<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(MARK ONE)
   [X]           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997


   [ ]           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
                -------------------------------  -------------------
               (State or other jurisdiction of    (I.R.S. Employer
                incorporation or organization)    Identification No.)

               1503 PENNSYLVANIA AVENUE, N.W., WASHINGTON, D.C. 20005
               ------------------------------------------------------
              (Address of principal executive offices)      (Zip Code)

                                 (301) 887-6000
              ------------------------------------------------------
               (Registrant's telephone number, including area code)

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 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 issuer's classes of
common stock, as of the latest practicable date.

COMMON STOCK, $2.50 PAR VALUE                         30,418,913 SHARES
-----------------------------                  --------------------------------
      (Title of Class)                         (Outstanding at August 11, 1997)



<PAGE>



                           RIGGS NATIONAL CORPORATION


                                TABLE OF CONTENTS



PART I.   FINANCIAL INFORMATION                                        PAGE NO.


Item 1.   Financial Statements-Unaudited

            Consolidated Statements of Income
            Three and six months ended June 30, 1997 and 1996                3

            Consolidated Statements of Condition
            June 30, 1997 and 1996, and December 31, 1996                    4

            Consolidated Statements of Changes in Stockholders' Equity
            Six months ended June 30, 1997 and 1996                          5

            Consolidated Statements of Cash Flows
            Six months ended June 30, 1997 and 1996                          6

            Financial Ratios and Other Financial Data                        7

            Notes to the Consolidated Financial Statements                8-13


Item 2.   Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                     14-28



PART II.  OTHER INFORMATION


Item 1.   Legal Proceedings                                               None

Item 2.   Change in Securities                                            None

Item 3.   Defaults Upon Senior Securities                                 None

Item 4.   Submission of Matters to a Vote of Security Holders               29

Item 5.   Other Information                                               None

Item 6.   Exhibits and Reports on Form 8-K                                None


Signatures                                                                  30






                                      -2-

<PAGE>





RIGGS NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
(UNAUDITED)                                                                  THREE MONTHS ENDED            SIX MONTHS ENDED
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)                                         JUNE 30,                      JUNE 30,
                                                                       -----------------------------------------------------------

                                                                              1997           1996           1997          1996
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>            <C>           <C>            <C>
INTEREST INCOME
  Interest and Fees on Loans                                                $ 51,148       $ 48,925      $101,352       $100,534 
  Interest on Securities Available for Sale                                   22,102         17,410        40,162         31,651 
  Interest on Money Market Assets:
      Time Deposits with Other Banks                                           2,094          2,377         4,112          5,790 
      Federal Funds Sold and Reverse Repurchase Agreements                     7,776          3,028        14,563          8,335 
----------------------------------------------------------------------------------------------------------------------------------
  Total Interest on Money Market Assets                                        9,870          5,405        18,675         14,125 
----------------------------------------------------------------------------------------------------------------------------------
  Total Interest Income                                                       83,120         71,740       160,189        146,310 

INTEREST EXPENSE
  Interest on Deposits:
      Savings and NOW Accounts                                                 1,625          4,322         3,344          8,969 
      Money Market Deposit Accounts                                           12,887          8,377        25,145         16,870 
      Time Deposits in Domestic Offices                                        8,662          9,512        17,539         19,783 
      Time Deposits in Foreign Offices                                         6,608          4,736        12,133          9,333 
----------------------------------------------------------------------------------------------------------------------------------
  Total Interest on Deposits                                                  29,782         26,947        58,161         54,955 
----------------------------------------------------------------------------------------------------------------------------------
  Interest on Short-Term Borrowings and Long-Term Debt:
      Federal Funds Purchased and Repurchase Agreements                        3,122          2,324         5,817          5,026 
      U.S. Treasury Demand Notes and Other Short-Term Borrowings                 255            451           465            616 
      Long-Term Debt                                                           4,368          4,745         8,736          9,508 
----------------------------------------------------------------------------------------------------------------------------------
  Total Interest on Short-Term Borrowings and Long-Term Debt                   7,745          7,520        15,018         15,150 
----------------------------------------------------------------------------------------------------------------------------------
  Total Interest Expense                                                      37,527         34,467        73,179         70,105 
----------------------------------------------------------------------------------------------------------------------------------
  Net Interest Income                                                         45,593         37,273        87,010         76,205 
  Less:  Provision for Loan Losses                                                 -              -             -              - 
----------------------------------------------------------------------------------------------------------------------------------
  Net Interest Income after Provision for Loan Losses                         45,593         37,273        87,010         76,205 

NONINTEREST INCOME
  Service Charges and Fees                                                     9,329          8,823        18,017         17,496 
  Trust Income                                                                 8,788          8,526        17,434         16,400 
  Interest on Tax Receivables                                                      -          5,135             -          5,135 
  Other Noninterest Income                                                     2,815          2,049         5,120          5,124 
  Securities Gains, Net                                                          157          1,209           159          7,162 
----------------------------------------------------------------------------------------------------------------------------------
  Total Noninterest Income                                                    21,089         25,742        40,730         51,317 

NONINTEREST EXPENSE
  Salaries and Wages                                                          15,882         15,146        31,039         29,767 
  Pensions and Other Employee Benefits                                         2,791          3,188         6,411          7,057 
  Occupancy, Net                                                               5,002          5,748         9,418         11,039 
  Data Processing Services                                                     4,710          4,468         9,338          8,938 
  Furniture and Equipment                                                      2,328          1,704         4,489          3,566 
  Advertising and Public Relations                                             1,505          1,306         2,860          2,677 
  FDIC Insurance                                                                 114              1           220              4 
  Other Real Estate Owned (Income) Expense, Net                                  107            186           (40)           183 
  Other Noninterest Expense                                                   13,221         12,184        25,737         23,704 
----------------------------------------------------------------------------------------------------------------------------------
  Total Noninterest Expense                                                   45,660         43,931        89,472         86,935 
----------------------------------------------------------------------------------------------------------------------------------

  Income before Taxes and Minority Interest                                   21,022         19,084        38,268         40,587 
  Applicable Income Tax Expense (Benefit)                                      5,454         (2,370)        9,523         (2,318)
  Minority Interest in Income of Subsidiaries, Net of Taxes                    4,932              -         7,643              - 
----------------------------------------------------------------------------------------------------------------------------------
  NET INCOME                                                                  10,636         21,454        21,102         42,905 

  Dividends on Preferred Stock                                                (2,687)        (2,687)       (5,375)        (5,375)
----------------------------------------------------------------------------------------------------------------------------------
  Net Income Available for Common Stock                                     $  7,949       $ 18,767      $ 15,727       $ 37,530 

EARNINGS PER COMMON SHARE                                                   $    .25       $    .62      $    .50       $   1.23 
</TABLE>
                                       -3-

<PAGE>



RIGGS NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION
<TABLE>
<CAPTION>
(UNAUDITED)                                                                        JUNE 30,          JUNE 30,      DECEMBER 31,
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)                                                 1997             1996             1996
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>               <C>             <C>
ASSETS
  Cash and Due from Banks                                                         $  168,989        $  200,625      $  211,144 
  Money Market Assets:
      Time Deposits with Other Banks                                                 182,797           160,107         281,126 
      Federal Funds Sold and Reverse Repurchase Agreements                           620,000           180,000         540,000 
--------------------------------------------------------------------------------------------------------------------------------
  Total Money Market Assets                                                          802,797           340,107         821,126 
--------------------------------------------------------------------------------------------------------------------------------

  Securities Available for Sale (at Market Value)                                  1,439,878         1,336,682       1,162,503 

  Loans                                                                            2,650,965         2,607,184       2,637,834 
  Reserve for Loan Losses                                                             63,856            58,802          64,486 
--------------------------------------------------------------------------------------------------------------------------------
  Net Loans                                                                        2,587,109         2,548,382       2,573,348 

  Premises and Equipment, Net                                                        166,358           160,473         166,074 
  Accrued Interest Receivable                                                         37,631            41,660          30,042 
  Other Real Estate Owned, Net                                                        23,504            33,301          28,121 
  Other Assets                                                                       139,744           148,103         142,742 
--------------------------------------------------------------------------------------------------------------------------------
  Total                                                                           $5,366,010        $4,809,333      $5,135,100 

LIABILITIES
  Deposits:
  Noninterest-Bearing Demand Deposits                                             $  912,304        $  843,903      $  892,594 
  Interest-Bearing Deposits:                                                                                   
      Savings and NOW Accounts                                                       391,193           800,764         472,625 
      Money Market Deposit Accounts                                                1,471,785           994,272       1,488,730 
      Time Deposits in Domestic Offices                                              809,258           837,766         820,748 
      Time Deposits in Foreign Offices                                               478,123           330,637         375,986 
--------------------------------------------------------------------------------------------------------------------------------
  Total Interest-Bearing Deposits                                                  3,150,359         2,963,439       3,158,089 
--------------------------------------------------------------------------------------------------------------------------------
  Total Deposits                                                                   4,062,663         3,807,342       4,050,683 

  Short-Term Borrowings:
      Federal Funds Purchased and Repurchase Agreements                              253,520           217,236         237,166 
      U.S. Treasury Demand Notes and Other Short-Term Borrowings                      26,522           115,618          18,068 
--------------------------------------------------------------------------------------------------------------------------------
  Total Short-Term Borrowings                                                        280,042           332,854         255,234 

  Other Liabilities                                                                   46,136            48,746          61,882 
  Long-Term Debt                                                                     191,525           217,625         191,525 
--------------------------------------------------------------------------------------------------------------------------------
  Total Liabilities                                                                4,580,366         4,406,567       4,559,324 

GUARANTEED PREFERRED BENEFICIAL INTERESTS IN JUNIOR
  SUBORDINATED DEFERRABLE INTEREST DEBENTURES                                        350,000                 -         150,000 
--------------------------------------------------------------------------------------------------------------------------------
                                                                                             
STOCKHOLDERS' EQUITY
  Preferred Stock-$1.00 Par Value
      Shares Authorized - 25,000,000 at June 30, 1997 and 1996, and
          December 31, 1996;  Liquidation Preference - $25 per share
      Shares Issued - Noncumulative Perpetual Series B - 4,000,000 shares
          at June 30, 1997 and 1996, and December 31, 1996                             4,000             4,000           4,000 
  Common Stock-$2.50 Par Value                                                               
      Shares Authorized - 50,000,000 at June 30, 1997 and 1996, and
          December 31, 1996
      Shares Issued - 31,316,811 at June 30, 1997, 31,195,262 at
          June 30, 1996 and 31,273,344 at December 31, 1996                           78,292            77,988          78,183 
  Surplus - Preferred Stock                                                           91,192            91,192          91,192 
  Surplus - Common Stock                                                             157,382           156,470         157,060 
  Foreign Exchange Translation Adjustments                                              (233)           (1,172)          1,111 
  Undivided Profits                                                                  131,372           104,053         118,682 
  Unrealized Loss on Securities Available for Sale, Net                               (2,638)           (6,042)           (729)
  Treasury Stock - 900,798 shares at June 30, 1997 and 1996, and
         December 31, 1996                                                           (23,723)          (23,723)        (23,723)
--------------------------------------------------------------------------------------------------------------------------------
  Total Stockholders' Equity                                                         435,644           402,766         425,776 
--------------------------------------------------------------------------------------------------------------------------------
  Total                                                                           $5,366,010        $4,809,333      $5,135,100 
</TABLE>


                                      -4-

<PAGE>


RIGGS NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                                                                             UNREALIZED
                             PREFERRED    COMMON                   FOREIGN                    LOSS ON
                               STOCK       STOCK                  EXCHANGE                   SECURITIES                    TOTAL
                               $1.00       $2.50                 TRANSLATION   UNDIVIDED     AVAILABLE      TREASURY   STOCKHOLDERS'
                                PAR         PAR      SURPLUS     ADJUSTMENTS    PROFITS    FOR SALE, NET      STOCK        EQUITY
-----------------------------------------------------------------------------------------------------------------------------------


<S>                            <C>       <C>        <C>            <C>         <C>              <C>         <C>             <C>
Balance,
  December 31, 1995           $  4,000   $ 77,938   $247,512       $   (873)   $ 68,038         $  3,777   $ (23,723)      $376,669 

Net Income                           -          -          -              -      42,905                -           -         42,905 

