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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
(X) SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 0-9756
RIGGS NATIONAL CORPORATION
--------------------------
(Exact name of registrant as specified in its charter)
Delaware 52-1217953
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1503 Pennsylvania Avenue, N.W., Washington, D.C. 20005
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(Address of principal executive offices) (Zip Code)
(301) 887-6000
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(Registrant's telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class Name of each exchange on which registered
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None None
Securities Registered Pursuant to Section 12(g) of the Act:
Title of Each Class Name of each exchange on which registered
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Common Stock, par value The NASDAQ Stock Market
$2.50 per share
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 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 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 registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendments to this Form 10-K. [X ]
The aggregate market value of the Corporation's voting stock held by
non-affiliates of the registrant as of February 29, 2000, was
$183,899,130.
The number of shares outstanding of the registrant's common stock, as of
February 29, 2000, was 28,316,197.
DOCUMENT INCORPORATED BY REFERENCE
Portions of Riggs National Corporation's definitive Proxy Statement
dated March 10, 2000 to Shareholders are incorporated by reference into Part
III of this Form 10-K. Portions of Riggs National Corporation's 1999 Annual
Report to Shareholders mailed with such Proxy Statement are incorporated
by reference into Parts I and II of this Form 10-K. With the exception of the
portions of the Proxy Statement and Annual Report specifically
incorporated herein by reference, the Proxy Statement and Annual Report are
not deemed to be filed as part of this Form 10-K.
Form
10-K INDEX
PART I Page(s)
Item 1--Business 3
Item 2--Properties 4
Item 3--Legal Proceedings 4
Item 4--Submission of Matters to a Vote of Security Holders 4
PART II
Item 5--Market for Registrant's Common Equity
and Related Shareholder Matters 5
Item 6--Selected Consolidated Financial Data 5
Item 7--Management's Discussion and Analysis of Financial Condition
and Results of Operations 5
Item 7A--Quantitative & Qualitative Disclosures about Market Risk 5
Item 8--Financial Statements and Supplementary Data 5
Item 9--Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 5
PART III
Item 10--Directors and Executive Officers of the Registrant 6
Item 11--Executive Compensation 8
Item 12--Security Ownership of Certain Beneficial Owners and Management 8
Item 13--Certain Relationships and Related Transactions 8
PART IV
Item 14--Exhibits, Financial Statement Schedules,
and Reports on Form 8-K 8
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PART I
ITEM 1.
BUSINESS
Riggs National Corporation
Riggs National Corporation is a bank holding company registered under the Bank
Holding Company Act of 1956, as amended (the "BHCA"), and incorporated in the
State of Delaware. Founded in 1980, we engage in a variety of banking-related
activities through our bank and non-bank subsidiaries. We currently have banking
operations or separate subsidiaries in the Washington, D.C., metropolitan area;
New Haven, Connecticut; Miami, Florida; London, England; Berlin, Germany; and
Nassau, Bahamas. At December 31, 1999, we had 1,589 full-time equivalent
employees.
Additional information concerning our business is incorporated by reference to
pages 69-77, 127-128 and 131-133 of our 1999 Annual Report.
Supervision and Regulation
Our company and Riggs Bank N.A. are subject to the supervision of and regulation
by the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"). Our national banking subsidiaries and certain of their subsidiaries are
subject to the supervision of and regulation by the Office of the Comptroller of
the Currency (the "OCC"). Other federal, state and foreign laws govern many
aspects of the businesses of our company and our subsidiaries.
Under the BHCA, bank holding companies may not directly or indirectly acquire
the ownership or control of five percent or more of the voting shares or
substantially all of the assets of any company, including a bank, without the
prior approval of the Federal Reserve Board. The BHCA also restricts the types
of businesses and activities in which a bank holding company and its
subsidiaries may engage. Generally, activities are limited to banking and
activities found by the Federal Reserve Board to be so closely related to
banking as to be a proper incident thereto.
We are required to maintain minimum levels of qualifying capital under Federal
Reserve Board risk-based capital guidelines. For full discussion of these
guidelines, see "Management's Discussion and Analysis--Capital Resources" and
"Notes to Consolidated Financial Statements-Note 10."
