<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
April 17, 1995
Date of Report (Date of earliest event reported)
Commission File Number 1-9718
PNC BANK CORP.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
PENNSYLVANIA 25-1435979
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
</TABLE>
ONE PNC PLAZA
FIFTH AVENUE AND WOOD STREET
PITTSBURGH, PENNSYLVANIA 15265
(Address of principal executive offices) (Zip Code)
(412) 762-3900
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 5. OTHER EVENTS
1995 First Quarter Financial Results
On April 17, 1995, PNC Bank Corp. ("Corporation") reported results of
operations for the three months ended March 31, 1995. A copy of the
earnings press release issued by the Corporation is attached as
Exhibit 99 and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
The exhibit listed on the Exhibit Index on page 4 of this Form 8-K is
filed herewith.
2
<PAGE> 3
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 thereunto duly authorized.
PNC BANK CORP.
(Registrant)
Date: April 20, 1995 By /s/ Robert L. Haunschild
---------------------------
Robert L. Haunschild
Senior Vice President and
Chief Financial Officer
3
<PAGE> 4
EXHIBIT INDEX
99 A copy of the earnings press release issued by the Corporation on
April 17, 1995, with respect to the results of operations for the three
months ended March 31, 1995, is filed herewith.
4
<PAGE> 1
EXHIBIT 99
PITTSBURGH, April 17, 1995 - PNC Bank Corp. (NYSE: PNC) today reported
1995 first quarter net income of $125.7 million, or $.54 per fully diluted
share, compared with $205.7 million, or $.86 per fully diluted share, a year
ago. Return on average assets and return on average common shareholders' equity
were .83 percent and 11.71 percent, respectively, and the after-tax profit
margin was 20 percent.
Thomas H. O'Brien, charirman and chief executive officer, said, "First
quarter results were consistent with our expectations and reflect the impact of
strategic actions taken to reduce sensitivity to further rate increases and to
downsize our securities portfolio.
"During the quarter we also continued to make significant progress
pursuing other strategic initiatives. We enhanced our asset management
capabilities with the addition of BlackRock Financial Management; targeted an
attractive customer base with our planned acquisition of Chemical Bank New
Jersey; and entered into an agreement with two innovators in the credit card
industry that will increase our credit card processing and marketing
capabilities."
Taxable-equivalent net interest income totaled $392.2 million in the
first quarter of 1995 compared with $432.7 million in the fourth quarter of
1994. The net interest margin was 2.72 percent compared with 2.92 percent in
the previous quarter. These declines reflect the cost of actions taken in the
fourth quarter of 1994 to reduce interest rate sensitivity and
<PAGE> 2
higher deposit and borrowing costs. The increase in deposit costs primarily
reflects customers shifting balances from lower-rate transaction products to
higher-rate alternatives. In the first quarter of 1994, taxable-equivalent net
interest income and net interest margin were $505.8 million and 3.68 percent,
respectively.
Noninterest income, excluding securities transactions, increased $5.9
million to $234.0 million in the first quarter of 1995 compared with the
year-earlier period. Investment management and trust income increased 8.5
percent to $79.1 million, primarily due to the BlackRock acquisition. BlackRock
is expected to add approximately 20 percent to investment management and trust
income on an annualized basis. Service charges, fees and commissions increased
1.9 percent to $89.6 million. Mortgage banking income increased 17.8 percent to
$44.7 million, due to higher gains on sales of mortgage servicing. Other
noninterest income declined $8.8 million in the comparison primarily due to
lower venture capital income.
Noninterest expense increased 2.0 percent to $435.6 million for the
first quarter of 1995 compared with the year-earlier period. Excluding
acquisitions, noninterest expense declined 4.0 percent in the comparison.
Asset quality remained strong during the quarter. The allowance for
credit losses was $981 million at March 31, 1995 and, as a percent of
nonperforming loans, increased to 325 percent compared with 314 percent at
year-end 1994 and 270 percent at March 31, 1994. Nonperforming assets totaled
$447 million at March 31, 1995 and were flat compared with year-end 1994. The
ratio of nonperforming assets to total loans and foreclosed assets was 1.25
percent at March 31, 1995 and December 31, 1994, and 1.56 percent a year ago.
