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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- --- ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1993
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _________ to _________
Commission File No. 0-6919
UNION PLANTERS CORPORATION
(Exact name of registrant as specified in its charter)
Tennessee 62-0859007
(State of incorporation) (I.R.S. Employer Identification No.)
7130 Goodlett Farms Parkway, Memphis, Tennessee 38018
(address of principal executive offices and zip code)
Registrant's telephone number, including area code: (901) 383-6000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Common Stock having a par New York Stock Exchange
value of $5 per share (name of each exchange
(title of class) on which registered)
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
8% Cumulative, Convertible Preferred Stock,
Series E having a stated value of $25 per share
(title of class)
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 for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirement for the past 90 days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. /X/
The aggregate market value of the voting stock held by nonaffiliates of the
registrant at February 28, 1994 was approximately $440,285,000.
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE
REGISTRANT'S CLASSES OF COMMON STOCK.
CLASS OUTSTANDING AT FEBRUARY 17, 1994
Common Stock having a par 20,505,885
value of $5 per share
(title of class)
DOCUMENTS INCORPORATED BY REFERENCE
Part of Form 10-K
Documents Incorporated into which Incorporated
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1. Certain parts of the Annual Report to Items 1, 2, 5, 6, 7, and 8
Shareholders for the year ended December
31, 1993
2. Certain parts of the Definitive Proxy Part III
Statement for the Annual Shareholders
Meeting to be held April 28, 1994
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FORM 10-K CROSS REFERENCE INDEX
Page Number
-----------
PART I
Item 1. Business 4
Item 1a. Executive Officers of the Registrant 20
Item 2. Properties 22
Item 3. Legal Proceedings 23
Item 4. Submission of Matters to a Vote of
Security Holders *
PART II
Item 5. Market for the Registrant's Common
Stock and Related Stockholder
Matters 27
Item 6. Selected Financial Data 27
Item 7. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 27
Item 8. Financial Statements and
Supplementary Data 27
Item 9. Changes in and Disagreements
with Accountants on Accounting
and Financial Disclosure *
PART III
Item 10. Directors and Executive Officers
of the Registrant 27
Item 11. Executive Compensation 28
Item 12. Security Ownership of Certain
Beneficial Owners and Management 28
Item 13. Certain Relationships and Related
Transactions 28
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PART IV
Item 14. Exhibits, Financial Statement
Schedules, and Reports on Form 8-K 28
SIGNATURES 30
* Not Applicable
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PART I
ITEM 1. BUSINESS
GENERAL
Union Planters Corporation (the Corporation) is a registered bank
holding company and savings and loan holding company incorporated under the
laws of Tennessee in 1971 and headquartered in Memphis, Tennessee. The
Corporation's activities are conducted primarily through its 32 (38 including
acquisitions consummated subsequent to December 31, 1993 and through March 1,
1994) bank and savings and loan subsidiaries headquartered in Tennessee,
Mississippi, Arkansas, Kentucky, and Alabama. The largest subsidiary of the
Corporation is Union Planters National Bank (UPNB), a financial services
company which provides commercial banking services and products in Tennessee
and other selected markets, primarily in the Mid-South and the Southeastern
United States. Reference is made to Table 15 in Part II, Item 7, of
Management's Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) for a listing of the Corporation's subsidiaries owned at
December 31, 1993, showing their respective total assets, total loans, total
deposits, and total shareholders' equity.
The Corporation serves its customers through 234 banking offices.
Reference is made to page 59 of the 1993 Annual Report to Shareholders for a
listing of the cities and communities served and the number of banking offices
for each of the Corporation's banking subsidiaries.
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UNION PLANTERS NATIONAL BANK (UPNB)
UPNB offers a full range of traditional commercial banking services and
products to individuals, businesses, and public and private entities. In
addition to commercial loans, UPNB offers cash management and depository
services, correspondent banking services, real estate and construction lending
services, secured or asset-based lending, agri-business lending, leasing, and
international trade services. Retail banking services include demand, savings
and time deposit accounts, money market accounts, small commercial loans,
personal loans, real estate and installment loans, credit cards, safe deposit
facilities, trust and discount brokerage services, and other ancillary
financial services normally furnished by full-service banks. Special private
banking centers offer a complete range of personal financial services including
credit and special investment services suitable to individuals having complex
financial services needs.
Trust services offered by UPNB include investment of funds, financial
planning, estate and trust administration, and other trust services to
individuals, businesses, government, and nonprofit organizations. UPNB acts in
various corporate trust and agency capacities in connection with living trusts,
retirement plans, and wills. Trust services are offered through UPNB's branch
system, an office in Jackson, Tennessee, and its principal trust office in
Memphis, Tennessee. Trust revenues for 1993 were $5.0 million compared to $4.5
million in 1992.
UPNB is a major residential mortgage and construction lender in Shelby
County, Tennessee. UPNB acts as a mortgage loan originator, processor, and
servicer and its revenues are derived from brokerage, origination, and
servicing fees. For 1993, these business activities had total revenues of
approximately $13.2 million compared to $15.3 million in 1992.
Commercial banking services also include providing data processing for
correspondent banks and a computerized remote data- processing system to both
correspondent and non-affiliated small and medium-sized banks. Management has
decided to discontinue its data-processing services and the wind-down should be
completed by mid-year 1994. Gross revenues from this operation were $482,000 in
1993 compared to $786,000 in 1992.
Union Planters Brokerage Services (UPBS), an unincorporated division of
UPNB, offers discount securities brokerage services to retail customers,
primarily individuals. Revenues from this operation were $1.5 million in 1993
compared to $1.2 million in 1992.
Through its Capital Markets Operation, UPNB purchases, pools, and
securitizes portfolios of whole mortgage loans, consumer loans, and other
financial instruments. The UPNB SBA Loan Trading
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Operation is similar to the Capital Markets Operations except that it involves
the purchasing, pooling, and securitization of the government-guaranteed
portions of SBA loans. The Capital Markets and SBA Loan Trading Operations
contributed approximately $474,000 and $4.1 million, respectively, to the
pretax earnings of UPNB in 1993 and had gross revenues of $4.0 million and
$12.7 million, respectively. In 1992, these operations generated pretax
earnings of $2.5 million and $3.8 million, respectively, on gross revenues of
$8.6 million and $11.2 million, respectively.
In 1993, UPNB had net earnings of $35.6 million, which represented a
return on average assets (ROA) of 1.07%, compared to net earnings of $27.1
million and an ROA of .89% for 1992.
COMMUNITY BANKING SUBSIDIARIES
The Corporation's Community Bank Group consists of 28 (34 including
acquisitions consummated subsequent to December 31, 1993 and through March 1,
1994) bank and three savings and loan subsidiaries headquartered in Tennessee,
Mississippi, Arkansas, Kentucky, and Alabama, and offers full retail banking
services in the market areas served. These services include checking and
savings accounts, money market accounts, various types of time deposits, safe
deposit facilities, 24-hour service for certain banking transactions through
automated teller machines, limited trust services, and money transfers.
Services also include financing of commercial transactions and making and
servicing both secured and unsecured loans to individuals, partnerships, and
corporations. The installment loan departments of the Community Banks make
direct loans to individuals for personal, automobile, real estate, home
improvement, business, and similar needs.
In 1993, the Community Bank Group had net earnings of $30.2 million which
represented a 1.01% ROA. This compares to net earnings of $24.4 million in 1992
which represented a 1.36% ROA. The decline in ROA between 1992 and 1993 was
due primarily to one-time charges related to institutions acquired in 1993 and
provisions for conversion to a new data processing system.