Under Federal Deposit Insurance Corporation ("FDIC") regulations, the assessment
rate for an insured depository institution varies according to the level of risk
incurred in its activities. An institution's risk category is based partly upon
whether the institution is assigned to one of the following "supervisory
subgroups": "healthy"; "supervisory concern"; or "substantial supervisory
concern."
The OCC must take "prompt corrective action" in respect of depository
institutions that do not meet minimum capital requirements. The OCC has
established levels at which an insured institution would be considered "well
capitalized,""adequately capitalized," "undercapitalized," "significantly
undercapitalized," and "critically undercapitalized."
Riggs Bank N.A. exceeds current minimum regulatory capital requirements and
qualifies as "well capitalized." Additional information concerning our capital
adequacy can be found on pages 115 and 116 of our 1999 Annual Report, which is
incorporated herein by reference.
A depository institution may not make any capital distribution (including
payment of a dividend) or pay any management fee to its holding company if the
depository institution would thereafter be undercapitalized. Undercapitalized
depository institutions are subject to increased regulatory monitoring and
growth limitations and are required to submit capital restoration plans.
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the
"Interstate Act"), authorizes interstate acquisitions of banks and bank holding
companies without geographic limitation. In addition, beginning June 1, 1997,
the Interstate Act authorized a bank to merge with a bank in another state as
long as neither of the states had opted out of interstate branching between the
date of enactment of the Interstate Act and May 31, 1997. A bank may establish
and operate a de novo branch in a state in which the bank does not maintain a
branch if that state expressly permits de novo branching. Once a bank has
established branches in a state through an interstate merger transaction, the
bank may establish and acquire additional branches at any location in the state
where any bank involved in the interstate merger transaction could have
established or acquired branches under applicable federal or state law. A bank
that has established a branch in a state through de novo branching may establish
and acquire additional branches in such state in the same manner and to the same
extent as a bank having a branch in such state as a result of an interstate
merger. If a state opts out of interstate branching within the specified time
period, no bank in any other state may establish a branch in the opting out
state, whether through an acquisition or de novo.
Effective June 1995, coinciding with the mandatory 1.25% funding of the Bank
Insurance Fund ("BIF") reserve, insurance rates were reduced from a range of
$.23 to $.26 per $100 in deposits insured to a range of $.04 to $.07 per $100 in
deposits insured. Further, in November 1995, based on the continuing increase in
reserves with BIF, the FDIC announced an additional reduction of insurance rates
to zero percent, however, banks must pay a mandatory minimum of $2 thousand per
year.
On September 30, 1996, Congress passed and the President signed an omnibus
funding bill which included legislation for the recapitalization of the Savings
Association Insurance Fund ("SAIF"), which is administered by the FDIC. This
legislation included a provision requiring the merger in 1999 of the BIF, which
was also administered by the FDIC, and SAIF assuming that bank charters and
thrift charters were combined by that time. The legislation provided for a new
Financing Corporation ("FICO") sharing formula between BIF and SAIF
insured institutions, which imposes a surcharge of 1.3 cents per one-hundred
dollars of BIF-insured deposits. We were subject to the FICO surcharge and were
required to pay one-fifth of the rate that SAIF institutions pay for three
years, ending in 1999.
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There are legal restrictions on the extent to which we and our non-bank
subsidiaries may borrow or otherwise obtain credit from Riggs Bank N.A. Subject
to certain limited exceptions, a bank subsidiary may not extend credit to us or
to any other affiliate (as defined) in an amount which exceeds 10% of our
capital stock and surplus and may not extend credit in the aggregate to such
affiliates in an amount which exceeds 20% of its capital stock and surplus.
Further, there are legal requirements as to the type, amount and quality of
collateral which must secure such extensions of credit by each bank subsidiary
to us or to other affiliates. Finally, extensions of credit and other
transactions between a bank subsidiary and our company or other affiliates must
be on terms and under circumstances, including credit standards, that are
substantially the same or at least as favorable to such a bank subsidiary as
those prevailing at the time for comparable transactions with non-affiliated
companies.
