-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, feDNqdzvGnHq7to7iM/ujg2f9CY0RK0Wmzy+TGHjFzBH+fMQcuybSWWH5IGQgq90 vyXKwvsnvS1XND9rbvrU9g== 0000950135-94-000644.txt : 19941117 0000950135-94-000644.hdr.sgml : 19941117 ACCESSION NUMBER: 0000950135-94-000644 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: UST CORP CENTRAL INDEX KEY: 0000316901 STANDARD INDUSTRIAL CLASSIFICATION: 6021 IRS NUMBER: 042436093 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-09623 FILM NUMBER: 94559040 BUSINESS ADDRESS: STREET 1: 40 COURT ST CITY: BOSTON STATE: MA ZIP: 02108 BUSINESS PHONE: 6177267000 10-Q 1 FORM 10-Q 1 - - -------------------------------------------------------------------------------- - - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR QUARTER ENDED SEPTEMBER 30, 1994 COMMISSION FILE #0-9623 ------------------------ UST CORP. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MASSACHUSETTS 04-2436093 (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization) 40 COURT STREET, BOSTON, MASSACHUSETTS 02108 (Address of principal executive offices) (617) 726-7000 (Registrant's telephone number, including area code) NO CHANGE (Former name, former address and former fiscal year, if changed since last year) 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 requirements for the past 90 days. Yes /X/ No / /. Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. At October 31, 1994, there were issued and outstanding 17,512,756 shares of common stock, par value $0.625 per share. - - -------------------------------------------------------------------------------- - - -------------------------------------------------------------------------------- 2 UST CORP. AND SUBSIDIARIES TABLE OF CONTENTS
PAGE ---- Part I. FINANCIAL INFORMATION........................................................ Item 1. Financial Statements................................................ Consolidated Balance Sheets -- September 30, 1994 and December 31, 1993...... 3 Consolidated Statements of Income -- Three and Nine Months Ended September 30, 1994 and 1993............................................................ 4 Consolidated Statements of Changes in Stockholders' Investment -- Nine Months Ended September 30, 1994 and 1993............................................ 5 Consolidated Statements of Cash Flows -- Nine Months Ended September 30, 1994 and 1993..................................................................... 6 Notes to Consolidated Financial Statements................................... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................................................................ 8 Part II. OTHER INFORMATION............................................................ Item 1. Legal Proceedings................................................... 17 Item 5. Other Information................................................... 17 Item 6. Exhibits and Reports on Form 8-K.................................... 17 SIGNATURES................................................................... 18
2 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS UST CORP. CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31, 1994 1993 ------------- ------------ (DOLLARS IN THOUSANDS) (UNAUDITED) ASSETS Cash, due from banks and interest-bearing deposits............. $ 87,572 $ 90,198 Excess funds sold to banks and other short-term investments.... 16,164 96,647 Securities: Securities held-to-maturity............................... 100 Securities available-for-sale: Mortgage-backed securities........................... 203,841 263,435 U.S. Treasury, corporate notes, and other............ 205,033 210,474 --------- ---------- Total securities available-for-sale............. 408,874 473,909 --------- ---------- Total securities........................... 408,974 473,909 Loans: Loans -- net of unearned discount of $10,598,000 in 1994 and $7,026,000 in 1993.................................. 1,249,775 1,338,807 Reserve for possible loan losses (Note 2)................. (62,173) (62,547) --------- ---------- 1,187,602 1,276,260 Premises, furniture and equipment, net......................... 31,973 32,661 Goodwill....................................................... 2,101 2,192 Other real estate owned........................................ 17,682 19,468 Other assets................................................... 41,900 52,931 --------- ---------- Total Assets.................................... $1,793,968 $2,044,266 ========== ========== LIABILITIES AND STOCKHOLDERS' INVESTMENT Deposits: Demand: Noninterest bearing.................................. $ 350,418 $ 373,793 Interest bearing..................................... 158,401 170,642 Savings: Money market......................................... 271,979 323,979 Other................................................ 302,171 320,924 Time: Certificates of deposit over $100 thousand........... 60,547 72,911 Other................................................ 324,253 378,549 --------- ---------- Total deposits....................................... 1,467,769 1,640,798 Short-term borrowings.......................................... 169,303 226,268 Other borrowings............................................... 10,143 14,286 Other liabilities.............................................. 10,413 10,095 --------- ---------- Total liabilities.................................... 1,657,628 1,891,447 Commitments and contingencies (Note 3) Stockholders' investment (Note 5): Preferred stock $1 par value; Authorized -- 4,000,000 shares; Outstanding -- None Common stock $0.625 par value; Authorized-30,000,000 shares; Outstanding -- 17,482,017 and 17,304,795 shares in 1994 and 1993, respectively.............. 10,926 10,815 Additional paid-in capital........................... 70,813 69,694 Retained earnings.................................... 71,819 68,437 Unrealized gain (loss) on securities available-for-sale, net of tax............................................. (17,689) 3,335 Deferred compensation, net........................... 471 538 --------- ---------- Total stockholders' investment....................... 136,340 152,819 --------- ---------- Total Liabilities and Stockholders' Investment.................................... $1,793,968 $2,044,266 ========== ==========