Reference is made to the MD&A discussion incorporated herein by reference
in Part II, Item 7, and to Note 2 to the financial statements for information
regarding the Corporation's completed and pending acquisitions.
UNION PLANTERS INVESTMENT BANKERS CORPORATION (UPIBC)
In the fourth quarter of 1990, the broker/dealer operations conducted by
UPIBC and its subsidiaries were discontinued, and on January 2, 1991, the
Corporation acquired an interest as a limited partner in Vining-Sparks IBG,
Limited Partnership (VSIBG), the general partner of which is
Memphis-headquartered broker/dealer, Vining Sparks Securities, Inc. (VSS).
VSIBG engages in certain
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broker/dealer activities of the types formerly carried on separately by VSS and
UPIBC. As discussed above, the activities of the Capital Markets and SBA Loan
Trading Operations which were formerly part of UPIBC have been transferred to
UPNB and are now part of UPNB's banking operations.
The revenues of the broker/dealer operations are now limited to the
Corporation's proportionate share (29%) of net earnings from its passive
investment as a limited partner in VSIBG, which amounted to $3.7 million in
1993 and $3.9 million in 1992.
The Corporation's investment in VSIBG at December 31, 1993 was $5.5
million. The only significant accounting transactions related to UPIBC in 1993
and 1992 were expenses related to pending litigation and some expenses related
to winding down the former operations. Reference is made to Notes 13 and 19 to
the financial statements found on pages 25 and 33, respectively, of the 1993
Annual Report to Shareholders. Reference is also made to Table 1, "Summary of
Consolidated Results" on page 49 of the 1993 Annual Report to Shareholders for
the impact of the broker/dealer operations on 1993 operating results. The
material specifically referred to is incorporated by reference as a part of
this response.
SUPERVISION AND REGULATION
Bank holding companies, banks, savings and loan holding companies, savings
and loan associations, and many of their non-bank subsidiaries are extensively
regulated under both federal and state law. Compliance with these laws,
including the Federal Deposit Insurance Corporation Improvement Act of 1991,
continues to increase the regulatory burden on depository institutions,
including the banking and thrift subsidiaries of the Corporation. The following
description of statutory and regulatory provisions is not intended to be
exhaustive and is qualified in its entirety by reference to such provisions.
Any significant change in applicable law or regulations may have a material
effect on the businesses and prospects of the Corporation.
GENERAL
As a bank holding company ("BHC"), the Corporation is subject to the
regulation and supervision of the Board of Governors of the Federal Reserve
System (the "Federal Reserve"). In addition, as a savings and loan holding
company, the Corporation is registered with the Office of Thrift Supervision
(the "OTS") and is subject to OTS regulations, supervision, and reporting
requirements under the Home Owners Loan Act. The Corporation's subsidiaries
which are national banking associations, including UPNB, are subject to
supervision and examination by the Office of the Comptroller of the Currency
(the "Comptroller") and the Federal Deposit Insurance Corporation (the "FDIC").
State bank subsidiaries of the
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Corporation which are members of the Federal Reserve System are subject to
supervision and examination by both the Federal Reserve and the state banking
authorities of the states in which their headquarters are located. State bank
subsidiaries which are not members of the Federal Reserve System are subject to
supervision and examination both by the FDIC and the state banking authorities
of the states in which they are located. The Corporation's savings and loan and
savings bank subsidiaries are subject to supervision and examination by the
OTS. The Corporation's "Banking Subsidiaries" (which term, as used herein,
shall be deemed to include its savings and loan and savings bank subsidiaries)
are subject to various requirements and restrictions, including requirements to
maintain reserves against deposits, restrictions on the types and amounts of
loans that may be granted and the rate of interest that may be charged thereon,
and limitations on the types and amounts of investments which may be made and
the types of services that may be offered. Various consumer-protection laws and
regulations also affect the operations of the Corporation's Banking
Subsidiaries. In addition to the impact of regulation, the Banking
Subsidiaries are affected significantly by the actions of the Federal Reserve
as it attempts to control the money supply and credit availability in order to
influence the economy.
The Bank Holding Company Act of 1956, as amended (the "BHCA") generally
requires the prior approval of the Federal Reserve where a BHC proposes to
acquire direct or indirect ownership or control of more than 5% of the voting
shares of any bank or otherwise to acquire control of a bank or to merge or
consolidate with any other BHC. The BHCA generally prohibits the Federal
Reserve from approving an application by a BHC to acquire a bank located in
another state, unless such an acquisition is specifically authorized by statute
of the state in which the bank to be acquired is located. Tennessee and certain
other states, including most states contiguous to Tennessee, have adopted
reciprocal interstate banking legislation permitting Tennessee-based bank
holding companies to acquire banks and bank holding companies in such other
states and allowing bank holding companies located in such states other than
Tennessee to acquire banks and bank holding companies headquartered in
Tennessee.
A BHC is generally prohibited under the BHCA from acquiring voting
shares of any company which is not a bank and from engaging in any activities
other than those of banking or of managing or controlling banks or furnishing
services to, or performing services for its subsidiaries. An exception to these
prohibitions permits a BHC to engage in, or to acquire an interest in a
company, such as a thrift institution, which engages in activities which the
Federal Reserve has determined are so closely related to banking or managing or
controlling banks as to be a proper incident thereto.
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CAPITAL ADEQUACY
The Federal Reserve has adopted risk-based capital guidelines for bank
holding companies. The minimum requirement of the guidelines for the ratio of a
BHC's total capital to risk-weighted assets, including certain
off-balance-sheet activities such as standby letters of credit (the "Total
Capital Ratio") is 8%. At least one-half of a BHC's total capital must be
composed of Tier 1 Capital which consists of common shareholders' equity,
minority interests in the equity accounts of consolidated subsidiaries,
non-cumulative perpetual preferred stock, and a limited amount of cumulative
perpetual preferred stock, less goodwill ("Tier 1 Capital"). The remainder of
total capital is classified as "Tier 2 Capital," which may consist of
subordinated debt (or certain other qualifying debt issued prior to March 12,
1988), other preferred stock, and a limited amount of loan loss reserves.
In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio of Tier 1 Capital to average total assets, less goodwill (the "Leverage
Ratio") of 3% for bank holding companies that meet certain specified criteria,
including those having the highest regulatory rating. All other bank holding
companies generally are required to maintain a Leverage Ratio of at least 3%
plus an additional cushion of 100 to 200 basis points. The guidelines also
provide that bank holding companies experiencing internal growth or making
acquisitions are expected to maintain strong capital positions substantially
above the minimum prescribed supervisory levels without significant reliance on
intangible assets. Moreover, the Federal Reserve has indicated that it will
consider a tangible Tier 1 Capital leverage ratio (arrived at by deducting all
intangibles) and other indicia of capital strength in evaluating proposals for
expansion or new activities. The Federal Reserve has not advised the
Corporation of any specific minimum Leverage Ratio which would be applied to
the Corporation.
In addition to those applicable to BHCs, there are capital guidelines
which must also be met by each of a BHC's depository-institution subsidiaries.
The Federal Reserve, the FDIC, the Comptroller, and the OTS have adopted
substantially similar minimum capital guidelines with which each of the
Corporation's Banking Subsidiaries regulated by them is expected to comply.
State-chartered banks are also required to meet minimum capital requirements
prescribed by their respective state bank regulatory authorities.
