<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Exhibit Index is on Page 19
For the fiscal year ended December 31, 1996
Commission file number 0-6879
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
MERIDIAN BANCORP, INC. SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
CORESTATES FINANCIAL CORP
Centre Square West
1500 Market Street
Philadelphia, PA 19101
<PAGE>
REQUIRED INFORMATION
The following financial statements and exhibits are filed as part of this
report:
(a) Item 4 Financial Statements
Report of Independent Auditors
Statement of Net Assets Available for Benefits, with Fund
Information, January 1, 1997 and December
31, 1996
Statement of Net Assets Available for Benefits, with Fund
Information, December 31, 1995
Statement of Changes in Net Assets Available for Benefits, with
Fund Information, one-day period ended January 1, 1997
Statement of Changes in Net Assets Available for Benefits, with
Fund Information, December 31, 1996
Statement of Changes in Net Assets Available for Benefits, with
Fund Information, December 31, 1995
Notes to Financial Statements
Supplemental Schedules
Line 27a -- Assets held for Investment Purposes as of
December 31, 1996
Line 27d -- Reportable Transactions, year ended
December 31, 1996 and one-day period ended January 1, 1997
SIGNATURE
(b) EXHIBIT INDEX
(c) Exhibit 23(a) - Consent of Independent Auditors
(D) Exhibit 23(b) - Consent of Certified Public Accountants
Financial statements schedules not included with this report have been omitted
because they are not applicable or the required information is shown in the
financial statements or notes thereto.
<PAGE>
Financial Statements
and Supplemental Schedules
Meridian Bancorp, Inc.
Savings Plan
One-day period ended January 1, 1997 and years
ended December 31, 1996 and 1995
with Report of Independent Auditors
<PAGE>
Meridian Bancorp, Inc.
Savings Plan
Financial Statements
and Supplemental Schedules
One-day period ended January 1,
1997 and years ended December 31,
1996 and 1995,
Contents
<TABLE>
<S> <C>
Report of Independent Auditors.................................................1
Audited Financial Statements
Statement of Net Assets Available for Benefits, with Fund Information,
January 1, 1997 and December 31, 1996........................................2
Statement of Net Assets Available for Benefits, with Fund Information,
December 31, 1995............................................................3
Statement of Changes in Net Assets Available for Benefits,
with Fund Information, one-day period ended January 1, 1997..................4
Statement of Changes in Net Assets Available for Benefits,
with Fund Information, December 31, 1996.....................................5
Statement of Changes in Net Assets Available for Benefits,
with Fund Information, December 31, 1995.....................................6
Notes to Financial Statements..................................................7
Supplemental Schedules
Line 27a--Assets Held for Investment Purposes as of December 31, 1996.........15
Line 27d--Reportable Transactions, year ended December 31, 1996 and
one-day period ended January 1, 1997........................................16
</TABLE>
<PAGE>
Report of Independent Auditors
To the Board of Directors
CoreStates Financial Corp
We have audited the accompanying statements of net assets available for benefits
of the Meridian Bancorp, Inc. Savings Plan (the Plan) as of January 1, 1997 and
December 31, 1996, and the related statements of changes in net assets available
for benefits for the one-day period and year then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audit. The
financial statements of the Plan for the year ended December 31, 1995 were
audited by other auditors whose report, dated May 16, 1996, expressed an
unqualified opinion on those statements.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
January 1, 1997 and December 31, 1996 and the changes in net assets available
for benefits for the one-day period and year then ended in conformity with
generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of January 1, 1997 and December 31,
1996 and reportable transactions for the one-day period and year then ended, are
presented for purposes of complying with the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, and are not a required part of the basic financial
statements. The Fund Information in the statement of net assets available for
benefits and the statement of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for plan
benefits of each fund. The supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in our audits of the financial
statements as indicated above and, in our opinion, are fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
June 13, 1997
Philadelphia, Pennsylvania
1
<PAGE>
Meridian Bancorp, Inc.
