 $(7,193) $ 13,360
NINE MONTHS ENDED SEPTEMBER 30, 1999:
Foreign Currency Translation Adjustments $ (822) $ 288 $ (534)
Unrealized Gains (Losses) on Securities:
Unrealized Holding Gains (Losses) Arising During Period (41,757) 14,615 (27,142)
Less: Reclassification Adjustment for (Gains) Losses Realized in Net Income (1,151) 403 (748)
-----------------------------------------------------------------------------------------------------------------------------------
Net Unrealized Gains (Losses) (42,908) 15,018 (27,890)
===================================================================================================================================
Other Comprehensive Income (Loss) $(43,730) $15,306 $(28,424)
</TABLE>
<TABLE>
<CAPTION>
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BALANCES
FOREIGN UNREALIZED ACCUMULATED
CURRENCY GAIN (LOSS) OTHER
TRANSLATION ON COMPREHENSIVE
ADJUSTMENTS SECURITIES INCOME (LOSS)
===================================================================================================================================
<S> <C> <C> <C>
NINE MONTHS ENDED SEPTEMBER 30, 2000:
Balance, December 31, 1999 $ (2,597) $ (39,493) $ (42,090)
Current-Period Change (2,390) 15,750 13,360
===================================================================================================================================
Balance, September 30, 2000 $ (4,987) $ (23,743) $ (28,730)
NINE MONTHS ENDED SEPTEMBER 30, 1999:
Balance, December 31, 1998 $ (1,349) $ (1,199) $ (2,548)
Current-Period Change (534) (27,890) (28,424)
===================================================================================================================================
Balance, September 30, 1999 $ (1,883) $ (29,089) $ (30,972)
</TABLE>
8
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
NOTE 4. SEGMENT PROFITABILITY
<TABLE>
<CAPTION>
===================================================================================================================================
NINE MONTHS RIGGS RIGGS
ENDED INTERNATIONAL RIGGS & CAPITAL NATIONAL
SEPTEMBER 30, 2000 BANKING BANKING COMPANY TREASURY PARTNERS OTHER RECONCILIATION CORPORATION
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET INTEREST INCOME
Interest Income $ 148,441 $ 47,392 $ 4,459 $ 113,250 $ 34 $ 35,337
Interest Expense 46,549 62,654 9,262 43,284 - 40,693
Funds Transfer Income (Expense) (8,038) 43,342 13,389 (61,461) (2,155) 14,923
-----------------------------------------------------------------------------------------------
Net Interest Income (Loss),
Tax-Equivalent 93,854 28,080 8,586 8,505 (2,121) 9,567
Provision for Loan Losses (4,160) (13,334) - - - -
Tax Equivalent Adjustment (1,648) - - - - -
-----------------------------------------------------------------------------------------------
Net Interest Income (Loss) $ 88,046 $ 14,746 $ 8,586 $ 8,505 $ (2,121) $ 9,567 $ - $ 127,329
-----------------------------------------------------------------------------------------------
NONINTEREST INCOME
Noninterest Income-External
Customers $ 29,845 $ 3,245 $ 43,589 $ 2,536 $ 15,050 $ 626
Intersegment Noninterest Income 2,654 4,304 177 1 248 2,167
-----------------------------------------------------------------------------------------------
Total Noninterest Income $ 32,499 $ 7,549 $ 43,766 $ 2,537 $ 15,298 $ 2,793 $ (9,551) $ 94,891
-----------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Depreciation and Amortization $ 5,205 $ 790 $ 660 $ 13 $ 15 $ 6,680
Direct Expense 50,376 24,779 27,163 3,050 1,503 54,723
Overhead and Support 39,291 9,335 9,282 1,279 59 (59,245)
-----------------------------------------------------------------------------------------------
Total Noninterest Expense $ 94,872 $ 34,904 $ 37,105 $ 4,342 $ 1,577 $ 2,158 $ (9,551) $ 165,407
-----------------------------------------------------------------------------------------------
Income (Loss) Before Taxes and
Minority Interest $ 25,673 $(12,609) $ 15,247 $ 6,700 $ 11,600 $ 10,202 $ - $ 56,813
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
Total Average Assets $2,806,172 $921,332 $102,080 $2,420,691 $ 68,568 $932,073 $(1,586,485)$ 5,664,431
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
===================================================================================================================================
NINE MONTHS RIGGS RIGGS
ENDED INTERNATIONAL RIGGS & CAPITAL NATIONAL
SEPTEMBER 30, 1999 BANKING BANKING COMPANY TREASURY PARTNERS OTHER RECONCILIATION CORPORATION
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET INTEREST INCOME
Interest Income $ 140,518 $ 44,414 $ 4,315 $ 75,801 $ 2 $ 38,547
Interest Expense 43,670 51,803 6,792 22,157 - 37,774
Funds Transfer Income (Expense) (1,885) 31,205 9,943 (45,122) (620) 6,479
-----------------------------------------------------------------------------------------------
Net Interest Income (Loss),
Tax-Equivalent 94,963 23,816 7,466 8,522 (618) 7,252
Provision for Loan Losses - - - - - -
Tax Equivalent Adjustment (1,948) - - (428) - -
-----------------------------------------------------------------------------------------------
Net Interest Income (Loss) $ 93,015 $ 23,816 $ 7,466 $ 8,094 $ (618) $ 7,252 $ - $ 139,025
-----------------------------------------------------------------------------------------------
NONINTEREST INCOME
Noninterest Income-External
Customers $ 29,793 $ 2,957 $ 39,391 $ 1,843 $ 434 $ 4,879
Intersegment Noninterest Income 1,674 3,243 338 1 - 2,342
-----------------------------------------------------------------------------------------------
Total Noninterest Income $ 31,467 $ 6,200 $ 39,729 $ 1,844 $ 434 $ 7,221 $ (7,598) $ 79,297
-----------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Depreciation and Amortization $ 5,636 $ 560 $ 618 $ 10 $ 8 $ 5,332
Direct Expense 46,093 17,499 24,113 2,292 1,480 55,955
Overhead and Support 41,402 8,836 9,155 1,264 9 (60,666)
-----------------------------------------------------------------------------------------------
Total Noninterest Expense $ 93,131 $ 26,895 $ 33,886 $ 3,566 $ 1,497 $ 621 $ (7,598) $ 151,998
-----------------------------------------------------------------------------------------------
Income (Loss) Before Taxes and
Minority Interest $ 31,351 $ 3,121 $ 13,309 $ 6,372 $ (1,681) $ 13,852 $ - $ 66,324
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
Total Average Assets $2,749,055 $935,864 $100,900 $1,840,020 $ 14,190 $1,075,175 $(1,185,334) $5,529,870