Failure to meet minimum capital requirements could subject a depository
institution to a variety of enforcement remedies, including issuance of a
capital directive, the termination of deposit insurance by the FDIC, and a
prohibition on the taking of brokered deposits. As described below, under the
"Prompt Corrective Action" regulations, substantial additional restrictions can
be imposed upon FDIC-insured institutions which fail to meet
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applicable capital requirements. See " -- Prompt Corrective Action."
At December 31, 1993, the Corporation's Total (risk-based) Capital Ratio
was 18.59%, its Tier 1 Capital ratio was 14.85% and its Leverage Ratio was
7.10%. In addition, each of the Corporation's Banking Subsidiaries satisfied
the minimum capital requirements applicable to it and had the requisite capital
levels to qualify as a "well-capitalized" institution under the prompt
corrective action provisions discussed below.
PROMPT CORRECTIVE ACTION
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") enacted in December 1991 requires the appropriate federal bank
regulatory authorities to take "prompt corrective action" with respect to
depository institutions which do not meet their minimum capital requirements.
FDICIA establishes five capital tiers: "well capitalized," "adequately
capitalized," "undercapitalized," "significantly undercapitalized," and
"critically undercapitalized." Under the capital regulations, a bank is defined
to be well capitalized if it maintains a Leverage Ratio of at least 5%, a Tier
1 Capital ratio of at least 6% and a Total Capital ratio of at least 10% and
has not been determined to be in a "troubled condition" by its appropriate
federal regulatory authority. A bank is defined to be adequately capitalized if
it meets all of its minimum capital requirements as described above under " --
Capital Adequacy." A bank will be considered to be undercapitalized if it
should fail to meet any minimum required measure, significantly
undercapitalized if it should fall significantly below such measure, and
critically undercapitalized if it should fail to maintain a level of tangible
equity equal to not less than 2% of its total assets. A bank may be deemed to
be in a capitalization category which is lower than is indicated by its actual
capital position if it should receive an unsatisfactory examination rating.
All institutions, regardless of their capital levels, are restricted
from making any capital distributions or paying any management fees if, as a
result thereof, the institution would fail to satisfy the minimum levels
required in order to be considered adequately capitalized. An undercapitalized
institution is: (i) subject to increased monitoring by the appropriate federal
banking regulator; (ii) required to submit to its regulator an acceptable
capital restoration plan within 45 days; (iii) subject to asset growth
limitations; and (iv) required to obtain prior regulatory approval for
acquisitions, branching, and new lines of business. The capital restoration
plan must include a guarantee by the institution's holding company that the
institution will comply with the plan until it has been adequately capitalized
on average for four consecutive quarters. Pursuant to the guarantee, the
institution's holding company would be liable up to the lesser of
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5% of the institution's total assets or the amount necessary to bring the
institution into capital compliance as of the date it failed to comply with its
capital restoration plan. If the controlling BHC should fail to fulfill its
obligations under the guarantee and should file (or have filed against it) a
petition under the federal Bankruptcy Code, the appropriate federal banking
regulator could have a claim as a general creditor of the BHC, and, if the
guarantee were deemed to be a commitment to maintain capital under the federal
Bankruptcy Code, the claim would be entitled to a priority position in such
bankruptcy proceeding over third-party creditors of the BHC.
The regulatory agencies have discretionary authority to reclassify
well-capitalized institutions as adequately capitalized or to impose on
adequately capitalized institutions requirements or actions specified for
undercapitalized institutions if the agency should determine, after notice and
an opportunity for hearing, that the institution is in an unsafe or unsound
condition or is engaging in an unsafe or unsound practice, which may consist of
its receipt of an unsatisfactory examination rating if the deficiencies cited
are not corrected. A significantly undercapitalized institution, as well as any
undercapitalized institution which fails to submit an acceptable capital
restoration plan, may be subject to regulatory demands for recapitalization,
broader application of restrictions on transactions with affiliates,
limitations upon interest rates paid on deposits, asset growth and other
activities, possible replacement of directors and officers and restrictions on
capital distributions by any BHC controlling the institution. Any company
controlling the institution could also be required to divest the institution or
the institution could be required to divest subsidiaries. The senior executive
officers of a significantly undercapitalized institution may not receive
bonuses or increases in compensation without prior regulatory approval and the
institution would be prohibited from making payments of the principal of, or
interest on its subordinated debt. If an institution should become critically
undercapitalized, the institution will be subject to conservatorship or
receivership within 90 days unless periodic determinations are made that
forbearance from such action would better protect the deposit insurance fund.
Unless appropriate findings and certifications are made by the appropriate
federal bank regulatory agencies, a critically undercapitalized institution
must be placed in receivership if it should remain critically undercapitalized
on average during the calendar quarter beginning 270 days after the date on
which it became critically undercapitalized.
DIVIDEND RESTRICTIONS
The Corporation is a legal entity which is separate and distinct from
its Subsidiary Banks as well as its non-bank subsidiaries. The Corporation's
revenues (on a parent company only basis) result, in significant part, from
dividends and management
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fees paid to the Corporation by its subsidiaries. The right of the Corporation,
and consequently the right of creditors and shareholders of the Corporation, to
participate in any distribution of the assets or earnings of any subsidiary,
through the payment of such dividends or otherwise, is necessarily subject to
the prior claims of creditors of the subsidiary (including its depositors, in
the case of the Banking Subsidiaries) except to the extent that claims of the
Corporation in its capacity as a creditor may be recognized.
There are statutory and regulatory requirements applicable to the
payment of dividends by the Corporation's Banking Subsidiaries to the
Corporation. Each subsidiary of the Corporation which is a national banking
association, including UPNB, is required by federal law to obtain the prior
approval of the Comptroller for the payment of dividends if the total of all
dividends declared by the board of directors of such bank in any year would
exceed the total of (i) such bank's net profits (as defined and interpreted by
regulation) for that year plus (ii) the retained net profits (as defined and
interpreted by regulation) for the preceding two years, less any required
transfers to surplus. In addition, national banks may only pay dividends to the
extent that their retained net profits (including the portion transferred to
surplus) exceed statutory bad debts (as defined by regulation). The
Corporation's state-chartered Depository Subsidiaries are subject to similar
restrictions on the payment of dividends by the respective state laws under
which they are organized. Moreover, as noted above under " -- Prompt Corrective
Action," all depository institutions are prohibited from paying any dividends,
making other distributions or paying any management fees if, after such
payment, the depository institution would fail to satisfy its minimum capital
requirements. At December 31, 1993, UPNB and the Corporation's other
Depository Subsidiaries had, in the aggregate, approximately $74.3 million
available for distribution to the Corporation without obtaining prior
regulatory approval. The actual amount of dividends paid will be limited to a
lesser amount by management of the Corporation in order to maintain compliance
with the Corporation's own internal capital guidelines and to maintain strong
capital positions in each of the Banking Subsidiaries of the Corporation.
Future dividends will essentially depend upon the level of earnings of the
Banking Subsidiaries of the Corporation.
It is the policy of the Federal Reserve that bank holding companies
should pay dividends only out of current earnings. The federal bank regulatory
authorities may also prohibit banks and bank holding companies from paying a
dividend if they should deem such payment to be an unsafe or unsound practice.
Furthermore, it is the position of the Federal Reserve that as a BHC, the
Corporation is expected to act as a source of financial strength to each of its
subsidiary banks. See " -- Support of Banking Subsidiaries" below.
