<PAGE> 1
UNITED STATES
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
October 10, 1996
Date of Report (Date of earliest event reported)
PNC BANK CORP.
(Exact name of registrant as specified in its charter)
COMMISSION FILE NUMBER 1-9718
PENNSYLVANIA 25-1435979
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE PNC PLAZA
249 FIFTH AVENUE
PITTSBURGH, PENNSYLVANIA 15222-2707
(Address of principal executive offices)
(Zip Code)
(412) 762-1553
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 5. OTHER EVENTS
1996 Third Quarter Financial Results
On October 10, 1996, PNC Bank Corp. ("Corporation") reported results
of operations for the three months and nine months ended September 30,
1996. 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 3 of this Form 8-K is
filed herewith.
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.
PNC BANK CORP.
(Registrant)
Date: October 10, 1996 By: /s/ Robert L. Haunschild
---------------------------
Robert L. Haunschild
Senior Vice President and
Chief Financial Officer
2
<PAGE> 3
EXHIBIT INDEX
99 Earnings press release issued by the Corporation on October 10, 1996,
with respect to the results of operations for the three months and nine
months ended September 30, 1996, is filed herewith.
3
<PAGE> 1
Exhibit 99
MEDIA:
Jonathan Williams
(412) 762-4550
[email protected]
INVESTORS:
William H. Callihan
(412) 762-8257
PNC BANK CORP. REPORTS EARNINGS OF $256.3 MILLION
EXCLUDING ONE-TIME SAIF ASSESSMENT
PITTSBURGH, Oct. 10, 1996 -- PNC Bank Corp. (NYSE: PNC) today
reported third quarter earnings of $256.3 million, excluding a one-time
assessment mandated by Congress to recapitalize the Savings Association
Insurance Fund (SAIF). On this basis, earnings per fully diluted share
increased 21% to $0.75 compared with $0.62 for the third quarter of 1995.
Return on average assets and average common shareholders' equity were 1.47% and
17.71%, respectively, compared with 1.11% and 14.43% a year ago. Earnings were
$210.7 million in the year-earlier period.
The corporation recorded a third quarter pre-tax charge of $35.1
million for the special one-time SAIF assessment. The SAIF legislation also
included provisions that will result in a modest reduction in future annual
deposit insurance costs. Including the SAIF assessment, net income was $234.0
million and earnings per fully diluted share increased 10% to $0.68. Return on
average assets and average common shareholders' equity were 1.34% and 16.16%,
respectively.
"Our third quarter performance reflects progress on strategies
designed to increase shareholder value," said Thomas H. O'Brien, chairman and
chief executive officer. "Growth businesses such as asset management, corporate
finance, treasury management and brokerage produced strong results, and we
benefited from the improved composition of our balance sheet."
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<PAGE> 2
PNC Bank Corp. Reports Earnings of $256.3 Million
Excluding One-Time SAIF Assessment Page 2
HIGHLIGHTS
- Net interest income increased 14.5% and net interest margin
widened 76 basis points to 3.85% as the ratio of average loans to
earning assets increased to 76.7% compared with 65.7% a year ago.
- Earning assets declined as the wholesale components of the balance
sheet were further reduced. Average securities declined 40.6% in
the comparison and the ratio of average wholesale funds to total
sources of funds was 26.4% compared with 34.0% a year ago.
- Fee-based revenue continued to expand led by asset management,
corporate finance, treasury management and brokerage.
- Noninterest expense, excluding the SAIF assessment and the
Chemical Bank, New Jersey acquisition, declined 2.5% from the
prior year.
- The Midlantic conversion was completed on schedule, with cost
savings ahead of expectations, and involved the conversion of 77
operating systems and 2 million customer accounts.
- Asset quality remained strong. During the quarter, nonperforming
assets continued to decline and represented 1.01% of loans and
foreclosed assets at Sept. 30, 1996. Net charge-offs remained low
at 0.30% of loans.
- The corporation acquired 5.9 million common shares during the
quarter under stock repurchase programs.
- On Oct. 3, 1996, the board of directors approved a 5.7% increase
in the fourth quarter dividend to $0.37 per common share.
- On Oct. 9, 1996, the corporation issued $300 million of preferred
stock, the proceeds of which will be used to repurchase additional
common stock.