Savings Plan
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1996 and January 1, 1997
<TABLE>
<CAPTION>
Balance at 1996
January 1, 1997 --------------------------------------------------------
Total Fund A Fund B Fund C
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Cash and cash equivalents $ -- $ 171,966 $ -- $ 42,864 $ --
Investments, at fair value (cost $122,078,461):
CoreStates Financial Corp common stock -- 94,795,107 -- -- 94,795,107
Short-term investments -- 31,789,599 291,026 27,541,440 79,544
Mutual funds -- 56,329,971 48,298,206 -- --
Common stock -- 243,580 243,580 -- --
American depository receipts -- 5,231 5,231 -- --
Employee loans -- 8,315,062 -- -- --
----------------------------------------------------------------------------
Total investments -- 191,478,550 48,838,043 27,541,440 94,874,651
Receivables:
Contribution receivable -- 1,623,391 560,706 282,566 604,929
Accrued investment income -- 1,024,411 92,100 -- 886,868
----------------------------------------------------------------------------
Total assets -- 194,298,318 49,490,849 27,866,870 96,366,448
Liabilities
Overdrafts -- 420,563 264,774 -- 78,554
----------------------------------------------------------------------------
Total liabilities -- 420,563 264,774 -- 78,554
----------------------------------------------------------------------------
Net assets available for Plan benefits $ -- $193,877,755 $ 49,226,075 $ 27,866,870 $ 96,287,894
============================================================================
<CAPTION>
1996
----------------------------------------------------------------------------
Segregated Rollover
Contribution Payment Contribution
Fund D Loan Fund Fund Fund Fund
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents $ -- $ -- $ -- $ 128,653 $ 449
Investments, at fair value (cost $130,388,666):
CoreStates Financial Corp common stock -- -- -- -- --
Short-term investments 69,019 765,394 1,873,849 1,062,206 107,121
Mutual funds 8,031,765 -- -- -- --
Common stock -- -- -- -- --
American depository receipts -- -- -- -- --
Employee loans -- 8,315,062 -- -- --
----------------------------------------------------------------------------
Total investments 8,100,784 9,080,456 1,873,849 1,062,206 107,121
Receivables:
Contribution receivable 122,132 -- 53,058 -- --
Accrued investment income 43,935 1,508 -- -- --
----------------------------------------------------------------------------
Total assets 8,266,851 9,081,964 1,926,907 1,190,859 107,570
Liabilities
Overdrafts 59,590 17,034 611 -- --
----------------------------------------------------------------------------
Total liabilities 59,590 17,034 611 -- --
----------------------------------------------------------------------------
Net assets available for Plan benefits $8,207,261 $9,064,930 $1,926,296 $1,190,859 $ 107,570
============================================================================
</TABLE>
See accompanying notes.
2
<PAGE>
Meridian Bancorp, Inc.
Savings Plan
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1995
<TABLE>
<CAPTION>
Total Fund A Fund B Fund C Fund D
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Cash and cash equivalents $ 1,039,333 $ 4,971 $ 1,007,867 $ -- $ 26,430
Investments, at fair value (cost $132,601,926):
Meridian Bancorp, Inc. common stock 91,641,939 -- -- 91,641,939 --
Corporate bonds -- -- -- -- --
Short-term investments 26,667,625 2,618 22,609,812 103,029 13,611
U.S. Government securities 4,992,800 -- 4,992,800 -- --
Mutual funds 53,039,687 44,082,891 -- -- 8,956,796
Common stock 270,127 270,127 -- -- --
American depository receipts 3,779 3,779 -- -- --
Employee loans 11,467,707 -- -- -- --
------------------------------------------------------------------------
Total investments 188,083,664 44,359,415 27,602,612 91,744,968 8,970,407
Receivables:
Employer contribution receivable 1,253,676 407,567 261,281 477,650 107,178
Accrued investment income 277,370 205 197,279 1,210 142
------------------------------------------------------------------------
Total assets 190,654,043 44,772,158 29,069,039 92,223,828 9,104,157
Liabilities
Overdrafts 175,498 -- -- 75,299 --
------------------------------------------------------------------------
Total liabilities 175,498 -- -- 75,299 --
------------------------------------------------------------------------
Net assets available for Plan benefits $190,478,545 $ 44,772,158 $ 29,069,039 $ 92,148,529 $ 9,104,157
========================================================================
<CAPTION>
Segregated Rollover
Contribution Payment Contribution
Loan Fund Fund Fund Fund
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Cash and cash equivalents $ -- $ -- $ -- $ 65
Investments, at fair value (cost $132,601,926):
Meridian Bancorp, Inc. common stock -- -- -- --
Corporate bonds -- -- -- --
Short-term investments 982,092 1,708,882 1,223,263 24,318
U.S. Government securities -- -- -- --
Mutual funds -- -- -- --
Common stock -- -- -- --
American depository receipts -- -- -- --
Employee loans 11,467,707 -- -- --
-----------------------------------------------------------------
Total investments 12,449,799 1,708,882 1,223,263 24,318
Receivables:
Employer contribution receivable -- -- -- --
Accrued investment income 68,910 6,413 3,103 108
-----------------------------------------------------------------
Total assets 12,518,709 1,715,295 1,226,366 24,491
Liabilities
Overdrafts 44,586 55,613 -- --
-----------------------------------------------------------------
Total liabilities 44,586 55,613 -- --
-----------------------------------------------------------------
Net assets available for Plan benefits $12,474,123 $ 1,659,682 $ 1,226,366 $ 24,491
=================================================================
</TABLE>
See accompanying notes.
