<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): October 19, 1994
CoreStates Financial Corp
------------------------------------------------------------------
(Exact name of registrant specified in its Charter)
Pennsylvania 0-6879 23-1899716
------------------------------------------------------------------
(State or other (Commission (IRS Employee
jurisdiction of File Number) identification No.)
incorporation)
Centre Square West, 1500 Market Street
Philadelphia, Pennsylvania 19101
------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone, including area code: (215) 973-3806
--------------
------------------------------------------------------------------
(Former name and former address, if changed since last report)
Page 1 of 7
<PAGE>
Item 5. Other Events.
-------------
The information set forth in the earnings news release of CoreStates
Financial Corp as Exhibit 28 is incorporated by reference and made a part
hereof.
Item 7. Exhibits
--------
28 CoreStates Financial Corp Earnings News Release dated October 19, 1994
SIGNATURE
---------
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 hereunto duly authorized.
CORESTATES FINANCIAL CORP
(Registrant)
By /s/David J. Martin
-------------------------
David J. Martin
Executive Vice President
and Chief Counsel
Dated: October 20, 1994
Page 2 of 7
<PAGE>
Exhibit Index
-------------
Exhibit No. Page
- ----------- ----
28 CoreStates Financial
Corp Earnings News
Release Dated October
19, 1994 4
Page 3 of 7
<PAGE>
[LOGO OF CORESTATES APPEARS HERE]
Contact Gary Brooten or Gregg Feistman
(215) 973-3546
For Release Immediately Upon Receipt
CoreStates Reports Record Earnings in Third Quarter
Philadelphia, October 19, 1994--CoreStates Financial Corp today
reported third quarter net income of $104,221,000 or 74 cents per share,
a per share improvement of 12% from $96,081,000 or 66 cents per share in
the third quarter of 1993.
The 1994 earnings were a new quarterly record, and the regional
banking services company continued to improve upon its strong performance
ratios of recent years. Return on average assets was 1.50% and return on
average equity was 18.91%, up from 1.38% and 17.09%, respectively, a year
earlier.
Year-to-date earnings, excluding all closing costs related to
CoreStates acquiring Constellation Bank in the first quarter and
Independence Bancorp in the second quarter, were $2.14 per share for
1994, compared to $1.84 per share a year earlier. Including the closing
costs, the 1994 nine-months' net income was $133,887,000 or 97 cents per
share. All 1993 results are restated to reflect the pooling of interests
with the two acquired banking companies.
Terrence A. Larsen, chairman, said the third quarter results
reflected continuing strength of the basic banking businesses in a
challenging environment, and also demonstrated good progress toward
achieving efficiencies from recent acquisitions.
-more-
Page 4 of 7
<PAGE>
2
Compared with the 1993 third quarter results, Larsen said,
sluggish growth in loans and flat revenues from fee-based services were
offset by a strong net financial margin, an improved efficiency ratio and
a better earning asset mix. Net interest income was up 4% from the 1993
third quarter but only slightly from the second quarter. Average assets
were level for all three quarters, with growth in credit card and
commercial finance outstandings offsetting sales of $230 million of
assets in connection with the acquisitions. The net financial margin grew
from 5.63% a year ago to 5.86%, best among regional banking companies in
the second quarter, and 5.91% in the third quarter.
Non-interest income was down year-to-year, reflecting a total of $22
million in one-time or acquisition-related items. These included a one-
time gain of $11 million in the 1993 third quarter from the sale of
branches in the Virgin Islands. They also include $6.5 million in one-
time 1993 gains and 1994 losses and a $4.5 million decrease in ongoing
non-interest revenues all of which result from acquisition-related
business changes.
Overall revenues from fee-based services were flat year-to-year, but
income from CoreStates' joint venture, Electronic Payment Services, Inc.,
was up nearly $5 million as a result of the late 1993 restructuring of
that investment. Except for international service fees, which have grown
strongly over the last several quarters, fees also were flat or slightly
down from the second quarter of 1994.
On the expense side, CoreStates' efficiency ratio (expenses to
revenues) was 60.96% for the third quarter, improved from 62.77% a year
earlier. Total non-financial expenses were down $20 million, of
-more-
Page 5 of 7
<PAGE>
3
which $10 million reflected a one-time charge in the third quarter
of 1993 for structuring the new Transys business unit. Excluding that
one-time item, expenses were down by 3.4% year-to-year.
Non-performing assets at September 30 were $356.6 million, compared
to $493.6 million at September 30, 1993 and $352.1 million at June 30,
1994. The slight increase from June 30 reflected ongoing general
improvement offset by the addition of a single $25 million credit to the
category.
The consolidated provision for loan losses was $25 million, compared
to $30 million in the year earlier quarter and unchanged from the regular
provision in the second quarter of 1994. Net charge-offs were $22.4
million for the third quarter and $194.9 million for the first nine
months of 1994, compared to $35.3 million and $86.2 million,
respectively, in 1993. The consolidated reserve for loan losses at
September 30 was $478 million, or 172% of non-performing loans.
Consolidated total assets at September 30 were $27.0 billion,
including $19.7 billion of loans. Consolidated total deposits were $19.5
billion.
Shareholders' equity at September 30 was $2.2 billion, or 8.1% of
total assets. The Tier 1 leverage ratio (Tier 1 or core capital as a
percentage of quarterly average assets) was 7.9% for the quarter. Tier 1
capital at September 30 was 9.1% of risk-adjusted assets and total
capital was 13.2% of risk-adjusted assets, compared to minimum regulatory
requirements of 4% and 8% respectively.
The one-time charges associated with the acquisitions were $195
million in the first quarter and $59 million in the second quarter.
-30-
Page 6 of 7
<PAGE>
CoreStates Financial Corp
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
1994 1993(a) 1994 1993(a)
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Income before cumulative
effect of a change in
accounting principle $104,221 $ 96,081 $137,317(b) $267,753
========= ========= ======== ========
Net income $104,221 $ 96,081 $133,887(c) $254,743(d)
========= ========= ======== ========
Per Share
- ---------
Income before cumulative
effect of a change in
accounting principle $0.74 $0.66 $0.97(b) $1.84
===== ===== ===== =====
Net income $0.74 $0.66 $0.95(c) $1.75(d)
===== ===== ===== =====
Average number of shares
outstanding 141,033 145,702 142,581 145,431
======= ======= ======= =======
</TABLE>
(a) Restated to include Constellation Bancorp which was acquired on March 16,
1994 and Independence Bancorp which was acquired on June 27, 1994. Both
transactions were accounted for as a pooling of interests.
(b) Excluding after-tax merger-related charges of $127.8 million, or $0.89 per
share, recorded in the first quarter of 1994 for the Constellation
acquisition and $39.6 million, or $0.28 per share, recorded in the second
quarter of 1994 for the Independence acquisition, selected financial
results for the nine months of 1994 compared to the prior year follows:
<TABLE>
<CAPTION>
1994 1993
------ -------
<S> <C> <C>
Income before cumulative effect of
a change in accounting principle $304,764 $267,753
Per share $2.14 $1.84
</TABLE>
(c) Reflects Independence's writedown to fair value for certain mortgage
securities deemed to be impaired under FASB's 1994 interpretation of FAS
115.
(d) Reflects the adoption of Statement of Financial Accounting Standards No.
112, "Employers' Accounting for Postemployment Benefits" (FAS 112). As
required under FAS 112, CoreStates recognized immediately the January 1,
1993 transitional liability of $20.0 million pre-tax, $13.0 million after-
tax or 0.09 per share, as the cumulative effect of a change in accounting
principle in the first quarter of 1993.
Page 7 of 7
