EX-99.1 2 g70595ex99-1.txt PRESS RELEASE DATED 07/19/2001 1 EXHIBIT 99.1 Union Planters Corporation Press Release dated July 19, 2001 announcing operating results for the three and six months ended June 30, 2001 2 JULY 19, 2001 UNION PLANTERS CORPORATION ANNOUNCES RECORD SECOND QUARTER CASH OPERATING EARNINGS OF $.89 PER SHARE Memphis, TN -- Union Planters Corporation (NYSE: UPC) today reported cash operating earnings for the second quarter of 2001 of $123.1 million, or $.89 per diluted share, an increase of 6.0% over the $.84 per diluted share for the same period in 2000. Cash operating earnings exclude goodwill and other intangibles amortization and nonoperating items, net of taxes. These earnings provided a return on average assets of 1.42%, a return on average common equity of 16.08%, and a return on average tangible common equity of 23.55%. Net earnings for the second quarter 2001 were $109.3 million, or $.79 per diluted share, an increase of 3.9% compared to $.76 per diluted share for the same period in 2000. Net earnings represented a return on average assets of 1.26% and a return on average common equity of 14.28%. For the first half of 2001, cash operating earnings were $243.4 million, or $1.76 per diluted share, an increase of 5.4% compared to $1.67 per diluted share for the same period in 2000. Net earnings for the first half of 2001 were $215.7 million, or $1.56 per diluted share, which compares to $204.2 million, or $1.49 per diluted share, for the same period in 2000. "We continue to gain momentum with another solid quarter of operating results," said Jackson W. Moore, Chairman, President and Chief Executive Officer. "During the first quarter, we started a strategic initiative, UPExcel, to drive significant new business growth and to control costs. We are finalizing the planning phase now and will be in a 3 position to communicate the impact on expected operating results in the next few weeks. This effort will not reduce our dividend nor do we expect it to have a negative impact on reported earnings during implementation. UPExcel is a balanced program that will be fully implemented in 18 months; however, it is already enhancing our financial performance through improved management structure, focus, and customer service. Second quarter results reflect some of the early benefits of this improvement: noninterest income is increasing as a percentage of total revenue, operating performance is improving and credit quality remains stable. The net interest margin was up from both last quarter and last year due to better loan pricing and lower funding cost. Operating noninterest income for the quarter increased to 36.1% of total revenue and our operating efficiency ratio continued to show improvement year over year. While our nonperforming assets have increased as expected due to the continuing slow down in the economy, our assets are well-secured and we do not anticipate any substantial increase in our charge off ratios." NET INTEREST INCOME Net interest income on a fully taxable-equivalent basis was $324.7 million for the second quarter of 2001, an increase of $4.3 million over the same quarter last year and a $4.4 million increase over the first quarter of 2001. The key drivers of this increase were improved pricing of loan products and the decline in core funding costs during the quarter. The interest rate spread and net interest margin for the second quarter of 2001 improved to 3.42% and 4.11%, respectively, from the 3.34% and 4.05%, respectively, reported for the first quarter of 2001. Average loans (excluding FHA/VA loans) were $25.5 billion for the second quarter of 2001 compared to $22.6 billion for the same period in 2000 and compared to $24.9 billion for the first quarter of 2001. Net of loan divestitures and the acquisition of Jefferson Heritage Bank in the 4 first quarter, average loans increased during the second quarter by 8.9% compared to the same quarter last year. This growth consisted of 12.2% in residential real estate loans, 19.5% other mortgage loans, and 6.2% growth in commercial, construction, financial and agricultural loans. Mortgage production continued to post strong performance, offsetting a decline in consumer loan growth compared to the second quarter last year. Average deposits were $23.7 billion for the second quarter of 2001 compared to $23.1 billion for the first quarter of 2001 and $23.2 billion for the same quarter last year. The deposit mix continues to shift toward more core funding, as brokered deposits and wholesale funding declined by $1.2 billion and $2.0 million, respectively, compared to the first quarter of 2001 and second quarter of 2000. NONINTEREST INCOME Growth in noninterest income continued to be robust during the second quarter with total noninterest income climbing to $187.2 million. Net of $8.3 million of investment securities gains, this represented a $14.0 million, or 8.5%, increase from the prior quarter and an increase of $45.2 million, or 33.8% from the same quarter last year. Operating noninterest income as a percent of total revenue