Issuance of
  Common Stock for
  Stock Option Plans,
  20,000 Shares                      -         50        150              -           -                -           -            200 

Cash Dividends --
  Series B Preferred Stock,
    $1.34375 per Share               -          -          -              -      (5,375)               -           -         (5,375)
  Common Stock,
    $.05 per Share                   -          -          -              -      (1,515)               -           -         (1,515)

Unrealized Loss on
  Securities Available
  for Sale, Net                      -          -          -              -           -           (9,819)          -         (9,819)

Foreign Exchange
  Translation Adjustments            -          -          -           (299)          -                -           -           (299)
-----------------------------------------------------------------------------------------------------------------------------------
Balance,
  June 30, 1996               $  4,000   $ 77,988   $247,662       $ (1,172)   $104,053         $ (6,042)  $ (23,723)      $402,766 



Balance,
  December 31, 1996           $  4,000   $ 78,183   $248,252       $  1,111    $118,682         $   (729)  $ (23,723)      $425,776 

Net Income                           -          -          -              -      21,102                -           -         21,102 

Issuance of
  Common Stock for
  Stock Option Plans,
  43,467 Shares                      -        109        322              -           -                -           -            431 

Cash Dividends--
  Series B Preferred Stock,
    $1.34375 per Share               -          -          -              -      (5,375)               -           -         (5,375)
  Common Stock,
    $.10 per Share                   -          -          -              -      (3,037)               -           -         (3,037)

Unrealized Loss on
  Securities Available
  for Sale, Net                      -          -          -              -           -           (1,909)          -         (1,909)

Foreign Exchange
  Translation Adjustments            -          -          -         (1,344)          -                -           -         (1,344)
-----------------------------------------------------------------------------------------------------------------------------------
Balance,
  June 30, 1997               $  4,000   $ 78,292   $248,574       $   (233)   $131,372         $ (2,638)  $ (23,723)      $435,644 
</TABLE>


                                      -5-
<PAGE>



RIGGS NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                      SIX MONTHS ENDED
                                                                                                          JUNE 30,
                                                                                                -----------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                      1997          1996
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                  <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income                                                                                        $   21,102     $   42,905 
  Adjustments to Reconcile Net Income to Cash
    Provided By Operating Activities:
     Provision for Loan Losses                                                                             -              - 
     Provision for Other Real Estate Owned Writedowns                                                    282            204 
     Depreciation Expense and Amortization of Leasehold Improvements                                   5,751          5,505 
     Interest on Tax Receivables                                                                           -         (5,135)
     Amortization of Purchase Accounting Adjustments                                                   1,728          1,761 
     Benefit from Deferred Taxes                                                                      (1,326)       (13,694)
     Gains on Securities Sales                                                                          (159)        (7,162)
     Gains on Other Real Estate Owned Sales                                                             (199)          (210)
     Increase in Accrued Interest Receivable                                                          (7,589)       (12,082)
     Decrease (Increase) in Other Assets                                                               3,640        (17,889)
     (Decrease) Increase in Other Liabilities                                                        (15,746)        10,855 
-----------------------------------------------------------------------------------------------------------------------------
  Total Adjustments                                                                                  (13,618)       (37,847)
-----------------------------------------------------------------------------------------------------------------------------
  Net Cash Provided By Operating Activities                                                            7,484          5,058 
-----------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Net Decrease In Time Deposits with Other Banks                                                      98,329         71,267 
  Proceeds from Maturities of Securities Available for Sale                                        3,299,265         41,791 
  Proceeds from Sale of Securities Available for Sale                                                 99,898        739,640 
  Purchase of Securities Available for Sale                                                       (3,679,332)    (1,155,823)
  Net Increase in Loans                                                                              (13,431)       (34,311)
  Proceeds from Sale and Other Payments of Other Real Estate Owned                                     4,600          1,250 
  Net Increase in Premises and Equipment                                                              (6,035)       (11,208)
  Other, Net                                                                                            (396)            (6)
-----------------------------------------------------------------------------------------------------------------------------
Net Cash Used In Investing Activities                                                               (197,102)      (347,400)
-----------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net Increase (Decrease) in:
    Demand, NOW, Savings and Money Market Deposit Accounts                                           (78,667)       (71,307)
    Time Deposits                                                                                     90,647         (6,530)
    Federal Funds Purchased and Repurchase Agreements                                                 16,354         31,227 
    U.S. Treasury Demand Notes and Other Short-Term Borrowings                                         8,454        100,152 
  Proceeds From the Issuance of Common Stock                                                             431            200 
  Minority Interest in Preferred Stock of Subsidiaries                                               200,000              - 
  Dividend Payments - Preferred                                                                       (5,375)        (5,375)
                    - Common                                                                          (3,037)        (1,515)
-----------------------------------------------------------------------------------------------------------------------------
Net Cash Provided By Financing Activities                                                            228,807         46,852 
-----------------------------------------------------------------------------------------------------------------------------
Effect of Exchange Rate Changes                                                                       (1,344)          (299)
-----------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents                                                  37,845       (295,789)
Cash and Cash Equivalents at Beginning of Period                                                     751,144        676,414 
-----------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period                                                       $   788,989    $   380,625 


SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES:

NONCASH ACTIVITIES:
  Loans Transferred to Other Real Estate Owned                                                   $        82    $     1,348 

CASH PAID DURING THE YEAR FOR:
  Interest Paid (Net of Amount Capitalized)                                                      $    72,517    $    71,039 
  Income Tax Payments                                                                                  3,790         15,015 
</TABLE>

                                      -6-
<PAGE>



RIGGS NATIONAL CORPORATION
FINANCIAL RATIOS AND OTHER FINANCIAL DATA
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED               SIX MONTHS ENDED
                                                                         JUNE 30,                        JUNE 30,
                                                               -----------------------------    ----------------------------
                                                                    1997          1996              1997          1996
-------------------------------------------------------------------------------------------------------------------------------

<S>                                                                   <C>           <C>              <C>             <C>
PERFORMANCE:

        Net Income to Average Assets                                   .81 %        1.83 %             .83 %         1.83 %
        Net Income to Average Earning Assets                           .89          2.05               .91           2.05  
        Net Income to Average Stockholders' Equity                   10.01         22.02             10.01          22.21  
        Net Income Available to Common Stock
                 to Average Common Equity                             9.64         25.44              9.61          25.73  
        Net Interest Income to Average Earning Assets                 3.90          3.66              3.83           3.73  


PER COMMON SHARE:

        Net Income                                                  $  .25        $  .62            $  .50         $ 1.23  
        Dividends Paid per Common Share                             $  .05        $  .05            $  .10         $  .05  
        Book Value (at period end)                                  $11.19        $10.15            $11.19         $10.15  
        Common Shares Outstanding (at period end)               30,416,013    30,294,464        30,416,013     30,294,464  
        Weighted Average Common Shares Outstanding              30,380,559    30,294,343        30,376,884     30,287,379  


ASSET QUALITY:

        Nonaccrual Loans as a % of Total Loans                                                         .24 %          .49 %
        Nonaccrual Loans as a % of Average Loans                                                       .25            .51  
        Nonaccrual and Renegotiated Loans as a % of
                 Total Loans                                                                           .25            .53  
        Nonperforming Assets as a % of Total Loans and OREO                                           1.12           1.78  
        Nonperforming Assets as a % of Total Assets                                                    .56            .98  
        Net Charge-Offs (Recoveries) as a % of Average Loans                                           .01           (.09) 
        Reserve for Loan Losses as a % of Total Loans                                                 2.41           2.26  
        Reserve for Loan Losses as a % of Nonaccrual and
                Renegotiated Loans                                                                  981.95         428.87  
        Period End Stockholders' Equity to Total Assets                                               8.12           8.37  


CAPITAL RATIOS AT PERIOD END:

        Tier I                                                                                       19.82 %        15.64 %
        Combined Tier I and Tier II                                                                  34.75          24.31  
        Leverage                                                                                     10.96           8.58  
</TABLE>












                                      -7-
<PAGE>



RIGGS NATIONAL CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


NOTE 1. BASIS OF PRESENTATION

In the opinion of management, the accompanying unaudited financial statements
contain all adjustments, of a normal recurring nature, necessary to present
fairly, in conformity with generally accepted accounting principles applied on a
consistent basis and which require the use of management estimates, Riggs
National Corporation's (the "Corporation") consolidated financial position at
June 30, 1997 and 1996, and December 31, 1996 (audited), and the related changes
in stockholders' equity, the consolidated statements of income and cash flows
for the interim periods presented. These statements should be read in
conjunction with the financial statements and accompanying notes included in the
Corporation's latest annual report. Certain reclassifications have been made to
prior-period amounts to conform with the current year's presentation. The
results of operations for the first six months of 1997 are not necessarily
indicative of the results to be expected for the full 1997 year.


NOTE 2. EARNINGS PER COMMON SHARE

Earnings per common share is calculated by dividing net income, after deduction
for preferred stock dividends, by the weighted-average number of common stock
and common stock equivalents outstanding during each period. Stock options are
considered common stock equivalents, unless determined to be anti-dilutive. The
weighted average shares outstanding were 30,380,559 and 30,376,884 for the
second quarter of 1997 and the six month period ended June 30, 1997,
respectively with 30,294,343 and 30,287,379 for the same periods in 1996. Stock
options include shares granted under the 1993 Riggs National Corporation Stock
Option Plan (the "1993 Plan"), the 1994 Riggs National Corporation Stock Option
Plan (the "1994 Plan") and the 1996 Riggs National Corporation Stock Option Plan
(the "1996 Plan"). Under the 1993 Plan, options to purchase up to 1,250,000
shares of common stock may be granted to key employees of the Corporation. As of
June 30, 1997, options to purchase 1,097,950 shares have been granted and remain
outstanding in the 1993 Plan at prices ranging from $9.00 to $12.00 per share.
Under the 1994 Plan, options to purchase up to 1,250,000 shares of common stock
may be granted to key employees of the Corporation. As of June 30, 1997, options
to purchase 721,833 shares have been granted and remain outstanding in the 1994
Plan at prices ranging from $9.06 to $19.75 per share. Under the 1996 Plan,
options to purchase up to 2,000,000 shares may be granted to key employees of
the Corporation. As of June 30, 1997, options to purchase 1,000,000 shares have
been granted and remain outstanding in the 1996 Plan at a price of $12.38 per
share.

In March 1997, SFAS No. 128, "Earnings Per Share" was issued. SFAS No. 128
supersedes APB No. 15 to conform earnings per share with international standards
as well as to simplify the computation under APB No. 15. In summary, SFAS No.
128 replaces the previous primary earnings per share ("EPS") calculation with a
basic EPS calculation. The basic EPS differs from the primary EPS calculation in
that the basic EPS does not include any potentially dilutive securities. Fully
dilutive EPS is replaced with diluted EPS and should be disclosed regardless of
its dilutive impact to basic EPS. SFAS No. 128 is effective for both interim and
annual periods ending after December 15, 1997, thus the EPS in the Statements of
Income included in this report are presented under APB No. 15. Proforma EPS
under SFAS No. 128 for the six months ended June 30, 1997 and 1996, is presented
below.