INCOME STATEMENT REVIEW
Taxable-equivalent net interest income for the third quarter of
1996 increased $78.1 million to $616.9 million and net interest margin widened
to 3.85% compared with $538.8 million and 3.09%, respectively, in the
year-earlier period. These increases primarily result from changes in balance
sheet composition and acquisitions.
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<PAGE> 3
PNC Bank Corp. Reports Earnings of $256.3 Million
Excluding One-Time SAIF Assessment Page 3
Noninterest income totaled $348.4 million in the third quarter of
1996 compared with $338.3 million in the prior-year period. Noninterest income
increased $38.2 million or 12.3%, excluding gains from the sale of 12 branches
in Dayton, Ohio in the prior year. Asset management and trust revenue increased
$13.2 million or 12.1% due to growth in personal trust, employee benefit and
mutual fund services and an increase in the value of assets under
administration. Service fees increased 17.2% to $144.4 million primarily as a
result of growth in deposit, corporate finance and brokerage fees. Mortgage
banking revenue declined in the comparison primarily due to lower servicing
sales and lower demand for mortgage loans. Mortgage originations totaled $1.2
billion in the third quarter of 1996 and, at Sept. 30, 1996, the corporation
serviced approximately $40.4 billion of mortgages, including $27.8 billion
serviced for others. Other noninterest income declined $14.8 million to $39.5
million, as higher venture capital income in the current period partially
offset the impact of gains from branch sales in 1995.
Noninterest expense totaled $595.4 million in the third quarter of
1996 compared with $547.4 million in the same period of 1995. Excluding the
SAIF assessment and the Chemical acquisition, noninterest expense declined 2.5%
in the comparison. The efficiency ratio improved to 58.1% for the third quarter
of 1996 compared with 62.4% a year ago, excluding the impact of the SAIF
assessment in the current period.
BALANCE SHEET REVIEW
Total assets were $69.7 billion at Sept. 30, 1996 compared with
$75.1 billion a year ago. The decline primarily results from initiatives to
downsize the securities portfolio and reduce associated wholesale funding.
Average earning assets declined $5.9 billion to $63.5 billion compared to the
third quarter of 1995. Average securities declined $8.9 billion to $13.1
billion and represented 20.6% of average earning assets compared with 31.7% a
year ago.
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<PAGE> 4
PNC Bank Corp. Reports Earnings of $256.3 Million
Excluding One-Time SAIF Assessment Page 4
Average loans increased $3.1 billion to $48.7 billion, representing
76.7% of average earning assets compared with 65.7% a year ago. Excluding
acquisitions, average loans grew by 0.7% in the comparison reflecting the
corporation's continued commitment to generating loans with acceptable yield
and risk characteristics.
Average deposits declined $361 million to $44.7 billion for the
third quarter of 1996. Average deposits represented 64.3% of total sources of
funds in the third quarter of 1996 compared with 59.9% a year ago.
The corporation's asset quality remained strong. The allowance for
credit losses was $1.1 billion at Sept. 30, 1996 and represented 306% of
nonperforming loans compared with 291% at Sept. 30, 1995. Net charge-offs were
$37 million, or 0.30% of average loans in the third quarter of 1996 compared
with $17 million and 0.15%, respectively, a year ago. Nonperforming assets
declined to $501 million at Sept. 30, 1996, compared with $631 million at the
end of the third quarter 1995. The ratio of nonperforming assets to total loans
and foreclosed assets was 1.01% at Sept. 30, 1996 and 1.37% at Sept. 30, 1995.
Shareholders' equity totaled $5.8 billion or $17.23 per common
share at Sept. 30, 1996. The leverage capital ratio was 7.18%, and Tier I and
total risk-based capital ratios are estimated to be 8.5% and 12.1%,
respectively. During the third quarter of 1996, approximately 5.9 million
common shares were repurchased pursuant to stock repurchase programs. On Oct.
3, 1996, the board of directors approved a 5.7% increase in the common dividend
to $0.37 per share. In addition, subsequent to quarter end, the corporation
issued $300 million of preferred stock, the proceeds of which will be used to
repurchase additional shares of common stock.