<PAGE>
Meridian Bancorp, Inc.
Savings Plan
Statements of Changes in Net Assets Available for Benefits, with Fund
Information
One-day period ended January 1, 1997
<TABLE>
<CAPTION>
Total Fund A Fund B Fund C Fund D
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net assets available for Plan benefits
at beginning of period $ 193,877,755 $ 49,226,075 $ 27,866,870 $ 96,287,894 $ 8,207,261
Transfer of assets (193,877,755) (49,226,075) (27,866,870) (96,287,894) (8,207,261)
--------------------------------------------------------------------------------
Net assets available for Plan benefits at end of
period $ -- $ -- $ -- $ -- $ --
================================================================================
<CAPTION>
Segregated Rollover
Contribution Payment Contribution
Loan Fund Fund Fund Fund
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net assets available for Plan benefits
at beginning of period $ 9,064,930 $ 1,926,296 $ 1,190,859 $ 107,570
Transfer of assets (9,064,930) (1,926,296) (1,190,859) (107,570)
---------------------------------------------------------------------------
Net assets available for Plan benefits at end of
period $ -- $ -- $ -- $ --
===========================================================================
</TABLE>
See accompanying notes.
4
<PAGE>
Meridian Bancorp, Inc.
Savings Plan
Statements of Changes in Net Assets Available for Benefits,
with Fund Information
December 31, 1996
<TABLE>
<CAPTION>
Total Fund A Fund B Fund C Fund D
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Contributions:
Employer $ 5,791,764 $ 1,513,542 $ 840,037 $ 1,701,385 $ 355,645
Employee 8,493,028 -- -- -- --
Allocation of employees' contributions -- 2,453,301 1,484,284 2,945,924 648,296
Allocation of employer's contributions -- 498,642 270,347 557,913 113,209
--------------------------------------------------------------------------------
Total contributions 14,284,792 4,465,485 2,594,668 5,205,222 1,117,150
Investment income:
Dividends on CoreStates Financial Corp
common stock 3,500,920 -- -- 3,500,920 --
Interest 3,110,924 11,461 1,471,096 19,447 534.942
Dividend income 3,930,463 3,930,463 -- -- --
--------------------------------------------------------------------------------
Total investment income 10,541,633 3,941,924 1,471,096 3,520,367 534,942
Net realized and unrealized appreciation
(depreciation) in the fair value of investments 33,195,354 7,252,214 8,706 26,230,248 (295,814)
Other income/reimbursement of trustee fees 292,163 118,410 142,339 30,058 1,356
Participants' withdrawals (54,703,258) (13,046,547) (9,878,812) (24,853,802) (2,138,309)
Administrative fees and expenses (211,474) (17,134) (30,088) (79,656) (22,196)
--------------------------------------------------------------------------------
Increase (decrease) in net assets before transfers 3,399,210 2,714,352 (5,692,091) 10,052,437 (802,871)
Net participants' interfund transfers -- 1,739,565 4,489,922 (5,913,072) (94,025)
--------------------------------------------------------------------------------
Net assets available for Plan benefits
at beginning of year 190,478,545 44,772,158 29,069,039 92,148,529 9,104,157
--------------------------------------------------------------------------------
Net assets available for Plan benefits
at end of year $ 193,877,755 $ 49,226,075 $ 27,866,870 $ 96,287,894 $ 8,207,261
================================================================================
<CAPTION>
Segregated Rollover
Contribution Payment Contribution
Loan Fund Fund Fund Fund
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contributions:
Employer $ -- $ 1,381,155 $ -- $ --
Employee -- 8,234,665 -- 258,363
Allocation of employees' contributions -- (7,531,805) -- --
Allocation of employer's contributions -- (1,440,111) -- --