<TABLE>
<CAPTION>
                                                              SIX MONTHS ENDED                   SIX MONTHS ENDED
                                                               JUNE 30, 1997                      JUNE 30, 1996
                                                     ---------------------------------- ----------------------------------
                                                          BASIC            DILUTED           BASIC            DILUTED
                                                           EPS               EPS              EPS               EPS
                                                     ----------------- ---------------- ----------------- ----------------
<S>                                                           <C>              <C>                <C>              <C>
Net Income                                                    $21,102          $21,102           $42,905          $42,905
Less:  Preferred Stock Dividends                                5,375            5,375             5,375            5,375
                                                     ----------------- ---------------- ----------------- ----------------
Income Available to Common Shareholders                       $15,727          $15,727           $37,530          $37,530

Weighted-Average Shares Outstanding                        30,376,884       30,376,884        30,287,379       30,287,379
Stock Option Plans                                                n/a        1,080,191               n/a          276,744
                                                     ----------------- ---------------- ----------------- ----------------
Adjusted Weighted-Average Shares Outstanding               30,376,884       31,457,075        30,287,379       30,564,123

BASIC EPS                                                        $.52                              $1.24
DILUTED EPS                                                                       $.50                              $1.23
</TABLE>

                                      -8-
<PAGE>





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



NOTE 3. RESERVE FOR LOAN LOSSES

<TABLE>
<CAPTION>
Changes in the reserve for loan losses are summarized as follows:

                                                                    THREE MONTHS ENDED                   SIX MONTHS ENDED
                                                                         JUNE 30,                            JUNE 30,
                                                      -------------------------------------------------------------------------
                                                                  1997              1996              1997              1996
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>               <C>               <C>                <C>
Balance, beginning of period                                   $ 63,595          $ 57,227          $ 64,486          $ 56,546 
Provision for loan losses                                             -                 -                 -                 - 

Loans charged-off:
     Domestic                                                       883               687             1,638             1,199 
     Foreign                                                         15               260                95               260 
-------------------------------------------------------- ---------------- ----------------- ----------------- -----------------
Total loans charged-off                                             898               947             1,733             1,459 
Recoveries on charged-off loans:
     Domestic                                                       492             1,636             1,196             2,508 
     Foreign                                                        338               715               319             1,213 
-------------------------------------------------------- ---------------- ----------------- ----------------- -----------------
Total recoveries on charged-off loans                               830             2,351             1,515             3,721 

Net loan charge-offs (recoveries)                                    68            (1,404)              218            (2,262)
Foreign exchange translation adjustments                            329               171              (412)               (6)
-------------------------------------------------------- ---------------- ----------------- ----------------- -----------------
Balance, end of period                                         $ 63,856          $ 58,802          $ 63,856          $ 58,802 
</TABLE>


NOTE 4. OTHER REAL ESTATE OWNED, NET

<TABLE>
<CAPTION>
Changes in other real estate owned, net of reserves, are summarized as follows:

                                                                                     SIX MONTHS ENDED
                                                                                         JUNE 30,
                                                                           ----------------------------------
                                                                                    1997             1996
-------------------------------------------------------- ----------------- ---------------- -----------------
<S>                                                                                <C>                <C>
Balance, beginning of period                                                      $28,121            $33,197
Additions                                                                              82              1,348
Deductions:
    Sales and repayments                                                            4,401              1,040
    Charge-offs                                                                       282                204
-------------------------------------------------------- ----------------- ---------------- -----------------
Total Deductions                                                                    4,683              1,244
Foreign exchange translation adjustments                                              (16)                 -
-------------------------------------------------------- ----------------- ---------------- -----------------
Balance, end of period                                                            $23,504            $33,301
</TABLE>


<TABLE>
<CAPTION>
Other real estate owned income and expense consisted of the following:

                                                                                     SIX MONTHS ENDED
                                                                                         JUNE 30,
                                                                           ----------------------------------
                                                                                    1997              1996
-------------------------------------------------------- ----------------- ---------------- -----------------
<S>                                                                                 <C>                <C>
Other Real Estate Owned Operating Revenue                                         $   387            $   528
Net Gain on Sale of Properties                                                        199                210
-------------------------------------------------------- ----------------- ---------------- -----------------
Net Revenue                                                                           586                738

Provision for Other Real Estate Owned Losses                                          282                204
Selling and Other Real Estate Owned Operating Expense                                 264                717
-------------------------------------------------------- ----------------- ---------------- -----------------
Net Expense                                                                           546                921
-------------------------------------------------------- ----------------- ---------------- -----------------
Total Other Real Estate Owned (Income) Expense, Net                               $   (40)           $   183



                                      -9-
<PAGE>





NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



NOTE 5. NEW FINANCIAL ACCOUNTING STANDARDS

In June 1996, SFAS No. 125, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities" was issued. SFAS No. 125 provides
accounting and reporting standards for transfers and servicing of financial
assets and extinguishments of liabilities, based on a financial-components
approach that focuses on control. Under this approach, after a transfer of
financial assets, financial and servicing assets are recognized if controlled or
liabilities are recognized if incurred. Financial and servicing assets are
removed from the statement of condition when control has been surrendered and
liabilities are removed when extinguished. SFAS No. 125 was effective and
adopted on January 1, 1997, and was applied prospectively. The Corporation did
not experience any material effect on its financial position from this
implementation.

In March 1997, SFAS No. 128, "Earnings Per Share" was issued. SFAS No. 128
supersedes APB No. 15 to conform earnings per share with international standards
as well as to simplify the computation under APB No. 15. In summary, SFAS No.
128 replaces the previous primary earnings per share ("EPS") calculation with a
basic EPS calculation. The basic EPS differs from the primary EPS calculation in
that the basic EPS does not include any potentially dilutive securities. Fully
dilutive EPS is replaced with diluted EPS and should be disclosed regardless of
the dilutive impact to basic EPS. SFAS No. 128 is effective for both interim and
annual periods ending after December 15, 1997 for the Corporation, thus the EPS
in the Statements of Income included in this report are presented under APB No.
15. Proforma EPS under SFAS No. 128 for the six months ended June 30, 1997 and
1996, is presented in Note 2--"Earnings per Common Share."

In June 1997, SFAS Nos. 130 and 131 were issued--"Reporting Comprehensive
Income" and "Disclosures about Segments of an Enterprise and Related
Information," respectively. SFAS No. 130 requires that certain financial
activity typically disclosed in stockholders' equity be reported in the
statements of income as an adjustment to net income in determining comprehensive
income. Items applicable to the Corporation would include activity in foreign
exchange translation adjustments and gain/loss on securities available for sale.
Items identified as comprehensive income should be reported also in the
statements of condition and the statements of changes in stockholders' equity,
under separate captions. SFAS No. 130 is effective for the Corporation on
January 1, 1998, including the restatement of prior periods reported consistent
with this pronouncement. The Corporation does not anticipate any financial
impact from the implementation of SFAS No. 130.

SFAS No. 131 requires the reporting of selected segmented information in
quarterly and annual reports. Information from operating segments is derived
from methods used by the Corporation's management to allocate resources and
measure performance. The Corporation is required to disclose profit and losses,
revenues and assets for each segment identified, including reconciliations of
these items to consolidated totals. The Corporation is also required to disclose
the basis for identifying the segments and the type of products and services
within each segment. SFAS No. 131 is effective for the Corporation on January 1,
1998, including the restatement of prior periods reported consistent with this
pronouncement, if practical. The Corporation is assessing the impact of the
implementation of this pronouncement and will disclose its findings in future
reports.













                                      -10-
<PAGE>





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



NOTE 6. INCOME TAXES

The provision for income taxes is based on income reported for consolidated
financial statement purposes and includes deferred taxes resulting from the
recognition of certain revenues and expenses in different periods for tax
reporting purposes.

Income before income taxes relating to the operations of domestic offices and
foreign offices for the three and six month periods ended June 30, 1997 and
1996, was as follows:


</TABLE>
<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED                  SIX MONTHS ENDED
                                                                         JUNE 30,                           JUNE 30,
                                                        -----------------------------------------------------------------------
                                                                   1997              1996              1997             1996
-------------------------------------------------------- ----------------- ----------------- ---------------- -----------------
<S>                                                                <C>               <C>              <C>               <C>
    Domestic Offices                                              $20,068           $18,649          $36,660           $39,515
    Foreign Offices                                                   954               435            1,608             1,072
-------------------------------------------------------- ----------------- ----------------- ---------------- -----------------

      Total                                                       $21,022           $19,084          $38,268           $40,587
</TABLE>


<TABLE>
<CAPTION>
The provision for income taxes for the three and six month periods ended June 30, 1997 and 1996 consisted of the following:

                                                                     THREE MONTHS ENDED                 SIX MONTHS ENDED
                                                                          JUNE 30,                           JUNE 30,
                                                             -------------------------------------------------------------------
                                                                   1997             1996              1997             1996
------------------------------------------------------------ ---------------- ----------------- ---------------- ---------------
<S>                                                              <C>               <C>               <C>              <C>
Current Provision:
    Federal                                                     $  5,568          $  6,686         $ 10,221          $ 13,655 
    State                                                            276            (2,352)             660            (2,235)
    Foreign                                                          (22)               (7)             (32)              (44)
--------------------------------------------------------- ---------------- ----------------- ---------------- -----------------
Total Current Provision                                            5,822             4,327           10,849            11,376 

Deferred Benefit:
    Federal                                                          904            (6,697)           1,325           (13,694)
    State                                                           (272)                -             (651)                - 
    Foreign                                                       (1,000)                -           (2,000)                - 
--------------------------------------------------------- ---------------- ----------------- ---------------- -----------------
Total Deferred Benefit                                              (368)           (6,697)          (1,326)          (13,694)

--------------------------------------------------------- ---------------- ----------------- ---------------- -----------------
                                                                                                            
Applicable Income Tax Expense (Benefit)                         $  5,454          $ (2,370)        $  9,523          $ (2,318)
</TABLE>


                                      -11-
<PAGE>





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



NOTE 7. COMMITMENTS AND CONTINGENT LIABILITIES

Outstanding commitments and contingent liabilities that do not appear in the
consolidated financial statements at June 30, 1997 and 1996, are as follows:
<TABLE>
<CAPTION>
                                                                               CONTRACTUAL OR
                                                                               NOTIONAL VALUE
                                                                                  JUNE 30,
                                                                         ----------------------------
                                                                             1997          1996
-----------------------------------------------------------------------------------------------------
<S>                                                                           <C>           <C>
Commitments to Extend Credit:
    Commercial                                                                $462,990      $430,950
    Real Estate:
         Commercial/Construction                                                53,113        27,854
         Mortgage                                                                9,456         5,227
         Home Equity                                                           180,859       181,781
-----------------------------------------------------------------------------------------------------
    Total Real Estate                                                          243,428       214,862
-----------------------------------------------------------------------------------------------------
    Consumer                                                                    85,834        85,816
-----------------------------------------------------------------------------------------------------
Total Commitments to Extend Credit                                            $792,252      $731,628

Letters of Credit:
    Commercial                                                                $ 80,646      $102,981
    Standby-Performance                                                          8,912         8,511
    Standby-Financial                                                           33,598        42,112
-----------------------------------------------------------------------------------------------------
Total Letters of Credit                                                       $123,156      $153,604

Derivative Instruments:
    Foreign Exchange Contracts:
         Commitments to Purchase                                              $ 96,684      $ 89,540
         Commitments to Sell                                                   196,844       181,872
    Interest-Rate Swap Agreements                                              326,441       319,009
    Interest-Rate Option Contracts:
         Corridors                                                                  --       300,000
         Caps                                                                      649            --
</TABLE>

In the normal course of business, the Corporation enters into various
transactions that, in accordance with generally accepted accounting principles,
are not included on the Consolidated Statements of Condition. These transactions
are referred to as "off-balance-sheet" commitments and differ from the
Corporation's balance sheet activities in that they do not give rise to funded
assets or liabilities. The Corporation enters into derivative transactions to
manage its own risks arising from movements in interest and currency rates. The
Corporation also offers such derivative products to its customers to meet their
financing objectives and to manage their interest and currency rate risk. The
balance sheet activities involve varying degrees of credit, interest-rate or
liquidity risk in excess of amounts recognized on the Consolidated Statements of
Condition. The Corporation's management believes that financial derivatives,
such as interest-rate agreements, can be an important element of prudent balance
sheet and interest-rate risk management.