increased to 36.1% in the second quarter of 2001, compared to 30.0% in the same quarter last year. The lower interest-rate environment and the divestiture of home mortgage loans resulted in double-digit growth in mortgage banking revenues. In addition, a more consistent administration of competitive pricing and collections on all account relationships across the entire franchise continued to show results with a 26.0%, or $11.6 million, increase in customer fee income in the second quarter of 2001, compared to the same quarter in 2000. Strategic Outsourcing Inc. (SOI), which was acquired in April 2000, accounted for $4.6 million of the increase in noninterest income over the same quarter last year. Merchant servicing 5 income, trust fees, factoring commissions and fees, profits and commissions from trading activities, and income from an investment in a broker/dealer operation also showed growth compared to the second quarter of 2000. The investment securities portfolio was restructured during the second quarter to minimize the Company's interest-rate risk, to enhance liquidity, reduce short-term borrowings, and improve the rate of return on earning assets. As part of this restructuring, Union Planters sold $1 billion of its available for sale investment securities portfolio during the second quarter, which resulted in a gain of $8.3 million. EFFICIENCY The efficiency ratio for the second quarter of 2001 was 56.52%, compared to 56.31% for the first quarter of 2001 and 57.27% for the second quarter of 2000. Noninterest expense for the second quarter of 2001 was $309.0 million, compared to $289.7 million in the prior quarter, and $275.9 million in the same quarter last year. The Jefferson and SOI acquisitions accounted for $8 million of the increase in noninterest expense over the second quarter of 2000. In conjunction with the increase in mortgage production, mortgage related expenses increased $1.6 million over prior quarter and $7.3 million over prior year. The Company also incurred a nonoperating charge of $8.0 million in the second quarter of 2001 related to the strategic initiative program discussed above. CREDIT QUALITY Nonperforming assets at June 30, 2001 were $282.5 million, or 1.17% of loans and foreclosed properties, compared to $232.3 million, or .95% of loans and foreclosed properties at March 31, 2001, and $169.4 million, or .74%, at June 30, 2000. The provision for losses on loans for the second quarter of 2001 was $28.9 million, or .45% of average loans, compared to $25.3 million, or .41% 6 of average loans, for the first quarter of 2001 and compared to $19.7 million, or .35% of average loans, for the same quarter last year. Net charge-offs as a percentage of average loans were .43% for the second quarter of 2001, an increase from the .37% reported in first quarter 2001, and an increase from .35% for the second quarter of 2000. The allowance for losses on loans totaled $342.9 million at June 30, 2001, equal to 1.42% of loans, compared to $342.1 million at March 31, 2001, equal to 1.41% of loans. Given the current economic conditions, nonperforming assets increased as anticipated, however, the risk of losses is mitigated by the diversity of the loan portfolio and the conservative underwriting practices throughout the banking franchise. CAPITAL STRENGTH Total shareholders' equity was $3.1 billion at June 30, 2001, representing 9.07% of period-end assets of $34.5 billion, and the leverage ratio was 6.87%. Both of these ratios improved compared to the first quarter 2001 ratios of 8.72% and 6.61%, respectively. SHARE PURCHASE PLAN In February 2000, the Board of Directors approved a plan to purchase 7.1 million shares of the Company's common stock, of which 1.6 million shares have been purchased to date. In addition, through June 30, 2001, the Company has repurchased 2.3 million shares of the 4.4 million shares issued in the Jefferson Heritage Bank acquisition. THE COMPANY Union Planters Corporation, headquartered in Memphis, Tennessee, is a multi-state bank holding company with 1,035 ATMs and 821 banking offices in Alabama, Arkansas, Florida, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Tennessee, and Texas. At December 31, 2000, Union Planters Corporation was the 27th largest bank holding company in the United 7 States based on total assets. The Company's common stock is traded on the New York Stock Exchange under the symbol UPC and is included in the S & P 500 Index. This press release contains forward-looking statements relating to management's expectations regarding its business plans and expected trends in nonperforming assets and the related risk of losses. These statements are deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and the current economic environment. Union Planters' actual strategies and results in future periods may differ materially from those currently expected due to various risks and uncertainties. A discussion of factors affecting business and prospects is contained in Union Planters' filings with the Securities and Exchange Commission, specifically "Risk