===================================================================================================================================
</TABLE>
9
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
Our reportable segments are strategic business units that provide diverse
products and services within the financial services industry. We have six
reportable segments: Banking, International Banking, Riggs & Company, Treasury,
Riggs Capital Partners and Other. The Banking segment provides traditional
banking services, such as lending and deposit taking to retail, corporate and
commercial customers. The International Banking segment includes our Washington,
D.C.- based embassy banking business and our London-based banking subsidiary,
Riggs Bank Europe Limited. Riggs & Company is our private client services
division that provides trust and investment management services to a broad
customer base. The Treasury segment is responsible for asset and liability
management throughout our operations. Riggs Capital Partners is our venture
capital subsidiary, and specializes in equity investments in privately-held
high-growth companies. "Other" consists of our unallocated parent-company income
and expense, net interest income from unallocated equity and foreclosed real
estate activities of Riggs Bank N.A., our principal banking subsidiary.
We evaluate segment performance based on net income before taxes and minority
interest. The accounting policies of the segments are substantially the same as
those described in the summary of significant accounting policies. We account
for intercompany transactions as if the transactions were to third parties under
market conditions. Overhead and support expenses are allocated to each operating
segment based on number of employees, service usage and other factors relevant
to the expense incurred.
Reconciliations are provided from the segment totals to our consolidated
financial statements. The reconciliations of noninterest income and noninterest
expense offset, as these items result from intercompany transactions. For years
in which we have either no provision for loan losses or a reduction to the
reserve for loan losses, an allocation of loan loss is not provided to the
segments. The reconciliation of total average assets represents the elimination
of intercompany transactions.
<TABLE>
<CAPTION>
===================================================================================================================================
THREE MONTHS RIGGS RIGGS
ENDED INTERNATIONAL RIGGS & CAPITAL NATIONAL
SEPTEMBER 30, 2000 BANKING BANKING COMPANY TREASURY PARTNERS OTHER RECONCILIATION CORPORATION
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET INTEREST INCOME
Interest Income $ 49,713 $ 15,293 $ 1,512 $ 38,451 $ 34 $ 11,748
Interest Expense 17,398 21,326 3,408 13,687 - 13,332
Funds Transfer Income (Expense) (517) 15,877 4,638 (24,488) (725) 5,215
-----------------------------------------------------------------------------------------------
Net Interest Income (Loss),
Tax-Equivalent 31,798 9,844 2,742 276 (691) 3,631
Provision for Loan Losses (3,860) (12,631) - - - -
Tax Equivalent Adjustment (543) - - - - -
-----------------------------------------------------------------------------------------------
Net Interest Income (Loss) $ 27,395 $ (2,787) $ 2,742 $ 276 $ (691) $ 3,631 $ - $ 30,566
-----------------------------------------------------------------------------------------------
NONINTEREST INCOME
Noninterest Income-External
Customers $ 10,174 $ 1,198 $ 14,965 $ 753 $ 2,597 $ 390
Intersegment Noninterest Income 876 2,233 45 - 85 722
-----------------------------------------------------------------------------------------------
Total Noninterest Income $ 11,050 $ 3,431 $ 15,010 $ 753 $ 2,682 $ 1,112 $ (3,961) $ 30,077
-----------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Depreciation and Amortization $ 1,424 $ 301 $ 215 $ 4 $ 6 $ 2,254
Direct Expense 16,995 10,149 8,870 1,011 450 18,229
Overhead and Support 12,953 3,219 3,020 424 19 (19,635)
-----------------------------------------------------------------------------------------------
Total Noninterest Expense $ 31,372 $ 13,669 $ 12,105 $ 1,439 $ 475 $ 848 $ (3,961) $ 55,947
-----------------------------------------------------------------------------------------------
Income (Loss) Before Taxes and
Minority Interest $ 7,073 $ (13,025) $ 5,647 $ (410) $ 1,516 $ 3,895 $ - $ 4,696
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
Total Average Assets $2,813,902 $ 869,842 $ 99,914 $2,384,700 $ 83,837 $918,936 $(1,619,026) $5,552,105
===================================================================================================================================
</TABLE>
10
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
===================================================================================================================================
THREE MONTHS RIGGS RIGGS
ENDED INTERNATIONAL RIGGS & CAPITAL NATIONAL
SEPTEMBER 30, 1999 BANKING BANKING COMPANY TREASURY PARTNERS OTHER RECONCILIATION CORPORATION
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET INTEREST INCOME
Interest Income $ 47,616 $ 13,577 $ 2,737 $ 28,506 $ 2 $ 11,955
Interest Expense 13,501 15,259 4,006 10,260 - 13,205
Funds Transfer Income (Expense) (3,270) 9,042 4,348 (13,759) (288) 3,927
-----------------------------------------------------------------------------------------------
Net Interest Income (Loss),
Tax-Equivalent 30,845 7,360 3,079 4,487 (286) 2,677
Provision for Loan Losses - - - - - -
Tax Equivalent Adjustment (801) - - - - -
-----------------------------------------------------------------------------------------------
Net Interest Income (Loss) $ 30,044 $ 7,360 $ 3,079 $ 4,487 $ (286) $ 2,677 $ - $ 47,361
-----------------------------------------------------------------------------------------------
NONINTEREST INCOME
Noninterest Income-External
Customers $ 10,307 $ 730 $ 13,697 $ 958 $ 50 $ 3,874
Intersegment Noninterest Income 1,415 1,182 69 - - 561
-----------------------------------------------------------------------------------------------
Total Noninterest Income $ 11,722 $ 1,912 $ 13,766 $ 958 $ 50 $ 4,435 $ (3,227) $ 29,616
-----------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Depreciation and Amortization $ 1,849 $ 170 $ 228 $ 4 $ 4 $ 1,771
Direct Expense 15,099 5,609 8,524 1,533 469 19,601
Overhead and Support 15,024 2,900 3,354 492 7 (21,777)