The Corporation's interest-rate swap and options contract activity for the
six-month period ended June 30, 1997, is as follows:

<TABLE>
<CAPTION>
                                                        BALANCE                                      BALANCE
                                                     DECEMBER 31,                                   JUNE 30,
                                                         1996         ADDITIONS     MATURITIES        1997
--------------------------------- ---- --- --- ---- ---------------- ------------- -------------- --------------
<S>                                                        <C>            <C>          <C>              <C>
Interest-Rate Swaps:
     Receive fixed/pay variable                            $200,000       $50,000       $     --       $250,000
     Receive variable/pay fixed                             100,000            --         50,000         50,000
     For Customers                                           25,137         1,953             --         27,090
Interest-Rate Option Contracts                              100,000            --        100,000             --
--------------------------------- ---- --- --- ---- ---------------- ------------- -------------- --------------

Total                                                      $425,137       $51,953       $150,000       $327,090
</TABLE>


                                      -12-
<PAGE>





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



NOTE 7. COMMITMENTS AND CONTINGENT LIABILITIES, CONTINUED

Interest-rate agreements, such as interest-rate swap agreements, involve two
parties that have agreed to exchange periodic payments calculated with reference
to fixed or variable interest rates applied to an agreed upon notional principal
amount. Notional amounts are used to determine the amount of payments exchanged
and do not represent an obligation to exchange principal balances. The
Corporation is exposed to certain levels of credit and market risk when entering
into interest-rate agreements. Credit risk is measured as the cost of replacing,
at market rates, the defaulted agreement. The Corporation minimizes credit risk
by adhering to similar underwriting standards as those used in other credit
transactions, as well as by obtaining collateral, if deemed appropriate under
the specific circumstances. In addition, all the Corporation's interest-rate
swap agreements have been transacted with either major investment or commercial
banks. Market risk arises from changes in the market values (replacement cost of
agreements at current prices) of agreements outstanding, the result of changes
in interest rates or security values underlying the interest-rate agreements.
Market risk is minimized primarily because of the Corporation's use of
interest-rate swaps to hedge certain assets and liabilities, and thus
termination of an agreement would be an infrequent event.

<TABLE>
<CAPTION>
INTEREST-RATE SWAP AGREEMENTS
JUNE 30, 1997                                                                                                    1997
                                                          WEIGHTED         ACCRUED    ACCRUED    UNAMORTIZED   YTD NET
                              NOTIONAL  UNREALIZED      AVERAGE RATE      INTEREST    INTEREST     FEES &      INTEREST
                                                    ---------------------
                               AMOUNT   GAIN(LOSS)   RECEIVE     PAY     RECEIVABLE   PAYABLE     PREMIUMS    INC./(EXP.)
-------------------------------------------------------------------------------------------------------------------------
<S>                            <C>         <C>         <C>         <C>        <C>        <C>         <C>           <C>
   Receive fixed/pay variable,
      Maturing July 1998       $200,000  $  (1,661)     5.38%      5.84%    $  1,913   $  2,109     $      --  $   (309)
   Receive fixed/pay variable,
      Maturing January 1999      25,000         22      6.45       5.85          278        252            --        81 
   Receive fixed/pay variable,
      Maturing February 1999     25,000        (19)     6.29       5.81          183        170            --        63 
   Receive variable/pay fixed,
      Maturing January 1998      25,000        138      5.83       5.21          271        239            --        65 
   Receive variable/pay fixed,
      Maturing January 1999      25,000        347      5.83       5.36          271        246            --        47 
   For Customers                 27,090       (139)       --         --          310        375            --      (157)
   Receive variable/pay fixed,
      Matured March 1997             --         --        --         --           --         --            --       (80)
   Receive variable/pay fixed,
      Matured April 1997             --         --        --         --           --         --            --       (88)
   Corridor,
      Matured April 1997             --         --        --         --           --         --            --      (129)
-------------------------------------------------------------------------------------------------------------------------
Total Interest-Rate Swap
   Agreements                  $327,090  $  (1,312)                         $  3,226   $  3,391     $      --  $   (507)
</TABLE>


Net receivables or payables under agreements designated as hedges are recorded
as adjustments to interest income or interest expense related to the hedged
asset or liability. Gains and losses on contracts to hedge certain
interest-sensitive assets and liabilities are amortized over the life of the
hedged transaction as an adjustment to yield. Fees received or paid when
entering certain derivative transactions are deferred and amortized over the
lives of the agreements. Unrealized gains and losses will not be reflected in
the accompanying financial statements unless the hedges are terminated.

During the first quarter of 1997, the Corporation entered into two $25 million
(notional principal balance) interest-rate swap agreements to alter the interest
sensitivity of a portion of the Corporation's floating-rate home equity loan
portfolio, which entail the receipt of fixed rates of 6.45% and 6.29%, and
payments of floating rates equal to the three-month London Interbank Offered
Rate ("LIBOR"), reset quarterly. These agreements mature in January 1999 and
February 1999, respectively (see table above). Payments for these swap
agreements are netted on a quarterly basis, with the aggregate net interest
income/expense from these swap agreements being included in interest income as
an adjustment to interest income recognized for the home equity loan portfolio.

                                      -13-
<PAGE>


RIGGS NATIONAL CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS


SUMMARY

The Corporation reported consolidated net income of $10.6 million ($.25 per
common share) for the second quarter of 1997 compared with net income of $21.4
million ($0.62 per common share) for the same quarter a year earlier. Net
earnings for the first half of 1997 totaled $21.1 million, or $0.50 per common
share compared with $42.9 million, or $1.23 per common share, for the same
period in 1996. Net income for the second quarter and the first half of 1996
benefited from lower tax expense and several nonrecurring income items, which
included interest from tax settlements totaling $5.1 million and $1.2 million in
net securities gains in the second quarter of 1996, and $6.0 million in net
securities gains in the first quarter of 1996.

Net interest income before the provision for loan losses was $45.6 million for
the second quarter and $87.0 million for the first half of 1997, an increase of
22.3% and 14.2% from the same periods in 1996. The increase from the prior
year's first half was primarily the result of a $481.8 million increase in
average earning assets between the periods. This increase was mostly due to
proceeds received from the issuance and sale of Trust Preferred Securities
(see "Stockholders' Equity and Regulatory Capital")in December 1996 and March
1997 totaling $350 million. The favorable increase in average earning assets
was partially offset by a $131.2 million increase in average interest-bearing
liabilities, the result of increases in the deposit portfolio between the
periods (see "Deposits"). The net interest margins for the second quarter
and first half of 1997 were 3.90% and 3.83%, compared with a margin of 3.66%
for the prior year's second quarter and 3.73% for the first half of 1996.

Noninterest income, excluding securities gains, for the current quarter and
six-month periods of 1997 totaled $20.9 million and $40.6 million, respectively,
compared with $24.5 million and $44.2 million, respectively, from the prior
year's periods. The decrease between the periods is due to the previously
mentioned interest from tax settlements recorded in 1996 totaling $5.1 million,
partially offset by increases in trust income and service charges (see
"Noninterest Income").

Noninterest expense for 1997's second quarter totaled $45.7 million, an increase
of $1.7 million (3.9%) from the prior year's quarter total of $43.9 million.
Likewise, noninterest expense for the first six months of 1997 totaled $89.5
million, an increase of $2.5 million (2.9%), compared with $86.9 million for the
first six months of 1996. The increase in noninterest expense for the second
quarter and year-to-date periods in 1997 in comparison to the same periods in
1996 was mostly due to increases in staffing, data processing, advertising and
other expenses involving the development and implementation of new products and
services in the retail banking group (see "Deposits" and "Noninterest Expense").

Nonperforming assets, including other real estate owned, decreased $17.0
million, or 36.2% to $30.0 million at June 30, 1997, when compared with 1996's
second quarter nonperforming asset total of $47.0 million. At June 30, 1997,
Riggs' reserve for loan losses totaled $63.9 million, resulting in a reserve to
total loans ratio of 2.41%. Nonperforming loans totaled $6.4 million at quarter
end and the reserve (coverage) was nine times greater than the balance of
nonperforming loans at June 30, 1997.

Total assets at June 30, 1997, were $5.37 billion, up $556.7 million, or 11.6%,
over the $4.81 billion level a year earlier. This growth was mostly due to
increases in the money market and securities portfolios, which totaled $565.9
million, funded by proceeds received from the issuance and sale of $350 million
of Trust Preferred Securities and a $255.3 million increase in the deposit
portfolio, partially offset by a $52.8 million decrease in short-term
borrowings.



                                      -14-
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS, CONTINUED


SECURITIES

Schedules detailing securities available for sale follow:
<TABLE>
<CAPTION>

                                                         JUNE 30, 1997                    JUNE 30, 1996
                                                --------------------------------  -------------------------------
                                                   AMORTIZED        MARKET/         AMORTIZED        MARKET/
              AVAILABLE FOR SALE                     COST         BOOK VALUE           COST        BOOK VALUE
-----------------------------------------------------------------------------------------------------------------
(In thousands)
<S>                                                    <C>             <C>             <C>              <C>
U.S. Treasury Securities                             $  685,010      $  681,779       $1,311,183      $1,302,028
Government Agencies Securities                          724,408         723,590                -               -
Mortgage-Backed Securities                                1,891           1,882                -               -
Other Securities                                         32,627          32,627           34,654          34,654
-----------------------------------------------------------------------------------------------------------------
Total                                                $1,443,936      $1,439,878       $1,345,837      $1,336,682
</TABLE>

Securities available for sale totaled $1.44 billion at June 30, 1997, compared
to $1.16 billion at year-end 1996, and $1.34 billion at June 30, 1996. The
activity for the first six months of 1997 included purchases of securities
available for sale totaling $3.68 billion, partially offset by maturities
totaling $3.30 billion and sales of securities available for sale totaling $99.9
million. The weighted-average maturities and yields for the portfolio, adjusted
for anticipated prepayments, was approximately 2 years and 5.99%, respectively,
at June 30, 1997.

The maturity distribution of securities available for sale at
June 30, 1997, follows:


<TABLE>
<CAPTION>
                                                                GOVERNMENT       MORTGAGE-
                                             U.S. TREASURY       AGENCIES          BACKED           OTHER
(IN THOUSANDS)                                 SECURITIES       SECURITIES       SECURITIES      SECURITIES       TOTAL
----------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>              <C>               <C>            <C>          <C>
Within 1 year
     Amortized Cost                               $  209,664      $  399,302       $        -      $    7,875   $  616,841 
     Market/Book                                     209,837         399,254                -           7,875      616,966 
     Yield*                                             5.80%           5.39%               -            4.95%        5.52%

After 1 but within 5 years                           305,138         325,106                -               -      630,244 
     Amortized Cost                                  302,892         324,336                -               -      627,228 
     Market/Book                                        5.82%           6.63%               -               -         6.24%
     Yield*

After 5 but within 10 years
     Amortized Cost                                  170,208               -                -               -      170,208 
     Market/Book                                     169,050               -                -               -      169,050 
     Yield*                                             6.35%              -                -               -         6.35%

After 10 years
     Amortized Cost                                        -               -            1,891          24,752       26,643 
     Market/Book                                           -               -            1,882          24,752       26,634 
     Yield*                                                -               -             7.28%           6.15%        6.23%
----------------------------------------------------------------------------------------------------------------------------

Total Securities Available for Sale
     Amortized Cost                               $  685,010      $  724,408       $    1,891      $   32,627   $1,443,936 
     Market/Book                                     681,779         723,590            1,882          32,627    1,439,878 
     Yield*                                             5.95%           5.95%            7.28%           5.86%        5.95%
</TABLE>

[FN]
*Weighted-average yield to maturity at June 30, 1997.



                                      -15-
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS, CONTINUED


LOANS

The following table reflects loans by type for the periods indicated:

<TABLE>
<CAPTION>
                                                            JUNE 30,             JUNE 30,           DECEMBER 31,
(IN THOUSANDS)                                                1997                 1996                 1996
----------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                  <C>                  <C>
Commercial and Financial                                   $  423,249           $  415,788           $  443,557
Real Estate - Commercial/Construction                         353,102              319,255              352,015
Residential Mortgage                                        1,200,297            1,258,861            1,226,110
Home Equity                                                   301,552              273,445              281,867
Consumer                                                       74,611               75,502               78,617
Foreign                                                       295,800              259,692              251,782
----------------------------------------------------------------------------------------------------------------

Loans                                                       2,648,611            2,602,543            2,633,948

Unamortized Premium (Unearned
        Discount/Net Deferred Fees)                             2,354                4,641                3,886
----------------------------------------------------------------------------------------------------------------

Total Net Loans                                            $2,650,965           $2,607,184           $2,637,834
</TABLE>

At June 30, 1997, total loans outstanding (net of premiums/discounts) were $2.65
billion, increasing $43.8 million from the June 30, 1996 total of $2.61 billion.
The increase in loans from June 30, 1996 was primarily attributed to increases
in foreign loans of $36.1 million, real estate - commercial/construction loans
of $33.8 million, home equity loans of $28.1 million and commercial and
financial loans of $7.5 million. These increases were offset in part by a $58.6
million decrease in residential mortgage loans between the periods.