Factors" in the 2000 Annual Report on Form 10-K and "Cautionary Statement Regarding Forward-Looking Information" in Union Planters' 2000 Annual Report to Shareholders. Union Planters undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the forward-looking statement is made or to reflect the occurrence of unanticipated events. -O0O- FOR ADDITIONAL INFORMATION, INCLUDING SUPPLEMENTAL FINANCIAL INFORMATION FOR THE SECOND QUARTER OF 2001, VISIT UNION PLANTERS' WEB SITE AT http://www.unionplanters.com, ACCESS UNION PLANTERS' CURRENT REPORT ON FORM 8-K DATED JULY 19, 2001 WHICH WAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, OR CONTACT: BOBBY L. DOXEY SENIOR EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER (901) 580-4565 [TWO PAGE FINANCIAL ATTACHMENT FOLLOWS] 8 UNION PLANTERS CORPORATION FINANCIAL HIGHLIGHTS (UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, 2001 2000 2001 2000 -------- -------- ------------ ------------ INCOME STATEMENT AMOUNTS Net interest income Actual $316,164 $311,352 $ 627,190 $ 626,102 Taxable-equivalent basis 324,673 320,388 644,964 644,259 Provision for losses on loans 28,900 19,699 54,200 37,002 Noninterest income Investment securities gains 8,330 77 8,354 77 Other 178,842 138,423 343,731 265,992 Noninterest expense 308,993 275,885 598,665 547,590 Earnings before income taxes 165,443 154,268 326,410 307,579 Income taxes 56,118 51,383 110,718 103,357 NET EARNINGS 109,325 102,885 215,692 204,222 NET EARNINGS APPLICABLE TO COMMON SHARES 108,946 102,483 214,927 203,408 OPERATING EARNINGS(1) 109,144 100,392 215,497 201,729 CASH OPERATING EARNINGS(2) 123,088 113,782 243,362 228,441 PER COMMON SHARE DATA Net earnings - basic $ .80 $ .76 $ 1.57 $ 1.50 - diluted .79 .76 1.56 1.49 Operating earnings(1) - basic .79 .74 1.57 1.48 - diluted .79 .74 1.56 1.47 Cash operating earnings(2) - basic .90 .84 1.77 1.68 - diluted .89 .84 1.76 1.67 Cash dividends .50 .50 1.00 1.00 Book value 22.68 19.88 BALANCES AT END OF PERIOD Loans, excluding FHA/VA government-insured/guaranteed loans $ 24,193,443 $ 22,880,375 Allowance for losses on loans 342,868 345,858 Nonperforming assets Nonaccrual loans 223,609 127,685 Restructured loans 1,166 1,680 Foreclosed properties 57,761 40,081 Loans 90 days past due 131,995 78,843 FHA/VA government-insured/guaranteed loans 298,239 447,815 Nonaccrual 2,296 4,408 90 days past due 120,362 166,231 Available for sale investment securities Amortized cost 5,194,729 7,192,127 Fair value 5,280,970 6,954,593 Unrealized gain (loss), net of taxes 54,400 (150,354) Total assets 34,468,079 34,226,813 Total deposits 23,842,353 23,290,355 Total shareholders' equity 3,127,882 2,698,670 Total common equity 3,109,124 2,678,687 Tier 1 capital 2,311,224 2,067,614
9 UNION PLANTERS CORPORATION FINANCIAL HIGHLIGHTS (UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, 2001 2000 2001 2000 ------------ ------------ ------------ ------------ AVERAGE BALANCES Loans, excluding FHA/VA government- insured/guaranteed loans $ 25,499,570 $ 22,595,309 $ 25,203,816 $ 22,063,388 FHA/VA government-insured/ guaranteed loans 299,320 463,535 294,896 481,385 Investment securities 5,532,370 7,392,264 6,080,134 7,518,739 Earning assets 31,689,438 30,759,224 31,895,512 30,403,716 Total assets 34,666,459 33,863,383 34,883,933 33,558,099 Total deposits 23,677,276 23,206,956 23,397,264 23,246,626 Interest-bearing liabilities 26,804,659 26,361,429 27,173,310 26,071,338 Demand deposits 4,077,740 4,058,827 3,984,400 4,043,121 Shareholders' equity 3,080,013 2,817,883 3,028,595 2,829,879 Common equity 3,060,709 2,797,485 3,009,178 2,809,297 OTHER SUPPLEMENTAL INFORMATION Net earnings Return on average assets 1.26% 1.22% 1.25% 1.22% Return on average common equity 14.28 14.73 14.40 14.56 Cash operating earnings(2) Return on average assets 1.42 1.35 1.41 1.37 Return on average common equity 16.08 16.30 16.26 16.29 Return on average tangible assets 1.47 1.39 1.45 1.41 Return on average tangible common equity 23.55 24.85 23.95 24.81 Allowance for losses on loans to loans(3) 1.42 1.51 Nonperforming loans to loans(3) .93 .57 Nonperforming assets to loans and foreclosed properties(3) 1.17 .74 Net charge-offs of loans $ 27,321 $ 19,662 $ 49,921 $ 33,444 Net charge-offs as a percentage of average loans(3) .43% .35% .40% .30% Common shares outstanding (end of period, in thousands) 137,071 134,732 Weighted average shares outstanding (in thousands) Basic 136,988 134,794 136,795 135,670 Diluted 138,608 136,268 138,395 137,170 Yield on earning assets (taxable-equivalent basis) 7.89% 8.31% 8.10% 8.24% Rate on interest-bearing liabilities 4.47 4.81 4.72 4.64 Interest rate spread (taxable-equivalent basis) 3.42 3.50 3.38 3.60 Net interest income as a percentage of average earning assets (taxable-equivalent basis) 4.11 4.19 4.08 4.26 Shareholders' equity to total assets 9.07 7.88 Leverage ratio 6.87 6.29
(1) Earnings before nonoperating items, net of taxes (2) Earnings before goodwill and other intangibles amortization and nonoperating items, net of taxes (3) Excludes FHA/VA government-insured/guaranteed loans