-----------------------------------------------------------------------------------------------
Total Noninterest Expense $ 31,972 $ 8,679 $ 12,106 $ 2,029 $ 480 $ (405)$ (3,227) $ 51,634
-----------------------------------------------------------------------------------------------
Income (Loss) Before Taxes and
Minority Interest $ 9,794 $ 593 $ 4,739 $ 3,416 $ (716) $ 7,517 $ - $ 25,343
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
Total Average Assets $2,792,640 $ 832,585 $ 202,657 $2,001,130 $ 19,084 $ 999,122 $(1,235,959) $5,611,259
===================================================================================================================================
</TABLE>
NOTE 5. NEW FINANCIAL ACCOUNTING STANDARDS
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities,"
was issued in June 1998. SFAS No. 133 will require us to record derivative
instruments, such as interest-rate swap agreements, on the Consolidated
Statement of Condition as assets or liabilities, measured at fair value.
Currently we treat such instruments as off-balance-sheet items. Gains or losses
resulting from changes in the values of those derivatives would be accounted for
depending on the specific use of each derivative instrument and whether it
qualifies for hedge accounting treatment as stated in the standard. SFAS No.
137, issued in June 1999, deferred the effective date for implementation of SFAS
No. 133 to January 1, 2001. We do not anticipate any material impact from the
implementation of SFAS No. 133.
11
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
NOTE 6. VALUATION POLICY OF VENTURE CAPITAL INVESTMENTS
Investments in the portfolio of our venture capital subsidiary, Riggs Capital
Partners, LLC ("RCP"), are carried at fair value with gains and losses included
in the Consolidated Statements of Income. Fair value is based upon quoted market
prices when available. If quoted markets prices are not available, information
and techniques that estimate the market price determine fair value. Permanently
impaired investments are written-down as necessary. We apply discounts to the
market values of our investments to reflect various factors.
Direct investments are investments in individual companies with their financial
returns exclusively dependent upon the particular companies' performance. Listed
securities are discounted as appropriate from their quoted market value to
reflect the effects on the fair market value because of a lack of trading
history, lock-up provisions, a potential lack of market liquidity, and other
factors. The appropriate discount is generally determined by discounting our
capital gain on a publicly traded security. Warrants to purchase publicly
traded shares in companies are valued using a similar methodology to that
described above. In the event that the listed value of an investment is
lower than the average cost basis of the fund's investment in the security,
the lower valuation will be employed. Alternatives to the above discounting
formulas may be necessary to account for extraordinary circumstances concerning
particular securities.
For direct investments in securities that do not have readily available market
prices, valuations are carried at cost until the occurrence of a material event,
such as a follow-on round of financing or a strategic sale. If the price of a
security in its most recent financing is higher than RCP's carrying value, RCP
will generally use the higher valuation if new, independent, sophisticated
investors purchased securities at the higher price. If no new investors
participated in the funding, then the previous valuation is generally
maintained. If we invest in the follow-on strategic financing round, these new
investments are valued at cost. If the most recent financing implies a lower
valuation than the previous round, we use the lower valuation regardless of
whether new, sophisticated investors participated in the funding. If a
company has been self-financing and has had positive cash flow from operations
for at least the past two fiscal years, the company's valuation may be
increased, in which case we would consider increasing a company's valuation
based on financial measures using price/earnings ratios, cash flow multiples, or
other financial measures of similar companies, appropriately discounted for a
lack of liquidity.
Indirect investments represent investments made in other investment funds in
which the investment decisions are made by the funds' management. We generally
rely on quarterly values reported by the Investment Manager/General Partner of
the partnership as the basis for valuing our ownership interests in private
equity limited partnerships. To account for the dilutive effects of
management fees, partnership expenses, and General Partners' "carried
interest" (i.e., share of profits), once a fund's gains have exceeded its
preferred return threshold to its limited partners, we discount the reported
value of its limited partnership interests in private equity funds as
appropriate.
In the event that a fund holds a publicly traded security in its
portfolio that it has not distributed, the security shall be valued at the lower
of the closing price of the security on the last trading day of the quarter
and the last reported value of the security by the fund.
NOTE 7. RIGGS CAPITAL PARTNERS II
In the third quarter of 2000, we formed a second venture capital
subsidiary-Riggs Capital Partners II in order to maintain new investment flow
as proceeds of old investments in Riggs Capital Partners, LLC are distributed to
investors. J. Carter Beese, President of Riggs Capital Partners, LLC was
appointed President of this second subsidiary. We have committed to providing
up to $100 million, over a three-year period, to Riggs Capital Partners II.
We may rescind the commitments at any time based upon our review of investment
performance of the Fund and/or our determination that other uses of capital are
of greater priority.
12
<PAGE>
RIGGS NATIONAL CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
We recorded a loss of $4.3 million, or $(.15) per diluted share, for the third
quarter of 2000, primarily the result of a $16.5 million provision for loan
losses. The provision included an amount for the discovery of a fraud in a
commercial facility to a borrower at our London operations. The third quarter
2000 loss compares to net income of $7.2 million, or $.25 per diluted share, in
the third quarter of 1999.