YEAR-TO-DATE RESULTS
Excluding the one-time SAIF assessment, earnings for the first nine
months of 1996 totaled $742.7 million, or $2.15 per fully diluted share,
compared with $584.2 million, or $1.70 per fully diluted share, for the first
nine months of 1995. On this basis, return on average assets
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<PAGE> 5
PNC Bank Corp. Reports Earnings of $256.3 Million
Excluding One-Time SAIF Assessment Page 5
and average common shareholders' equity were 1.39% and 17.23%, respectively,
compared with 1.04 and 13.64%, respectively, a year ago. Including the SAIF
assessment, net income totaled $720.3 million or $2.08 per fully diluted share.
Return on average assets and average common shareholders' equity were 1.35% and
16.71%, respectively.
PNC Bank Corp., headquartered in Pittsburgh, is one of the largest
financial services organizations in the United States, with banking
subsidiaries in Pennsylvania, New Jersey, Delaware, Ohio, Kentucky, Indiana,
Massachusetts, and Florida. Its major businesses include consumer banking,
corporate banking, mortgage banking, real estate banking and asset management.
[TABULAR MATERIAL FOLLOWS]
Visit PNC Bank on the World Wide Web at http://www.pncbank.com
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<PAGE> 6
PNC BANK CORP. AND SUBSIDIARIES Page 6
Consolidated Financial Highlights
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
-------------------------------------------------
1996 1995 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FINANCIAL PERFORMANCE (Dollars in thousands, except per share data)
Net interest income (taxable-equivalent basis) $616,938 $538,809 $1,852,972 $1,624,686
Net income 233,953 210,737 720,323 584,237
Fully diluted earnings per common share .68 .62 2.08 1.70
Return on average total assets 1.34% 1.11% 1.35% 1.04%
Return on average common shareholders' equity 16.16 14.43 16.71 13.64
Net interest margin 3.85 3.09 3.77 3.11
After-tax profit margin 24.24 24.03 25.19 22.81
Efficiency ratio 61.68 62.41 60.34 64.15
AVERAGE BALANCES (In millions)
Assets $69,546 $75,266 $71,234 $75,149
Earning assets 63,545 69,458 65,196 69,479
Loans, net of unearned income 48,713 45,646 48,825 44,713
Securities 13,097 22,045 14,214 23,048
Deposits 44,716 45,077 45,214 44,374
Shareholders' equity 5,766 5,802 5,766 5,747
=================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
September 30 June 30 December 31 September 30
As of or for the three months ended 1996 1996 1995 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PERIOD-END BALANCES (In millions)
Assets $69,662 $71,961 $73,404 $75,100
Earning assets 62,533 65,234 66,772 69,281
Loans, net of unearned income 49,443 49,223 48,653 45,900
Securities 11,243 14,107 15,839 21,514
Deposits 45,430 44,852 46,899 43,870
Shareholders' equity 5,798 5,832 5,768 5,913
SELECTED RATIOS
Capital ratios
Leverage 7.18% 6.96% 6.37% 6.98%
Common shareholders' equity to assets 8.30 8.08 7.83 7.85
Average common shareholders' equity to average assets 8.27 7.94 7.76 7.69
Asset quality ratios
Net charge-offs to average loans .30 .29 .45 .15
Nonperforming loans to loans .76 .77 .74 .96
Nonperforming assets to loans and foreclosed assets 1.01 1.03 1.10 1.37
Nonperforming assets to total assets .72 .71 .73 .84
Allowance for credit losses to loans 2.33 2.42 2.59 2.80
Allowance for credit losses to nonperforming loans 306.11 312.19 351.68 291.16
Book value per common share
As reported $17.23 $17.07 $16.87 $17.55
Excluding net unrealized securities gains/losses 17.58 17.49 16.79 17.67
=================================================================================================================================
</TABLE>
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<PAGE> 7
PNC BANK CORP. AND SUBSIDIARIES Page 7
Consolidated Statement of Income
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
----------------------------------------------------
In thousands, except per share data 1996 1995 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans and fees on loans $979,050 $944,819 $2,931,715 $2,759,610
Securities 207,729 316,227 677,422 999,226
Other 29,851 32,463 105,973 90,593
----------------------------------------------------
Total interest income 1,216,630 1,293,509 3,715,110 3,849,429
INTEREST EXPENSE
Deposits 350,912 402,379 1,073,786 1,150,854