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SUPPORT OF BANKING SUBSIDIARIES
Under Federal Reserve policy, the Corporation is expected to act as a
source of financial strength to its Banking Subsidiaries and, where required,
to commit resources to support each of such Subsidiaries. This support may be
required at times when, absent such Federal Reserve policy, the Corporation
might not be inclined to provide it. Moreover, if one of its subsidiary banks
should become undercapitalized, the Corporation would be required by FDICIA to
guarantee the subsidiary bank's compliance with its capital plan in order for
such plan to be accepted by the appropriate federal regulatory authority. See
"-- Prompt Corrective Action."
Under the "cross guarantee" provisions of the Federal Deposit Insurance
Act, any FDIC-insured subsidiary of the Corporation (which includes all of the
Corporation's Banking Subsidiaries) may be held liable for any loss incurred
by, or reasonably expected to be incurred by the FDIC in connection with (i)
the "default" of any other commonly controlled FDIC-insured subsidiary or (ii)
any assistance provided by the FDIC to any commonly controlled FDIC-insured
subsidiary "in danger of default." "Default" is defined generally as the
appointment of a conservator or receiver and "in danger of default" is defined
generally as the existence of certain conditions indicating that a default is
likely to occur in the absence of regulatory assistance.
Because it is a bank holding company, any capital loans made by the
Corporation to any of its Banking Subsidiaries are subordinate in right of
payment to the claims of depositors and to certain other indebtedness of such
Banking Subsidiary. In the event of a BHC's bankruptcy, any commitment by the
BHC to a federal bank regulatory agency to maintain the capital of a subsidiary
bank will be assumed by the bankruptcy trustee and entitled to priority of
payment over certain other creditors of the BHC.
TRANSACTIONS WITH AFFILIATES
Provisions of the Federal Reserve Act impose restrictions and
limitations upon the type, amount, quantity, and quality of transactions
between an "affiliate" (as defined below) of an FDIC-insured bank and the
insured bank (including transactions with its bank holding company and its
nonbank subsidiaries). The purpose of these restrictions and limitations is to
prevent misuse of the resources of an FDIC-insured institution by its uninsured
affiliates. An exception to most of these restrictions is provided for
transactions between two insured banks which are subsidiaries of the same bank
holding company where the holding company owns 80% or more of each of these
banks (the "sister bank" exception). The restrictions are also inapplicable to
transactions between an insured bank and its wholly-owned subsidiaries. These
restrictions include limitations on the purchase and sale of assets and
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extensions of credit by the insured bank to its BHC or its BHC's nonbank
subsidiaries. An insured bank and its subsidiaries are limited in engaging in
"covered transactions" with their nonbank or non-savings bank affiliates to the
following amounts: (i) in the case of any one such affiliate, the aggregate
amount of covered transactions of the insured bank and its subsidiaries may not
lawfully exceed 10% of the capital stock and surplus of the insured bank and
(ii) in the case of all affiliates of such insured bank, the aggregate amount
of covered transactions of the insured bank and its subsidiaries may not
lawfully exceed 20% of the capital stock and surplus of the bank. "Covered
transactions" are defined by statute to include a loan or extension of credit,
as well as a purchase of securities issued by an affiliate, a purchase of
assets (unless otherwise exempted by the Federal Reserve), the acceptance of
securities issued by the affiliate as collateral for a loan and the issuance of
a guarantee, acceptance, or letter of credit for, or on behalf of, an
affiliate. An "affiliate" of an insured bank is a person or entity which
controls, is controlled by or is under common control with, such insured bank.
The BHCA also prohibits a BHC and its subsidiaries from engaging in certain
tie-in arrangements in connection with any extension of credit, lease or sale
of property or furnishing of services.
FDIC INSURANCE ASSESSMENTS
The Banking Subsidiaries of the Corporation are subject to FDIC deposit
insurance assessments. The FDIC has adopted a risk-based premium schedule which
has increased the assessment rates for most FDIC-insured depository
institutions. Under the new schedule, the annual premiums initially range from
$.23 to $.31 for every $100 of deposits. Each financial institution is assigned
to one of three capital classifications -- well capitalized, adequately
capitalized or undercapitalized -- and further assigned to one of three
subgroups within its capital classification based upon supervisory evaluations
by the institution's primary federal and, if applicable, state supervisory
authorities and on the basis of other information relevant to the institution's
financial condition and the risk posed to the applicable insurance fund. The
actual assessment rate applicable to a particular institution will, therefore,
depend in part upon the risk assessment classification so assigned to the
institution by the FDIC.
RECENT BANKING LEGISLATION
In addition to the matters noted above, FDICIA made other significant
changes to the federal banking laws. FDICIA institutes certain changes to the
supervisory process, including provisions that mandate certain regulatory
agency actions against undercapitalized institutions within specified time
limits.
STANDARDS FOR SAFETY AND SOUNDNESS. FDICIA required the federal bank
regulatory agencies to prescribe, by regulation to become
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effective no later than December 1, 1993, standards for all insured depository
institutions and depository-institution holding companies relating to: (i)
internal controls, information systems and audit systems; (ii) loan
documentation; (iii) credit underwriting; (iv) interest-rate risk exposure; (v)
asset growth; and (vi) compensation, fees, and benefits. The compensation
standards must prohibit employment contracts, compensation or benefit
arrangements, stock option plans, fee arrangements or other compensatory
arrangements that would provide excessive compensation, fees or benefits or
could lead to material financial loss, but (subject to certain exceptions) may
not prescribe specific compensation levels or ranges for directors, officers or
employees. In addition, the federal bank regulatory agencies are required to
prescribe by regulation standards specifying: (i) maximum classified assets to
capital ratios; (ii) minimum earnings sufficient to absorb losses without
impairing capital; and (iii) to the extent feasible, a minimum ratio of market
value to book value for publicly traded shares of depository institutions and
depository-institution holding companies.
BROKERED DEPOSITS. The FDIC has adopted regulations governing the
receipt of brokered deposits. Under the regulations, a bank may not lawfully
accept, roll over or renew any brokered deposits unless (i) it is well
capitalized or (ii) it is adequately capitalized and receives a waiver from the
FDIC. A bank that may not receive brokered deposits also may not offer
"pass-through" insurance on certain employee benefit accounts. Whether or not
it has obtained such a waiver, an adequately capitalized bank may not pay an
interest rate on any deposits in excess of 75 basis points over certain
prevailing market rates specified by regulation. There are no such
restrictions on a bank that is well capitalized. Because UPNB and all of the
Community Banks had at December 31, 1993, the requisite capital levels to
qualify as well capitalized institutions, management of the Corporation
believes that the brokered deposits regulation will have no material effect on
the funding or liquidity of any of its Banking Subsidiaries. Moreover,
management does not believe that the Corporation now has, or at that date had
brokered deposits in any amount.
CONSUMER PROTECTION PROVISIONS. FDICIA seeks to encourage enforcement of
existing consumer-protection laws and enacted new consumer-oriented provisions
including a requirement of notice to appropriate regulatory authorities and
customers of any proposed branch closing and provisions intended to encourage
the offering of "lifeline" banking accounts and lending in distressed
communities. FDICIA also requires depository institutions to make additional
disclosures to depositors with respect to the rate of interest to be paid on,
and the terms of their deposit accounts.
INSTITUTIONAL EXPOSURE. FDICIA also required the Federal Reserve to
prescribe standards which limit the risks posed by an insured institution's
"exposure" to any other depository
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16
institution in order to limit the risks that the failure of a large depository
institution would pose to an insured depository institution. FDICIA broadly
defines "exposure" to include extensions of credit to the other institution;
purchases of, or investments in, securities issued by the other institution;
securities issued by the other institution and accepted as collateral for an
extension of credit to any person; and all similar transactions which the
Federal Reserve has defined by regulation to constitute exposure. The Federal
Reserve has adopted certain procedures and "benchmark" standards to limit an
insured depository institution's credit and settlement exposure to each of its
correspondent banks. The final rules were effective on December 19, 1992, but
provided for a two-year transition period.