For the first nine months of 2000, we had net income of $17.6 million, or $.62
per diluted share, compared with net income of $24.5 million, or $.84 per
diluted share for the first nine months of 1999. The decrease in net income of
28% resulted primarily from the current quarter's loan loss provision.
The $16.5 million loan loss provision reflected an $11.0 million charge-off
representing our total exposure to the London borrower previously mentioned, as
well as a loss of $3.9 million incurred in the sale of a domestic loan.
Return on average assets was (.30)% and .42% for the three and nine months ended
September 30, 2000, compared to .51% and .59% for the same periods a year ago.
Return on average shareholders' equity was 6.69% for the nine months ended
September 30, 2000, compared to 9.43% for the nine months ended September 30,
1999.
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 $47.6 million in
the third quarter of 2000, almost unchanged from the $48.2 million for the same
quarter in 1999. Net interest income was $146.5 million for the first nine
months of 2000, compared to $141.4 for the same period a year ago. The increase
from the prior year's first nine months was primarily due to a reduction in
interest expense due to the redemption of $125 million in subordinated notes in
July 1999, and increases in interest income of $4.7, $9.1, and $8.5 million,
respectively, on the loans, securities, and overnight investments portfolios.
These items were partially offset by increases in interest expense on our
interest-bearing deposits and short-term borrowings.
NET INTEREST INCOME CHANGES (1)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 2000 VS 1999 SEPTEMBER 30, 2000 VS 1999
------------------------------------------------------------------------
(TAX-EQUIVALENT BASIS) DUE TO DUE TO TOTAL DUE TO DUE TO TOTAL
(IN THOUSANDS) RATE VOLUME CHANGE RATE VOLUME CHANGE
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Interest Income:
Loans, Including Fees $3,304 $(3,029) $ 275 $ 8,611 $(3,940) $ 4,671
Securities Available for Sale 727 197 924 3,390 5,685 9,075
Time Deposits with Other Banks 1,464 (843) 621 4,634 (6,310) (1,676)
Federal Funds Sold and Reverse
Repurchase Agreements 860 778 1,638 1,823 6,652 8,475
-----------------------------------------------------------------------------------------------------------------------------------
Total Interest Income 6,355 (2,897) 3,458 18,458 2,087 20,545
Interest Expense:
Interest-Bearing Deposits 5,071 (1,311) 3,760 11,784 (1,050) 10,734
Repurchase Agreements and Other
Short-Term Borrowings 1,821 (928) 893 5,301 5,599 10,900
Long-Term Debt 27 (660) (633) 476 (6,635) (6,159)
-----------------------------------------------------------------------------------------------------------------------------------
Total Interest Expense 6,919 (2,899) 4,020 17,561 (2,086) 15,475
===================================================================================================================================
Net Interest Income $ (564) $ 2 $ (562) $ 897 $ 4,173 $ 5,070
</TABLE>
(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.
13
<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
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999
------------------------------------------------------------------------
(TAX-EQUIVALENT BASIS) (1) AVERAGE INCOME/ AVERAGE INCOME/
(IN THOUSANDS) BALANCE EXPENSE RATE BALANCE EXPENSE RATE
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Loans, Including Fees (2) $3,074,941 $58,775 7.60% $3,213,650 $ 58,500 7.22%
Securities Available for Sale (3) 1,269,559 19,955 6.25 1,255,783 19,031 6.01
Time Deposits with Other Banks 328,265 5,575 6.76 387,892 4,954 5.07
Federal Funds Sold and Reverse Repurchase Agreements 277,315 4,603 6.60 224,509 2,965 5.24
-----------------------------------------------------------------------------------------------------------------------------------
Total Earning Assets and Average Rate Earned 4,950,080 88,908 7.15 5,081,834 85,450 6.67
Reserve for Loan Losses (36,860) (52,224)
Cash and Due from Banks 128,591 151,931
Other Assets 510,294 429,718
===================================================================================================================================
Total Assets $5,552,105 $5,611,259
LIABILITIES, MINORITY INTEREST AND
SHAREHOLDERS' EQUITY
Interest-Bearing Deposits $3,474,879 $31,645 3.62% $3,564,923 $ 27,885 3.10%
Repurchase Agreements and Other Short-Term Borrowings 545,662 8,058 5.87 624,094 7,165 4.55
Long-Term Debt 66,525 1,605 9.60 93,699 2,238 9.48
-----------------------------------------------------------------------------------------------------------------------------------
Total Interest-Bearing Funds and Average Rate Paid 4,087,066 41,308 4.02 4,282,716 37,288 3.45
Demand Deposits 645,585 579,101
Other Liabilities 101,457 65,965
Minority Interest in Preferred Stock of Subsidiaries 350,000 350,000
Shareholders' Equity 367,997 333,477
===================================================================================================================================
Total Liabilities, Minority Interest and
Shareholders' Equity $5,552,105 $5,611,259
===================================================================================================================================
NET INTEREST INCOME AND SPREAD $47,600 3.13% $ 48,162 3.22%
===================================================================================================================================
NET INTEREST MARGIN ON EARNING ASSETS 3.83% 3.76%
</TABLE>
(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.
NONINTEREST INCOME
Noninterest income for the three months ended September 30, 2000, totaled $30.1
million, an increase of $.5 million from the $29.6 million for the same period a
year ago. $2.7 million in venture capital investment gains at Riggs Capital
Partners contributed significantly to noninterest income for the third quarter
of 2000, while in the third quarter of 1999 we recorded $3.8 million in gains
from the sale of the corporate aircraft, which was replaced. Noninterest income
between the periods was also enhanced by increases in trust and investment
advisory income and service charges and fees of $697 thousand and $601 thousand,
respectively.