Borrowed funds 80,133 220,005 300,292 657,251
Notes and debentures 176,655 144,106 514,465 452,203
----------------------------------------------------
Total interest expense 607,700 766,490 1,888,543 2,260,308
----------------------------------------------------
Net interest income 608,930 527,019 1,826,567 1,589,121
Provision for credit losses 1,500 4,500
----------------------------------------------------
Net interest income less provision for credit losses 608,930 525,519 1,826,567 1,584,621
NONINTEREST INCOME
Asset management and trust 122,299 109,117 367,691 308,636
Service fees 144,446 123,283 408,313 363,846
Mortgage banking 34,400 51,609 106,140 147,190
Net securities gains 7,722 44 14,569 9,264
Other 39,507 54,273 109,808 108,197
----------------------------------------------------
Total noninterest income 348,374 338,326 1,006,521 937,133
NONINTEREST EXPENSE
Staff expense 277,761 269,279 840,699 798,095
Net occupancy and equipment 90,229 86,730 275,694 258,001
Intangible asset and MSR amortization 29,012 26,094 80,738 73,284
Federal deposit insurance 38,324 1,470 44,949 50,007
Other 160,066 163,862 483,280 464,062
----------------------------------------------------
Total noninterest expense 595,392 547,435 1,725,360 1,643,449
----------------------------------------------------
Income before income taxes 361,912 316,410 1,107,728 878,305
Applicable income taxes 127,959 105,673 387,405 294,068
----------------------------------------------------
Net income $233,953 $210,737 $720,323 $584,237
----------------------------------------------------
EARNINGS PER COMMON SHARE
Primary $.69 $.62 $2.10 $1.71
Fully diluted .68 .62 2.08 1.70
CASH DIVIDENDS DECLARED PER COMMON SHARE .35 .35 1.05 1.05
AVERAGE COMMON SHARES OUTSTANDING
Primary 340,535 338,983 342,143 339,220
Fully diluted 345,173 344,145 346,958 345,165
==================================================================================================================================
</TABLE>
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<PAGE> 8
PNC BANK CORP. AND SUBSIDIARIES Page 8
Details of Net Interest Income
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
Taxable-equivalent basis ------------------------- -------------------------
In thousands 1996 1995 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income/expense before financial derivatives
Interest income $1,190,223 $1,312,720 $3,651,352 $3,905,642
Loan fees 28,068 23,115 73,353 64,058
Taxable-equivalent adjustment 8,008 11,790 26,405 35,565
---------------------------------------------------
Total interest income 1,226,299 1,347,625 3,751,110 4,005,265
Interest expense 607,882 760,001 1,887,308 2,239,476
---------------------------------------------------
Net interest income before financial derivatives 618,417 587,624 1,863,802 1,765,789
Effect of financial derivatives on
Interest income (1,661) (42,326) (9,595) (120,271)
Interest expense (182) 6,489 1,235 20,832
---------------------------------------------------
Total effect of financial derivatives (1,479) (48,815) (10,830) (141,103)
---------------------------------------------------
Net interest income $616,938 $538,809 $1,852,972 $1,624,686
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Three months ended
Taxable-equivalent basis September 30 June 30 March 31 December 31 September 30
In thousands 1996 1996 1996 1995 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income/expense before financial derivatives
Interest income $1,190,223 $1,224,852 $1,236,277 $1,318,461 $1,312,720
Loan fees 28,068 20,828 24,457 17,965 23,115
Taxable-equivalent adjustment 8,008 9,146 9,251 11,077 11,790
----------------------------------------------------------------
Total interest income 1,226,299 1,254,826 1,269,985 1,347,503 1,347,625
Interest expense 607,882 632,229 647,197 739,819 760,001
----------------------------------------------------------------
Net interest income before financial derivatives 618,417 622,597 622,788 607,684 587,624
Effect of financial derivatives on
Interest income (1,661) (2,538) (5,396) (36,424) (42,326)
Interest expense (182) 133 1,284 7,435 6,489
----------------------------------------------------------------
Total effect of financial derivatives (1,479) (2,671) (6,680) (43,859) (48,815)
----------------------------------------------------------------
Net interest income $616,938 $619,926 $616,108 $563,825 $538,809