---------------------------------------------------------------------
Total contributions -- 643,904 -- 258,363
Investment income:
Dividends on CoreStates Financial Corp
common stock -- -- -- --
Interest 946,714 -- 51,018 1,661
Dividend income -- 73,911 -- --
---------------------------------------------------------------------
Total investment income 946,714 73,911 51,018 1,661
Net realized and unrealized appreciation
(depreciation) in the fair value of investments -- -- -- --
Other income/reimbursement of trustee fees -- -- -- --
Participants' withdrawals (3,715,066) (368,122) (702,600) --
Administrative fees and expenses (62,400) -- -- --
---------------------------------------------------------------------
Increase (decrease) in net assets before transfers (2,830,752) 349,693 (651,582) 260,024
Net participants' interfund transfers (578,441) (83,079) 616,075 (176,945)
---------------------------------------------------------------------
Net assets available for Plan benefits
at beginning of year 12,474,123 1,659,682 1,226,366 24,491
---------------------------------------------------------------------
Net assets available for Plan benefits
at end of year $ 9,064,930 $ 1,926,296 $ 1,190,859 $ 107,570
=====================================================================
</TABLE>
See accompanying notes
5
<PAGE>
Meridian Bancorp, Inc.
Savings Plan
Statements of Changes in Net Assets Available for Benefits,
with Fund Information
December 31, 1995
<TABLE>
<CAPTION>
Total Fund A Fund B Fund C
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contributions:
Employer $ 5,022,119 $ 1,588,665 $ 1,093,021 $ 1,813,896
Employee 9,809,432 -- -- --
Allocation of employees' contributions -- 3,581,399 1,958,456 3,254,532
-----------------------------------------------------------------------
Total contributions 14,831,551 5,170,064 3,051,477 5,068,428
Investment income:
Dividends on Meridian Bancorp, Inc.
common stock 3,061,518 -- -- 3,061,518
Interest 3,106,875 46,580 1,536,951 32,967
Dividends 3,799,195 3,799,195 -- --
-----------------------------------------------------------------------
Total investment income 9,967,588 3,845,775 1,536,951 3,094,485
Net realized and unrealized appreciation
(depreciation) in the fair value of investments 48,570,745 8,179,204 302,520 39,303,171
Other income/reimbursement of trustee fees 828,325 163,194 155,669 465,344
Participants' withdrawals (28,190,397) (5,947,668) (5,680,461) (10,067,163)
Loan principal repayments 3,614,563 -- -- --
Administrative fees and expenses (209,260) (37,703) (27,780) (64,467)
-----------------------------------------------------------------------
Increase (decrease) in net assets before transfers 49,413,115 11,372,866 (661,624) 37,799,798
Net participants' interfund transfers -- (372,979) (437,682) 1,064,230
-----------------------------------------------------------------------
Net assets available for Plan benefits
at beginning of year 141,065,430 33,772,271 30,168,345 53,284,501
-----------------------------------------------------------------------
Net assets available for Plan benefits
at end of year $ 190,478,545 $ 44,772,158 $ 29,069,039 $ 92,148,529
=======================================================================
<CAPTION>
Segregated Rollover
Contribution Payment Contribution
Fund D Loan Fund Fund Fund Fund
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Contributions:
Employer $ 439,644 $ -- $ 86,893 $ -- $ --
Employee -- -- 9,365,258 -- 444,174
Allocation of employees' contributions 832,818 -- (9,627,205) -- --
--------------------------------------------------------------------------
Total contributions 1,272,462 -- (175,054) -- 444,174
Investment income:
Dividends on Meridian Bancorp, Inc.