Noninterest income for the nine months ended September 30, 2000, totaled $94.9
million, an increase of $15.6 million from the $79.3 million earned for the same
period in 1999. This increase was primarily due to $15.3 million in venture
capital investment gains at Riggs Capital Partners, and an increase of $2.9
million in trust and advisory income from 1999 to 2000 at Riggs & Company.
Noninterest income for the prior year's nine months ended was enhanced by the
$3.8 million gain discussed above.
14
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
<TABLE>
<CAPTION>
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999
------------------------------------------------------------------------
(TAX-EQUIVALENT BASIS) (1) AVERAGE INCOME/ AVERAGE INCOME/
(IN THOUSANDS) BALANCE EXPENSE RATE BALANCE EXPENSE RATE
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Loans, Including Fees (2) $3,125,668 $178,596 7.63% $3,195,091 $ 173,925 7.28%
Securities Available for Sale (3) 1,274,350 59,872 6.28 1,151,402 50,797 5.90
Time Deposits with Other Banks 354,881 16,671 6.27 506,533 18,347 4.84
Federal Funds Sold and Reverse Repurchase Agreements 316,113 14,767 6.24 167,519 6,292 5.02
-----------------------------------------------------------------------------------------------------------------------------------
Total Earning Assets and Average Rate Earned 5,071,012 269,906 7.11 5,020,545 249,361 6.64
Reserve for Loan Losses (38,820) (53,055)
Cash and Due from Banks 137,973 148,358
Other Assets 494,266 414,022
===================================================================================================================================
Total Assets $5,664,431 $5,529,870
LIABILITIES, MINORITY INTEREST AND
SHAREHOLDERS' EQUITY
Interest-Bearing Deposits $3,544,256 $92,759 3.50% $3,545,657 $ 82,025 3.09%
Repurchase Agreements and Other Short-Term Borrowings 629,212 25,861 5.49 470,094 14,961 4.26
Long-Term Debt 66,525 4,815 9.67 158,558 10,974 9.25
-----------------------------------------------------------------------------------------------------------------------------------
Total Interest-Bearing Funds and Average Rate Paid 4,239,993 123,435 3.89 4,174,309 107,960 3.46
Demand Deposits 630,528 595,877
Other Liabilities 91,708 62,401
Minority Interest in Preferred Stock of Subsidiaries 350,000 350,000
Shareholders' Equity 352,202 347,283
===================================================================================================================================
Total Liabilities, Minority Interest and
Shareholders' Equity $5,664,431 $5,529,870
===================================================================================================================================
NET INTEREST INCOME AND SPREAD $146,471 3.22% $ 141,401 3.18%
===================================================================================================================================
NET INTEREST MARGIN ON EARNING ASSETS 3.86% 3.77%
</TABLE>
(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.
NONINTEREST EXPENSE
Noninterest expense for the three months ended September 30, 2000, was $55.9
million, an increase of $4.3 million from the $51.6 million reported for the
three months ended September 30, 1999. This increase was a result of added
personnel costs during the year, partially related to new business initiatives,
and other noninterest expense, such as data processing costs and occupancy
expense related to these business initiatives. In addition, in the third quarter
of 2000, we incurred legal fees related to the discovery of fraud in a
commercial facility to a borrower at our London operations discussed under
"Results of Operations" in the Management's Discussion and Analysis of this Form
10Q.
Noninterest expense for the nine months ended September 30, 2000, was $165.4
million compared to $152.0 million for the same period a year ago. The increase
for the nine month period was partially due to the new business initiatives and
legal fees discussed in the preceding paragraph.
15
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
FINANCIAL CONDITION
SECURITIES
Securities available for sale totaled $1.28 billion at September 30, 2000,
compared to $1.29 billion at year-end 1999 and $1.30 billion at September 30,
1999. The activity for the first nine months included purchases of securities
available for sale totaling $1.08 billion, which were more than offset by
maturities, curtailments and sales of securities available for sale totaling
$1.11 billion. The weighted-average durations and yields for the portfolio,
adjusted for anticipated prepayments, were approximately 3.3 years and 6.14%,
respectively, at September 30, 2000.
<TABLE>
<CAPTION>
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999 DECEMBER 31, 1999
------------------------------------------------------------------------
AMORTIZED MARKET/ AMORTIZED MARKET/ AMORTIZED MARKET/
AVAILABLE FOR SALE COST BOOK VALUE COST BOOK VALUE COST BOOK VALUE
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
U.S. Treasury Securities $ 313,718 $ 301,519 $ 314,267 $ 298,605 $ 289,242 $ 268,008
Government Agencies Securities 445,211 442,725 438,809 435,975 479,297 474,457
Mortgage-Backed Securities 513,285 491,442 526,640 500,384 518,418 483,734
Other Securities 47,485 47,485 63,287 63,287 63,685 63,685
===================================================================================================================================
Total $1,319,699 $1,283,171 $1,343,003 $1,298,251 $1,350,642 $1,289,884
</TABLE>
LOANS
At September 30, 2000, loans outstanding totaled $3.03 billion, decreasing from
the September 30, 1999 and December 31, 1999 balances of $3.25 and $3.20
billion, respectively. The decreases were primarily in commercial and financial,
residential mortgage and foreign loans from both prior periods. The majority of
the decrease in commercial and financial loans from both prior periods was in
syndicated loans. Syndicated loan commitments decreased $231 million from
September 30, 1999 and $171 million from December 31, 1999, respectively. It is
part of our strategy generally to no longer participate in these types of loans.
These decreases were partially offset by increases in home equity and real
estate/commercial construction loans.
During the second quarter of 2000, we began originating mortgage loans for sale
in the secondary market. At September 30, 2000, residential real estate loans
originated and held for sale totaled $18.6 million. There were no such loans at
either September 30, 1999, or December 31, 1999.