The accompanying notes are an integral part of these consolidated financial statements. 3 4 UST CORP. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ----------------------- ------------------------- 1994 1993 1994 1993 ------- ------- ------- -------- (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) Interest income: Interest and fees on loans.................... $ 26,369 $ 28,100 $ 76,098 $ 84,293 Interest and dividends on securities: Taxable.................................. 6,640 6,619 20,264 21,442 Nontaxable............................... 54 71 159 209 Dividends................................ 41 117 120 265 Interest on excess funds and other............ 367 303 1,433 405 ---------- ----------- ----------- ----------- Total interest income............... 33,471 35,210 98,074 106,614 ---------- ----------- ----------- ----------- Interest expense: Interest on deposits.......................... 7,926 9,913 24,582 31,036 Interest on short-term borrowings............. 1,615 1,482 4,434 4,943 Interest on other borrowings.................. 265 330 909 1,103 ---------- ----------- ----------- ----------- Total interest expense.............. 9,806 11,725 29,925 37,082 ---------- ----------- ----------- ----------- Net interest income........................... 23,665 23,485 68,149 69,532 Provision for possible loan losses................. 6,600 8,050 18,625 61,083 ---------- ----------- ----------- ----------- 17,065 15,435 49,524 8,449 ---------- ----------- ----------- ----------- Noninterest income: Asset management fees......................... 3,383 3,415 11,079 12,293 Service charges on deposit accounts........... 1,235 1,357 3,702 4,099 Gain on sale of securities, net............... 504 646 1,022 4,291 Corporate services income..................... 2,017 2,054 5,936 6,203 Other......................................... 439 606 1,355 2,590 ---------- ----------- ----------- ----------- Total noninterest income............ 7,578 8,078 23,094 29,476 ---------- ----------- ----------- ----------- Noninterest expense: Salary and employee benefits.................. 11,462 9,453 31,891 27,942 Net occupancy expense......................... 1,985 1,710 6,275 5,692 Credit card processing expense................ 981 949 2,815 2,790 Deposit insurance assessment.................. 1,174 1,170 3,522 3,756 Foreclosed asset and workout expense.......... 2,427 3,034 6,572 18,478 Other......................................... 5,111 4,340 16,686 13,703 ---------- ----------- ----------- ----------- Total noninterest expense........... 23,140 20,656 67,761 72,361 ---------- ----------- ----------- ----------- Income (loss) before income taxes.................. 1,503 2,857 4,857 (34,436) Income tax provision (benefit)................ 447 834 1,475 (12,051) ---------- ----------- ----------- ----------- Net income (loss) before change in accounting method........................................... 1,056 2,023 3,382 (22,385) Cumulative effect of change in method of accounting for income taxes (Note 4)........................ -- -- -- 750 Net income (loss).................................. $ 1,056 $ 2,023 $ 3,382 $ (21,635) ========== =========== =========== =========== Per Share Data: Net income (loss)............................. $ 0.06 $ 0.12 $ 0.19 $ (1.47) Cash dividends declared....................... -- -- -- -- Weighted average number of common shares (Note 5)............................................... 17,805,079 16,199,447 17,814,670 14,716,664
The accompanying notes are an integral part of these consolidated financial statements. 4 5 UST CORP. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' INVESTMENT (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, ------------------------- 1994 1993 -------- -------- (DOLLARS IN THOUSANDS) Balance, January 1................................................ $152,819 $143,880 Net income (loss)............................................ 3,382 (21,635) Exercise of stock options and vesting of restricted stock.... 1,230 519 Proceeds from sale of common stock........................... 23,244 Change in deferred compensation.............................. (67) 1,421 Change from unrealized gain to unrealized loss on securities available-for-sale......................................... (21,024) Change in unrealized loss on marketable equity securities.... 17 -------- -------- Balance, September 30............................................. $136,340 $147,446 ======== ======== The accompanying notes are an integral part of these consolidated financial statements.
5 6 UST CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, ------------------------- 1994 1993 -------- -------- (DOLLARS IN THOUSANDS) Cash flows from operating activities: Net income (loss)............................................ $ 3,382 $(21,635) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Cumulative effect of change (Note 4) in accounting method................................................ (750) Provision for possible loan losses...................... 18,625 61,083 Depreciation and amortization........................... 3,485 3,850 Amortization of gain on sale/leaseback.................. (288) (288) Amortization of security premiums, net.................. 551 1,111 Gain on sale of securities available-for-sale, net...... (1,022) (4,291) (Gain)/loss on sale of other real estate owned, net..... (608) 1,198 Writedowns of other real estate owned................... 3,115 13,455 Deferred income tax benefit............................. (463) (10,476) Increase in accruals and other, net..................... 17,773 49,610 -------- -------- Net cash provided by operating activities......................... 44,550 92,867 Cash flows provided by investing activities: Proceeds from sales of securities available-for-sale......... 51,390 203,928 Proceeds from maturities of securities available-for-sale.... 114,581 25,034 Purchases of securities available-for-sale................... (127,272) (250,958) Purchases of securities held-to-maturity..................... (100) Net decrease in short-term investments....................... 80,483 (7,018) Net loans paid............................................... 60,817 49,857 Proceeds from other real estate owned........................ 8,495 13,223 Purchases of premises and equipment.......................... (2,113) (763) -------- -------- Net cash provided by investing activities......................... 186,281 33,303 Cash flows used by financing activities: Net decrease in nontime deposits............................. (106,369) (136,797) Net payments on certificates of deposit...................... (66,660) (34,903) Net (payments) proceeds on short-term borrowings............. (56,965) (2,789) Net payments on other borrowings............................. (4,143) (4,000) Issuance of common stock for cash, net....................... 680 23,243 -------- -------- Net cash used by financing activities............................. (233,457) (155,246) -------- -------- Decrease in cash and cash equivalents........................ (2,626) (29,076) Cash and cash equivalents at beginning of year............... 90,198 116,529 -------- -------- Cash and cash equivalents at end of period................... $ 87,572 $ 87,453 ======== ======== Supplemental disclosure of cash flow information: Cash paid during the period for: Interest................................................ $ 29,899 $ 37,725 Income taxes............................................ $ 2,144 $ 1,949 Noncash transactions: Transfers from investment portfolio to securities held for sale.............................................. $ 453 Transfers from other assets to securities available-for-sale.................................... $ 300 Transfers from loans to other real estate owned......... $ 14,043 $ 34,350 Financed other real estate owned........................ $ 5,073 $ 22,483 Stock issuance............................................... $ 550 $ 519