MISCELLANEOUS. FDICIA also made extensive changes in the applicable
rules regarding audit, examinations, and accounting. FDICIA generally requires
annual, on-site, full-scope examinations by each bank's primary federal
regulatory authority. FDICIA also imposes new responsibilities on management,
the independent audit committee and outside accountants to develop, approve or
attest to reports regarding the effectiveness of internal controls, legal
compliance, and off-balance-sheet liabilities and assets.
DEPOSITOR PREFERENCE. Legislation recently enacted by Congress
establishes a nationwide depositor preference rule in the event of a bank
failure. Under this arrangement, all deposits and certain other claims against
a bank, including the claim of the FDIC as subrogee of insured depositors,
would receive payment in full before any general creditor of the bank would be
entitled to any payment in the event of an insolvency or liquidation of the
bank.
SECURITIES ACTIVITIES
The Securities Exchange Act of 1934 and in some instances state securities
statutes impose supervisory and regulatory requirements on the various
securities activities conducted by banks and non-banking subsidiaries of bank
holding companies.
GOVERNMENT POLICIES
The earnings of the Corporation may be significantly affected by the
policies of various regulatory authorities, including the domestic monetary
policies of the Federal Reserve regulating credit, United States fiscal policy,
and policies implemented by regulations affecting interest rates payable on
deposits. The effect of such changes in policies upon the future earnings of
the Corporation cannot be predicted.
COMPETITION
The Corporation and its subsidiaries are subject to substantial
competition in all aspects of their businesses. They
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17
compete directly with numerous other financial services firms, a significant
number of which have substantially greater capital and other resources, higher
lending limits, larger advertising budgets, and which offer a wider range of
financial services. In addition to the competition from commercial banks and
securities firms, there is increasing competition from other sources such as
savings and loans, insurance companies, consumer finance companies, credit
unions, mortgage companies, money market funds, and lending agencies of the
United States Government. In the five-county Memphis market alone, there were
approximately 45 banks and savings and loan associations (excludes credit
unions) at June 30, 1993, as well as numerous other competing financial
institutions. There is significant competition with respect to interest rates
paid on deposits, interest rates charged on loans, and fees charged for
services.
PERSONNEL
As of February 28, 1994, the Corporation, including all subsidiaries, had
3,457 employees (including 517 part-time employees).
STATISTICAL DISCLOSURES
The statistical information required by Item 1 may be found in the 1993
Annual Report to Shareholders, and, to the extent indicated, is incorporated
herein by reference, as follows:
Page in the Corporation's
1993 Annual Report to
Guide 3 Disclosure Shareholders
------------------ -------------------------
I. Distribution of Assets, Liabilities,
and Shareholders' Equity; Interest
Rates and Interest Differential
A. Average Balance Sheet 51
B. Net Interest Earnings Analysis 51
C. Rate/Volume Analysis 52
II. Investment Portfolio
A. Book Value of Investment Securities 14, 15, and 56
B. Maturities of Investment Securities 15 and 16
C. Investment Securities Concentrations Not applicable
III. Loan Portfolio
A. Types of Loans 53
B. Maturities and Sensitivity of
Loans to Changes in Interest Rates Follows this table
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Page in the Corporation's
1993 Annual Report to
Guide 3 Disclosure Shareholders
------------------ -------------------------
C. Risk Elements
1. Nonaccrual, Past Due 90 Days
or More, and Restructured Loans 54
2. Potential Problem Loans 44
3. Foreign Outstandings Not significant
4. Loan Concentrations --
D. Other Interest-Bearing Assets Not significant
IV. Summary of Loan Loss Experience
A. Analysis of Allowance for Loan Losses 54
B. Allocation of the Allowance for Loan
Losses 53
V. Deposits
A. Average Balances 51 and 52
B. Maturities of Large Denomination
Certificates of Deposit Follows this table
C. Foreign Deposit Liability Disclosure Not significant
VI. Return on Equity and Assets
A. Return on Assets 35
B. Return on Equity 35
C. Foreign Deposit Liability Disclosure Not significant
D. Equity to Assets Ratio 35
VII. Short-Term Borrowings 18
The following table presents the maturities and sensitivities of the
Corporation's loans to changes in interest rates at December 31, 1993:
Due Due After One Due After
Within But Within Five
One Year Five Years Years
-------- ------------- ---------
(Dollars in thousands)
Commercial $410,209 $166,083 $ 90,320
Real Estate-Construction 66,318 11,726 4,927
-------- -------- --------
Total $476,527 $177,809 $ 95,247
======== ======== ========
Fixed Rate $107,564 $ 24,601
======== ========
Variable Rate $ 70,245 $ 70,646
======== ========
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The following table presents maturities of certificates of deposit of $100,000
and over and other time deposits of $100,000 and over:
December 31,
1993
------------
(Dollars in thousands)
Under 3 Months $153,576
3 to 6 Months 85,835
6 to 12 Months 46,968
Over 12 Months 81,216
--------
Total $367,595
========
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ITEM 1A. EXECUTIVE OFFICERS OF THE REGISTRANT
The following is a list of executive officers of the Corporation.
Information regarding the executive officers, their ages, their present
positions held with the Corporation and its subsidiaries, and their principal
occupations for the last five years are as follows:
Position of Executive Officers
Name with the Corporation and UPNB Age
---- ------------------------------ ---
Benjamin W. Rawlins, Jr. Chairman of the Board and 56
Chief Executive Officer of the
Corporation; Chairman of the Board
and Chief Executive Officer of UPNB
J. Armistead Smith Vice Chairman of the Corporation 58
Jackson W. Moore President of the Corporation 45
Jack W. Parker Executive Vice President and 47
Chief Financial Officer of
the Corporation; Executive
Vice President and Chief
Financial Officer of UPNB
M. Kirk Walters Senior Vice President, Treasurer, 53
and Chief Accounting Officer
of the Corporation; Senior Vice
President and Chief Accounting
Officer of UPNB
J. F. Springfield Secretary and General Counsel of 64
the Corporation; Executive Vice
President, Secretary, and General
Counsel of UPNB
James A. Gurley Executive Vice President of the 60
Corporation; Executive Vice
President of UPNB
Mr. Rawlins has been Chairman of the Board of the Corporation and UPNB since
April, 1989 and January, 1986, respectively. He has also served as Chief
Executive Officer of the Corporation and UPNB since September, 1984. Mr.
Rawlins was President of the Corporation from September, 1984 until he was
elected Chairman.
Mr. Smith has been Vice Chairman of the Corporation since 1989. Effective
March, 1994, Mr. Smith became Chairman of the East Tennessee Region of the
Corporation. He was President of the
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Corporation's Community Bank Group from April of 1992 until February, 1994. Mr.
Smith was President of UPNB from 1988 to April, 1992. Prior to becoming a Vice
Chairman of the Corporation, Mr. Smith was an Executive Vice President of the
Corporation from 1987 until elected Vice Chairman. He was a Vice Chairman of
UPNB from 1985 until he was elected President.