<TABLE>
<CAPTION>
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
(IN THOUSANDS) 2000 1999 1999
=======================================================================================================================
<S> <C> <C> <C>
Commercial and Financial $ 538,718 $ 713,081 $ 667,393
Real Estate - Commercial/Construction 450,862 399,440 415,304
Residential Mortgage 1,175,691 1,237,522 1,219,740
Loans Available for Sale 18,559 - -
Home Equity 339,557 311,958 315,520
Consumer 69,951 72,090 73,158
Foreign 446,685 522,291 517,012
-----------------------------------------------------------------------------------------------------------------------
Total Loans 3,040,023 3,256,382 3,208,127
Net Deferred Loan Fees,
Premiums and Discounts (5,184) (5,585) (6,146)
=======================================================================================================================
Loans $3,034,839 $3,250,797 $3,201,981
</TABLE>
16
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
RESERVE FOR LOAN LOSSES
Changes in the reserve for loan losses are summarized as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
2000 1999
===================================================================================================================================
<S> <C> <C>
Balance, January 1 $ 41,455 $ 54,455
Provision for loan losses 17,494 -
Loans charged-off 23,403 4,337
Less: Recoveries on charged-off loans 2,191 1,355
-----------------------------------------------------------------------------------------------------------------------------------
Net loan charge-offs (recoveries) 21,212 2,982
Foreign exchange translation adjustments (590) (94)
===================================================================================================================================
Balance, September 30 $ 37,147 $ 51,379
</TABLE>
ASSET QUALITY
NONPERFORMING ASSETS
Nonperforming assets, which include nonaccrual loans, renegotiated loans and
other real estate owned (net of reserves), totaled $39.6 million at September
30, 2000, a $4.1 million decrease from the year-end 1999 total of $43.7 million
and a $13.9 million decrease from the September 30, 1999 total. The decrease in
nonperforming assets from the third quarter of 1999 was mainly due to
charge-offs on two nonaccrual loans, which were placed on non-accrual in the
third quarter of that year. These charge-offs included $8.8 million on a
computer equipment manufacturing and servicing company and $6.0 million on a
health care entity. Another charge-off in the amount of $11.1 million,
representing our total exposure to the borrower, was made in September 2000 on a
loan which had been placed on nonaccrual in August 2000 at our London
operations. This charge-off was made as a result of the discovery of fraud in
the facility. We also charged-off $3.9 million to achieve a discounted sale of a
loan which, although not a nonperforming asset, made us doubtful about full
repayment. These charge-offs were partially offset by additions to the
non-accrual portfolio of several loans in London totaling $3.8 million.
The loans to the health care entity and computer equipment manufacturing and
servicing company, as well as several smaller loans, are considered impaired.
Impaired loans totaled $37.4 million at September 30, 2000. The assigned reserve
for loan losses for impaired loans was $8.9 million at September 30, 2000.
PAST-DUE AND POTENTIAL PROBLEM LOANS
Past-due loans consist of residential real estate loans, commercial and
industrial loans, and consumer loans that are in the process of collection and
that are accruing interest. Past-due loans increased $2.1 million during the
first nine months of 2000 to $9.6 million, with most of the increase in secured,
residential real estate loans. Potential problem loans increased from September
30 and December 31, 1999, mostly due to a loan at our London operations.
17
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
NONPERFORMING ASSETS AND PAST-DUE LOANS
<TABLE>
<CAPTION>
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
(IN THOUSANDS) 2000 1999 1999
=======================================================================================================================
<S> <C> <C> <C>
NONPERFORMING ASSETS:
Nonaccrual Loans (1) $ 37,547 $ 51,203 $ 41,534
Renegotiated Loans 939 1,409 1,263
Other Real Estate Owned, Net 1,133 908 908
=======================================================================================================================
Total Nonperforming Assets $ 39,619 $ 53,520 $ 43,705
PAST-DUE LOANS (2) $ 9,576 $ 8,647 $ 7,429
POTENTIAL PROBLEM LOANS $ 4,926 $ - $ 2,013
</TABLE>
(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 contractually past due 90 days or more in principal or
interest that are well-secured and in the process of collection.
DEPOSITS
Deposits are our primary and most stable source of funds. Deposits totaled $4.08
billion at September 30, 2000, a decrease of $98.2 million from the December 31,
1999 total of $4.18 billion, and a decrease of $11.8 million from the September
30, 1999 deposit total of $4.09 billion. For both periods, deposits decreased in
savings and NOW and time deposits in domestic offices accounts, and increased in
money market accounts. Demand deposits decreased as they were swept into money
market accounts in order to reduce reserve requirements.
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings decreased by $339.6 million from the year-end 1999
balance, and $293.6 million from the September 30, 1999 balance. These changes
reflect borrowings and calls of $400 million in advances from the Federal Home
Loan Bank of Atlanta (FHLB). During 1999, we borrowed $400 million, all callable
during the year 2000, at an average rate of 4.99%. $200 million was called by
the FHLB in the first quarter of 2000, with the remaining $200 million called in
July. Short-term borrowings are an additional source of funds that we have
utilized to meet certain asset/liability and daily cash management objectives
and are used to generate cash and maintain adequate levels of liquidity.
In July 1999 we redeemed $125 million of our 8.5% subordinated notes due in
2006, at the price of 104.25%. General corporate funds were used to retire the
debt. We recorded an extraordinary expense of $5.1 million, after tax, in the
third quarter of 1999 as a result of the redemption.