===================================================================================================================================
</TABLE>
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<PAGE> 9
PNC BANK CORP. AND SUBSIDIARIES Page 9
Details of Net Interest Margin
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
---------------------------------------------
Taxable-equivalent basis 1996 1995 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rates earned/paid before financial derivatives
Book-basis yield on earning assets 7.43% 7.49% 7.44% 7.47%
Effect of loan fees .17 .13 .15 .12
Taxable-equivalent adjustment .05 .07 .05 .07
---------------------------------------------
Taxable-equivalent yield on earning assets 7.65 7.69 7.64 7.66
Rate on interest-bearing liabilities 4.60 5.11 4.64 5.06
---------------------------------------------
Interest rate spread 3.05 2.58 3.00 2.60
Noninterest-bearing sources .81 .79 .79 .77
---------------------------------------------
Net interest margin before financial derivatives 3.86 3.37 3.79 3.37
Effect of financial derivatives on
Interest income (.01) (.24) (.02) (.22)
Interest expense .04 .04
---------------------------------------------
Total effect of financial derivatives (.01) (.28) (.02) (.26)
---------------------------------------------
Net interest margin 3.85% 3.09% 3.77% 3.11%
==================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Three months ended September 30 June 30 March 31 December 31 September 30
Taxable-equivalent basis 1996 1996 1996 1995 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Rates earned/paid before financial derivatives
Book-basis yield on earning assets 7.43% 7.37% 7.51% 7.50% 7.49%
Effect of loan fees .17 .12 .15 .10 .13
Taxable-equivalent adjustment .05 .06 .06 .06 .07
---------------------------------------------------------------
Taxable-equivalent yield on earning assets 7.65 7.55 7.72 7.66 7.69
Rate on interest-bearing liabilities 4.60 4.59 4.74 4.98 5.11
---------------------------------------------------------------
Interest rate spread 3.05 2.96 2.98 2.68 2.58
Noninterest-bearing sources .81 .78 .79 .79 .79
---------------------------------------------------------------
Net interest margin before financial derivatives 3.86 3.74 3.77 3.47 3.37
Effect of financial derivatives on
Interest income (.01) (.02) (.03) (.20) (.24)
Interest expense .01 .05 .04
---------------------------------------------------------------
Total effect of financial derivatives (.01) (.02) (.04) (.25) (.28)
---------------------------------------------------------------
Net interest margin 3.85% 3.72% 3.73% 3.22% 3.09%
===================================================================================================================================
</TABLE>
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<PAGE> 10
PNC BANK CORP. AND SUBSIDIARIES Page 10
Details of Noninterest Income
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
---------------------------------------------
In thousands 1996 1995 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Asset management and trust
Asset management services $25,963 $20,814 $75,896 $54,138
Mutual fund services 43,100 40,829 132,757 112,003
Trust 53,236 47,474 159,038 142,495
----------------------------------------------
Total asset management and trust 122,299 109,117 367,691 308,636
Service fees
Deposit 74,104 60,722 212,025 177,435
Brokerage 12,432 10,113 41,418 29,766
Consumer 16,602 14,437 44,430 38,602
Corporate finance 19,645 13,133 49,166 38,538
Credit card and merchant services 5,656 9,649 14,856 36,301
Insurance 7,712 6,764 21,356 18,232
Other 8,295 8,465 25,062 24,972
----------------------------------------------
Total service fees 144,446 123,283 408,313 363,846
Mortgage banking
Servicing 29,361 30,215 88,842 91,113
Marketing 4,339 10,649 15,616 23,402
Sale of servicing 700 10,745 1,682 32,675
----------------------------------------------
Total mortgage banking 34,400 51,609 106,140 147,190
Net securities gains 7,722 44 14,569 9,264
Other 39,507 54,273 109,808 108,197
----------------------------------------------
Total $348,374 $338,326 $1,006,521 $937,133
================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Three months ended September 30 June 30 March 31 December 31 September 30
In thousands 1996 1996 1996 1995 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Asset management and trust