The accompanying notes are an integral part of these consolidated financial statements. 6 7 UST CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: The consolidated financial statements of UST Corp. and its subsidiaries (the "Company") included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The Company, however, believes that the disclosures are adequate to make the information presented not misleading. Certain prior period amounts have been reclassified to conform to current classifications. The amounts shown reflect, in the opinion of management, all adjustments necessary for a fair presentation of the financial statements for the periods reported. All such adjustments were of a normal recurring nature, except as disclosed herein. These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's Report on Form 10-K for the fiscal year ended December 31, 1993. The results of operations for the three-and nine-month periods ended September 30, 1994 are not necessarily indicative of the results of operations for the full year or any other interim period. NOTE 2: An analysis of the reserve for possible loan losses for the nine months ended September 30, 1994 and 1993 follows:
1994 1993 ------- ------- (DOLLARS IN THOUSANDS) Balance at beginning of period....................... $62,547 $50,126 Loans charged off.................................... (22,181) (38,400) Recoveries on loans previously charged off........... 3,182 2,042 ------- ------- Net chargeoffs....................................... (18,999) (36,358) Provided from operations............................. 18,625 61,083 ------- ------- Balance at end of period............................. $62,173 $74,851 ======= =======
The reserve for possible loan loss is based on a consistent, systematic method which analyzes the size and risk of the loan portfolio on a monthly basis. See "Credit Quality and Reserve for Possible Loan Loss" in Management's Discussion and Analysis of Financial Condition and Results of Operations herein. The increase in the reserve for 1993 resulted from a change in the Company's strategy regarding the management of problem assets. As a result, a $30 million special provision for loan losses was recorded during the 1993 period. NOTE 3: At September 30, 1994, the Company had the following off-balance sheet financial instruments whose contract amounts represent credit risk:
AMOUNT -------- (DOLLARS IN THOUSANDS) Commitments to extend credit......................... $306,000 Standby letters of credit and financial guarantees... 60,000 Commercial letters of credit......................... 2,000
NOTE 4: Cumulative effect of change in accounting method: See "Income Taxes" in Management's Discussion and Analysis of Financial Condition and Results of Operations herein for information. NOTE 5: The weighted average number of common shares for calculating earnings per share includes shares related to a directors deferred compensation plan and dilutive options totaling 387,253, 448,096, and 266,346 for the three- and nine-month periods ended September 30, 1994, and three-month period ended September 30, 1993, respectively. Due to the net loss for the nine-month period ended September 30, 1993, shares related to the directors deferred compensation plan and options have been excluded from the earnings per share calculations due to their antidilutive effect. 7 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION AT SEPTEMBER 30, 1994 INTRODUCTION The Company's primary loan market, the New England region, experienced a weak economic environment from 1990 to 1993. The economic climate contributed to a decline in real estate values and adversely affected the net worth of certain borrowing customers of the Company's subsidiary banks and the Company's collateral position with respect to certain loans. The majority of the Company's outstanding loans are collateralized by real estate located in New England, more specifically, Eastern Massachusetts. Management of the Company has identified the reduction of the aggregate amount of nonperforming assets and substandard loans, as measured by the Company's internal risk rating system, as a high priority. Although the level of nonperforming assets has fluctuated from quarter to quarter, total substandard loans have declined over $100 million to $153 million at September 30, 1994 from a peak of $255 million at December 31, 1993. As of September 30, 1994, approximately 75 percent of substandard loans were collateralized with real estate, and the remainder were collateralized with accounts receivable, inventory, equipment and other business assets. Of the loans secured by real estate, approximately 60 percent were collateralized by commercial real estate development, approximately 25 percent by owner-occupied commercial properties and approximately 10 percent by residential real estate. The remaining were collateralized by real estate under construction and raw land. While the New England economy has shown recent signs of improvement, the foregoing factors influenced the Company's financial results for both the third quarter and first nine months of 1994, particularly with regard to the provision for possible loan losses and expenses associated with foreclosed asset and workout expense. Such factors may continue to influence future operating results. Recent amendments to the Federal Deposit Insurance Improvement Act of 1991 require each federal banking agency to prescribe standards by regulation or guideline, relating to (i) certain operational and managerial matters and (ii) to the extent determined to be appropriate by such regulators, asset quality, earnings and stock valuation. Any such standards would apply to the Company's banking subsidiaries only and not to the Company directly. The Company is not aware of any presently proposed regulations or guidelines that would have any material effect on the operations or results of any of the Company's banking subsidiaries or, indirectly, of the Company. This discussion should be read in conjunction with the financial statements, notes, and tables included in the Company's Report on Form 10-K for the fiscal year ended December 31, 1993. ASSETS Total assets at September 30, 1994 were $1.8 billion compared with $2.0 billion at December 31, 1993. The Company's loan portfolio decreased 7%, or $89 million, since December 31, 1993. The decrease is primarily due to repayments while new loan activity has been affected by increased competition for the small-to-middle market credits. Another factor in the reduction of the portfolio was the chargeoffs of certain credits. See "Credit Quality and Reserve for Loan Loss" herein. Securities decreased $64.9 million since December 31, 1993 to $409.0 million at September 30, 1994, reflecting the maturity of short-term U.S. Treasury and Agency securities. At September 30, 1994, securities were principally comprised of mortgage-backed securities, U.S. Treasury and Agency securities, and corporate notes. On December 31, 1993, the Company adopted Statement of Financial Accounting Standards No. 115 ("SFAS 115"), "Accounting for Certain Investments in Debt and Equity Securities," issued by the Financial Accounting Standards Board. This Standard addresses the accounting and reporting for debt and equity securities that have readily determinable market values. According to SFAS 115, these securities must be classified as either held-to-maturity, available-for-sale, or trading and