- The Washington Times - Monday, April 16, 2001

Riggs National Corp., the largest bank holding company headquartered in the District, reported its income fell 50 percent for its first quarter compared to the same time last year, disappointing analysts.

The company reported last week an income of $5.61 million (19 cents per diluted share) compared to $11.53 million (41 cents) in 2000. Diluted shares reflect the value of options, warrants and other securities convertible into common stock.

"With Riggs you always have to dig a little deeper to find out what's going on," says Derek Statkevicus, an analyst with Keefe Bruyette & Woods Inc. in New York.

Several factors skewed Riggs' numbers, he says. The company's venture capital unit suffered a $7.9 million loss. At the same time Riggs recorded a $10.3 million gain on sale of securities.

Riggs spokesman Mark Hendrix says the company's performance "reflects the economic slowdown and the weakening of the capital markets," and stems "primarily from losses of the venture capital unit."

But Riggs' financials did not affect its stock, which has earned 20 percent since last year while the index for bank stocks has dropped about 11 percent.

Five months ago shares of Riggs hit a 52-week low of $9.50 on Nasdaq, but they have picked up steadily since, closing Thursday at $15.99.

"The stock has had an absolutely tremendous run," says Mr. Statkevicus. "But if you look back in history, in 1998 it was a $30 stock, so still, it is well, well off its highs."

Yet the stock's affordability is what kept it trading, says another analyst, Gerard Cassidy with Tucker Anthony Sutro Capital Markets in Portland, Maine.

"Riggs' stock this year traded below book value," he says, "and that caused a number of people to buy the stock."

But the main reason why the stock has risen was the sale of a $25 million loan that had been considered bad, because the borrowing company had been under bankruptcy protection.

Lastly, Mr. Cassidy says the start of each year brings takeover rumors, which push the stock up.

"Riggs has a very large market share, and its locations and markets are deemed very desirable by many banks," he says. "Wachovia, BBNT, SunTrust they've all expressed interest in extending their presence in Northern Virginia and Washington D.C., so a Riggs franchise would be a natural extension for these banks."

Both analysts rate Riggs' stock a hold.

The company, with offices in the District, Miami, London, Berlin and the Bahamas, has been undergoing a transition for about two years: It changed its reputation from that of a traditional bank holding company to a multifaceted financial services firm that manages wealth and engages in venture capital investing.

This past quarter brought some executive team changes to the company: Two months ago Joe Allbritton, who had been chairman and chief executive officer, became senior chairman. His son, Robert Allbritton, replaced him, rising from vice chairman of the corporation and president of Allbritton Communications Co. He also became chairman of Riggs Bank, while Lawrence Hebert, a longtime member of Riggs' board of directors, became chairman and chief executive of the bank.

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