Under Federal Reserve Board policy, bank holding companies are expected to act
as a source of financial strength to their subsidiary banks and to commit
resources to support such banks in circumstances where a bank holding company
might not do so absent such policy. In addition, any capital loans by a bank
holding company to any of its subsidiary banks are subordinate in right of
payment to deposits and to certain other indebtedness of such subsidiary bank.
In the event of a bank holding company's bankruptcy, any commitment by the bank
holding company to a federal bank regulatory agency to maintain the capital of a
subsidiary bank will be assumed by the bankruptcy trustee and entitled to a
priority of payment.
Our subsidiaries face substantial competition in their operations from banking
and nonbanking institutions, including savings and loan associations, credit
unions, money market funds and other investment vehicles, mutual fund advisory
companies, brokerage firms, insurance companies, mortgage banking companies,
finance companies and other types of financial services providers.
ITEM 2.
PROPERTIES
We own properties located in Washington, D.C. which house our executive offices,
15 of our branches, and certain operational units of Riggs Bank N.A. We also own
an office building in Maryland, where additional operational units of Riggs Bank
N.A. are located. Further, we own an office building in London, England, and
lease various properties in Washington, D.C.; London, England; Berlin, Germany;
Miami, Florida; New Haven, Connecticut; northern Virginia and Maryland.
Additional information concerning our facilities can be found on pages 70, 74
- -75 and 77 of our 1999 Annual Report, which information is incorporated herein
by reference.
ITEM 3.
LEGAL PROCEEDINGS
Incorporated by reference to page 114 of our 1999 Annual Report.
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
No matters were submitted to security holders for vote during the fourth quarter
of 1999.
-4-
PART II
ITEM 5.
MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The common stock of Riggs National Corporation is traded on The Nasdaq Stock
Market under the symbol:"RIGS."
A history of the Corporation's stock prices and dividends is incorporated by
reference to page 138 of our 1999 Annual Report.
As of February 29, 2000, there were 2,241 shareholders of record.
Other information required by this item is incorporated by reference to pages
115-117 of our 1999 Annual Report.
ITEM 6.
SELECTED CONSOLIDATED FINANCIAL DATA
Incoporated by reference to page 77 of our 1999 Annual Report.
ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Incorporated by reference to pages 77-96 of our 1999 Annual Report.
ITEM 7 A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Incorporated by reference to pages 82-83 and 96 of our 1999 Annual Report.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated by reference to pages 97-139 of our 1999 Annual Report.
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
None.
-5-
PART III
ITEM 10.
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item pertaining to directors of our company is
included in our proxy statement for our 2000 Annual Meeting of Shareholders (the
"2000 Proxy Statement"), which is incorporated by reference. The information
required by this Item pertaining to executive officers of our company is as
follows:
Executive Officer* Position Age
Joe L. Allbritton Chairman of the Board and Chief Executive Officer of the Corporation since 1981,
Chairman of the Board of Riggs Bank N.A. since 1983 and Chief Executive
Officer of Riggs Bank N.A. since 1997 75
Timothy C. Coughlin President of the Corporation since 1992 57
John L. Davis Chief Financial Officer, Treasurer and Comptroller of the Corporation and
Executive Vice President and Chief Financial Officer of Riggs Bank N.A. since 1993 58
Joseph W. Barr Executive Vice President of Riggs Bank N.A.
Community Banking since 1993 50
Joseph M. Cahill Executive Director of Legal Affairs, Riggs Bank N.A. since 1998 46
Henry A. Dudley, Jr. Executive Vice President and Chief Trust Officer of Riggs Bank N.A. since 1994 53
Raymond M. Lund Executive Vice President of Riggs Bank N.A.
International Banking Group since 1996 38
Robert C. Roane Executive Vice President and Chief Operating Officer of Riggs Bank N.A. since 1999 44
W. E. Tige Savage Executive Vice President of Riggs Bank N.A. since 1998 31
David W. Scott Executive Vice President and Chief Credit Officer of Riggs Bank N.A. since 1995 38
Alfred J. Serafino Executive Vice President of Riggs Bank N.A.
Relationship Banking since 1993 51
*Executive officers of Riggs National Corporation, including certain executive
officers of Riggs Bank N.A., as of March 1, 2000.