common stock -- -- -- -- --
Interest 544,734 842,288 67,520 31,299 4,536
Dividends -- -- -- -- --
--------------------------------------------------------------------------
Total investment income 544,734 842,288 67,520 31,299 4,536
Net realized and unrealized appreciation
(depreciation) in the fair value of investments 796,291 (10,441) -- -- --
Other income/reimbursement of trustee fees 43,439 85 54 540 --
Participants' withdrawals (1,307,856) (4,702,402) (243,670) (241,177) --
Loan principal repayments -- 3,614,563 -- -- --
Administrative fees and expenses (8,314) (70,210) -- (786) --
--------------------------------------------------------------------------
Increase (decrease) in net assets before transfers 1,340,756 (326,117) (351,150) (210,124) 448,710
Net participants' interfund transfers (201,372) (323,735) (5,128) 910,235 (633,569)
--------------------------------------------------------------------------
Net assets available for Plan benefits
at beginning of year 7,964,773 13,123,975 2,015,960 526,255 209,350
--------------------------------------------------------------------------
Net assets available for Plan benefits
at end of year $ 9,104,157 $ 12,474,123 $ 1,659,682 $ 1,226,366 $ 24,491
==========================================================================
</TABLE>
See accompanying notes.
6
<PAGE>
Meridian Bancorp, Inc.
Savings Plan
Notes to Financial Statements
Years ended December 31, 1996 and 1995
1. Description of Plan
The following brief description of the Plan is provided for general information
only. Participants should refer to the Plan agreement for more complete
information.
General
The Plan is a voluntary defined contribution plan which was established to
encourage and assist eligible employees in adopting a regular savings program to
help provide additional security for their retirement. The Plan meets the
requirements of the Employee Retirement Income Security Act of 1974 (ERISA) and
has received qualification as a tax-exempt organization (see note 5).
On April 9, 1996, the sponsor of the Plan, Meridian Bancorp, Inc., was acquired
by CoreStates Financial Corp (the Company). The Plan remained in effect for the
remainder of 1996. On January 1, 1997, the Plan was merged into the CoreStates
Employee Stock Ownership and Savings Plan (see note 6).
Contributions
Employee Contributions
Under the terms of the Plan, as existing through December 31, 1996, a
participant may direct the Company to make basic contributions to the
participant's account of up to 10% of the participant's earnings on a before-tax
basis, as authorized by a salary reduction agreement executed by the participant
and adopted by the plan administrator. A participant may also elect to make
supplemental contributions to his account of up to 10% of earnings on an after-
tax basis. In addition, the Plan places a ceiling of 16% of eligible
compensation on the combined before-tax and after-tax contributions of the
participant.
Company Contributions
Company matching contributions are made to participant accounts for all eligible
employees meeting service requirements. Eligible employees who have been
employed for a minimum of two years are eligible to receive matching
contributions. In 1995 and 1996, the Company contributed an amount which
equaled 100% of a
7
<PAGE>
Meridian Bancorp, Inc.
Savings Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
Contributions (continued)
Company Contributions (continued)
participant's basic contributions up to a maximum Company matching contribution
of 4% of the employee's earnings. Beginning April 1, 1996, the funding policy
was amended to allow the Company's contribution to range from 50% to 150% of a
participant's basic contributions up to a maximum Company contribution of 4% of
the employee's earnings. For employees whose earnings consist solely of
commissions, there is no Company matching. Company contributions must be made
only from its profits of the current year and/or accumulated retained earnings.
The matching contribution will be allocated among the funds in the same
proportion as the participant had elected for any basic contribution.
Investment Options
At the time an employee elects to become a participant, the participant elects
to invest any contributions, in whole percentage increments or a flat dollar
amount, to any or all of Funds A - D described below:
Fund A - consists primarily of investments in mutual funds designed to
invest primarily in common stocks.