are reported at either amortized cost or 8 9 fair value, depending upon the classification. At September 30, 1994, the Company's portfolio consisted of $.1 million of securities held-to-maturity and $408.9 million available-for-sale. At December 31, 1993, all securities were classified in the available-for-sale category. Between December 31, 1993 and September 30, 1994, the application of SFAS 115 resulted in a decrease of $21.0 million to stockholders' investment, representing the change from an unrealized gain of $3.3 million after tax at December 31, 1993 to an unrealized loss of $17.7 million after tax at September 30, 1994. In light of the size of the unrealized loss and the current level of taxable income, the Company has concluded that $3.7 million is the appropriate deferred tax asset related to unrealized loss to be recorded at September 30, 1994. The decline in market value reflects the rapid increase in interest rates and corresponding decline in market prices for bonds, which has continued throughout the first nine months of 1994. LIQUIDITY AND FUNDING Liquidity involves the Company's ability to raise or gain access to funds in order to fulfill its existing and anticipated financial obligations. It may be provided through the maturity or sale of an entity's assets, such as loans and securities, liability sources such as increased deposits and purchased or borrowed funds, and access to the capital markets. While the Company's security portfolio is currently classified almost entirely as available-for-sale, the Company has no present intention or need to sell any of its securities or existing loan portfolio, other than a nominal volume of fixed rate residential mortgage loans sold to investors as they are originated. At September 30, 1994, liquidity, which includes excess cash, excess funds sold and unpledged securities, totaled approximately $246 million, or 14% of quarter-end assets compared to $310 million, or 15%, at December 31, 1993. The funds needed to support the Company's loan and securities portfolios are provided through a combination of commercial and retail deposits. Total deposits decreased $173.0 million, or 11%, to $1.5 billion since December 31, 1993. Approximately 79% of the decline occurred in savings and time deposits as the average yield has fallen from 2.91% for the fourth quarter of 1993 to 2.75% for the third quarter of 1994. Generally, rate-conscious investors are increasingly utilizing mutual funds and other nonbank vehicles to obtain higher rates of return. As shown in the Consolidated Statements of Cash Flows, cash and cash equivalents decreased $2.6 million during the nine-month period ended September 30, 1994. Cash provided by operations resulted largely from net interest income from loans and securities, less the net difference of noninterest expense over noninterest income. Net cash provided by investing activities was due principally to the net decreases in short-term investments, net decreases in loans through repayment, and to an excess of proceeds from sales and maturities of securities over securities purchases. Net cash used for financing activities was primarily the result of decreases in both nontime deposits and certificates of deposit and a net decrease in short-term borrowings. At September 30, 1994, the parent company had $16.0 million in short-term investments. This balance reflects the investment of proceeds received from the sale of 2.87 million shares of the Company's common stock to more than sixty institutional investors in a European offering made under Regulation S of the United States Securities and Exchange Commission on August 12, 1993. These investments were reduced from $20 million to $16 million during the third quarter of 1994 as the Company paid its third annual principal installment of $4 million on its 8.5% senior notes. For the nine months ended September 30, 1994, the Company received a total of $3.0 million in dividends from United States Trust Company ("USTC"). During the same period, $4.9 million was contributed to UST Bank/Connecticut ("UST/CT") and $500 thousand was contributed to USTrust by the Company to supplement their respective equity capital accounts. INTEREST RATE RISK Volatility in interest rates requires the Company to manage interest rate risk. Interest rate risk arises from differences in the timing of repricing assets and liabilities. Management monitors and adjusts the difference 9 10 between interest-sensitive assets and interest-sensitive liabilities ("GAP" position) within various time frames. An institution with more assets repricing than liabilities within a given time frame is considered asset sensitive ("positive GAP") and in time frames with more liabilities repricing than assets it is liability sensitive ("negative GAP"). Within GAP limits established by the Board of Directors, the Company seeks to balance the objective of insulating the net interest margin from rate exposure with that of taking advantage of anticipated changes in rates in order to enhance income. The Company's policy is to limit its one-year cumulative GAP position to 2.5 times equity, presently equal to approximately 19% of total assets. The Company manages its interest rate GAP primarily by lengthening or shortening the maturity structure of the Company's securities portfolio. The Company's GAP presentation may not reflect the degrees to which interest-earning assets and core deposit costs respond to changes in market interest rates. The Company's rate-sensitive assets consist primarily of loans tied to the prime rate. As interest rates rose during the first nine months of 1994, the prime rate and, therefore, the Company's yield on earning assets increased faster than the rate paid on interest-bearing liabilities. The following table summarizes the Company's GAP position at September 30, 1994. The majority of loans are included in 0-30 days as they reprice in response to changes in the interest rate environment. Securities and demand deposits are categorized according to their expected lives. They are evaluated in conjunction with the Company's asset/liability management strategy and securities may be purchased or sold in response to expected or actual changes in interest rates, prepayment risk, loan growth and similar factors. The reserve for possible loan losses is included in the "Over 1 Year" category of loans. At September 30, 1994, the one-year cumulative GAP position was slightly negative at $57 million, or approximately 3% of total assets.
INTEREST SENSITIVITY PERIODS -------------------------------------------------------------- 0-30 DAYS 31-90 DAYS 91-365 DAYS OVER 1 YEAR TOTAL --------- ---------- ----------- ----------- ----- (DOLLARS IN MILLIONS) Loans...................................... $799 $ 18 $ 83 $350 $1,250 Short-term investments..................... 16 16 Securities................................. 4 4 27 374 409 Other assets............................... 4 115 119 ---- ----- ----- ---- ------ Total assets............................... 819 22 114 839 $1,794 ---- ----- ----- ---- ------ Interest-bearing deposits.................. 622 57 168 270 1,117 Borrowed funds............................. 168 11 179 Demand deposits............................ (4) 354 350 Other liabilities and stockholders' investment............................... 1 147 148 ---- ----- ----- ---- ------ Total liabilities and equity............... 787 57 168 782 $1,794 ---- ----- ----- ---- ------ GAP for period............................. $ 32 $ (35) $ (54) $ 57 ==== ===== ===== ==== Cumulative GAP............................. $ 32 $ (3) $ (57) $ 0 ==== ===== ===== ==== As a percent of total assets............... 1.78% (0.17)% (3.18)% ==== ===== =====
