<PAGE> 1
Rule 424(b)(5)
Registration No. 33-55114
PROSPECTUS SUPPLEMENT
(To Prospectus dated February 11, 1993) LOGO
6,000,000 SHARES
PNC BANK CORP.
FIXED/ADJUSTABLE RATE NONCUMULATIVE PREFERRED STOCK, SERIES F
------------------------
This Prospectus Supplement relates to 6,000,000 shares of Fixed/Adjustable
Rate Noncumulative Preferred Stock, Series F, $50 liquidation preference per
share (the "Series F Preferred Stock"), of PNC Bank Corp. ("PNC" or the
"Corporation"). Dividends on the Series F Preferred Stock are payable quarterly
on March 31, June 30, September 30 and December 31 of each year, commencing
December 31, 1996, at a rate per share of 6.05% per annum to September 30, 2001.
Thereafter, the dividend rate on the Series F Preferred Stock will be the
Applicable Rate from time to time in effect. The Applicable Rate per share per
annum for any dividend period beginning on or after September 30, 2001 will be
equal to .35% plus the highest of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate and the Thirty Year Constant Maturity Rate (each as defined
herein), as determined in advance of such dividend period. The Applicable Rate
per share per annum for any dividend period beginning on or after September 30,
2001 will not be less than 6.55% nor greater than 12.55%. The amount of
dividends payable in respect of the Series F Preferred Stock will be adjusted in
the event of certain amendments to the Internal Revenue Code of 1986, as amended
(the "Code"), in respect of the dividends received deduction. See "Description
of Series F Preferred Stock-Dividends."
The Series F Preferred Stock is redeemable at any time on and after
September 30, 2001, at the option of PNC, in whole or in part, at $50 per share
plus accrued and unpaid dividends (whether or not earned or declared) from the
immediately preceding Dividend Payment Date, as defined herein (but without any
cumulation for unpaid dividends for prior dividend periods) to the date fixed
for redemption. The Series F Preferred Stock may also be redeemed prior to
September 30, 2001, in whole, at the option of PNC, in the event of certain
amendments to the Code in respect of the dividends received deduction. See
"Description of Series F Preferred Stock--Redemption by PNC." For a description
of the rights and preferences of Series F Preferred Stock, see "Description of
Series F Preferred Stock."
CERTAIN PROPOSED AMENDMENTS TO THE CODE MAY TRIGGER EARLY REDEMPTION. PNC CANNOT
PREDICT IF, WHEN OR THE FINAL FORM IN WHICH SUCH AMENDMENTS WILL BE PASSED. SEE
"RECENT TAX PROPOSALS" AND "DESCRIPTION OF SERIES F PREFERRED STOCK--REDEMPTION
BY PNC."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
================================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC (1) DISCOUNT (2) PNC (1)(3)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share............................... $50.00 $.625 $49.375
- ----------------------------------------------------------------------------------------------------------------
Total................................... $300,000,000 $3,750,000 $296,250,000
================================================================================================================
</TABLE>
(1) Plus accrued dividends, if any, from October 9, 1996 to the date of
delivery.
(2) PNC has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended (the "Securities Act"). See "Underwriting."
(3) Before deducting expenses payable by PNC estimated at $200,000.
------------------------
The shares of Series F Preferred Stock are offered by the several
Underwriters, subject to prior sale, when, as and if issued to and accepted by
them and subject to approval of certain legal matters by Cravath, Swaine & Moore
and certain other conditions. The Underwriters reserve the right to withdraw,
cancel or modify such offer and to reject orders in whole or in part. It is
expected that delivery of the Series F Preferred Stock will be made in New York,
New York on or about October 9, 1996.
------------------------
MERRILL LYNCH & CO.
MORGAN STANLEY & CO. SALOMON BROTHERS INC SMITH BARNEY INC.
INCORPORATED
------------------------
The date of this Prospectus Supplement is October 4, 1996.
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES F
PREFERRED STOCK OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
CERTAIN INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT UPDATES AND
SUPERSEDES CERTAIN INFORMATION CONTAINED IN THE PROSPECTUS. IN THE EVENT OF A
CONFLICT OR INCONSISTENCY, THIS PROSPECTUS SUPPLEMENT SHALL PREVAIL. SEE
"CERTAIN UPDATING INFORMATION."
SHARES OF SERIES F PREFERRED STOCK ARE NOT BANK DEPOSITS AND ARE NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER INSURER OR GOVERNMENTAL
AGENCY.
PNC BANK CORP.