Mr. Moore has been President of the Corporation since April, 1989. Since 1977,
he had been a partner in the law firm of Wildman, Harrold, Allen, Dixon &
McDonnell (and its predecessor Canada, Russell & Turner), the Corporation's
outside legal counsel and had served on its Management Committee and as
Chairman of its Administrative Committee for five years. He is also Chairman of
PSB Bancshares, Inc. and is a Vice President and Director of its subsidiary,
The Peoples Savings Bank, located in Clanton, Alabama. He has served on the
Boards of the Corporation and UPNB since 1986.
Mr. Parker has been Executive Vice President and Chief Financial Officer of the
Corporation since March, 1990. He has been an Executive Vice President and
Chief Financial Officer of UPNB since March, 1990. From 1987 until being
elected to these positions with the Corporation, he was an Executive Vice
President of UPNB and President of the Mortgage Banking Group of UPNB.
Mr. Walters was elected Senior Vice President of the Corporation in November,
1990 and has been Chief Accounting Officer since February, 1990. He has been
Treasurer of the Corporation since 1985. He was a Vice President of the
Corporation from 1975 until he was elected to his current position. Mr. Walters
has been an officer of UPNB for more than twenty years and is currently a
Senior Vice President.
Mr. Springfield has been Secretary and General Counsel of the Corporation and
Secretary and General Counsel of UPNB since December, 1985. He has been an
officer of UPNB for more than thirty-seven years, and is currently an Executive
Vice President.
Mr. Gurley was elected Executive Vice President of the Corporation in November,
1990. He was a Vice President of the Corporation from 1980 until he was elected
Executive Vice President. He has been an officer of UPNB for more than twenty
years and is currently an Executive Vice President.
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ITEM 2. PROPERTIES
The Corporation's corporate headquarters are located in the company-owned
UPNB Administrative Center at 7130 Goodlett Farms Parkway, Memphis, Tennessee,
a two-building complex located near the center of Shelby County. In addition to
being the corporate headquarters, it contains approximately 250,000 square feet
of space and houses Retail Branch Administration, Bank Cards, Mortgage
Servicing and Origination, Funds Management, Data Processing, Operations,
Marketing, Human Resources, Financial, Legal, Insurance Services, and Community
Bank Group Administration.
UPNB's headquarters is located in a 70,000 square foot company-owned
building in East Memphis. In addition to being its headquarters, the building
also houses UPNB's Commercial Group, Trust Group, Credit and Review, and
Brokerage Services.
As of December 31, 1993, UPNB and other subsidiaries of the Corporation
operated 170 banking offices in Tennessee, 25 in Mississippi, 22 in Arkansas,
and 2 in Alabama. Of these, 150 are owned and 69 are leased by the
subsidiaries. The subsidiaries also operate 167 twenty-four hour automated
teller locations. The acquisitions completed subsequent to December 31, 1993
and through March 1, 1994 increased by 15 the number of banking offices to 234,
of which 10 were added in Tennessee and five in Kentucky.
There are no material encumbrances on any of the company-owned properties.
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ITEM 3. LEGAL PROCEEDINGS
The Corporation and/or various subsidiaries are parties to various
pending civil actions, all of which are being defended vigorously. Management
is of the opinion that the Corporation has accrued liabilities sufficient to
cover the estimated costs associated with the ultimate resolution of all
pending matters, including those discussed below. While additional provisions
for litigation are possible, management is of the opinion, based on current
information, including evaluations of outside counsel, that no additional
provisions will be necessary for the foreseeable future. Any such additional
provisions would obviously impact earnings in the operating periods in which
such provisions were made. Nevertheless, management's view is that such
additional provisions, if any, would not materially affect the financial
condition of the Corporation. Various other legal proceedings against the
Corporation and its subsidiaries have arisen in the ordinary course of
business. Management is of the opinion that the Corporation's financial
position will not be materially affected by the ultimate resolution of these
other legal matters.
UPNB and one of its officers are co-defendants in two civil actions seeking
$29 million (after trebling) filed on or about July 25, 1985 in the U.S.
Bankruptcy Court for the Eastern District of Missouri by the trustee for a
failed grocery and its shareholders purportedly predicated upon an August, 1981
$115,000 loan by the First National Bank of Gibson County, Tennessee, later
acquired by UPNB, to finance the shareholders' acquisition of the grocery
business from other defendants unrelated to UPNB. The actions allege that the
defendants subsequently conspired to defraud the plaintiffs of their rights in
the grocery. This matter has been dormant since UPNB filed a motion for summary
judgment in 1985.
In 1988, the Corporation rescinded and terminated a purported agreement for
the acquisition of a Louisiana bank holding company, Great American Corporation
(GAC). The Corporation and a subsidiary were made parties to several civil
actions relating to the failed acquisition alleging damages estimated at $66
million and founded essentially upon theories that the Corporation had breached
the acquisition agreement and committed wrongful acts under state law and a
separate confidentiality agreement. In November, 1992, the Corporation
completed the negotiation and signing of definitive agreements for the
settlement of all the pending civil actions. A class consisting of all outside
GAC shareholders between January 22 and October 4, 1988 was certified for
purposes of consummating the settlement and the number of share owners excluded
from that class was immaterial. Early in the second quarter of 1993
consummation of the settlement of all pending civil actions involving the
Corporation and a subsidiary arising from the attempted acquisition
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of GAC was effected. The costs of such settlement did not exceed amounts
previously reserved for such purpose.
UPNB, a member of the MasterCard and VISA organizations, was a
co-defendant or cross-claim defendant in two related civil actions arising out
of its previous utilization of a third party, Electronic Transaction Network,
Inc.(E-Net), to solicit and assist in the administration of credit card
transaction processing arrangements with several thousand consumer merchants
located throughout the United States. The plaintiff sought compensatory damages
said to exceed $10 million (trebled to exceed $30 million) and other relief
based on various alleged wrongdoing by UPNB and two co-defendants. During the
third quarter of 1993, a definitive agreement was entered into for the
settlement of all pending litigation against UPNB in connection with its former
relationship with E-Net, without the payment of any sum by UPNB.
The Corporation's broker/dealer subsidiaries (now inactive) are among
the more than eighty defendants in various actions brought by purchasers of
$400 million in housing revenue bonds issued by the Health, Educational, and
Housing Facility Board of the City of Memphis, Tennessee and by purchasers of
bonds that were part of seven other taxable municipal issues. These actions
have been transferred to the United States District Court for the Eastern
District of Louisiana for pretrial proceedings captioned In Re: Taxable
Municipal Bond Securities Litigation, Multi-district Litigation ("MDL" 863).