Net charge-offs totaled $22 million in the first quarter of 1995 compared with
$23 million in the year-earlier period.
PNC Bank's total assets declined $2.1 billion during the quarter to
$62.1 billion at March 31, 1995 due to a reduction of the securities portfolio.
Average loans increased 10.3 percent during the first quarter of 1995 compared
with the first quarter 1994. Excluding acquisitions, average loans increased
6.2 percent in the comparison. Average loans for the
<PAGE> 3
first quarter represented 61.5 percent of average earning assets compared with
58.0 percent a year ago.
At March 31, 1995, the leverage capital ratio was 6.3 percent, and Tier
I and total risk-based capital ratios are estimated to be 8.3 percent and 11.2
percent, respectively. These ratios declined from year-end 1994 primarily due
to the BlackRock acquisition. Common shares outstanding totaled 229.1 million
and 233.2 million at March 31, 1995 and December 31, 1994, respectively,
reflecting the impact of the corporation's share repurchase program.
During the first quarter of 1995, the corporation announced a
definitive agreement to acquire the Chemical Bank franchise in southern and
central New Jersey. The transaction includes approximately $3.3 billion of
assets and $2.9 billion of retail core deposits and is expected to close by
year-end 1995, pending regulatory approvals.
The corporation also completed the acquisitions of Indian River Federal
Savings Bank, Vero Beach, Florida, and Brentwood Financial Corporation,
Cincinnati, Ohio, with combined assets and deposits of $175 million and $140
million, respectively.
In April 1995, PNC Bank Corp. announced an agreement with First Data
Corporation/Card Services Group and Card Issuer Program Management Corporation
to provide marketing expertise and state-of-the-art processing technology
designed to increase the corporation's share of the credit card business.
PNC Bank Corp., headquartered in Pittsburgh, is one of the largest
financial services organizations in the United States. It operates consumer
banking offices across Pennsylvania, Delaware, Ohio, Kentucky and Indiana and
mortgage offices in 30 states. PNC Bank's major businesses include corporate
banking; consumer banking; private banking; mortgage banking; and trust and
mutual fund asset management.
<PAGE> 4
PNC BANK CORP. AND SUBSIDIARIES
Consolidated Financial Highlights
<TABLE>
<CAPTION>
===============================================================================================================
March 31 December 31 March 31
Three months ended 1995 1994 1994
...............................................................................................................
FINANCIAL PERFORMANCE (Dollars in thousands, except per share data)
<S> <C> <C> <C>
Net interest income (taxable-equivalent basis) $392,168 $432,722 $505,804
Net income 125,651 28,530 205,689
Fully diluted earnings per common share .54 .12 .86
Return on average total assets .83 % .18 % 1.41 %
Return on average common shareholders' equity 11.71 2.56 19.32
Net interest margin 2.72 2.92 3.68
After-tax profit margin 20.02 5.31 26.91
Overhead ratio 69.42 90.92 55.84
SELECTED AVERAGE BALANCES (In millions)
Assets $61,693 $62,952 $58,966
Earning assets 57,448 59,173 55,182
Loans, net of unearned income 35,315 34,955 32,023
Securities 20,903 22,923 21,238
Deposits 33,052 33,409 31,737
Shareholders' equity 4,357 4,386 4,330
===============================================================================================================
</TABLE>
<TABLE>
<CAPTION>
========================================================================================================
March 31 December 31 March 31
1995 1994 1994
........................................................................................................
SELECTED RATIOS
<S> <C> <C> <C>
Capital
Leverage 6.26 % 6.59 % 7.15 %
Common shareholders' equity to total assets 7.04 6.82 6.97
Average common shareholders' equity to average total assets 7.03 7.09 7.31
Asset quality
Net charge-offs to average loans .24 .29 .29
Nonperforming loans to total loans .85 .90 1.09
Nonperforming assets to total loans and foreclosed assets 1.25 1.25 1.56
Allowance for credit losses to total loans 2.75 2.83 2.94
Allowance for credit losses to nonperforming loans 324.94 314.17 269.60
Book value per common share
As reported $19.08 $18.76 $18.14
Excluding net unrealized securities gains/losses 19.36 19.26 18.53
========================================================================================================
</TABLE>
<PAGE> 5
PNC BANK CORP. AND SUBSIDIARIES
Condensed Consolidated Statement of Income
<TABLE>
<CAPTION>
=====================================================================================================================
Three months ended March 31 December 31 March 31
In thousands except per share data 1995 1994 1994
.....................................................................................................................