REAL ESTATE - COMMERCIAL/CONSTRUCTION LOANS
GEOGRAPHIC DISTRIBUTION BY TYPE
JUNE 30, 1997
<TABLE>
<CAPTION>
                                                                            GEOGRAPHIC LOCATION
                                         DISTRICT OF                                 UNITED
(IN THOUSANDS)                            COLUMBIA      VIRGINIA      MARYLAND       KINGDOM        OTHER         TOTAL
----------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>          <C>            <C>         <C>           <C>              <C>
Land Acquisition and
    Construction Development                 $ 17,084     $  9,232       $  7,835      $      -      $      -      $ 34,151
Multifamily Residential                        11,335       11,738          3,729             -         6,494        33,296
Commercial:
    Office Buildings                           70,888       27,904         31,123             -             -       129,915
    Retail/Shopping Centers                    31,900       11,671         14,075             -             -        57,646
    Hotels                                      1,148            -              -             -             -         1,148
    Industrial/Warehouse                        2,246       14,349          4,464             -             -        21,059
    Churches                                   26,522        4,448         15,929             -             -        46,899
    Other                                       7,331       15,378          6,213             -            66        28,988
----------------------------------------------------------------------------------------------------------------------------
Total Commercial                              140,035       73,750         71,804             -            66       285,655
----------------------------------------------------------------------------------------------------------------------------

Total Domestic Real Estate -
    Commercial/Construction Loans             168,454       94,720         83,368             -         6,560       353,102
Foreign                                             -            -              -       119,057             -       119,057
----------------------------------------------------------------------------------------------------------------------------
Total Real Estate - Commercial/
    Construction Loans                       $168,454     $ 94,720       $ 83,368      $119,057      $  6,560      $472,159
</TABLE>


                                      -16-
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS, CONTINUED


LOANS, CONTINUED

The Corporation extends credit to borrowers domiciled outside of the United
States through several of its banking subsidiaries. Cross-border outstandings
include loans, acceptances, interest-bearing deposits with other banks,
investments, accrued interest and other monetary assets. These assets may be
impacted by changing economic conditions in their respective countries. In
addition, cross-border outstandings include legally enforceable guarantees
issued on behalf of non-local third parties and local currency outstandings to
the extent they are not funded by local currency borrowings. Cross-border
outstandings are then reduced by tangible liquid collateral and any legally
enforceable guarantees issued by non-local third parties on behalf of the
respective country.

The table below details those countries in which the Corporation had total
outstandings in excess of 1% of its total assets. At June 30, 1997, the
Corporation had no cross-border outstandings exceeding 1% of its total assets to
countries experiencing difficulties in repaying their external debt. The
Corporation did not have any cross-border outstandings between .75% and 1% at
June 30, 1997, December 31, 1996 or June 30, 1996.


CROSS-BORDER OUTSTANDINGS THAT EXCEED 1% OF TOTAL ASSETS


<TABLE>
<CAPTION>
                                                                                             90 DAYS
                                            % OF                                             OR MORE        POTENTIAL
(IN MILLIONS)              AMOUNT          ASSETS         NONACCRUAL      RENEGOTIATED      PAST DUE         PROBLEM
-------------------------------------------------------------------------------------------------------------------------
<S>                              <C>              <C>               <C>              <C>             <C>             <C>
JUNE 30, 1997
United Kingdom                  $113.7            2.1%             $  -             $  -            $  -            $  -

JUNE 30, 1996
United Kingdom                   183.0            3.8               2.5                -               -               -

DECEMBER 31, 1996
United Kingdom                   196.3            3.8               0.3                -               -               -
</TABLE>


                                      -17-
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS, CONTINUED


ASSET QUALITY

NONPERFORMING ASSETS

Nonperforming assets, which include nonaccrual loans, renegotiated loans and
other real estate owned (net of reserves), totaled $30.0 million at June 30,
1997, a $8.1 million (21.3%) decrease from the year-end 1996 total of $38.1
million and a $17.0 million (36.2%) decrease from the June 30, 1996 total.

NONPERFORMING ASSETS AND PAST-DUE LOANS

<TABLE>
<CAPTION>
                                                                      JUNE 30,         JUNE 30,        DECEMBER 31,
(IN THOUSANDS)                                                          1997             1996              1996
---------------------------------------------- ----------- -- --- ----------------- ---------------- -----------------
<S>                                                                         <C>              <C>               <C>
NONPERFORMING ASSETS:

Nonaccrual Loans: (1)
  Domestic                                                                 $ 5,932          $10,332           $ 9,133
  Foreign                                                                      456            2,529               743
---------------------------------------------- ----------- -- --- ----------------- ---------------- -----------------
Total Nonaccrual Loans                                                       6,388           12,861             9,876
---------------------------------------------- ----------- -- --- ----------------- ---------------- -----------------

Renegotiated Loans: (2)
  Domestic                                                                     115              850               125
  Foreign                                                                        -                -                 -
---------------------------------------------- ----------- -- --- ----------------- ---------------- -----------------
Total Renegotiated Loans                                                       115              850               125
---------------------------------------------- ----------- -- --- ----------------- ---------------- -----------------

Other Real Estate Owned, Net:
  Domestic                                                                  23,421           32,731            27,722
  Foreign                                                                       83              570               399
---------------------------------------------- ----------- -- --- ----------------- ---------------- -----------------
Total Other Real Estate Owned, Net                                          23,504           33,301            28,121

---------------------------------------------- ----------- -- --- ----------------- ---------------- -----------------

 Total Nonperforming Assets                                                $30,007          $47,012           $38,122

PAST-DUE LOANS: (3)
  Domestic                                                                 $ 6,355          $ 4,396           $ 3,849
  Foreign                                                                        -                -                 -
---------------------------------------------- ----------- -- --- ----------------- ---------------- -----------------

Total Past-Due Loans                                                       $ 6,355          $ 4,396           $ 3,849
</TABLE>

[FN]
(1) - Loans (other than consumer) that are in default in either principal or
interest for 90 days or more that are not well-secured and in the process
of collection, or that are, in management's opinion, doubtful as to the
collectibility of either interest or principal.

(2) - Loans for which terms have been renegotiated to provide a reduction of
interest or principal as a result of a deterioration in the financial
position of the borrower in accordance with Statement of Financial Accounting
Standards No. 15.  Renegotiated loans do not include $10.2 million in loans
renegotiated at market terms that have performed in accordance with their
respective renegotiated terms.  These performing, market rate loans are no
longer included in nonperforming asset totals.

(3) - Loans contractually past due 90 days or more in principal or interest that
are well-secured and in the process of collection.

                                      -18-
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS, CONTINUED


ASSET QUALITY, CONTINUED

NONACCRUAL AND RENEGOTIATED LOANS

At June 30, 1997, nonaccrual loans, including both domestic and foreign, were
$6.4 million, or 0.2% of total loans, compared with $9.9 million, or 0.4% of
total loans, at year-end 1996 and $12.9 million, or 0.5% of total loans at June
30, 1996. The $6.4 million of nonaccrual loans includes $0.6 million of loans
identified as impaired (see "Impaired Loans"). The decrease in nonaccrual loans
during the first half of 1997 was due to paydowns of $3.4 million, loans
returning to accrual status of $548 thousand, and charge offs of $358 thousand.
These decreases were offset by additions of $866 thousand. Renegotiated loans
totaled $115 thousand at June 30, 1997, a decrease of $10 thousand from December
31, 1996, and $735 thousand from the prior year's period. The decrease in
renegotiated loans from the prior year's balance was the result of paydowns and
payoffs between the years. Nonaccrual and renegotiated real estate -
commercial/construction loans, both foreign and domestic, totaled $2.1 million
at June 30, 1997, or 31.7% of the total nonaccrual and renegotiated loans.

OTHER REAL ESTATE OWNED, NET

Other real estate owned, net of reserves, decreased to $23.5 million at June 30,
1997, compared with $28.1 million at December 31, 1996 and $33.3 million at June
30, 1996. The decrease during the first half of 1997 is the result of paydowns
and sales of $4.4 million and charge-offs of $282 thousand, offset by additions
of $82 thousand. At June 30, 1997, residential and commercial land composed
88.7% of the other real estate owned portfolio.

OTHER REAL ESTATE OWNED - (1)
GEOGRAPHIC DISTRIBUTION BY TYPE
JUNE 30, 1997
<TABLE>
<CAPTION>
                                                                              GEOGRAPHIC LOCATION
                                                  DISTRICT OF                                      UNITED
(IN THOUSANDS)                                      COLUMBIA       VIRGINIA       MARYLAND        KINGDOM         TOTAL
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>             <C>             <C>          <C>               <C>
Land                                                    $     -        $14,991         $ 5,864        $     -        $20,855
Single-Family Residential                                     -              -             829              -            829
Office Buildings/Retail                                       -              -           1,522              -          1,522
Hotels                                                        -              -               -             83             83
Industrial/Warehouse                                        215              -               -              -            215
-----------------------------------------------------------------------------------------------------------------------------

Total Other Real Estate Owned, Net                      $   215        $14,991         $ 8,215        $    83        $23,504
</TABLE>

[FN]
(1) - Balances are net of valuation reserves totaling $1.9 million.

PAST-DUE AND POTENTIAL PROBLEM LOANS

Past-due loans consist predominantly of residential real estate and consumer
loans that are well-secured and in the process of collection and that are
accruing interest. Past-due loans increased $2.5 million during the first half
of 1997 to $6.4 million, while increasing $2.0 million from June 30, 1996. These
increases were predominately residential, single-family past-due loans, which
increased $2.4 million in the first half of 1997 and $2.6 million during the
past year.

At June 30, 1997, the Corporation had identified $9.9 million in potential
problem loans that are currently performing but that management believes have
certain attributes that may lead to nonaccrual or past due status in the
foreseeable future. These loans consisted entirely of domestic loans, primarily
commercial and financial.





                                      -19-
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS, CONTINUED


ASSET QUALITY, CONTINUED

RESERVE FOR LOAN LOSSES

The Corporation's subsidiaries maintain reserves for loan losses that are
available to absorb potential losses in the current loan portfolio. The reserve
for loan losses is based on management's assessment of existing conditions and
reflects potential losses determined to be probable and subject to reasonable
estimation. The reserve for loan losses was $63.9 million, or 2.41% of total
loans (net of premiums/discounts) at June 30, 1997, compared with $64.5 million,
or 2.44% of total loans at December 31, 1996, and $58.8 million, or 2.26% of
total loans, at June 30, 1996. The coverage ratio was 982% at June 30, 1997,
645% at year-end 1996 and 429% at June 30, 1996. The increase in the coverage
ratio from the prior year's periods was the result of a $7.2 million decrease in
nonperforming loans between the periods, combined with the $5.1 million increase
in the reserve for loan losses.

IMPAIRED LOANS

Impaired loans are measured and reported based on the present value of expected
cash flows discounted at the loan's effective interest rate, or at the fair
value of the loan's collateral if the loan is deemed "collateral dependent."
Impaired loans are generally defined as nonaccrual loans, excluding large groups
of smaller-balance loans (with similar collateral characteristics), which are
collectively evaluated for impairment. Specific reserves are required to the
extent that the fair value of the impaired loans is less than the recorded
investment. Impaired loans totaled $621 thousand at June 30, 1997 (see table
below), a $2.3 million decrease from the December 31, 1996 total of $2.9 million
and a $5.3 million decrease from June 30, 1996. Impaired loans at June 30, 1997
and 1996 are solely collateral dependent loans, which are measured at the fair
value of the collateral. All of the Corporation's impaired loans are included
in the totals of the preceding "Nonperforming Assets and Past-Due Loans" table.

TOTAL IMPAIRED LOANS (1)
<TABLE>
<CAPTION>
                                                                           JUNE 30,          JUNE 30,       DECEMBER 31,
(IN THOUSANDS)                                                               1997              1996             1996
----------------------------------------------------- ---------------- ----------------- ----------------- ----------------
<S>                                                                                <C>              <C>              <C>
Domestic:
     Real Estate - Commercial/Construction                                       $  621            $4,317           $2,890
Foreign                                                                               -             1,602                -
----------------------------------------------------- ---------------- ----------------- ----------------- ----------------

Total Impaired Loans                                                             $  621            $5,919           $2,890
</TABLE>

[FN]
(1)   There were no specific reserves for impaired loans as of June 30, 1997
       and 1996, and December 31, 1996.