Focusing upon the fact that the bond sale proceeds were initially invested and
remain in "guaranteed investment contracts" ("GICs") with Executive Life
Insurance Company ("ELIC"), whose own investments were allegedly concentrated
in so-called "junk bonds" of declining value, the lawsuits in MDL 863 allege
that the offering materials failed to make adequate disclosures and that the
bonds represented a scheme among the Executive Life organization, Drexel
Burnham Lambert, Inc., and the other defendants to raise money for "junk bond"
purchases, rather than for public purposes. ELIC is in conservatorship,
interest on the bonds is in default, and Drexel is in Chapter 11
reorganization. The complaint for the Memphis issue requests certification of a
plaintiff class including substantially all persons who purchased a Memphis
bond through April 9, 1990, either in the original $400 million Memphis bond
underwriting, in which a broker/dealer subsidiary of the Corporation
participated, or in the secondary market, wherein such subsidiary sold a total
of approximately $120 million par value in Memphis bonds. The class claims in
respect of the Memphis issue seek to impose joint and several liability upon,
among others, numerous defendants who participated in the underwriting,
including such subsidiary. In addition, a number of individual actions naming
the Corporation's broker/dealer subsidiaries have been brought by secondary
market purchasers. The class and individual plaintiffs predicate their claims
upon Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5
promulgated thereunder, the Investment Company Act, the
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Investment Advisors Act, common law fraud, negligent misrepresentation, gross
and ordinary negligence, breach of fiduciary duty, the Tennessee Securities
Act, and other laws. For relief, the various complaints seek a declaratory
judgment that the Memphis bonds were void from their inception, rescission of
all of plaintiffs' purchases, punitive damages, prejudgment interest, and other
relief. While the actions originally included Investment Company Act,
Investment Advisers Act, and racketeering (RICO) claims, most of these have
been dismissed, and the current complaints do not assert any such claims
against the UPC parties. On January 28, 1993, the California Supreme Court
declined to review a lower court ruling to the effect that claims to ELIC
assets by policyholders, annuitants, and holders of GICs are to be treated as
equal in priority in the distribution of such assets. The Corporation's
broker/dealer subsidiaries have joined in a common defense with other members
of the syndicate which underwrote the bonds which are the subject of the
litigation.
On May 30, 1991, in an action originally filed by UPNB in the Circuit
Court of Cook County, Illinois, Chancery Division, seeking to foreclose on a
single parcel of mortgaged residential property, the defendant debtors filed a
counterclaim against UPNB and the Corporation individually and on the purported
behalf of a requested class which would have consisted essentially of all
persons who had a mortgage loan serviced by UPNB at any time during the past 10
years. The counterclaim alleged that UPNB, like other participants in the
mortgage loan industry, engaged in a regular practice of charging mortgage
debtors greater amounts to escrow for estimated property taxes and insurance
than is allowed by law and applicable loan agreements. The counterclaim sought
recovery of all excess charges and/or interest thereon, and other relief. The
class action aspects of this counterclaim have been dismissed, leaving only a
setoff claim by the defendant debtors with respect to the foreclosure. On
February 16, 1993, an action was filed in the Circuit Court of Choctaw County,
Alabama as an individual action and as a purported class action against UPNB
and UPC with theories of recovery and relief requested similar to the Illinois
counterclaim.
On or about July 10, 1991, UPNB was joined with nine other banks as
defendants in a civil action in the Circuit Court of Shelby County, Tennessee.
The suit as originally filed alleges that the banks unlawfully conspired to fix
the charges for checks drawn on insufficient funds. The suit seeks compensatory
and punitive damages of $25 million against each defendant and certification of
a class of plaintiffs comprised of all depositors who have been charged the NSF
fees. The suit was amended on or about July 12, 1991, August 2, 1991 and again
on November 25, 1991 to add plaintiffs and to include claims of unfair and
deceptive trade practices, breach of contract, tortious conduct, violation of
provisions of the UCC, treble damages under the Tennessee Consumer Protection
Act, and usury. The amendments also broadened the class
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and the claims to seek recovery for fees charged for deposited third-party
checks which were returned uncollected. In March, 1992 the state court
proceeding was dismissed; plaintiffs subsequently appealed the dismissal, and
on February 23, 1993, the Tennessee Court of Appeals affirmed the dismissal of
five of the six counts in the state court action but reversed the dismissal of
the count alleging violation of the contractual duty of good faith and fair
dealing, holding that the plaintiffs met bare minimum pleading requirements to
permit that claim to go forward. During the third quarter of 1993, class
certification was granted by the state court, with the plaintiff class
apparently consisting of all persons in the United States who, in the six years
prior to the filing of the complaint were charged the fees described above.
However, on December 17, 1993, the defendants' motion for summary judgment was
granted on the remaining breach of contract claim. Plaintiffs have appealed
that ruling. Further, on May 22, 1992, substantially the same group of
plaintiffs filed a civil action in the U.S. District Court for the Western
District of Tennessee against UPNB and eight other banks, alleging violations
of the Sherman Act, the federal anti-trust statute prohibiting the fixing of
prices by competitors, as well as the Tennessee Consumer Protection Act. The
suit further requests certification of a similarly broad class, seeks
injunctive relief and damages for the class members in amounts, according to
the suit, "which are presently undetermined but believed to be more than $100
million." The complaint also seeks treble damages and a jury trial. On March
19, 1993 the federal court granted defendants' motion to dismiss the Tennessee
Consumer Protection Act claim, but permitted the Sherman Act claim to remain at
that stage of the proceedings. On September 15, 1993 the defendants filed a
motion for summary judgment seeking dismissal of the price fixing allegations
as well, and on March 11, 1994, the court granted that motion. Plaintiffs have
indicated they will appeal.
Certain subsidiaries of the Corporation and UPNB were threatened in 1989
with a civil action by the FDIC for the estate of a closed savings association.
If filed, the action would reportedly seek compensatory damages of at least $37
million, and other relief including an injunction against transferring or
encumbering any assets until any judgments were paid, based upon allegations of
wrongdoing in the sale of covered call options to the closed savings
association. A tolling and forbearance agreement, entered into by all parties
to the threatened action in 1989, continues in effect. The Corporation has
furnished the FDIC with information assertedly demonstrating the lack of merit
in the threatened action and believes that such action, if nevertheless filed,
can be resolved without material loss.
During 1993, agreements-in-principle and/or final settlements were
reached with plaintiffs to resolve a significant number of previously reported
legal claims, utilizing reserves previously
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established in prior periods or otherwise having no material effect upon the
Corporation's financial position.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
The information required by Item 5 is included in the Corporation's 1993
Annual Report to Shareholders on page 57 under the heading Table 14, "Selected
Quarterly Data," which is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information required by Item 6 is included in the Corporation's 1993
Annual Report to Shareholders on page 35 under the heading "Selected Financial
Data," and which is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The information required by Item 7 is included in the Corporation's 1993
Annual Report to Shareholders on pages 36-58 under the heading "Management's
Discussion and Analysis of Results of Operations and Financial Condition," and
which is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by Item 8 is included in the Corporation's 1993
Annual Report to Shareholders on pages 4-34 and on page 57 under the heading
Table 14, "Selected Quarterly Data," and which is incorporated herein by
reference.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by Item 10 as to the directors of the Corporation
is included on pages 3-5 and 15 of the definitive proxy statement of the
Corporation for the annual meeting of shareholders to be held on April 28, 1994
(Proxy Statement) and which is incorporated herein by reference.
The information concerning "Executive Officers of the Registrant" is
included in Part I (Item 1a) of this Form 10-K in accordance with Instruction 3
to paragraph (b) of Item 401 of Regulation S-K.
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ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 as to compensation of directors and
executive officers is included on pages 5 and 6 and 7-14 of the Proxy
Statement which is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by Item 12 as to certain beneficial owners and
management is included on pages 2-5 of the Proxy Statement which is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 13 as to transactions and relationships
with certain directors and executive officers of the Corporation and their
associates is included on page 13 of the Proxy Statement which is incorporated
herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) The following audited consolidated financial statements of Union
Planters Corporation and Subsidiaries, included in the
Corporation's 1993 Annual Report to Shareholders, are
incorporated herein by reference in Item 8:
Page in
Annual Report
-------------
Consolidated Balance Sheet - December 31,
1993 and 1992 4
Consolidated Statement of Earnings - Years
ended December 31, 1993, 1992, and 1991 5
Consolidated Statement of Changes in
Shareholders' Equity - Years ended
December 31, 1993, 1992, and 1991 6
Consolidated Statement of Cash Flows -
Years ended December 31, 1993, 1992, and 1991 7
Notes to Consolidated Financial Statements 8
Management's Responsibility for Financial
Reporting 34
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Page in
Annual Report
-------------
Report of Independent Accountants 34
(a) (2) All schedules have been omitted since the required information is
either not applicable, not deemed material, or is included in the
respective consolidated financial statements or in the notes
thereto.