Fund B - consists primarily of a mutual fund that invests in short-term
investments, foreign notes, certificates of deposit maturing within one
year, Treasury bonds, Treasury notes, other short-term government
obligations, commercial paper, repurchase agreements, asset-backed
securities, and a money market account.
Fund C - At December 31, 1995, Fund C consisted primarily of investments in
Meridian Bancorp, Inc. common stock. On April 9, 1996, as a result of the
Meridian Bancorp, Inc. merger with CoreStates Financial Corp, each Meridian
Bancorp, Inc. common share was converted to 1.225 CoreStates Financial Corp
common shares. Consequently, subsequent to April 9, 1996, Fund C consisted
primarily of CoreStates Financial Corp common stock.
8
<PAGE>
Meridian Bancorp, Inc.
Savings Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
Investment Options (continued)
Fund D - consists of investments in mutual funds designed to invest in
obligations of the U.S. Government and its agencies, and prime or first
quality commercial paper, debt instruments of U.S. corporations, asset
backed securities, CMOs, and money market accounts.
Other Plan Funds
Loan fund - consists of loans granted to participants on available
balances. The repayments of principal and interest on the loans may be
invested in short-term investments. Participants have the option of
borrowing a maximum of the lesser of $50,000 or 50% of their outstanding
balance.
Contribution fund - primarily represents contributions received and held in
short-term investments until such contributions are allocated to other
funds in accordance with the employees' election.
Segregated payment fund - represents balances of participants who have
terminated their plan participation and who will not receive their
distribution at the time of termination. Such balances are retained until
distribution is required and are invested in short-term instruments.
Rollover contribution fund - represents employee contributions from
qualified plans of certain merged companies and/or new employees. This fund
invests in short-term investments until such funds are allocated to the
other funds in accordance with the employees' rollover election.
In addition, the trustee may, at its discretion, invest a portion of any fund in
cash and other forms of short-term securities.
Each participant may transfer all or a portion of his balance in any one or more
funds to another fund or funds. Elections for this purpose must be made by the
15/th/ of the month prior to end of each quarter during the Plan year. The
transfer will be made as of the first day of the quarter following such an
election.
9
<PAGE>
Meridian Bancorp, Inc.
Savings Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
Vesting
Employee contributions, rollovers, and qualified voluntary employee contribution
accounts, as affected by investment results, are fully vested at all times.
Expenses
The expenses of the plan, including but not limited to legal and accounting
fees, shall be paid by the Plan unless voluntarily paid by the Company.
Payment of Benefits
Upon termination of employment, a participant may receive vested benefits as a
lump-sum payment or if the participant's vested accrued benefit exceeds $3,500,
the participant may elect to receive equal annual installments over a period not
exceeding ten years.
Loans
Active participants, terminated participants, and beneficiaries with accrued
benefits under the Plan, may borrow funds from the Plan subject to requirements
of the Plan. Loans advanced against employees' vested benefits in the Plan are
deducted from the amount of any benefits which are payable to the participant
upon termination.
Related Party Transactions
Prior to April 9, 1996, Meridian Asset Management, Inc. (a wholly-owned
subsidiary of Meridian Bancorp, Inc.), through its subsidiaries, acted as
trustee to the Plan. After the merger of Meridian Bancorp, Inc. and CoreStates
Financial Corp, CoreStates Asset Management (a division of CoreStates Financial
Corp), assumed the duties of trustee for the Plan and provided for the
management, investment, and reinvestment of the Plan's trust funds.
CoreStates Financial Corp provides investment advisory and custodial services
for the CoreFund group of Funds.
2. Summary of Accounting Policies
Basis of Presentation
The accompanying financial statements of the Meridian Bancorp, Inc. Savings Plan
(the Plan) have been prepared on the accrual basis and present the net assets
available in the Plan and the changes in those net assets.
10
<PAGE>
Meridian Bancorp, Inc.
Savings Plan
Notes to Financial Statements (continued)
2. Summary of Accounting Policies (continued)
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying
schedules. Actual results could differ from those estimates.
Investments
Investments are carried at fair value. The value of common stock and debt
securities is the last reported sales price on the last day of the year. Mutual
funds are valued at net asset value at the close of business on the last
business day of the Plan year. Employee loans are stated at their unpaid
principal balance which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on an accrual basis. Dividends are recorded on the
ex-dividend date.