-6-
EXPERIENCE OF MANAGEMENT
JOE L. ALLBRITTON has been Chairman of the Board and Chief Executive Officer of
the Corporation since 1981. He has served as Chairman of the Board of Riggs Bank
N.A. since 1983 and has served as Chief Executive Officer of Riggs Bank N.A.
since 1997. Mr. Allbritton is the beneficial owner of approximately 42% of the
Common Stock of the Corporation as of February 29, 2000. He also serves as
Chairman of the Board of, and is the owner of, Westfield News Advertiser, Inc.,
and Perpetual Corporation, indirect owner of Allbritton Communications Company.
TIMOTHY C. COUGHLIN has served as President of the Corporation since 1992. He
has been a Director of the Corporation since 1988 and was a Director of Riggs
Bank N.A. from 1983 to 1996.
JOHN L. DAVIS has served as Chief Financial Officer of the Corporation and
Executive Vice President and Chief Financial Officer of Riggs Bank N.A. since
June 1993.
JOSEPH W. BARR has served as Executive Vice President in charge of Community
Banking since July 1993.
JOSEPH M. CAHILL was appointed Executive Director of Legal Affairs of Riggs Bank
N.A. in 1998. Mr. Cahill served as the Litigation Manager of Riggs Bank N.A.
from 1996 to 1997, and Associate Litigation Manager from 1993 to 1995.
HENRY A. DUDLEY, JR., Executive Vice President, has served as Chief Trust
Officer in charge of Financial Services, which includes the Trust Division,
Riggs Investment Management Corporation (RIMCO), and the Domestic Private
Banking Division, since 1994.
RAYMOND M. LUND has served as Executive Vice President-International Banking
Group since 1996. Mr. Lund has served in various management positions during the
past 10 years, including Head of the International and Domestic Private Banking
Divisions.
ROBERT C. ROANE, Executive Vice President, has served as Chief Operating Officer
of Riggs Bank N.A. since May of 1999. Mr. Roane has served in various management
positions with Riggs during the past 22 years.
W. E. TIGE SAVAGE has served as Executive Vice President of Riggs Bank N.A.
since 1998, supporting the activities of Riggs Capital Partners LLC, the
Corporation's venture capital subsidiary, and the Office of the Chairman. He has
also served at Riggs Bank N.A. as Vice President and Executive Assistant to the
Chairman and as a commercial lender.
DAVID W. SCOTT, Executive Vice President, has served as Chief Credit Officer of
Riggs Bank N.A. since 1995. Mr. Scott has served in various management positions
with Riggs during the past 11 years.
ALFRED J. SERAFINO has served as Executive Vice President-Relationship Banking
since 1993. He also has served as Executive Vice President in Commercial Banking
and President and Chief Executive Officer of the subsidiary formerly known as
The Riggs National Bank of Maryland.
-7-
ITEM 11.
EXECUTIVE COMPENSATION
The information required by this Item is included in Riggs National
Corporation's 2000 Proxy Statement to Shareholders, which is incorporated herein
by reference.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is included in Riggs National
Corporation's 2000 Proxy Statement to Shareholders, which is incorporated herein
by reference.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is included in the 2000 Proxy Statement to
Shareholders, which is incorporated herein by reference.
PART IV
ITEM 14.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
14(a) Financial Statements
The financial statements included on pages 97-139 of our 1999 Annual Report are
incorporated herein by reference.
The exhibits listed on the Index to Exhibits are incorporated herein by
reference.
14(b) Reports on Form 8-K
None.
-8-
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.
RIGGS NATIONAL CORPORATION
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 and on the date indicated.
JOE L. ALLBRITTON*
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Joe L. Allbritton,
Chairman of the Board and Chief Executive Officer
March 24, 2000
TIMOTHY C. COUGHLIN* President
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Timothy C. Coughlin
/s/ JOHN L. DAVIS Chief Financial Officer and Comptroller
- ----------------- (Principal Financial and Accounting Officer)
John L. Davis
ROBERT L. ALLBRITTON* Director
- ---------------------
(Robert L. Allbritton)
JOHN M. FAHEY, JR.* Director
- -------------------
(John M. Fahey, Jr.)