Asset management services $25,963 $24,284 $25,649 $18,890 $20,814
Mutual fund services 43,100 45,671 43,986 42,349 40,829
Trust 53,236 54,560 51,242 50,285 47,474
---------------------------------------------------------------
Total asset management and trust 122,299 124,515 120,877 111,524 109,117
Service fees
Deposit 74,104 72,403 65,518 62,843 60,722
Brokerage 12,432 15,344 13,642 11,587 10,113
Consumer 16,602 14,370 13,458 14,821 14,437
Corporate finance 19,645 16,106 13,415 14,592 13,133
Credit card and merchant services 5,656 282 8,918 10,888 9,649
Insurance 7,712 6,872 6,772 6,599 6,764
Other 8,295 8,221 8,546 9,473 8,465
---------------------------------------------------------------
Total service fees 144,446 133,598 130,269 130,803 123,283
Mortgage banking
Servicing 29,361 30,443 29,038 28,488 30,215
Marketing 4,339 4,683 6,594 9,893 10,649
Sale of servicing 700 632 350 1,046 10,745
---------------------------------------------------------------
Total mortgage banking 34,400 35,758 35,982 39,427 51,609
Net securities gains (losses) 7,722 3,904 2,943 (288,958) 44
Other 39,507 38,810 31,491 30,490 54,273
---------------------------------------------------------------
Total $348,374 $336,585 $321,562 $23,286 $338,326
===================================================================================================================================
</TABLE>
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<PAGE> 11
PNC BANK CORP. AND SUBSIDIARIES Page 11
Details of Noninterest Expense
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
--------------------------------------------------
In thousands 1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Compensation $232,161 $218,934 $694,936 $641,506
Employee benefits 45,600 50,345 145,763 156,589
--------------------------------------------------
Total staff expense 277,761 269,279 840,699 798,095
Net occupancy 47,530 46,542 147,294 137,974
Equipment 42,699 40,188 128,400 120,027
Intangible asset and MSR amortization 29,012 26,094 80,738 73,284
Taxes other than income 12,972 12,856 40,993 39,061
Federal deposit insurance 38,324 1,470 44,949 50,007
Other 147,094 151,006 442,287 425,001
--------------------------------------------------
Total $595,392 $547,435 $1,725,360 $1,643,449
===============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Three months ended September 30 June 30 March 31 December 31 September 30
In thousands 1996 1996 1996 1995 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Compensation $232,161 $234,542 $228,233 $221,645 $218,934
Employee benefits 45,600 49,739 50,424 45,317 50,345
------------------------------------------------------------------
Total staff expense 277,761 284,281 278,657 266,962 269,279
Net occupancy 47,530 49,192 50,572 42,424 46,542
Equipment 42,699 42,990 42,711 45,639 40,188
Intangible asset and MSR amortization 29,012 28,062 23,664 41,387 26,094
Taxes other than income 12,972 13,391 14,630 13,796 12,856
Federal deposit insurance 38,324 3,435 3,190 7,662 1,470
Other 147,094 142,971 152,222 148,031 151,006
------------------------------------------------------------------
Total noninterest expense before special charges 595,392 564,322 565,646 565,901 547,435
Special charges 259,926
------------------------------------------------------------------
Total $595,392 $564,322 $565,646 $825,827 $547,435
=================================================================================================================================
</TABLE>
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<PAGE> 12
PNC BANK CORP. AND SUBSIDIARIES Page 12
Consolidated Balance Sheet
<TABLE>
<CAPTION>
September 30 December 31 September 30
Dollars in millions, except par values 1996 1995 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks $3,611 $3,679 $2,956
Short-term investments 920 1,611 954
Loans held for sale 915 659 901
Securities available for sale 11,243 15,839 3,035
Investment securities, fair value of $18,253 18,479
Loans, net of unearned income of $347, $403 and $390 49,443 48,653 45,900
Allowance for credit losses (1,152) (1,259) (1,284)
---------------------------------------
Net loans 48,291 47,394 44,616
Goodwill and other intangibles 999 997 751
Mortgage servicing rights 322 268 286
Other 3,361 2,957 3,122
---------------------------------------