CREDIT QUALITY AND RESERVE FOR POSSIBLE LOAN LOSS The Company maintains a reserve for possible loan losses to absorb future chargeoffs of loans in the existing portfolio. The reserve is increased by a loan loss provision charged to expense. When a loan, or portion thereof, is considered uncollectible, it is charged against the reserve. Recoveries on amounts previously charged off are added to the reserve when collected. Adequacy of the reserve for possible loan losses is determined using a consistent, systematic methodology which analyzes the size and risk of the loan portfolio on a monthly basis. Factors in this analysis include historical loan loss experience and asset quality, as reflected by delinquency trends, nonaccrual and restructured loans and the Company's credit risk rating profile. The Company's credit risk rating profile uses categories of risk based on those currently used by its primary regulators and accuracy of the ratings is monitored by an ongoing evaluation by the Company's Loan Review Department. Consideration is also given to the current and expected economic conditions and in 10 11 particular how such conditions affect the types of credits in the portfolio and the market area in general. This analysis is documented monthly using a combination of numerical, statistical and qualitative analysis (including sensitivity tests) and a written conclusion discussing the rationale supporting the monthly adequacy of the loan loss reserve. The following table measures the Company's performance regarding some key indicators of asset quality:
SEPTEMBER 30, JUNE 30, MARCH 31, DECEMBER 31, SEPTEMBER 30, 1994 1994 1994 1993 1993 ------------ ------- --------- ------------ ------------- (DOLLARS IN MILLIONS) Nonperforming assets: Nonaccrual loans............... $ 69.5 $63.2 $48.6 $ 49.3 $ 65.4 Accruing loans 90 days or more past due..................... 1.2 1.0 1.3 .5 .9 Other real estate owned (OREO), net.......................... 17.7 10.1 16.2 19.5 27.1 Restructured loans............. 17.7 18.4 25.8 41.5 34.9 ------ ----- ----- ------ ------ Total nonperforming assets.................. $106.1 $92.7 $91.9 $110.8 $128.3 ====== ===== ===== ====== ====== Reserve for loan losses............. $ 62.2 $61.0 $60.9 $ 62.5 $ 74.9 Net chargeoffs for the quarter...... 5.5 6.5 7.1 51.8** 8.0 OREO reserve........................ 3.6 3.1 6.6 6.6 8.0 Ratios: Reserve to nonaccrual loans.... 89.4% 96.6% 125.2% 127.0% 114.4% Reserve to total of nonaccrual loans, accruing loans 90 days or more past due and restructured loans........... 70.3% 74.0% 80.5% 68.5% 74.0% Reserve to period-end loans.... 5.0% 4.7% 4.7% 4.7% 5.4% Nonaccrual loans to period-end loans........................ 5.6% 4.9% 3.8% 3.7% 4.8% Nonaccrual and accruing loans over 90 days past due to period-end loans............. 5.7% 5.0% 3.9% 3.8% 4.8% Nonperforming assets to period-end loans, and OREO... 8.4% 7.1% 7.1% 8.3% 9.2% Nonperforming assets to total assets....................... 5.9% 5.0% 4.6% 5.4% 4.6% Net chargeoffs to average loans........................ 1.7%* 2.0%* 2.2%* 3.7%** 2.3%* OREO reserve to OREO........... 16.9% 23.4% 28.9% 25.2% 22.7% - - --------------- * Annualized ** Full year 1993
During the second quarter of 1993, a strategy was developed which recognized that many troubled credits would require resolution in an expeditious manner in order to reduce the management and staff involvement and associated carrying costs. While this strategy would increase the initial cost of the workouts, it would allow the Company's resources to be redirected toward new business. One result of this strategy was to record a $30 million special loan loss provision in the second quarter of 1993 to reflect Management's estimate of possible future losses based upon the identified level of substandard and nonperforming assets. Total nonperforming assets at September 30, 1994 have decreased $4.7 million, or 4%, to $106.1 million since December 31, 1993, and have increased 14% from the $92.7 million reported at June 30, 1994. Nonperforming assets have declined $22.2 million, or 17%, from September 30, 1993 due primarily to paydowns, OREO sales, and chargeoffs. Future economic conditions could result in further deterioration of the Company's loan portfolio and the value of its OREO portfolio. Adverse developments could produce increases in delinquencies, nonperforming assets, restructured loans, and OREO writedowns which individually or collectively could have a material negative effect on future earnings. These factors could negatively affect the Company's income statement 11 12 through reduced interest income, increased loan loss provisions, and higher costs to collect loans and maintain repossessed collateral. CAPITAL AND REGULATORY AGREEMENTS There are three capital requirements which bank and bank holding companies must meet. Two requirements take into consideration risk inherent in assets for both on-balance and off-balance sheet items on a weighted basis ("risk-based assets"). Under these requirements, the Company must meet minimum Tier 1 and Total risk-based capital ratios (capital, as defined in the regulations, divided by risk-based assets) of 4% and 8%, respectively. Tier 1 capital is essentially shareholders' investment, net of intangible assets and Tier 2 capital is the allowable portion of the loan loss reserve (as defined) and discounted subordinated debt. Total capital is the combination of Tier 1 and Tier 2. The Company's risk-based assets were $1.51 billion at September 30, 1994 and $1.64 billion at December 31, 1993. The third requirement is a leverage capital ratio, defined as Tier 1 capital divided by total average assets, net of intangibles. It requires a minimum of 3% for the highest rated institutions and higher percentages for others. At September 30, 1994 and December 31, 1993, the Company's ratios and the regulatory minimum requirements applicable to the Company were:
SEPTEMBER 30, 1994 DECEMBER 31, 1993 -------------------- -------------------- AMOUNT PERCENT AMOUNT PERCENT ------ ----- ------ ----- (DOLLARS IN MILLIONS) Tier 1 capital: Actual................................ $147.1 9.74% $141.7 8.68% Minimum required*..................... $ 60.4 4.00% $ 65.3 4.00% Total (Tier 1 and Tier 2) capital: Actual................................ $166.8 11.38% $164.5 10.35% Minimum required*..................... $117.3 8.00% $130.6 8.00% Tier 1 leverage capital:*.................. $147.1 7.98% $141.7 7.06% - - --------------- * See discussion below. The Company has not been notified of a specific minimum requirement above the 3% for highest-rated institutions. However, two of the Company's banking subsidiaries, comprising almost all of the consolidated assets, have a 6% Tier 1 leverage capital requirement.