<S> <C> <C> <C>
INTEREST INCOME
Loans and fees on loans $707,039 $660,119 $572,836
Securities 295,423 343,426 295,808
Other 21,621 20,600 26,460
.....................................................................................................................
Total interest income 1,024,083 1,024,145 895,104
.....................................................................................................................
INTEREST EXPENSE
Deposits 292,334 271,099 200,004
Borrowed funds 204,121 160,858 96,737
Notes and debentures 143,654 167,837 101,022
.....................................................................................................................
Total interest expense 640,109 599,794 397,763
.....................................................................................................................
Net interest income 383,974 424,351 497,341
Provision for credit losses 25,015
.....................................................................................................................
Net interest income less provision for credit losses 383,974 424,351 472,326
.....................................................................................................................
NONINTEREST INCOME
Investment management and trust 79,140 73,237 72,967
Service charges, fees and commissions 89,614 95,011 87,902
Mortgage banking 44,650 39,274 37,892
Net securities gains (losses) 1,254 (121,024) 30,392
Other 20,645 18,253 29,398
.....................................................................................................................
Total noninterest income 235,303 104,751 258,551
.....................................................................................................................
NONINTEREST EXPENSES
Staff expense 201,171 216,673 206,899
Net occupancy and equipment 68,375 80,415 65,282
Other 166,023 191,593 154,665
.....................................................................................................................
Total noninterest expenses 435,569 488,681 426,846
.....................................................................................................................
Income before income taxes 183,708 40,421 304,031
Applicable income taxes 58,057 11,891 98,342
.....................................................................................................................
Net income $125,651 $28,530 $205,689
.....................................................................................................................
EARNINGS PER COMMON SHARE
Primary $.54 $.12 $.87
Fully diluted .54 .12 .86
.....................................................................................................................
CASH DIVIDENDS DECLARED PER COMMON SHARE .35 .35 .32
.....................................................................................................................
AVERAGE COMMON SHARES OUTSTANDING
Primary 232,589 235,337 236,698
Fully diluted 234,463 237,134 238,592
=====================================================================================================================
</TABLE>
<PAGE> 6
PNC BANK CORP. AND SUBSIDIARIES
Details of Net Interest Income and Net Interest Margin
NET INTEREST INCOME
<TABLE>
<CAPTION>
=================================================================================================================
Three months ended
Taxable-equivalent basis March 31 December 31 March 31
In thousands 1995 1994 1994
.................................................................................................................
<S> <C> <C> <C>
Net interest income before swaps and caps
Interest income $1,044,764 $1,026,612 $855,158
Loan fees 16,570 15,011 18,689
Taxable-equivalent adjustment 8,194 8,371 8,463
.................................................................................................................
Total interest income 1,069,528 1,049,994 882,310
Interest expense 636,592 598,060 433,171
.................................................................................................................
Net interest income before swaps and caps 432,936 451,934 449,139
Effect of swaps and caps on
Interest income (37,251) (17,478) 21,257
Interest expense 3,517 1,734 (35,408)
.................................................................................................................
Total swaps and caps (40,768) (19,212) 56,665
.................................................................................................................
Net interest income $392,168 $432,722 $505,804
=================================================================================================================
</TABLE>
NET INTEREST MARGIN
<TABLE>
<CAPTION>
=================================================================================================================
Three months ended March 31 December 31 March 31
Taxable-equivalent basis 1995 1994 1994
.................................................................................................................
<S> <C> <C> <C>
Net interest spread before swaps and caps
Book-basis yield on earning assets 7.29 % 6.91 % 6.23 %
Effect of loan fees .11 .10 .14
Taxable-equivalent adjustment .06 .06 .06
.................................................................................................................