PNC is a bank holding company organized under the laws of the Commonwealth
of Pennsylvania. PNC was incorporated in 1983 with the consolidation of
Pittsburgh National Corporation and Provident National Corporation. Since 1983,
the Corporation has diversified its geographical presence and product
capabilities through strategic bank and nonbank acquisitions and the formation
of various nonbanking subsidiaries. The Corporation operates bank subsidiaries
in Pennsylvania, Delaware, Florida, Indiana, Kentucky, Massachusetts, New Jersey
and Ohio and conducts certain nonbanking operations throughout the United
States. The Corporation's major businesses include consumer banking, corporate
banking, real estate banking, mortgage banking and asset management. At June 30,
1996, the Corporation had total assets of $72.0 billion, total loans (net of
unearned income) of $49.2 billion, total deposits of $44.9 billion and total
shareholders' equity of $5.8 billion. Based on June 30, 1996 total assets, PNC
was the 13th largest bank holding company in the United States. For the first
six months of 1996, the Corporation employed approximately 25,170 persons on an
average full-time equivalent basis.
PNC's principal executive offices are located at One PNC Plaza, 249 Fifth
Avenue, Pittsburgh, Pennsylvania 15222-2702 and its telephone number is (412)
762-1553.
S-2
<PAGE> 3
SUMMARY CONSOLIDATED FINANCIAL DATA
The following unaudited table sets forth certain consolidated financial
data for PNC and its subsidiaries and is qualified in its entirety by the
detailed information and financial statements included in the documents
incorporated herein by reference. See "Incorporation of Certain Documents by
Reference" in the accompanying Prospectus. The financial data for the six months
ended June 30, 1996 are not necessarily indicative of the results that may be
expected for the full year or for any other interim period.
<TABLE>
<CAPTION>
AS OF OR FOR THE
SIX MONTHS ENDED AS OF OR FOR THE
JUNE 30, YEAR ENDED DECEMBER 31,
------------------------ ------------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS (in
thousands)
Interest income.............. $2,498,480 $2,555,920 $5,149,431 $4,723,147 $4,022,771 $4,281,178 $5,399,913
Interest expense............. 1,280,843 1,493,818 3,007,562 2,231,153 1,682,944 2,103,691 3,327,114
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income.......... 1,217,637 1,062,102 2,141,869 2,491,994 2,339,827 2,177,487 2,072,799
Provision for credit
losses..................... 3,000 6,000 83,458 350,249 493,830 1,152,431
Noninterest income excluding
net securities gains
(losses)................... 651,300 589,587 1,240,113 1,180,582 940,899 930,885 995,822
Net securities gains
(losses)................... 6,847 9,220 (279,694) (141,582) 194,699 246,256 60,564
Noninterest expenses......... 1,129,968 1,096,014 2,469,276 2,237,620 1,984,689 2,072,804 2,015,332
Applicable income taxes...... 259,446 188,395 218,952 318,460 261,539 251,526 114,939
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before cumulative
effect of changes in
accounting principles...... 486,370 373,500 408,060 891,456 878,948 536,468 (153,517)
Cumulative effect of changes
in accounting principles,
net of taxes............... (7,528) 19,569 (148,287)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income................... $ 486,370 $ 373,500 $ 408,060 $ 883,928 $ 898,517 $ 388,181 $ (153,517)
---------- ---------- ---------- ---------- ---------- ---------- ----------
PERIOD-END BALANCE SHEET DATA
(In millions)
Total assets................. $ 71,961 $ 76,519 $ 73,404 $ 77,461 $ 76,012 $ 65,802 $ 63,024
Loans, net of unearned
income..................... 49,223 45,491 48,653 44,043 42,113 35,943 38,762
Allowance for credit
losses..................... 1,189 1,300 1,259 1,352 1,372 1,568 1,645
Shareholders' equity......... 5,832 5,793 5,768 5,727 5,404 4,543 4,044
SELECTED RATIOS
Return on average total
assets..................... 1.36% 1.00% .54% 1.19% 1.40% .64% (.24)%
Return on average common
shareholders' equity....... 16.99 13.24 7.05 16.09 18.55 9.38 (4.30)
Average common shareholders'
equity to average total
assets..................... 7.94 7.51 7.64 7.34 7.52 6.67 5.79
Net interest margin.......... 3.72 3.12 3.15 3.64 3.99 3.90 3.59
CREDIT QUALITY RATIOS
Nonperforming loans to
period-end loans(a)........ .77% 1.05% .74% 1.28% 2.03% 5.02% 6.33%
Nonperforming assets to
period-end loans and
foreclosed assets (b)...... 1.03 1.47 1.10 1.71 2.65 6.16 7.38
As a percent of average loans
Net charge-offs............ .29 .28 .29 .40 1.65 1.62 2.21
Provision for credit
losses................... .01 .20 .99 1.36 2.66
Allowance for credit
losses................... 2.43 2.94 2.76 3.17 3.86 4.32 3.80
Allowance as a percent of
period-end
Loans...................... 2.42 2.86 2.59 3.07 3.26 4.36 4.24
Nonperforming loans........ 312.19 272.54 351.68 239.29 160.28 86.87 67.09
</TABLE>
- ---------
Footnotes:
(a) Nonperforming loans are comprised of nonaccrual and restructured loans.