Capital ratios have been calculated consistent with current regulatory policy which excludes the impact of SFAS 115 and the recording of an unrealized gain/loss on securities available-for-sale. The Company understands that a modification to current regulations is under consideration which would disallow, for regulatory capital calculations, the amount of deferred tax assets that are dependent upon future taxable income for a period greater than one year. If adopted, this proposal would not materially affect the reported ratios of the Company. The Company further understands that a new proposal by the FDIC would reduce capital by the unrealized loss resulting from SFAS 115. If adopted, Tier 1, total capital and Tier 1, leverage capital ratios at September 30, 1994 would be 8.58%, 10.18% and 7.08%, respectively. In February 1992, the Company's two Massachusetts-based banking subsidiaries, USTC and USTrust, each entered into a Consent Agreement and Order with the Federal Deposit Insurance Corporation ("FDIC") and the Commissioner of Banks in the Commonwealth of Massachusetts ("Massachusetts Commissioner"). In accordance with these agreements, the banks agreed to, among other things, maintain a Tier 1 leverage capital ratio at or in excess of 6% by February 1993. At September 30, 1994 the Tier 1 leverage capital ratio of USTrust was 7.30% and was 31.75% for USTC. This compares with 6.49% and 23.75%, respectively, at December 31, 1993. In February 1994 the FDIC and Massachusetts Commissioner terminated and lifted the Consent Agreement and Order with USTC. 12 13 Since June 1991, the Company's Connecticut-based banking subsidiary, UST/CT has been operating under a Stipulation and Agreement with the Commissioner of Banks for the State of Connecticut. This agreement was amended in August 1992, November 1993, and July 1994 and requires UST/CT to maintain a 6% Tier 1 leverage capital ratio. During the second quarter of 1994, regulators for UST/CT required that a portion of its deferred tax asset not be included in capital calculations. UST/CT's Tier 1 leverage capital ratio as modified in the preceding sentence at September 30, 1994 was 7.68% compared with 6.21% at December 31, 1993. Effective August 3, 1992, UST Corp. entered into a written agreement with the Federal Reserve Bank of Boston and the Massachusetts Commissioner which requires the Company to maintain Tier 1, Total risk-based and Tier 1 leverage capital ratios which conform to the Capital Adequacy Guidelines of the Board of Governors of the Federal Reserve System, and which take into account the current and future capital requirements of the subsidiary banks, without specifying a numeric minimum for the Tier 1 leverage capital ratio. The Company believes its consolidated ratios meet the required minimums. Additionally, per these agreements, the Company has agreed not to pay any dividends to stockholders, nor take any dividends from its banking subsidiaries, without prior regulatory approval. Similarly, the banking subsidiaries have agreed to refrain from transferring funds in the form of dividends to the Company without prior regulatory approval. The FDIC and Massachusetts Commissioner terminated and lifted the Consent Agreement and Order with USTC in February 1994; however, USTC has agreed to continue to request regulatory consent prior to the payment of dividends. The Company and each of its subsidiary banks is currently in compliance with its respective capital requirements under these regulatory agreements. The Company believes that each of its subsidiary banks is also in satisfactory compliance with the other terms of the respective regulatory agreements (See Part II, Item 1). RESULTS OF OPERATIONS COMPARISON OF 1994 WITH 1993 The Company reported net income of $1.1 million, or $.06 per share, in the third quarter of 1994 and $3.4 million, or $.19 per share in the first nine months of 1994. This compares with net income of $2.0 million or $0.12 per share and net loss of $21.6 million, or $1.47 per share, for the same periods in 1993. Results for the nine-month period ending September 30, 1993 include a special loan loss provision of $30 million recorded in the second quarter in connection with the aforementioned strategy regarding problem asset resolution. Results for the first nine months of 1994 reflect declines in net interest income and noninterest income from the prior year, which were more than offset by a lower loan loss provision and decreased expenses associated with foreclosed assets and loan workout. The Company's net interest income on a fully taxable equivalent basis was $23.9 million in the third quarter of 1994 compared with $23.8 million for the same period in 1993. For the first nine months of 1994, net interest income on a fully taxable basis was $68.9 million compared with $70.4 million for the same period in 1993. Interest rate spread and margin increased in the third quarter of 1994 from the second quarter of 1994. The improved interest rate spread and margin this quarter was a direct result of increased earning asset yields coupled with stable rates on interest-bearing liabilities. (See "Net Interest Income Analysis" below.) The resultant increase in net interest income was partially offset by a continued decline in the volume of earning assets. NET INTEREST INCOME ANALYSIS Due to the continued rise in interest rates since the beginning of 1994, increases in earning asset yields outpaced increases in the cost of interest-bearing liabilities. Specifically, the yield on interest-earning assets increased to 7.71% for the third quarter of 1994 compared with 7.38% for the second quarter of 1994. However, the cost of interest-bearing liabilities only increased from 2.89% last quarter to 2.93% this quarter. Although rates have risen throughout 1994, they are lower than both the third quarter and first nine months of 13 14 1993. The yield on interest-earning assets for the first nine months of 1994 was 7.40% compared to 7.69% in the first nine months of 1993, and the cost of interest-bearing liabilities was 2.87% compared to 3.19% in the first nine months of 1993. Average loans outstanding in the third quarter were $1.3 billion, $122 million lower than the same period in 1993. Average interest-bearing deposits were $1.1 billion, a decrease of $126 million from the 1993 third quarter average. For the first nine months of 1994, average loans outstanding were $1.3 billion, a decrease of $140 million from 1993, and average interest-bearing deposits were $1.2 billion, a decrease of $97 million. See "Assets" section above for discussion of changes in loan volume. Interest rate spread in the third quarter of 1994 was 4.78% compared with 4.50% for the second quarter of 1994. Net interest margin was 5.47% in the third quarter of 1994 compared with 5.13% last quarter. Interest rate spread was 4.53% and the net interest margin was 5.16% for the first nine months of 1994 compared with 4.49% and 5.04% for the same periods in 1993. See "Financial Condition" above for a discussion regarding loans and deposits. The following tables attribute changes in interest income, interest expense and the related net interest income for the quarter and nine months ended September 30, 1994 when compared with the quarter and nine months ended September 30, 1993, either to changes in average balances or to changes in average rates on interest-bearing assets and liabilities. In this table, changes attributable to both rate and volume are allocated on a weighted basis.
INCREASE (DECREASE) FROM QUARTER ENDED SEPTEMBER 30, 1993 ---------------------------------- QUARTER AMOUNTS DUE TO ENDED CHANGES IN SEPTEMBER 30, TOTAL -------------------- 1994 CHANGE VOLUME RATE ------- ------- ------- ------ (DOLLARS IN THOUSANDS) Interest income: Interest and fees on loans*.............. $26,570 $(1,757) $(2,611) $ 854 Interest and dividends on securities: Taxable............................. 6,652 13 125 (112) Nontaxable*......................... 122 (126) (46) (80) Interest on excess funds and other....... 367 64 (39) 103 ------- ------- ------- ------ Total interest income*.............. 33,711 (1,806) (2,571) 765 ------- ------- ------- ------ Interest expense: Interest on deposits..................... 7,926 (1,987) (937) (1,050) Interest on short-term borrowings........ 1,615 133 (164) 297 Interest on other borrowings............. 265 (65) (106) 41 ------- ------- ------- ------ Total interest expense.............. 9,806 (1,919) (1,207) (712) ------- ------- ------- ------ Net interest income*.......................... $23,905 $ 113 $(1,364) $1,477 ======= ======= ======= ====== - - --------------- * Fully taxable equivalent at the Federal income tax rate of 35% and includes applicable state taxes net of Federal benefit.