Taxable-equivalent yield on earnings assets 7.46 7.07 6.43
Rate on interest-bearing liabilities 5.13 4.64 3.69
.................................................................................................................
Interest rate spread before swaps and caps 2.33 2.43 2.74
Effect of
Noninterest-bearing sources .67 .62 .48
Interest rate swaps and caps on
Interest income (.25) (.12) .16
Interest expense .03 .01 (.30)
.................................................................................................................
Total swaps and caps (.28) (.13) .46
.................................................................................................................
Net interest margin 2.72 % 2.92 % 3.68 %
=================================================================================================================
</TABLE>
<PAGE> 7
PNC BANK CORP. AND SUBSIDIARIES
Details of Noninterest Income and Noninterest Expense
NONINTEREST INCOME
<TABLE>
<CAPTION>
==============================================================================================================
Three months ended March 31 December 31 March 31
In thousands 1995 1994 1994
..............................................................................................................
<S> <C> <C> <C>
Investment management and trust
Trust $50,967 $47,402 $49,399
Mutual funds 28,173 25,835 23,568
..............................................................................................................
Total investment management and trust 79,140 73,237 72,967
Service charges, fees and commissions
Deposit account and corporate services 39,542 40,064 39,806
Credit card and merchant services 14,175 15,500 12,920
Brokerage 9,243 9,010 8,677
Corporate finance 10,707 11,414 10,679
Other services 15,947 19,023 15,820
..............................................................................................................
Total service charges, fees and commissions 89,614 95,011 87,902
Mortgage banking
Servicing 31,123 28,636 29,877
Sales of servicing 12,258 9,235 5,145
Marketing 1,269 1,403 2,870
..............................................................................................................
Total mortgage banking 44,650 39,274 37,892
Other 20,645 18,253 29,398
..............................................................................................................
Total noninterest income before securities transactions 234,049 225,775 228,159
Net securities gains (losses) 1,254 (121,024) 30,392
..............................................................................................................
Total $235,303 $104,751 $258,551
==============================================================================================================
</TABLE>
<TABLE>
<CAPTION>
NONINTEREST EXPENSES
==============================================================================================================
Three months ended March 31 December 31 March 31
In thousands 1995 1994 1994
..............................................................................................................
<S> <C> <C> <C>
Compensation $163,107 $188,507 $164,792
Employee benefits 38,064 28,166 42,107
..............................................................................................................
Total staff expense 201,171 216,673 206,899
Net occupancy 34,229 46,606 32,420
Equipment 34,146 33,809 32,862
Amortization of intangible assets 21,146 22,759 19,560
Federal deposit insurance 18,376 19,157 18,176
Taxes other than income 12,057 10,816 11,096
Other 114,444 138,861 105,833
..............................................................................................................
Total $435,569 $488,681 $426,846
==============================================================================================================
</TABLE>
<PAGE> 8
PNC BANK CORP. AND SUBSIDIARIES
Condensed Consolidated Balance Sheet
<TABLE>
<CAPTION>
==============================================================================================================
March 31 December 31 March 31
In millions, except share data 1995 1994 1994
..............................................................................................................
<S> <C> <C> <C>
ASSETS
Cash and due from banks $2,699 $2,592 $2,536
Short-term investments 533 809 1,208
Loans held for sale 437 487 996
Securities available for sale 3,137 3,457 9,751
Investment securities, fair value of $16,369, $16,233 and $11,284 17,070 17,464 11,558
Loans, net of unearned income of $236, $240 and $209 35,724 35,407 33,294
Allowance for credit losses (981) (1,002) (980)
..............................................................................................................
Net loans 34,743 34,405 32,314
Other 3,475 4,931 2,800
..............................................................................................................
Total assets $62,094 $64,145 $61,163
==============================================================================================================
LIABILITIES
Deposits
Noninterest-bearing $6,578 $6,992 $6,901
Interest-bearing 26,363 28,019 26,099
..............................................................................................................