              --------------------------------------------------------

IMPAIRED LOANS
AVERAGE INVESTMENT AND INTEREST RECOGNIZED
<TABLE>
<CAPTION>
                                                                JUNE 30, 1997                      JUNE 30, 1996
                                                      ---------------------------------- ----------------------------------
                                                          AVERAGE          INTEREST          AVERAGE          INTEREST
(IN THOUSANDS)                                          INVESTMENT        RECOGNIZED        INVESTMENT       RECOGNIZED
----------------------------------------------------- ---------------- ----------------- ----------------- ----------------
<S>                                                             <C>               <C>               <C>             <C>
Domestic:
     Real Estate - Commercial/Construction                     $1,555            $    -            $4,506           $    -
Foreign                                                             -                 -             1,138               25
----------------------------------------------------- ---------------- ----------------- ----------------- ----------------

Total                                                          $1,555            $    -            $5,644           $   25
</TABLE>




                                      -20-
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS, CONTINUED


DEPOSITS

Deposits are the primary and most stable source of funds for the Corporation.
Deposits totaled $4.06 billion at June 30, 1997, increasing $255.3 million
(6.7%) from the June 30, 1996 deposit total. The increase from the year earlier
balance was due to increases in money market accounts of $477.5 million, foreign
time deposits of $147.5 million, and demand deposits of $68.4 million, partially
offset by the decrease in savings and NOW accounts of $409.6 million. The large
variances in the money market and savings and NOW balances is mostly
attributable to a new program started during the third quarter of 1996. Deposit
balances in certain NOW and noninterest checking accounts are transferred to the
money market classification, thereby reducing the level of deposit reserves
required by the Federal Reserve. Total accounts transferred equaled
approximately $347 million at June 30, 1997.

DEPOSITS
<TABLE>
<CAPTION>
                                                                  JUNE 30,                            CHANGE
                                                         ---------------------------        ----------------------------
(IN THOUSANDS)                                               1997          1996                 AMOUNT       PERCENT
-------------------------------------------------------- ------------- ------------- ------- ------------- -------------
<S>                                                          <C>            <C>                 <C>              <C>
Demand Deposits                                             $  912,304    $  843,903           $  68,401          8.1 %
Interest-Bearing Deposits:
     Savings and NOW Accounts                                  391,193       800,764            (409,571)       (51.1) 
     Money Market Deposit Accounts                           1,471,785       994,272             477,513         48.0  
     Time Deposits in Domestic Offices                         809,258       837,766             (28,508)        (3.4) 
     Time Deposits in Foreign Offices                          478,123       330,637             147,486         44.6  
-------------------------------------------------------- -------------- ------------- ------ ------------- -------------
Total Interest-Bearing Deposits                              3,150,359     2,963,439             186,920          6.3  
-------------------------------------------------------- -------------- ------------- ------ ------------- -------------

Total Deposits                                              $4,062,663    $3,807,342           $ 255,321          6.7 %
</TABLE>

Since 1994, the Corporation has been conducting a detailed analysis of its
retail banking system, determining the best use of its locations, branch
facilities, product lines and personnel. The Corporation has already sold or
consolidated seven retail branches to date. The Corporation is actively seeking
enhancements to existing branches to attract new customers, improve service
quality and the overall profitability of its branches. Enhancements include
improving the computer network system and the redesigning of 20 retail branches
to provide better access to traditional banking services as well as trust and
investment advisory services. In April 1997, the Corporation introduced its home
banking and imaging services products and anticipates the completion of its
Internet home page later in 1997.

SHORT-TERM BORROWINGS AND LONG-TERM DEBT

Short-term borrowings increased by $24.8 million during the first six months of
1997, while decreasing $52.8 million (15.9%) from the year earlier balance.
Short-term borrowings are an additional source of funds that the Corporation has
utilized to meet certain asset/liability and daily cash management objectives.
The decrease in short-term borrowings from the year-earlier balances was the
result of increased fund inflows from the deposit portfolio between the periods.
The decrease in long-term debt from the prior year was the result of $26.1
million of floating-rate subordinated notes maturing in September 1996.

SHORT-TERM BORROWINGS AND LONG-TERM DEBT
<TABLE>
<CAPTION>
                                                                      JUNE 30,                            CHANGE
                                                             ---------------------------        ---------------------------
(IN THOUSANDS)                                                   1997          1996                AMOUNT       PERCENT
------------------------------------------------------------ ------------- ------------- ------ ------------- -------------
<S>                                                               <C>           <C>                 <C>             <C>
Federal Funds Purchased and Repurchase Agreements                $253,520      $217,236            $ 36,284         16.7 %
U.S. Treasury Notes and Other Borrowed Funds                       26,522       115,618             (89,096)       (77.1) 
------------------------------------------------------------ ------------- ------------- ------ ------------- -------------
Total Short-Term Borrowings                                       280,042       332,854             (52,812)       (15.9) 

Floating-Rate Subordinated Capital Notes due 1996                       -        26,100             (26,100)         n/a  
Subordinated Debentures due 2009                                   66,525        66,525                   -            -  
Subordinated Notes due 2006                                       125,000       125,000                   -            -  
------------------------------------------------------------ ------------- ------------- ------ ------------- -------------
Total Long-Term Debt                                              191,525       217,625             (26,100)       (12.0) 
------------------------------------------------------------ ------------- ------------- ------ ------------- -------------

Total Short-Term Borrowings and Long-Term Debt                   $471,567      $550,479            $(78,912)       (14.3)%
</TABLE>


                                      -21-
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS, CONTINUED


LIQUIDITY

The Corporation seeks to maintain sufficient liquidity to meet the needs of
depositors, borrowers and creditors at a reasonable cost and without undue
stress on the operations of the Corporation and its banking subsidiaries. The
Corporation's Asset-Liability Committee actively analyzes and manages liquidity
in coordination with other areas of the organization (see "Interest-Rate Risk
Management"). At June 30, 1997, the Corporation's liquid assets, on a
consolidated basis, which include cash and due from banks, U.S. Treasury
securities and Government obligations, federal funds sold, reverse repurchase
agreements and time deposits at other banks, totaled $2.4 billion (44.9% of
total assets). This compares with $2.2 billion (42.7%) at December 31, 1996, and
$1.9 billion (39.0%) at June 30, 1996. The increase in total liquid assets and
the percentage of liquid assets to total assets from the prior year's balance
was primarily the result of cash inflows from the issuance and sale of Trust
Preferred Securities in December 1996 and March 1997. The Corporation expects
liquid assets to remain at approximately the June 30, 1997 level for the
foreseeable future. The liquidity position of the Corporation is enhanced by the
stable source of funds maintained through its core deposit relationships and its
ability to attract new deposits. Additionally, the Corporation has other sources
of funds, such as short-term borrowings and advances available through its
membership in the Federal Home Loan Bank of Atlanta.

INTEREST-RATE RISK MANAGEMENT

The Corporation's asset/liability management function is controlled by the
Asset/Liability Committee ("ALCO"), which is comprised of representatives who
lead the major divisions within the Corporation. The objective of the group is
to manage prudently the assets and liabilities of the Corporation to provide
both an optimum and stable net interest margin while maintaining adequate levels
of liquidity and capital. This approach entails the management of overall risk
of the organization in conjunction with the acquisition and deployment of funds.
ALCO monitors and modifies exposure to changes in interest rates based upon its
view of current and prospective market and economic conditions. The traditional
measurement of an organization's exposure to interest-rate fluctuations, such as
interest sensitivity, entails a "static gap" measurement, which portrays a
snapshot of the statement of condition at one point in time. However, this
methodology does not adequately measure the Corporation's exposure to
interest-rate risk. The statement of condition must be viewed within a dynamic
framework in which relationships may vary over time in virtually every segment
of the financial statement.

The Corporation manages interest-rate risk through the use of a simulation model
allowing for various interest-rate scenarios to be portrayed. The model
forecasts the impact on earnings of these rate scenarios over a 36-month time
horizon assuming selected changes in the mix of assets and liabilities, spread
relationships, and management actions. A "most likely" scenario is forecasted
based upon internal as well as consensus views of the marketplace. Alternatives,
which reflect interest rates moving significantly higher or lower than this
view, are also evaluated, with the results compared against risk tolerance
limits established by corporate policy. The Corporation's current policy
establishes limits for possible fluctuations in net interest income for the
ensuing 12-month period under the "most likely" scenario described above. As of
year-end 1996, the Corporation's interest sensitivity position was liability
sensitive and continued to be liability sensitive at June 30, 1997. In both
instances the Corporation was well-insulated against interest rates moving
significantly in either direction. At June 30, 1997, the forecasted impact of
interest rates either steadily rising or falling 300 basis points versus a "most
likely" scenario would reflect a change in net interest income of less than 2%
over an initial 12-month period and less than 4% for the entire 36-month
horizon--well below the established tolerance levels set by the Corporation.

In managing the Corporation's interest-rate risk, ALCO also utilizes financial
derivatives in the normal course of business. These products might include
interest-rate swaps, caps, collars, floors, futures, and options, among others.
Financial derivatives are employed to assist in the management and/or reduction
of interest-rate risk for the Corporation and can effectively alter the interest
sensitivity of segments of the statement of condition for specified periods of
time. All of these vehicles are considered "off-balance-sheet" as they do not
impact the actual levels of assets or liabilities of the Corporation.

Management finds that all of the methodologies discussed above provide a
meaningful representation of the Corporation's interest-rate sensitivity,
although factors other than changes in the interest-rate environment, such as
levels of nonearning assets, and changes in the composition of earning assets,
may impact net interest income. Management believes its current rate sensitivity
level is appropriate, considering the Corporation's economic outlook and the
conservative approach taken in the review and monitoring of the Corporation's
interest-rate risk position.


                                      -22-
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS, CONTINUED


STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL

Total stockholders' equity at June 30, 1997 was $435.6 million, an increase of
$9.9 million from the year-end 1996 total and up $32.9 million from June 30,
1996. The increase from year-end 1996 was the result of an increase in net
earnings of $21.1 million, partially offset by dividends on preferred and common
stock of $8.4 million, unrealized losses in the Corporation's securities
available for sale portfolio of $1.9 million and foreign exchange translation
adjustments of $1.3 million. The increase in stockholders' equity over the
preceding year was mostly attributed to earnings during the period combined with
net unrealized gains from the securities available for sale portfolio, partially
offset by dividend payments.

In December 1996 and March 1997, Riggs Capital and Riggs Capital II,
respectively, issued Trust Preferred Securities, Series A and C, at 8.625% and
8.875%, respectively. These securities mature in December 2026 for Riggs Capital
and March 2027 for Riggs Capital II. Riggs Capital and Riggs Capital II are new
trust entities formed in order to issue the preferred securities and each are
wholly-owned subsidiaries of the Corporation. Dividends for both issues are
payable semi-annually with the first dividend payments paid on June 30, 1997.
The Trust Preferred Securities, Series A cannot be redeemed until December 2006,
and the Trust Preferred Securities, Series C cannot be redeemed until March
2007, except under certain limited circumstances. These securities enhance
certain regulatory capital ratios (see below), and the proceeds of these
offerings are available for general corporate purposes.

The Corporation's total (combined Tier I and Tier II) and core (Tier I) capital
ratios were 34.75% and 19.82%, respectively, at June 30, 1997, compared with
28.47% and 20.04% at December 31, 1996, and 24.31% and 15.64% at June 30, 1996,
respectively. The Federal Reserve Board's risk-based capital guidelines require
bank holding companies to meet a minimum ratio of qualifying total (combined
Tier I and Tier II) capital to risk-weighted assets of 8.00%, at least half of
which must be composed of core (Tier I) capital elements. The Federal Reserve
Board has established an additional capital adequacy guideline--the leverage
ratio, which measures the ratio of Tier I capital to quarterly average assets.
The most highly rated bank holding companies are required to maintain a minimum
leverage ratio of 3.00%. Those that are not in the most highly rated category,
including the Corporation, are expected to maintain minimum ratios of at least
4.00%, or higher, if determined appropriate by the Federal Reserve Board through
its assessment of the Corporation's asset quality, earnings performance,
interest-rate risk and liquidity. The Federal Reserve Board has not advised the
Corporation of a specific leverage ratio requirement above the 4.00% minimum.
The Corporation's leverage ratio was 10.96% at June 30, 1997, compared with
leverage ratios of 11.84% and 8.58% at December 31, 1996 and June 30, 1996,
respectively. Regulatory capital ratios do not include the impact of net
unrealized losses on the securities available for sale portfolio totaling $2.6
million for the period-ended June 30, 1997. The Corporation's equity to assets
ratio, which includes these unrealized losses, was 8.12% at June 30, 1997,
compared to 8.29% and 8.37% at December 31, 1996, and June 30, 1996,
respectively.