LAWRENCE I. HEBERT* Director
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(Lawrence I. Hebert)
STEVEN B. PFEIFFER* Director
- -------------------
(Steven B. Pfeiffer)
JOHN E. V. ROSE* Director
- ----------------
(John E. V. Rose)
ROBERT L. SLOAN* Vice Chairman
- ----------------- of the Board
(Robert L. Sloan)
JACK VALENTI* Director
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(Jack Valenti)
WILLIAM L. WALTON* Director
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(William L. Walton)
EDDIE N. WILLIAMS* Director
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(Eddie N. Williams)
*By: /s/ JOSEPH M. CAHILL
--------------------
Joseph M. Cahill, Attorney-in-fact
March 24, 2000
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Index to
EXHIBITS
Exhibit
No. Description Pages
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(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. 0-9756)
(3.2) By-laws of the Registrant with amendments through April 10, 1996
(Incorporated by reference to the Registrant's Form 10-K for the
year ended December 31, 1998, SEC File No. 0-9756)
(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. 0-9756)
(4.2) Indenture dated January 1, 1994 with respect to $125 million, 8.5%
Subordinated Debentures due 2006 (Incorporated by reference to the
Registrant's Form 10-Q for the quarter ended March 31, 1994,
SEC File No. 0-9756)
(4.3) 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)
(4.4) 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)
(10.1) Aircraft Purchase Agreement for the Sale of Riggs Bank's
Gulfstream III (Incorporated by reference to the Registrant's
Form 10-Q for the quarter ended September 30, 1999, SEC
File No. 0-9756)
(10.2) Outfitted Gulfstream V Sales Agreement, Addendum I, and Amendment
for Riggs Bank's Purchase of a new Gulfstream V (Incorporated
by reference to the Registrant's Form 10-Q for the quarter
ended September 30, 1999, SEC File No. 0-9756)
(10.3)+ Amended Joe L. Allbritton Employment Agreement, dated December 28,
1999 12
(10.4)+ Riggs National Corporation's Executive Incentive Plan
(Incorporated by reference to the Registrant's Form 10-Q for the
quarter ended September 30, 1999, SEC File No. 0-9756)
(10.5)+ Split Dollar Life Insurance Plan Agreements (Incorporated by
reference to the Registrant's Form 10-K for the year ended
December 31, 1998, SEC File No. 0-9756)
-10-
Exhibit
No. Description Pages
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(10.6)+ The 1993 Stock Option Plan and the 1994 Stock Option Plan, as
amended April 15, 1998 (Incorporated by reference to the
Registrant's Annual Meeting Proxy Statement filed March 18, 1998),
and the 1996 Stock Option Plan and the 1997 Non-Employee Directors
Stock Option Plan, as amended April 14, 1999 (Incorporated by
reference to the Registrant's Annual Meeting Proxy Statement filed
March 17, 1999)
(10.7)+ Deferred Compensation Plan for Directors (Incorporated by
reference to the Registrant's Form 10-K for the year ended
December 31, 1998, SEC File No. 0-9756)
(10.8)+ Description of the 1998 General Incentive Plan (Incorporated by
reference to the Registrant's Form 10-K for the year ended
December 31, 1998, SEC File No. 0-9756)
(10.9)+ Description of the 1999 General Incentive Plan (Incorporated by
reference to the Registrant's Form 10-K for the year ended
December 31, 1998, SEC File No.0-9756)
(10.10)+ Supplemental Executive Retirement Plan, as amended and restated
July 12, 1995 (Incorporated by reference to the Registrant's Form
10-K for the ended December 31, 1998, SEC File No. 0-9756)
(10.11)+ Trust Agreement, dated July 12, 1995, for the Supplemental
Executive Retirement Plan and the Split Dollar Life Insurance and
Supplemental Death Benefit Plans (Incorporated by reference to the
Registrant's Form 10-K for the year ended December 31, 1998,
SEC File No. 0-9756)
(10.12) Operating Agreement of Riggs Capital Partners LLC 35
(11) Computation of Per Share Earnings 68
(13) Portions of our 1999 Annual Report to Shareholders 69
(21) Subsidiaries of the Registrant 140
(23) Consent of Independent Public Accountants 141
(24) Powers of Attorney 142
(27) Financial Data Schedule 144
+ Management contract or compensatory plan, contract, or arrangement
-11-