<TABLE>
<CAPTION>
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
(IN THOUSANDS) 2000 1999 1999
=======================================================================================================================
<S> <C> <C> <C>
Repurchase Agreements and Other Short-Term Borrowings $ 492,602 $ 786,170 $ 832,202
Subordinated Debentures due 2009 66,525 66,525 66,525
=======================================================================================================================
Total Short-Term Borrowings and Long-Term Debt $ 559,127 $ 852,695 $ 898,727
</TABLE>
18
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
LIQUIDITY
We seek to maintain sufficient liquidity to meet the needs of depositors,
borrowers and creditors at a reasonable cost and without undue stress on our
operations and those of our banking subsidiaries. Our Asset/Liability Committee
actively analyzes and manages liquidity in coordination with other areas of the
organization (see "Sensitivity to Market Risk"). At September 30, 2000, our
liquid assets, on a consolidated basis, which include cash and due from banks,
Government obligations and other securities, federal funds sold, reverse
repurchase agreements and time deposits at other banks, totaled $1.96 billion
(36% of total assets). This compares with $2.20 billion (38%) at December 31,
1999, and $2.07 billion (36%) at September 30, 1999. At September 30, 2000,
$998.8 million of our assets were pledged to secure deposits and other
borrowings. This compares with pledged assets of $1.02 billion at December 31,
1999, and $887.4 million at September 30, 1999.
Our liquidity position is maintained by a stable source of funds from our core
deposit relationships. We have other sources of funds, such as short-term credit
lines available from several Federal Home Loan Banks and other financial
institutions. In addition, we have a line of credit available through our
membership in the FHLB. At September 30, 2000, December 31, 1999, and September
30, 1999, short-term credit lines and the FHLB Atlanta line of credit available
totaled approximately $1.75 billion, $1.38 billion, and $1.41 billion,
respectively. At September 30, 2000, December 31, 1999, and September 30, 1999,
the amounts outstanding were $15.0 million, $423.2 million, and $431.9 million,
respectively.
SHAREHOLDERS' EQUITY AND REGULATORY CAPITAL
Total shareholders' equity at September 30, 2000, was $365.2 million, an
increase of $27.5 million from year-end 1999 and $22.1 million from a year ago.
The increase from year-end was primarily the result of net income of $17.6
million and a reduction in unrealized securities losses of $15.8 million, after
tax. The increase from September 30, 1999 was primarily the result of net income
of $24.7 million, and a reduction in unrealized securities losses of $5.4
million. For more information on our securities portfolio, see the discussion
under "Securities" in the Management's Discussion and Analysis of Financial
Condition and Results of Operation in this Form 10-Q.
Book value per common share was $12.87 as of September 30, 2000, compared to
$11.93 at year-end 1999 and $12.12 at September 30, 1999. The increases in book
value from September 30th and year-end 1999 were primarily the result of the net
income and net unrealized securities gains described in the preceding paragraph.
Following are our capital ratios and those of our banking subsidiary, Riggs Bank
National Association (Riggs Bank N.A.) at September 30, 2000 and 1999, and
December 31, 1999.
<TABLE>
<CAPTION>
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, REQUIRED
2000 1999 1999 MINIMUMS
===================================================================================================================================
<S> <C> <C> <C> <C>
RIGGS NATIONAL CORPORATION:
Tier I 15.55% 13.76% 14.09% 4.00%
Combined Tier I and Tier II 25.41 23.25 23.55 8.00
Leverage 9.17 8.67 8.59 4.00
RIGGS BANK N.A.:
Tier I 13.47 13.36 12.63 4.00
Combined Tier I and Tier II 14.67 14.61 13.86 8.00
Leverage 8.03 8.69 7.91 4.00
</TABLE>
19
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
SENSITIVITY TO MARKET RISK
We are exposed to various market risks. We have determined that interest-rate
risk has a material impact on our financial performance, and as such we have
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 our
operations to provide a stable net interest margin while maintaining liquidity
and capital. This entails the management of our overall risk in conjunction with
the acquisition and deployment of funds based upon ALCO's view of both current
and prospective market and economic conditions.
We manage our 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
September 30, 2000 and 1999 are shown in the following tables. 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 over a 12-month time
period and a 300 basis point (3%) gradual increase or decrease in rates over a
36-month time period.
<TABLE>
<CAPTION>
INTEREST-RATE SENSITIVITY ANALYSIS (1)
MOVEMENTS IN INTEREST RATES FROM SEPTEMBER 30, 2000
===================================================================================================================================
SIMULATED IMPACT OVER SIMULATED IMPACT OVER
NEXT TWELVE MONTHS NEXT THIRTY-SIX MONTHS
-----------------------------------------------------------------------------------------------------------------------------------
(In Thousands) +100BP -100BP +300BP -300BP
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Simulated Impact Compared With a
"Most Likely" Scenario:
Net Interest Income Increase/(Decrease) (0.2)% 3.7% (0.00)% 4.4%
Net Interest Income Increase/(Decrease) $ (300) $ 7,111 $ (203) $26,797
MOVEMENTS IN INTEREST RATES FROM SEPTEMBER 30, 1999
===================================================================================================================================
SIMULATED IMPACT OVER SIMULATED IMPACT OVER
NEXT TWELVE MONTHS NEXT THIRTY-SIX MONTHS
-----------------------------------------------------------------------------------------------------------------------------------
(In Thousands) +100BP -100BP +300BP -300BP
-----------------------------------------------------------------------------------------------------------------------------------
Simulated Impact Compared With a
"Most Likely" Scenario:
Net Interest Income Increase/(Decrease) (1.1)% 2.2% (3.5)% 0.9%
Net Interest Income Increase/(Decrease) $(2,180) $ 4,294 $(21,642) $ 5,586
</TABLE>
(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.
20
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK, CONTINUED
At September 30, 2000, 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 4%. 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 5%. The results of the simulation for
September 30, 2000, indicated that we were "neutral" to "liability sensitive"
over both the 12 and 36-month time horizons. We were within guidelines for
interest rates moving significantly in either direction.