The Corporation ensures that its operating subsidiaries are capitalized in
accordance with regulatory guidelines. The Corporation's national bank
subsidiary--Riggs Bank National Association ("Riggs Bank N.A.") is subject to
minimum capital ratios prescribed by the Office of the Comptroller of the
Currency, which are generally the same as those of the Federal Reserve Board.
The following table details the actual and required minimum ratios for the
Corporation and its insured bank subsidiary:


CAPITAL RATIOS
<TABLE>
<CAPTION>
                                                       JUNE 30,        JUNE 30,      DECEMBER 31,      REQUIRED
                                                         1997            1996            1996          MINIMUMS
--------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>             <C>             <C>             <C>
RIGGS NATIONAL CORPORATION:
     Tier I                                             19.82%          15.64%          20.04%          4.00%
     Combined Tier I and Tier II                        34.75           24.31           28.47           8.00 
     Leverage*                                          10.96            8.58           11.84           4.00 

RIGGS BANK N.A.:
     Tier I                                             15.08           19.14           18.66           4.00 
     Combined Tier I and Tier II                        16.34           20.40           19.92           8.00 
     Leverage*                                           8.30           10.44           10.96           4.00 
</TABLE>


[FN]
*   Most bank holding  companies  and national  banks,  including  the
    Corporation  and the  Corporation's  national  bank subsidiary,
    are expected to maintain at least a 4.00% minimum leverage ratio, or higher,
    if determined  appropriate by the Federal Reserve Board and other
    regulators.  The Federal Reserve Board has not indicated a requirement
    higher than 4.00% at June 30, 1997.


                                      -23-
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS, CONTINUED


NET INTEREST INCOME

Net interest income on a tax-equivalent basis (net interest income plus an
amount equal to the tax savings on tax-exempt interest) totaled $46.6 million in
the second quarter of 1997, increasing $8.3 million from the second quarter of
1996. Net interest income on a tax-equivalent basis was $88.9 million for the
first half of 1997, compared with $77.9 million for the same period in 1996. The
increases from the prior year's quarter and the year-to-date period were
primarily the result of favorable increases in average earning assets over
increases in average interest-bearing liabilities between the periods, stemming
from $350 million in proceeds received from Trust Preferred Securities issued
and sold in December 1996 and March 1997 (see "Stockholders' Equity and
Regulatory Capital").

The net interest margin (net interest income on a tax-equivalent basis divided
by average earning assets) for the second quarter of 1997 was 3.90% (see
schedule on the following page), an increase of 24 basis points from 3.66% for
the second quarter of 1996. The net interest margin for the six-month periods
ended June 30, 1997 and 1996 were 3.83% and 3.73%, respectively. The
loan-to-deposit ratio stood at 65.3% at June 30, 1997, up slightly from the
year-end 1996 ratio of 65.1%, but down from 68.5% at June 30, 1996, the result
of stronger increases in deposits than loans between the periods. The ratio of
average loans to average earning assets was 54.1% for the second quarter of
1997, compared with a ratio of 60.1% for the year earlier quarter, reflecting
the increase in earning assets from the proceeds received from the issuance and
sale of the Trust Preferred Securities. Interest income earned on nonaccrual and
restructured loans totaled $138 thousand and $127 thousand for the six months
ended June 30, 1997 and 1996, respectively. Interest income that would have been
earned under the original terms of these loans was $435 thousand and $662
thousand, respectively, which reduced the net interest margin by approximately
one basis point in 1997 and approximately three basis points in 1996.

NET INTEREST INCOME CHANGES (1)

<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED                          SIX MONTHS ENDED
                                              JUNE 30, 1997 VS 1996                      JUNE 30, 1997 VS 1996
                                        ----------------------------------         ----------------------------------
                                          DUE TO     DUE TO      TOTAL               DUE TO     DUE TO      TOTAL
(IN THOUSANDS)                             RATE      VOLUME      CHANGE               RATE      VOLUME      CHANGE
---------------------------------------------------------------------------------------------------------------------
<S>                                       <C>          <C>        <C>                <C>         <C>         <C>

Interest Income:
   Loans, Including Fees                  $   619     $ 1,668    $ 2,287             $(2,917)    $ 3,768    $   851 
   Securities Available for Sale            1,201       3,450      4,651               1,743       6,915      8,658 
   Time Deposits with Other Banks              85        (368)      (283)                (56)     (1,622)    (1,678)
   Federal Funds Sold and Reverse
    Repurchase Agreements                     130       4,618      4,748                  86       6,142      6,228 
---------------------------------------------------------------------------------------------------------------------

Total Interest Income                       2,035       9,368     11,403              (1,144)     15,203     14,059 

Interest Expense:
   Savings and NOW Accounts                   301      (2,998)    (2,697)                363      (5,988)    (5,625)
   Money Market Deposit Accounts             (667)      5,177      4,510              (1,603)      9,878      8,275 
   Time Deposits in Domestic Offices         (656)       (194)      (850)             (1,640)       (604)    (2,244)
   Time Deposits in Foreign Offices           216       1,656      1,872                 159       2,641      2,800 
   Federal Funds Purchased and
      Repurchase Agreements                   670         128        798                 430         361        791 
   U.S. Treasury Demand Notes and Other
      Short-Term Borrowings                   100        (296)      (196)                155        (306)      (151)
   Long-Term Debt                             202        (579)      (377)                419      (1,191)      (772)
---------------------------------------------------------------------------------------------------------------------

Total Interest Expense                        166       2,894      3,060              (1,717)      4,791      3,074 
---------------------------------------------------------------------------------------------------------------------

Net Interest Income                       $ 1,869     $ 6,474    $ 8,343             $   573     $10,412    $10,985 
</TABLE>

[FN]
(1) - The dollar amount of changes in interest income and interest expense
      attributable to changes in rate/volume (change in rate multiplied by
      change in volume) has been allocated between rate and volume variances
      based on the percentage relationship of such variances to each
      other.  Income and rates are computed on a  tax-equivalent  basis using
      a Federal  income tax rate of 35% and local tax rates as applicable.



                                      -24-
<PAGE>



RIGGS NATIONAL CORPORATION
AVERAGE CONSOLIDATED STATEMENTS OF CONDITION AND RATES

<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED                    THREE MONTHS ENDED
                                                                JUNE 30, 1997                        JUNE 30, 1996
                                                      ----------------------------------   -----------------------------------
(TAX-EQUIVALENT BASIS) (1)                              AVERAGE     INCOME/                AVERAGE       INCOME/
(IN THOUSANDS)                                          BALANCE     EXPENSE     RATE       BALANCE       EXPENSE      RATE
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>          <C>         <C>          <C>           <C>        <C>
ASSETS

  Loans: (2)
   Commercial - Taxable                                 $  363,691    $ 7,128      7.86 %     $  339,357   $ 6,468       7.67 %
   Commercial - Tax-Exempt                                  49,038      1,043      8.53           25,900       623       9.67
   Real Estate - Commercial/Construction                   327,845      7,323      8.96          317,142     7,006       8.88
   Residential Mortgage                                  1,207,673     21,768      7.23        1,268,299    22,681       7.19
   Home Equity                                             298,208      6,345      8.53          268,811     5,496       8.22
   Consumer                                                 73,963      2,255     12.23           74,296     2,262      12.25
   Foreign                                                 275,209      5,569      8.12          233,704     4,608       7.93
------------------------------------------------------------------------------------------------------------------------------
  Total Loans, Including Fees                            2,595,627     51,431      7.95        2,527,509    49,144       7.82
------------------------------------------------------------------------------------------------------------------------------

  Securities Available for Sale (3)                      1,480,941     22,867      6.19        1,256,102    18,216       5.83
  Time Deposits with Other Banks                           167,154      2,094      5.02          197,265     2,377       4.85
  Federal Funds Sold and Resale Agreements                 557,822      7,776      5.59          226,991     3,028       5.37
------------------------------------------------------------------------------------------------------------------------------
    Total Earning Assets and Average Rate Earned         4,801,544     84,168      7.03        4,207,867    72,765       6.96
------------------------------------------------------------------------------------------------------------------------------

  Less: Reserve for Loan Losses                             63,675                                58,557
  Cash and Due from Banks                                  158,559                               201,644
  Premises and Equipment, Net                              166,180                               158,341
  Other Assets                                             196,116                               200,288

------------------------------------------------------------------------------------------------------------------------------
  Total Assets                                          $5,258,724                            $4,709,583

LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY

  Interest-Bearing Deposits:
   Savings and NOW Accounts                             $  287,682    $ 1,625      2.27 %     $  825,594   $ 4,322       2.11 %
   Money Market Deposit Accounts                         1,605,203     12,887      3.22          969,258     8,377       3.48
   Time Deposits in Domestic Offices                       802,945      8,662      4.33          820,318     9,512       4.66
   Time Deposits in Foreign Offices                        466,813      6,608      5.68          349,853     4,736       5.44
------------------------------------------------------------------------------------------------------------------------------
  Total Interest-Bearing Deposits                        3,162,643     29,782      3.78        2,965,023    26,947       3.66
------------------------------------------------------------------------------------------------------------------------------

  Borrowed Funds:
   Federal Funds Purchased and
        Repurchase Agreements                              246,040      3,122      5.09          233,944     2,324       4.00
   U.S. Treasury Notes and Other Borrowed Funds             19,826        255      5.16           44,660       451       4.06
   Long-Term Debt                                          191,525      4,368      9.15          217,625     4,745       8.77
------------------------------------------------------------------------------------------------------------------------------
    Total Interest-Bearing Funds and Average Rate Paid   3,620,034     37,527      4.16        3,461,252    34,467       4.01
------------------------------------------------------------------------------------------------------------------------------

  Demand Deposits                                          807,381                               806,648
  Other Liabilities                                         55,339                                49,743
  Minority Interest in Preferred Stock of Subsidiaries     350,000                                     -
  Stockholders' Equity                                     425,970                               391,940

------------------------------------------------------------------------------------------------------------------------------
  Total Liabilities, Minority Interest and
    Stockholders' Equity                                $5,258,724                            $4,709,583

------------------------------------------------------------------------------------------------------------------------------
  NET INTEREST INCOME AND SPREAD                                      $46,641      2.87 %                  $38,298       2.95 %

------------------------------------------------------------------------------------------------------------------------------
  NET INTEREST MARGIN ON EARNING ASSETS                                            3.90 %                                3.66 %
</TABLE>

[FN]
(1) - Income and rates are computed on a tax-equivalent basis using a Federal
income tax rate of 35% and local tax rates as applicable.
(2) - Nonperforming loans are included in average balances used to
determine rates.
(3) - The averages and rates for the securities available for sale portfolio are
based on amortized cost.