(a) (3) Exhibits:
The exhibits listed on the Exhibit Index on pages i, ii, and iii,
following page 30 of this Form 10-K are filed herewith or are incorporated
herein by reference.
(b) Reports on Form 8-K:
Date of Current Report Subject
---------------------- ---------------------------
October 14, 1993 Financial Statements of two
entities being acquired
October 21, 1993 Third Quarter Press Release announcing operating results
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
UNION PLANTERS CORPORATION
(Registrant)
By: /s/ Benjamin W. Rawlins, Jr.
---------------------------------------------------
Benjamin W. Rawlins, Jr., Chairman of the Board and
Chief Executive Officer
Date: March 23, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on the 23rd of March, 1994
/s/Benjamin W. Rawlins, Jr. /s/John W. Parker
- ---------------------------------------------- --------------------------------------------------
Benjamin W. Rawlins, Jr. John W. Parker
Chairman of the Board, Chief Executive Officer, Executive Vice President and Chief Financial
and Director Officer
/s/J. Armistead Smith /s/M. Kirk Walters
- ---------------------------------------------- --------------------------------------------------
J. Armistead Smith M. Kirk Walters
Vice Chairman and Director Senior Vice President, Treasurer, and Chief
Accounting Officer
/s/Jackson W. Moore /s/R. Brad Martin
- ---------------------------------------------- --------------------------------------------------
Jackson W. Moore R. Brad Martin
President and Director Director
/s/Albert M. Austin
- ---------------------------------------------- --------------------------------------------------
Albert M. Austin Stanley D. Overton
Director Director
/s/Marvin E. Bruce
- ---------------------------------------------- --------------------------------------------------
Marvin E. Bruce C. Penn Owen, Jr.
Director Director
/s/Dr. V. Lane Rawlins
- ---------------------------------------------- --------------------------------------------------
George W. Bryan Dr. V. Lane Rawlins
Director Director
/s/Robert B. Colbert, Jr. /s/Donald F. Schuppe
- ---------------------------------------------- --------------------------------------------------
Robert B. Colbert, Jr. Donald F. Schuppe
Director Director
/s/Leslie M. Stratton, III
- ---------------------------------------------- --------------------------------------------------
Hanford F. Farrell, Jr. Leslie M. Stratton, III
Director Director
/s/Parnell S. Lewis, Jr.
- ---------------------------------------------- --------------------------------------------------
Parnell S. Lewis, Jr. Mike P. Sturdivant
Director Director
/s/C. J. Lowrance, III
- ---------------------------------------------- --------------------------------------------------
C. J. Lowrance, III Richard A. Trippeer, Jr.
Director Director
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EXHIBIT INDEX
3 (a) Restated Charter of Incorporation, as amended December 17, 1992,
of Union Planters Corporation (Filed herewith)
3 (b) Amended and Restated By-Laws, as amended January 20, 1994, of
Union Planters Corporation (Filed herewith)
2 Amendment and Plan of Reorganization, along with the Plan of
Merger annexed thereto as Exhibit A, dated as of January 27, 1994
between Union Planters Corporation and BFC Acquisition Company,
Inc. and BANCFIRST Corporation and BANKFIRST, a federal savings
bank (incorporated by reference to Exhibit 2 to Union Planters
Corporation Current Report on Form 8-K dated February 8, 1994
filed on February 18, 1994).
4 (a) Rights Agreement, dated January 19, 1989 between Union Planters
Corporation and Union Planters National Bank, including Form of
Rights Certificate (Exhibit A), and a Form Summary of Rights
(Exhibit B) (Incorporated by reference to Exhibit 1 to Union
Planters Corporation's Current Report dated as of January 19,
1989 on Form 8-K filed February 1, 1989 Commission File No.
0-6919)
4 (b) Indenture dated April 1, 1989 between Union Planters Corporation
and LaSalle National Bank for $34,500,000 of 10 1/8% Subordinated
Capital Debentures due 1999 *
4 (c) Indenture dated October 1, 1992 between Union Planters
Corporation and The First National Bank of Chicago (Trustee) for
$40,250,000 of 8 1/2% Subordinated Notes due 2002 ***
4 (d) Subordinated Indenture dated October 15, 1993 between Union
Planters Corporation and The First National Bank of Chicago for
$75,000,000 of 6.25% Subordinated Notes due 2003 ****
10 (a) Employment Agreement between Union Planters Corporation and
Benjamin W. Rawlins, Jr. (incorporated by reference to Exhibit
10(a) to the Annual Report on Form 10-K dated December 31, 1992)
10 (b) Employment Agreement between Union Planters Corporation and J.
Armistead Smith (incorporated by reference to Exhibit 10(b) to
the Annual Report on Form 10-K dated December 31, 1992)
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32
10 (c) Employment Agreement between Union Planters Corporation and
Jackson W. Moore (incorporated by reference to Exhibit 10(c) to
the Annual Report on Form 10-K dated December 31, 1992)
10 (d) Deferred Compensation Agreements between Union Planters
Corporation and certain highly compensated officers (incorporated
by reference to Exhibit 10 (g) to the Annual Report on Form 10-K
dated December 31, 1989)
10 (e) Union Planters Corporation 1983 Stock Incentive Plan **
10 (f) (1) Amended Union Planters Corporation 1983 Stock Incentive
Plan *****
10 (g) Union Planters Corporation 1992 Stock Incentive Plan
(incorporated by reference to Exhibit 10(g) to the Annual Report
on Form 10-K dated December 31, 1992)
10 (h) Deferred Compensation Agreements between Union Planters
Corporation and Union Planters National Bank and certain outside
directors (Incorporated by reference to Exhibit 10(m) to the
Annual Report on Form 10-K dated December 31, 1989)
10 (i) Executive Deferred Compensation Agreement between Union Planters
Corporation and certain highly compensated officers (Incorporated
by reference to Exhibit 10 (n) to the Annual Report on Form 10-K
dated December 31, 1989)
10 (j) "Standard Form of Agreement Between Owner and Contractor" between
Union Planters National Bank and Martin, Cole, Dando, and
Robertson, Inc. (incorporated by reference to Exhibit 10(j) to
the Annual Report on Form 10-K dated December 31, 1992)
10 (k) "Standard Form of Agreement Between Owner and Architect" between
Union Planters National Bank and Hnedak Bobo Group, P.C.
(incorporated by reference to Exhibit 10(k) to the Annual Report
on Form 10-K dated December 31, 1992)
11 Computation of Per Share Earnings (Filed herewith)
13 Annual Report to Security Holders (Filed herewith)
21 Subsidiaries of the Registrant (Filed herewith)
23 Consent of Price Waterhouse (Filed herewith)
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33
* Incorporated by reference to exhibit number 4 filed as part of
Registration Statement No. 33-27784
** Incorporated by reference to exhibit 10 (1) filed as part of
Registration Statement 2-97661
*** Incorporated by reference to exhibit number 4 filed as part of
Registration Statement No. 33-52434
**** Incorporated by reference to Exhibit Number 4(d) filed as part of
Registration Statement No. 33-50655
***** Incorporated by reference to Exhibit Number 4 filed as part of
Registration Statement No. 33-23306
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