Total assets $69,662 $73,404 $75,100
=======================================
LIABILITIES
Deposits
Noninterest-bearing $10,900 $10,707 $9,225
Interest-bearing 34,530 36,192 34,645
---------------------------------------
Total deposits 45,430 46,899 43,870
Borrowed funds
Federal funds purchased 1,523 3,817 3,460
Repurchase agreements 909 2,851 6,350
Commercial paper 400 753 490
Other 2,505 1,244 3,389
---------------------------------------
Total borrowed funds 5,337 8,665 13,689
Notes and debentures 11,313 10,398 9,985
Other 1,784 1,674 1,643
---------------------------------------
Total liabilities 63,864 67,636 69,187
SHAREHOLDERS' EQUITY
Preferred stock - $1 par value
Authorized: 17,471,629; 17,529,342 and 17,545,591 shares
Issued and outstanding: 808,829; 848,784 and 865,033 shares 1 1 1
Common stock - $5 par value
Authorized: 450,000,000 shares
Issued: 343,316,174; 340,863,348 and 344,939,110 shares 1,717 1,704 1,725
Capital surplus 590 545 702
Retained earnings 3,931 3,571 3,831
Deferred benefit expense (77) (79) (92)
Net unrealized securities gains (losses) (115) 26 (41)
Common stock held in treasury at cost: 7,831,321 and 9,002,981 shares (249) (213)
---------------------------------------
Total shareholders' equity 5,798 5,768 5,913
---------------------------------------
Total liabilities and shareholders' equity $69,662 $73,404 $75,100
=================================================================================================================================
COMMON SHAREHOLDERS' EQUITY $5,781 $5,750 $5,895
=================================================================================================================================
</TABLE>
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<PAGE> 13
PNC BANK CORP. AND SUBSIDIARIES Page 13
Condensed Consolidated Average Balance Sheet
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
-------------------------------------------------
In millions 1996 1995 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Interest-earning assets
Short-term investments $807 $815 $1,020 $1,062
Securities available for sale 13,097 3,222 14,214 3,723
Investment securities 18,823 19,325
Loans, net of unearned income 48,713 45,646 48,825 44,713
Other interest-earning assets 928 952 1,137 656
-------------------------------------------------
Total interest-earning assets 63,545 69,458 65,196 69,479
Other 6,001 5,808 6,038 5,670
-------------------------------------------------
Total assets $69,546 $75,266 $71,234 $75,149
=================================================
LIABILITIES
Interest-bearing liabilities
Deposits $34,794 $35,945 $35,348 $35,439
Borrowed funds 5,510 14,016 7,044 14,017
Notes and debentures 12,048 8,829 11,675 9,504
-------------------------------------------------
Total interest-bearing liabilities 52,352 58,790 54,067 58,960
Noninterest-bearing deposits 9,922 9,132 9,866 8,935
Other 1,506 1,542 1,535 1,507
-------------------------------------------------
Total liabilities 63,780 69,464 65,468 69,402
SHAREHOLDERS' EQUITY 5,766 5,802 5,766 5,747
-------------------------------------------------
Total liabilities and shareholders' equity $69,546 $75,266 $71,234 $75,149
=================================================
COMMON SHAREHOLDERS' EQUITY $5,749 $5,784 $5,749 $5,696
=================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Three months ended September 30 June 30 March 31 December 31 September 30
In millions 1996 1996 1996 1995 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets
Short-term investments $807 $1,155 $1,102 $950 $815
Securities available for sale 13,097 14,740 14,818 9,349 3,222
Investment securities 10,101 18,823
Loans, net of unearned income
Consumer 13,054 13,243 13,370 13,188 11,822
Residential mortgage 12,325 11,883 11,619 11,462 11,066
Commercial 17,049 17,190 16,806 16,590 15,914
Commercial real estate 4,712 4,831 4,885 5,029 5,096
Other 1,573 2,044 1,945 2,035 1,748
---------------------------------------------------------------
Total loans, net of unearned income 48,713 49,191 48,625 48,304 45,646
Other interest-earning assets 928 1,270 1,160 977 952
---------------------------------------------------------------
Total interest-earning assets 63,545 66,356 65,705 69,681 69,458
Other 6,001 6,084 6,028 6,026 5,808
---------------------------------------------------------------