14 15
INCREASE (DECREASE) FROM NINE MONTHS ENDED SEPTEMBER 30, 1993 NINE ------------------------------------ MONTHS AMOUNTS DUE TO ENDED CHANGES IN SEPTEMBER 30, TOTAL -------------------- 1994 CHANGE VOLUME RATE ------- ------- ------- ------ (DOLLARS IN THOUSANDS) Interest income: Interest and fees on loans*.............. $76,702 $(8,288) $(8,358) $ 70 Interest and dividends on securities: Taxable............................. 20,300 (1,188) 1,836 (3,024) Nontaxable*......................... 357 (273) (130) (143) Interest on excess funds and other....... 1,433 1,028 945 83 ------- ------- ------- ------ Total interest income*.............. 98,792 (8,721) (5,707) (3,014) ------- ------- ------- ------ Interest expense: Interest on deposits..................... 24,582 (6,454) (2,223) (4,231) Interest on short-term borrowings........ 4,434 (509) (1,510) 1,001 Interest on other borrowings............. 909 (194) (304) 110 ------- ------- ------- ------ Total interest expense.............. 29,925 (7,157) (4,037) (3,120) ------- ------- ------- ------ Net interest income*.......................... $68,867 $(1,564) $(1,670) $ 106 ======= ======= ======= ====== - - --------------- * Fully taxable equivalent at the Federal income tax rate of 35% and includes applicable state taxes net of Federal benefit.
NONINTEREST INCOME Total noninterest income decreased $.5 million in the third quarter of 1994 compared with the same period in 1993. Service charges on deposit accounts and gain-on-sale of securities declined $.1 million and $.1 million, respectively, while other noninterest income decreased $.2 million, a direct result of lower residual income from maturing equipment leases. Total noninterest income decreased $6.4 million in the nine months ended September 30, 1994 compared with the same period in 1993. The decrease is primarily due to fluctuations and variances in asset management fee-based income contingent on transaction volume and other factors. In addition, a decline in securities gains from $4.3 million in 1993 to $1.0 million in 1994 contributed to the decrease. Gains on securities were lower in 1994 compared with 1993 which included a larger amount of sales in response to a decrease in total deposits in the first quarter of 1993. Other noninterest income decreased $1.2 million and the following are the more significant reasons: Lease income decreased $.7 million due to a decline in residuals on completed leases and income from home equity loans purchased from the Resolution Trust Corporation at a substantial discount in late 1991 decreased $.4 million as the principal declines due to paydowns. NONINTEREST EXPENSE Total noninterest expense for the third quarter of 1994 increased $2.4 million to $23.1 million from $20.7 million for the same period in 1993. The increase is due to the following significant reasons: Personnel-related costs increased $2.0 million due to third quarter 1994 severance payments of $.5 million, an asset management division revenue-sharing provision of $.6 million (See discussion below), higher pension expense of $.4 million and additional staffing. Other noninterest expense increased $.8 million as a result of a special reduction in the Company's reserve for litigation recorded in the third quarter of 1993. Foreclosed asset and workout expense declined $.6 million. The Company and certain senior executives in USTC's asset management division are presently negotiating the terms of employment agreements designed to maximize the profitability and grow the assets under management of the asset management business. The proposed agreements are also designed to increase the foregoing executives' participation in the value created in the asset management business and, in a change-in-control situation, increase the likelihood that a prospective purchaser will retain the services of the executives. The agreements are expected to contain revenue-sharing provisions which will permit the asset management division to use a specified percentage of its base revenues for the payment of expenses of the 15 16 operation, including incentive compensation. The revenue-sharing provisions are expected to represent a percentage of base revenues to be defined in the agreements and would become effective upon the execution of the agreements. In connection therewith, the Company has recorded an estimated revenue-sharing accrual of $.6 million for the quarter ended September 30, 1994 and, subject to the level of defined base revenues, would record a similar accrual for the fourth quarter. It has also been proposed that the revenue-sharing provisions be applied retroactively to January 1, 1994. In the event of such retroactive application, the Company would record an additional accrual during the fourth quarter subject to the final terms of the proposed agreements. Such accrual would include adjustments for incentive accruals already recorded under existing arrangements and would contain other exclusions from defined base revenues. Total noninterest expense for the first nine months of 1994 decreased $4.6 million to $67.8 million from $72.4 million for the same period in 1993. Foreclosed asset and workout expense declined $11.9 million primarily due to decreases in writedowns of OREO to net realizable value. Personnel-related costs increased $3.9 million due to severance payments of $.7 million, an asset management division revenue-sharing provision of $.6 million, higher pension expense of $.8 million and additional staffing and merit increases. Net occupancy expense for the 1994 period includes a writedown of $.3 million in connection with a sale of a former branch building. Other noninterest expense increased $3.0 million in the nine-month comparisons. This increase was largely due to a special reduction of $.8 million in the Company's reserve for litigation recorded in the 1993. An increase of $.7 million was attributable to fees paid for consulting services on a number of planning and operational improvement initiatives and for consulting services by certain Company executives. Appraisal fees increased $.6 million for new appraisals ordered on a large number of collateral-based loans. Advertising expense increased $.8 million due to increased promotional campaigns. INCOME TAXES The Company recorded tax provisions of $447 thousand in the third quarter of 1994, and $834 thousand in the third quarter of 1993. This compares with a tax provision of $1.5 million for the first nine months of 1994 and a tax benefit of $12.8 million, net of the effect of SFAS No. 109 noted below, in 1993. Income taxes are a direct result of the level and composition of pre-tax income. In February 1992 the Financial Accounting Standards Board issued a new standard, SFAS No. 109 "Accounting for Income Taxes," a modification of SFAS No. 96, which changes the accounting for deferred income tax to the "liability method." The Company adopted SFAS No. 109 on January 1, 1993. This change increased net income $750 thousand in January 1993. This represented the cumulative