                                      -25-
<PAGE>



RIGGS NATIONAL CORPORATION
AVERAGE CONSOLIDATED STATEMENTS OF CONDITION AND RATES

<TABLE>
<CAPTION>
                                                              SIX MONTHS ENDED                      SIX MONTHS ENDED
                                                                JUNE 30, 1997                        JUNE 30, 1996
                                                      ----------------------------------   -----------------------------------
(TAX-EQUIVALENT BASIS) (1)                              AVERAGE     INCOME/                AVERAGE       INCOME/
(IN THOUSANDS)                                          BALANCE     EXPENSE     RATE       BALANCE       EXPENSE      RATE
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>         <C>         <C>           <C>         <C>         <C>

ASSETS

  Loans: (2)
   Commercial - Taxable                                 $  376,739   $ 14,714      7.88 %     $  331,820  $ 15,567       9.43 %
   Commercial - Tax-Exempt                                  48,167      2,029      8.49           27,571     1,340       9.77
   Real Estate - Commercial/Construction                   329,594     14,413      8.82          318,156    14,192       8.97
   Residential Mortgage                                  1,213,989     43,476      7.22        1,275,447    45,477       7.17
   Home Equity                                             293,276     12,089      8.31          264,150    11,001       8.38
   Consumer                                                 74,341      4,567     12.39           75,139     4,558      12.20
   Foreign                                                 266,817     10,617      8.02          224,081     8,919       8.00
------------------------------------------------------------------------------------------------------------------------------
  Total Loans, Including Fees                            2,602,923    101,905      7.89        2,516,364   101,054       8.08
------------------------------------------------------------------------------------------------------------------------------

  Securities Available for Sale (3)                      1,375,174     41,518      6.09        1,141,761    32,860       5.79
  Time Deposits with Other Banks                           167,455      4,112      4.95          232,846     5,790       5.00
  Federal Funds Sold and Resale Agreements                 536,306     14,563      5.48          309,047     8,335       5.42
------------------------------------------------------------------------------------------------------------------------------
    Total Earning Assets and Average Rate Earned         4,681,858    162,098      6.98        4,200,018   148,039       7.09
------------------------------------------------------------------------------------------------------------------------------

  Less: Reserve for Loan Losses                             63,679                                57,758
  Cash and Due from Banks                                  161,242                               209,576
  Premises and Equipment, Net                              166,111                               156,903
  Other Assets                                             195,581                               195,298

------------------------------------------------------------------------------------------------------------------------------
  Total Assets                                          $5,141,113                            $4,704,037

LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY             

  Interest-Bearing Deposits:
   Savings and NOW Accounts                             $  299,498   $  3,344      2.25 %     $  835,529  $  8,969       2.16 %
   Money Market Deposit Accounts                         1,593,363     25,145      3.18          972,329    16,870       3.49
   Time Deposits in Domestic Offices                       810,207     17,539      4.37          835,709    19,783       4.76
   Time Deposits in Foreign Offices                        435,867     12,133      5.61          339,947     9,333       5.52
------------------------------------------------------------------------------------------------------------------------------
  Total Interest-Bearing Deposits                        3,138,935     58,161      3.74        2,983,514    54,955       3.70
------------------------------------------------------------------------------------------------------------------------------

  Borrowed Funds:
   Federal Funds Purchased and
        Repurchase Agreements                              232,289      5,817      5.05          217,012     5,026       4.66
   U.S. Treasury Notes and Other Borrowed Funds             18,357        465      5.11           31,754       616       3.90
   Long-Term Debt                                          191,525      8,736      9.20          217,625     9,508       8.79
------------------------------------------------------------------------------------------------------------------------------
    Total Interest-Bearing Funds and Average Rate Paid   3,581,106     73,179      4.12        3,449,905    70,105       4.09
------------------------------------------------------------------------------------------------------------------------------

  Demand Deposits                                          809,355                               815,734
  Other Liabilities                                         52,768                                49,903
  Minority Interest in Preferred Stock of Subsidiaries     272,652                                     -
  Stockholders' Equity                                     425,232                               388,495

------------------------------------------------------------------------------------------------------------------------------
  Total Liabilities, Minority Interest and
    Stockholders' Equity                                $5,141,113                            $4,704,037

------------------------------------------------------------------------------------------------------------------------------
  NET INTEREST INCOME AND SPREAD                                     $ 88,919      2.86 %                 $ 77,934       3.00 %

------------------------------------------------------------------------------------------------------------------------------
  NET INTEREST MARGIN ON EARNING ASSETS                                            3.83 %                                3.73 %
</TABLE>

[FN]
(1) - Income and rates are computed on a tax-equivalent basis using a Federal
income tax rate of 35% and local tax rates as applicable.
(2) - Nonperforming loans are included in average balances used to
determine rates.
(3) - The averages and rates for the securities available for sale portfolio are
based on amortized cost.



                                      -26-
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS, CONTINUED


NONINTEREST INCOME

Noninterest income for the second quarter of 1997 was $21.1 million, compared
with $25.7 million for the second quarter of 1996. The $4.7 million decrease in
noninterest income between the quarters was the result of $5.1 million in
interest from tax settlements combined with $1.2 million in net securities gains
recognized in the prior year. These decreases were partially offset by increases
in service charges and trust income of $768 thousand, and a $753 thousand
residual gain realized in other noninterest income during the current quarter
from the sale of a portion of the Corporation's corporate trust business in the
fourth quarter of 1996. Noninterest income for the first six months of 1997
decreased $10.6 million compared to the same period in 1996. This decrease was
attributed to the previously mentioned interest from tax settlements and net
securities gains recognized in the prior year's period, offset by increases in
trust and service fees of $1.6 million (see table below).

<TABLE>
<CAPTION>
NONINTEREST INCOME                            THREE                                          SIX
                                          MONTHS ENDED                                   MONTHS ENDED
                                            JUNE 30,               CHANGE                  JUNE 30,               CHANGE
                                      --------------------- ----------------------    ------------------- ------------------------
(IN THOUSANDS)                          1997       1996     AMOUNT    PERCENT           1997      1996     AMOUNT      PERCENT
------------------------------------- ---------- --------- ---------- ------------ -- --------- ---------- ----------- -----------
<S>                                      <C>       <C>        <C>          <C>          <C>        <C>        <C>          <C>
Service Charges                         $ 9,329   $ 8,823   $   506         5.7 %      $18,017    $17,496   $    521        3.0 %
Trust Income                              8,788     8,526       262         3.1         17,434     16,400      1,034        6.3  
Interest on Tax Receivables                   -     5,135    (5,135)        n/a              -      5,135     (5,135)       n/a  
Other Noninterest Income                  2,815     2,049       766        37.4          5,120      5,124         (4)      (0.1) 
------------------------------------- ---------- --------- ---------- ------------ - ---------- ---------- ----------- -----------

Noninterest Income Excluding
    Securities Gains, Net                20,932    24,533    (3,601)      (14.7)        40,571     44,155     (3,584)      (8.1) 
Securities Gains, Net                       157     1,209    (1,052)      (87.0)           159      7,162     (7,003)     (97.8) 
------------------------------------- ---------- --------- ---------- ------------ - ---------- ---------- ----------- -----------

Total Noninterest Income                $21,089   $25,742   $(4,653)      (18.1)%      $40,730    $51,317   $(10,587)     (20.6)%
</TABLE>

NONINTEREST EXPENSE

Noninterest expense for the second quarter of 1997 was $45.7 million, an
increase of $1.7 million when compared with the second quarter of 1996. The
increase from the prior year's quarter was largely attributable to the increase
in other noninterest expense of $1.0 million, the result of increases in
consulting and other expenses related to the development and implementation of
several retail banking strategies in 1997 (see "Deposits"). Additionally,
increases in salaries and wages of $736 thousand, the result of staff additions
between the periods, was partially offset by lower benefits costs attributable
to reductions in medical and life insurance expenses.

Noninterest expense for the first half of 1997 increased $2.5 million compared
with the same period in 1996. Increases in salaries and wages, data processing,
furniture and equipment and other noninterest expenses resulted from the
previously described development and implementation of retail banking related
strategies in the current year (see "Deposits"). These increases were partially
offset by decreases in employee benefits costs and other real estate owned
expense between the periods, with the largest decrease stemming from benefits,
which was attributed to decreases in medical and life insurance expenses for
active and retired employees.



                                      -27-
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS, CONTINUED


NONINTEREST EXPENSE, CONTINUED

<TABLE>
<CAPTION>
NONINTEREST EXPENSE                           THREE                                           SIX
                                          MONTHS ENDED                                    MONTHS ENDED
                                            JUNE 30,               CHANGE                   JUNE 30,                 CHANGE
                                      --------------------- ----------------------   ----------------------- -----------------------
(IN THOUSANDS)                          1997       1996     AMOUNT      PERCENT         1997        1996       AMOUNT     PERCENT
------------------------------------- ---------- --------- ---------- ------------ - ----------- ----------- ----------- -----------
<S>                                     <C>        <C>       <C>           <C>          <C>          <C>         <C>          <C>
Salaries and Wages                     $15,882    $15,146   $   736         4.9 %      $31,039      $29,767    $ 1,272        4.3 %
Pensions and Other Employee
   Benefits                              2,791      3,188      (397)      (12.5)         6,411        7,057       (646)      (9.2) 
------------------------------------- ---------- --------- ---------- ------------ - ----------- ----------- ----------- -----------

Total Staff Expense                     18,673     18,334       339         1.8         37,450       36,824        626        1.7  
------------------------------------- ---------- --------- ---------- ------------ - ----------- ----------- ----------- -----------

Occupancy, Net                           5,002      5,748      (746)      (13.0)         9,418       11,039     (1,621)     (14.7) 
Data Processing Services                 4,710      4,468       242         5.4          9,338        8,938        400        4.5  
Furniture and Equipment                  2,328      1,704       624        36.6          4,489        3,566        923       25.9  
Advertising and Public Relations         1,505      1,306       199        15.2          2,860        2,677        183        6.8  
FDIC Insurance                             114          1       113         n/a            220            4        216        n/a  
Other Real Estate Owned
   (Income) Expense, Net                   107        186       (79)      (42.5)           (40)         183       (223)       n/a  
Other Noninterest Expense               13,221     12,184     1,037         8.5         25,737       23,704      2,033        8.6  
------------------------------------- ---------- --------- ---------- ------------ - ----------- ----------- ----------- -----------

Total Noninterest Expense              $45,660    $43,931   $ 1,729         3.9 %      $89,472      $86,935    $ 2,537        2.9 %
</TABLE>

TAXES

The Corporation's provision for income taxes includes Federal, state and foreign
income taxes. Income tax expense totaling $5.4 million was recognized for the
quarter ended June 30, 1997, compared with a tax benefit of $2.4 million for the
quarter ended June 30, 1996, the result of a local tax refund received in the
prior year's quarter. Income tax expense totaling $9.5 million was recognized
for the six month period ended June 30, 1997, compared with a benefit of $2.3
million recognized for the same period in 1996 stemming from the previously
mentioned tax refund received in 1996. The 1997 tax provision was less than the
statutory rate because of the Corporation's ability to reduce the previously
established valuation allowance.




                                      -28-
<PAGE>



RIGGS NATIONAL CORPORATION
EXHIBITS AND SIGNATURES



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


           The Annual Meeting of the shareholders of the Corporation was held on
           May 14, 1997, in Washington, D.C. Chairman of the Board Joe L.
           Allbritton presided and 26,726,419 of the 30,374,496 shares
           outstanding as of the record date of March 31, 1997, were represented
           at the meeting in person or by proxy.

           1-Elections of Directors


           Nominees for membership on the Board of Directors of the Corporation,
           listed below, were elected by the shareholders. The following
           schedule lists the number of shares cast for each nominee:

<TABLE>
<CAPTION>
                                                                       Total                   Total
                                                                     Votes For             Votes Withheld
                                                              ------------------------ -----------------------
                      <S>                                           <C>                       <C>
                      Joe L. Allbritton                             26,168,394                422,533
                      Robert L. Allbritton                          26,165,928                422,533
                      Timothy C. Coughlin                           26,202,817                422,533
                      Lawrence I. Hebert                            26,200,746                422,533
                      Steven B. Pfeiffer                            26,203,912                422,533
                      Robert L. Sloan                               26,202,746                422,533
                      Jack Valenti                                  26,140,545                422,533
                      Eddie N. Williams                             26,198,956                422,533
</TABLE>


           2-Proposal to Change the Annual Meeting Date


           By a vote of 2,205,279 For, to 21,327,510 Against, with 447,873
           Abstaining, the Corporation's shareholders rejected a proposal to
           change the annual meeting date of Riggs National Corporation.


                                      -29-
<PAGE>



RIGGS NATIONAL CORPORATION
EXHIBITS AND SIGNATURES, CONTINUED



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K


        (A)    EXHIBITS

               None


        (B)    REPORTS ON FORM 8-K

               None






                                   SIGNATURES
         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.


                           RIGGS NATIONAL CORPORATION


Date:     August 12, 1997                           /s/ TIMOTHY C. COUGHLIN
     ---------------------------                --------------------------------
                                                      Timothy C. Coughlin
                                                            President






Date:     August 12, 1997                              /s/ JOHN L. DAVIS
     ---------------------------                --------------------------------
                                                         John L. Davis
                                                    Chief Financial Officer
                                                   (Principal Financial and
                                                      Accounting Officer)



                                      -30-