Reclassification
Certain prior year amounts were reclassified to conform to current year format.
3. Investments
<TABLE>
<CAPTION>
Investments at Fair Value as Determined
by Quoted Market Price 1996 1995
- -----------------------------------------------------------------------------
<S> <C> <C>
Domestic common stock:
Hercules Inc. Common $ 173,216 $ 225,782
Monsanto Co. Common 70,364 44,345
----------------------
243,580 270,127
American depository receipts:
British Pete PLC American Depository Share $ 5,231 $ 3,779
</TABLE>
11
<PAGE>
Meridian Bancorp, Inc.
Savings Plan
Notes to Financial Statements (continued)
3. Investments (continued)
<TABLE>
<CAPTION>
Investments at Fair Value as Determined
by Quoted Market Price 1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C>
Mutual funds:
Conestoga Equity Fund (dividend reinvestment) * - 44,082,891
Conestoga Bond Fund (dividend reinvestment) - 8,956,796
CoreFund Equity Fund Class Y * 48,298,206 -
CoreFund Bond Fund Class Y 8,031,765 -
----------------------------
56,329,971 53,039,687
CoreStates Financial Corp common stock
(1,827,376 shares) * 94,795,107 -
Meridian Bancorp, Inc. common stock
(1,970,794 shares) * - 91,641,939
Short-term investments:
Meridian Market Rate for Employee Benefit
Accounts (money market) - 4,057,813
Conestoga Cash Management Fund * - 22,609,812
CoreFund Cash Reserve Class Y * 30,883,628 -
CoreStates TR Money Market Fund 905,971 -
----------------------------
31,789,599 26,667,625
U.S. Government securities:
U.S. Treasury notes:
4.00%, due 1/31/96 - 3,996,240
4.25%, due 5/15/96 - 996,560
----------------------------
4,992,800
Employee loans 8,315,062 11,467,707
----------------------------
Total investments $191,478,550 $188,083,664
============================
</TABLE>
* Represents greater than 5% of net assets available for benefits.
12
<PAGE>
Meridian Bancorp, Inc.
Savings Plan
Notes to Financial Statements (continued)
3. Investments (continued)
The Plan's investments are held by a bank-administered trust fund. During 1996
and 1995, the Plan's investments (including investments bought, sold, as well as
held during the year) appreciated (depreciated) in fair value as follows:
<TABLE>
<CAPTION>
Net
Appreciation in
Fair Value
During
1996 and 1995
------------------------------------
<S> <C> <C>
Fair value as determined by quoted
market prices:
Common stock $26,230,248 $39,303,171
Mutual funds 6,965,106 9,267,574
------------------------------------
$33,195,354 $48,570,745
====================================
</TABLE>
4. Plan Termination
CoreStates has the authority to terminate the Plan at any time. If the Plan were
to be terminated, each participant would remain fully entitled to the value of
his or her account.
5. Income Tax Status
The Plan has received notification from the Internal Revenue Service that it
qualifies as a tax-exempt organization under Sections 401(a), 401(k), and 501(a)
of the Internal Revenue Code. As such, no provision for federal income taxes has
been included in the financial statements.
Participants are not subject to federal income tax on employer contributions or
the income allocated to their account until they receive a distribution of
benefits or make a withdrawal.
13
<PAGE>
Meridian Bancorp, Inc.
Savings Plan
Notes to Financial Statements (continued)
6. Subsequent Events
Effective January 1, 1997, the Plan was merged into, and participants of the
Plan became eligible to participate in, the CoreStates Employee Stock Ownership
and Savings Plan, as a result of the April 9, 1996 acquisition by CoreStates
Financial Corp of Meridian Bancorp, Inc. As a result, the net assets of the Plan
were transferred into the CoreStates Employee Stock Ownership and Savings Plan
as of January 1, 1997. The transfer of assets does not constitute a termination
of the Plan.
14
<PAGE>
Meridian Bancorp, Inc.