effect of the new standard on the balance sheet. As of September 30, 1994, the Company had a deferred tax asset of approximately $10.4 million, net of a valuation allowance of $4.0 million, included in other assets which is expected to be realized against future taxable income. Management believes that it is more likely than not that the Company will realize the benefit of these deferred tax assets. RECENT ACCOUNTING DEVELOPMENTS The Financial Accounting Standards Board (FASB) has issued SFAS No. 112, "Employers' Accounting for Postemployment Benefits," which requires accrual of a liability for all types of benefits paid to former or inactive employees after employment but before retirement. The Company has determined that this statement will have no material effect on its financial statements. Adoption of the statement was required for fiscal years beginning after December 15, 1993. FASB has issued SFAS No. 114, "Accounting by Creditors for Impairment of a Loan," which requires that all creditors value all loans for which it is probable that the creditor will be unable to collect all amounts due according to the terms of the loan agreement at the present value of expected future cash flows discounted at the loan's effective interest rate or, as a practical expedient at the loan's observable market price or the fair value of the collateral if the loan is collateral dependent. This statement would apply for fiscal years beginning after December 15, 1994. Portions of SFAS No. 114 have been amended by SFAS No. 118, "Accounting by Creditors for Impairment of a Loan-Income Recognition and Disclosures." The effect on the Company's results of operations has not yet been determined. 16 17 PART II -- OTHER INFORMATION For the quarter ended September 30, 1994, Items 2 through 4 of Part II are either inapplicable or would elicit a response of "NONE" and therefore no reference thereto has been made herein. ITEM 1. LEGAL PROCEEDINGS In the ordinary course of operations, the Company and its subsidiaries become defendants in a variety of judicial and administrative proceedings. In the opinion of management, however, there is no proceeding pending, or to the knowledge of management threatened, which in the event of an adverse decision would be likely to result in a material adverse change in the financial condition or results of operations of the Company and its subsidiaries. With respect to the potential regulatory penalties referred to under Item 1 -- Recent Developments -- Potential Regulatory Sanctions of the Company's Annual Report on Form 10-K for its fiscal year ended December 31, 1993, while the Company does not know whether the FDIC will attempt to assess any penalties with respect to this matter, the person or persons upon whom any penalty would be assessed or the amounts of any such penalties, were they to be assessed, management of the Company believes that it is unlikely that this matter will have a material adverse effect on its financial condition or results of operations. Consequently, no provision in respect of penalties has been made in the Company's Consolidated Financial Statements. In the event penalties are imposed, the Company and its legal counsel will evaluate the grounds upon which the penalties are based, consider the size of such penalties, note upon which entities or individuals such penalties are imposed and determine whether it will independently (or jointly with the directly affected entity or individual) contest the imposition of the penalty. ITEM 5. OTHER INFORMATION (a) Retirement of Paul M. Siskind as Chairman of the Board and Director of the Company. Effective October 18, 1994 Paul M. Siskind retired (and accordingly resigned) as Chairman of the Board and as a Director of the Company. William Schwartz, Vice Chairman of the Board of UST Corp. has assumed the responsibilities of the Chairman until a successor is named. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits -- Press Release, dated September 29, 1994 concerning the retirement (and related resignation) of Paul M. Siskind as Chairman and as a Director of the Company effective October 18, 1994. (b) Exhibits -- Article 9 Summary financial information for nine months ended September 30, 1994 (Exhibit 27). (c) Reports on Form 8-K -- The Company filed a Current Report on Form 8-K with the Commission on October 3, 1994 regarding the retirement (and related resignation) of Paul M. Siskind as Chairman of the Board and as a Director of the Company. 17 18 Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. UST CORP. Date: November 14, 1994 By: /S/ NEAL F. FINNEGAN ...................................... NEAL F. FINNEGAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER Date: November 14, 1994 By: /S/ JAMES K. HUNT ...................................... JAMES K. HUNT, EXECUTIVE VICE PRESIDENT, TREASURER AND CHIEF FINANCIAL OFFICER
18 EX-27 2 ARTICLE 9- FINANCIAL DATA SCHEDULES
9 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF UST CORP. FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 U.S. DOLLARS 9-MOS DEC-31-1994 JAN-01-1994 SEP-30-1994 1.00 87,521 51 16,164 0 408,874 100 98 1,249,775 62,173 1,793,968 1,467,769 169,303 10,413 10,143 10,926 0 0 125,414 1,793,968 76,098 20,543 1,433 98,074 24,582 29,925 68,149 18,625 1,022 67,761 4,857 3,382 0 0 3,382 .19 .19 5.16 69,563 1,189 17,701 0 62,547 22,181 3,182 62,173 62,173 0 11,261
EX-99 3 PRESS RELEASE 1 PAUL M. SISKIND RETIRES AS UST CORP. CHAIRMAN BOSTON, MASS . . . SEPTEMBER 29, 1994 . . . The Board of Directors of UST Corp. (NASDAQ:USTB), parent company of USTrust, and United States Trust Company in Massachusetts and USTBank/Connecticut, announced today that Chairman of the Board Paul M. Siskind has decided to retire and will accordingly resign as a director effective October 18, 1994. Mr. Siskind has been a member of the UST Corp. Board of Directors since 1967 and has served as Chairman for 27 years. In addition to his many significant contributions to UST Corp., Mr. Siskind has had a distinguished legal career. Appointed Assistant Professor of Law at Boston University in 1948, he went on to serve as Dean of the Boston University School of Law from 1966 until 1976. He continued as Professor of Law until 1980 and is currently Professor Emeritus. "I've enjoyed and appreciated the opportunity to help build UST and I feel this is a good time for me to move on," notes Siskind. "I am confident that the Company is well-positioned for the future, and will continue to benefit from the guidance of the Board and senior management." "Paul Siskind has played an integral part in the growth of UST," commented Neal F. Finnegan, UST Corp. President and Chief Executive Officer. "His leadership and guidance have been invaluable in shaping our Company. He is greatly admired and respected by the Board, management and employees alike." William Schwartz, Vice Chairman of the Board of UST Corp., will assume the responsibilities of the Chairman until a successor has been named. -----END PRIVACY-ENHANCED MESSAGE-----