Total deposits 32,941 33,011 33,000
Borrowed funds 13,780 11,608 11,696
Notes and debentures 9,599 11,754 10,286
Other 1,384 1,378 1,899
..............................................................................................................
Total liabilities 57,704 59,751 56,881
..............................................................................................................
SHAREHOLDERS' EQUITY
Realized shareholders' equity 4,455 4,513 4,374
Net unrealized securities losses (65) (119) (92)
..............................................................................................................
Total shareholders' equity 4,390 4,394 4,282
..............................................................................................................
Total liabilities and shareholders' equity $62,094 $64,145 $61,163
==============================================================================================================
COMMON SHAREHOLDERS' EQUITY $4,371 $4,375 $4,262
COMMON SHARES OUTSTANDING 229,122,025 233,248,508 234,953,452
==============================================================================================================
</TABLE>
<PAGE> 9
PNC BANK CORP. AND SUBSIDIARIES
Condensed Consolidated Average Balance Sheet
<TABLE>
<CAPTION>
==============================================================================================================
Three months ended March 31 December 31 March 31
In millions 1995 1994 1994
..............................................................................................................
<S> <C> <C> <C>
ASSETS
Interest-earning assets
Short-term investments $771 $771 $864
Securities available for sale 3,626 5,172 10,191
Investment securities 17,277 17,751 11,047
Loans, net of unearned income
Commercial 12,129 12,311 11,349
Real estate project 1,619 1,670 1,723
Real estate mortgage 10,882 10,236 9,055
Consumer 9,023 9,061 8,450
Other 1,662 1,677 1,446
..............................................................................................................
Total loans, net of unearned income 35,315 34,955 32,023
Other interest-earning assets 459 524 1,057
..............................................................................................................
Total interest-earning assets 57,448 59,173 55,182
Other 4,245 3,779 3,784
..............................................................................................................
Total assets $61,693 $62,952 $58,966
==============================================================================================================
LIABILITIES
Interest-bearing liabilities
Deposits $26,937 $26,943 $25,716
Borrowed funds 13,328 11,642 11,543
Notes and debentures 9,736 12,593 10,142
..............................................................................................................
Total interest-bearing liabilities 50,001 51,178 47,401
Noninterest-bearing deposits 6,115 6,466 6,021
Other 1,220 922 1,214
..............................................................................................................
Total liabilities 57,336 58,566 54,636
..............................................................................................................
SHAREHOLDERS' EQUITY 4,357 4,386 4,330
..............................................................................................................
Total liabilities and shareholders' equity $61,693 $62,952 $58,966
==============================================================================================================
COMMON SHAREHOLDERS' EQUITY $4,338 $4,366 $4,309
==============================================================================================================
</TABLE>
<PAGE> 10
PNC BANK CORP. AND SUBSIDIARIES
Asset Quality Data
<TABLE>
<CAPTION>
NONPERFORMING ASSETS
===================================================================================
March 31 December 31 March 31
In millions 1995 1994 1994
...................................................................................
<S> <C> <C> <C>
Nonaccrual loans
Commercial $129 $143 $193
Real estate project 71 70 88
Real estate mortgage 94 97 74
...................................................................................
Total nonaccrual loans 294 310 355
Restructured loans 8 9 9
...................................................................................
Total nonperforming loans 302 319 364
Foreclosed assets
Real estate project 89 77 94
Real estate mortgage 32 26 40
Other 24 24 23
...................................................................................
Total foreclosed assets 145 127 157
...................................................................................
Total $447 $446 $521
===================================================================================
</TABLE>
<TABLE>
<CAPTION>
ALLOWANCE FOR CREDIT LOSSES
===================================================================================
Three months ended March 31 December 31 March 31
In millions 1995 1994 1994
...................................................................................
<S> <C> <C> <C>
Beginning balance $1,002 $1,030 $972
Charge-offs (40) (50) (38)
Recoveries 18 22 15
...................................................................................
Net charge-offs (22) (28) (23)
Provision for credit losses 25
Acquisitions 1 6
...................................................................................
Ending balance $981 $1,002 $980
===================================================================================
</TABLE>