Savings Plan
Line 27a--Assets Held for Investment Purposes
December 31, 1996
<TABLE>
<CAPTION>
Identity of Issue, Borrower, Current
Lessor or Similar Party Cost Value
- ----------------------------------------------------------------------
<S> <C> <C>
Domestic common stock:
Hercules Inc. Common $ 71,059 $ 173,216
Monsanto Co. Common 29,943 70,364
------------------------------
101,002 243,580
American depository receipts:
British Pete PLC American
Depository share 3,159 5,231
Mutual funds:
CoreFund Equity Fund Class Y* 42,313,815 48,298,206
CoreFund Bond Fund Class Y* 7,739,330 8,031,765
------------------------------
50,053,145 56,329,971
CoreStates Financial Corp common stock* 31,816,494 94,795,107
Short-term investments:
CoreFunds Cash Reserve Class Y* 30,883,628 30,883,628
CoreStates TR Money Market Fund* 905,971 905,971
------------------------------
31,789,599 31,789,599
Employee loans 8,315,062 8,315,062
------------------------------
Total investments $122,078,461 $191,478,550
==============================
</TABLE>
* Indicates party-in-interest to the Plan.
15
<PAGE>
Meridian Bancorp, Inc.
Savings Plan
Line 27d--Reportable Transactions
Year ended December 31, 1996
<TABLE>
<CAPTION>
(A) (A)
Identity of Purchase Selling Gain
Parties Involved Description of Assets Price Price (Loss)
- ----------------------------------------------------------------------------------------------------------
Category III--A series of transactions in a security issue aggregating in excess of 5% of plan assets
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CoreFund Cash Reserve Class Y* Purchased 18,457,226 units;
sold 10,932,289 units $18,457,226 $10,932,289 $ --
CoreStates TR Money Market Fund* Purchased 7,361,136 units;
sold 6,793,427 units 7,361,136 6,793,427 --
CoreStates Financial Corp* Purchased 40,984 units;
sold 334,006 units 1,676,836 13,607,237 7,928,428
Meridian Money Market* Purchased 33,104,616 units;
sold 28,070,836 units 33,104,616 35,123,702 --
CoreFund Equity Fund Class Y* Purchased 298,803 units;
sold 404,460 units 5,317,032 7,126,602 779,743
</TABLE>
* Indicates party-in-interest to the Plan.
There were no Category I, II, or IV transactions during the year ended December
31, 1996.
(A) Commissions and fees related to purchases and sales of investments are
included in the cost of the investment or the proceeds from the sale and are
not separately identified.
There were no reportable transactions during the one-day period ended
January 1, 1997.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Trustee has duly caused this annual report to be signed on its behalf by the
undersigned hereunto authorized.
MERIDIAN TRUST COMPANY, as Trustee
for MERIDIAN BANCORP, INC. SAVINGS
PLAN
Date: June 27, 1997 By:/s/ Vikram H. Dewan
------------------------------
Vikram H. Dewan,
Executive Vice President
<PAGE>
CoreStates Financial Corp
EXHIBIT INDEX
Sequentially
Exhibit No. Description Numbered
23(a) Consent of Independent Auditors 18
23(b) Consent of Certified Public Accountants 19
17
<PAGE>
Exhibit 23(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-12292) pertaining to the Meridian Bancorp, Inc. Savings Plan of
CoreStates Financial Corp of our report dated June 13, 1997, with respect to the
financial statements and schedules of the Meridian Bancorp, Inc. Savings Plan
included in this Annual Report (Form 11-K) for the year ended December 31, 1996.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
June 27, 1997
18
<PAGE>
Exhibit 23(b)
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
CoreStates Financial Corp
We consent to incorporation by reference in the Registration Statement
(Registration No. 33-12292) on Form S-8 of Meridian Bancorp, Inc. of our report
dated May 16, 1996 relating to the statements of net assets available for plan
benefits of the Meridian Bancorp, Inc. Savings Plan as of December 31, 1995 and
1994, and the related statements of changes in net assets available for plan
benefits for each of the years in the three-year period ended December 31, 1995,
which report appears in the December 31, 1995 annual report on Form 11-K of the
Meridian Bancorp, Inc. Savings Plan.
/s/ KPMG Peat Marwick LLP
Philadelphia, Pennsylvania
June 27, 1997
19