In managing our interest-rate risk, ALCO uses financial derivative instruments,
such as interest-rate swaps. Financial derivatives are employed to assist in the
management and/or reduction of our interest-rate risk and can effectively alter
the sensitivity of segments of the statement of condition for specified periods
of time. All of these derivative instruments are considered off-balance-sheet,
as they do not materially affect the level of our assets or liabilities. Along
with financial derivative instruments, 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.
We find that the methodologies previously discussed provide a meaningful
representation of our 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. We believe our current interest-rate sensitivity level is
appropriate, considering our economic outlook and what we believe is a
conservative approach taken in the review and monitoring of our sensitivity
position.
COMMITMENTS AND CONTINGENT LIABILITIES
Outstanding commitments and contingent liabilities that do not appear in the
consolidated financial statements at September 30, 2000 and 1999, and December
31, 1999 are detailed in the tables below. At September 30, 2000, our financial
derivative instruments included five generic swaps and three basis swaps with a
total notional amount of $141.5 million. The generic swaps extend the maturities
of certain short-term liabilities at the current funding rates to protect these
liabilities against rising interest rates. These agreements were contracted in
October 1999, December 1999, January 2000 and July 2000, and entail the payment
of a blended 6.87% fixed rate and the receipt of a floating rate equal to
three-month LIBOR. These swaps reset quarterly and mature in 2004 and 2005. The
basis swaps lock in a spread between the 3-month T-bill and federal funds to
protect against a narrowing of spreads for deposits that are tied to the 3-month
T-bill. These agreements were contracted in July 2000 and effectively result in
the payment of the federal funds rate minus a spread and the receipt of the
3-month T-bill rate. These swaps reset weekly and mature in July 2001.
We had 31 swaps at Riggs Bank Europe Limited, our London-based banking
subsidiary, with a total notional amount of $96.2 million that entail the
payment of a blended 6.59% fixed rate and the receipt of a floating rate equal
to six-month LIBOR. These swaps have varying maturities extending until 2005 and
are entered into for the purpose of converting fixed rate loans to variable.
As a result of Riggs Capital Partners venture capital investment activity, we
had venture capital commitments of $13.1 million at September 30, 2000 of which
$358 thousand were less than one year.
<TABLE>
<CAPTION>
CONTRACTUAL OR NOTIONAL VALUE
------------------------------------------------------------------------
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
2000 1999 1999
===================================================================================================================================
<S> <C> <C> <C>
Commitments to Extend Credit $ 944,225 $ 981,818 $1,035,644
Venture Capital Commitments 13,102 - 25,210
Letters of Credit 144,388 155,207 137,622
Derivative Instruments:
Foreign Exchange Contracts:
Commitments to Purchase $ 69,155 $ 109,944 $ 112,226
Commitments to Sell 297,638 195,075 317,837
Interest Rate Agreements
Swaps 237,668 104,689 126,786
Purchased Options - - 629
</TABLE>
21
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK, CONTINUED
Our interest rate agreement activity for the nine months ended September 30,
2000, is as follows:
<TABLE>
<CAPTION>
BALANCE BALANCE
DECEMBER 31, SEPTEMBER 30,
1999 ADDITIONS MATURITIES TERMINATIONS 2000
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Interest Rate Agreements:
Receive variable/pay fixed $ 25,000 $ 116,500 $ - $ - $ 141,500
Riggs Bank Europe Limited 101,786 11,836 17,454 - 96,168
===================================================================================================================================
Total $126,786 $ 128,336 $ 17,454 $ - $ 237,668
</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, including the references to earnings from venture capital,
implementation of our business strategy, hedging activities and our trust and
investment advisory income. A variety of factors could cause our actual results
and experiences to differ materially from those expressed or implied by the
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 our business. These factors also
include the growth of the economy, changes in credit quality or interest rates,
changes in value of venture capital investments in the technology and other
sectors, timing of technology enhancements for products and operating systems,
the impact of competitive products, services and pricing, customer business
requirements, Congressional legislation and similar matters.
22
<PAGE>
RIGGS NATIONAL CORPORATION
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
--------
The exhibits listed on page 24 are incorporated by
reference or filed herewith in response to this item.
(b) Reports on Form 8-K
-------------------
On August 23, 2000, we filed a Form 8-K regarding our
press release issued on the same date. This press
release announced the discovery of potential fraud in a
commercial facility to a borrower at our London
operation.
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: November 13, 2000 /s/ TIMOTHY C. COUGHLIN
----------------- -----------------------
Timothy C. Coughlin
President
Date: November 13, 2000 /s/ DAVID E. ISNER
----------------- ------------------
David E. Isner
Assistant Treasurer
(Chief Accounting Officer)
23
<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION PAGES
NO.
===================================================================================================================================
<S> <C> <C>
(3.1)Restated Certificate of Incorporation of Riggs National Corporation,
dated April 19, 1999 (Incorporated by reference to the Registrant's
Form 10-Q for the quarter ended June 30, 1999, SEC File No. 09756).
(3.2)By-laws of the Registrant with amendments through April 12, 2000
(Incorporated by reference to the Registrant's Form 10-Q for the
quarter ended June 30, 2000, SEC File No. 09756).
(4.1)Indenture dated June 1, 1989, with respect to $100 million 9.65%
Subordinated Debentures due 2009 (Incorporated by reference to the
Registrant's Form 8-K dated June 20, 1989, SEC File No. 09756.)
(4.2)Indenture dated December 13, 1996, with respect to $150 million,
8.625% Trust Preferred Securities, Series A due 2026 (Incorporated
by reference to the Registrant's S-3 dated February 6, 1997, SEC
File No. 333-21297.)
(4.3)Indenture dated March 12, 1997, with respect to $200 million, 8.875%
Trust Preferred Securities, Series C due 2027 (Incorporated by
reference to the Registrant's S-3 dated May 2, 1997, SEC File No.
333-26447.)
(27)Financial Data Schedule Exhibit 27
</TABLE>
(Exhibits omitted are not required or not applicable.)
24