Total assets $69,546 $72,440 $71,733 $75,707 $75,266
===============================================================
LIABILITIES
Interest-bearing liabilities
Deposits $34,794 $35,383 $35,872 $36,577 $35,945
Borrowed funds 5,510 7,816 7,823 11,511 14,016
Notes and debentures 12,048 11,904 11,068 10,637 8,829
---------------------------------------------------------------
Total interest-bearing liabilities 52,352 55,103 54,763 58,725 58,790
Noninterest-bearing deposits 9,922 9,996 9,681 9,639 9,132
Other 1,506 1,574 1,525 1,450 1,542
---------------------------------------------------------------
Total liabilities 63,780 66,673 65,969 69,814 69,464
SHAREHOLDERS' EQUITY 5,766 5,767 5,764 5,893 5,802
---------------------------------------------------------------
Total liabilities and shareholders' equity $69,546 $72,440 $71,733 $75,707 $75,266
===============================================================
COMMON SHAREHOLDERS' EQUITY $5,749 $5,750 $5,747 $5,875 $5,784
=================================================================================================================================
</TABLE>
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<PAGE> 14
PNC BANK CORP. AND SUBSIDIARIES Page 14
Asset Quality Data
<TABLE>
<CAPTION>
ALLOWANCE FOR CREDIT LOSSES
Three months ended September 30 June 30 March 31 December 31 September 30 June 30 March 31
In millions 1996 1996 1996 1995 1995 1995 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Beginning balance $1,189 $1,225 $1,259 $1,285 $1,300 $1,318 $1,352
Charge-offs
Consumer (38) (38) (39) (36) (23) (27) (23)
Commercial (8) (17) (10) (29) (11) (14) (30)
Other (9) (3) (6) (12) (14) (12) (9)
-----------------------------------------------------------------------------------------
Total loans charged off (55) (58) (55) (77) (48) (53) (62)
Recoveries
Consumer 10 12 9 9 10 12 10
Commercial 6 6 9 8 14 14 13
Other 2 4 3 5 7 1 3
-----------------------------------------------------------------------------------------
Total recoveries 18 22 21 22 31 27 26
-----------------------------------------------------------------------------------------
Net charge-offs (37) (36) (34) (55) (17) (26) (36)
Provision for credit losses 1 2 2 1
Acquisitions 28 6 1
-----------------------------------------------------------------------------------------
Ending balance $1,152 $1,189 $1,225 $1,259 $1,285 $1,300 $1,318
=================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
NONPERFORMING ASSETS
September 30 June 30 March 31 December 31 September 30
In millions 1996 1996 1996 1995 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nonaccrual loans
Commercial $176 $169 $141 $118 $126
Commercial real estate
Commercial mortgage 118 127 116 108 109
Real estate project 21 30 40 45 89
Consumer 5 6 7 10 17
Residential mortgage 54 46 51 54 55
-------------------------------------------------------------------
Total nonaccrual loans 374 378 355 335 396
Restructured loans 3 3 17 23 45
-------------------------------------------------------------------
Total nonperforming loans 377 381 372 358 441
Foreclosed assets
Commercial real estate 79 85 98 105 115
Residential 22 21 26 24 25
Other 23 22 44 49 50
-------------------------------------------------------------------
Total foreclosed assets 124 128 168 178 190
-------------------------------------------------------------------
Total nonperforming assets $501 $509 $540 $536 $631
=================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
LOAN PORTFOLIO
Period ended September 30 June 30 March 31 December 31 September 30
In millions 1996 1996 1996 1995 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Consumer $13,341 $13,178 $13,566 $13,539 $11,954
Residential mortgage 12,642 12,139 11,620 11,689 11,444
Commercial 17,484 17,296 16,950 16,812 15,789
Commercial real estate
Commercial mortgage 2,544 2,644 2,737 2,775 2,799
Real estate project 2,090 2,193 2,137 2,139 2,261
Other 1,689 2,131 2,170 2,102 2,044
-------------------------------------------------------------------
Total loans 49,790 49,581 49,180 49,056 46,291
Unearned income (347) (358) (380) (403) (390)
-------------------------------------------------------------------
Loans, net of unearned income $49,443 $49,223 $48,800 $48,653 $45,901
=================================================================================================================================
</TABLE>