(b) Nonperforming assets are comprised of nonperforming loans and foreclosed
assets.
S-3
<PAGE> 4
CONSOLIDATED RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following unaudited table presents the consolidated ratio of earnings
to combined fixed charges and preferred stock dividends of PNC. The consolidated
ratio of earnings to combined fixed charges and preferred stock dividends has
been computed by dividing income before income taxes, cumulative effect of
changes in accounting principles and fixed charges by fixed charges and
preferred stock dividends. Fixed charges represent all interest expense (ratios
are presented both excluding and including interest on deposits), amortization
of notes and debentures expense, and the portion of net rental expense which is
deemed to be equivalent to interest on debt. Preferred stock dividends are
increased to an amount representing the pretax earnings which would be required
to cover such dividend requirements. Interest expense (other than on deposits)
includes interest on notes and debentures, federal funds purchased and
securities sold under agreements to repurchase, mortgages, commercial paper and
other funds borrowed.
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED -----------------------------------------
JUNE 30, 1996 1995 1994 1993 1992 1991
------------- ------ ------ ------ ------ -----
<S> <C> <C> <C> <C> <C> <C>
Excluding interest on
deposits.................... 2.30x 1.42x 2.09x 2.60x 2.33x .94x
Including interest on
deposits.................... 1.57 1.21 1.53 1.66 1.37 .99
</TABLE>
CERTAIN UPDATING INFORMATION
The address of the New York regional office of the Securities and Exchange
Commission (the "SEC") is 7 World Trade Center, Suite 1300, New York, New York
10048. Copies of documents filed by PNC with the SEC now may also be accessed
electronically by means of the SEC's home page on the Internet at
"http://www.sec.gov". The information under "Statement of Available information"
in the Prospectus should be read accordingly.
Written requests for copies of documents incorporated herein by reference
should be directed to Glenn Davies, Vice President-Financial Reporting, PNC Bank
Corp., One PNC Plaza, 249 Fifth Avenue, Pittsburgh, Pennsylvania 15222-2702 or
"[email protected]" on the Internet. Oral requests may be directed to
(412)762-1553. The information under "Incorporation of Certain Documents by
Reference" in the Prospectus should be read accordingly.
See "PNC Bank Corp." and "Summary Consolidated Financial Data" for updated
information on PNC Bank Corp., including the address of its principal executive
offices.
USE OF PROCEEDS
The net proceeds from the sale of the shares of Series F Preferred Stock
will be used by PNC to repurchase issued and outstanding shares of PNC's Common
Stock.
OUTSTANDING CAPITAL STOCK
PNC's total authorized capital stock currently consists of 467,471,629
shares divided into two classes consisting of 17,471,629 shares of preferred
stock, with a par value of $1.00 per share (the "Preferred Stock"), and
450,000,000 shares of common stock, with a par value of $5.00 per share (the
"Common Stock"). The Board of Directors of PNC (the "PNC Board") is authorized
without further shareholder action to cause the issuance, as of September 30,
1996, of up to 16,662,800 shares of Preferred Stock, and such Preferred Stock
may be issued in one or more series, each with such preferences, limitations,
designations, conversion rights, voting rights, dividend rights, voluntary and
involuntary liquidation rights and other rights as the PNC Board may determine
at the time of issuance.
As of September 30, 1996, there were 335,484,853 shares of Common Stock
issued and outstanding. As of such date, there were four series of Preferred
Stock issued and outstanding, including 16,507 shares of $1.80
S-4
<PAGE> 5
Cumulative Convertible Preferred Stock-Series A (Preferred Stock-A"); 4,699
shares of $1.80 Cumulative Convertible Preferred Stock-Series B ("Preferred
Stock-B"); 334,240 shares of $1.60 Cumulative Convertible Preferred Stock-Series
C ("Preferred Stock-C"); and 453,383 shares of $1.80 Cumulative Convertible
Preferred Stock-Series D ("Preferred Stock-D"). All shares of a former series of
Preferred Stock, designated as $2.60 Cumulative Non-Voting Preferred
Stock-Series E, have been redeemed and restored to the status of authorized but
unissued Preferred Stock.
DESCRIPTION OF SERIES F PREFERRED STOCK
The following description of the particular terms of the Series F Preferred
Stock supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of Preferred Stock set forth in
the accompanying Prospectus, to which description reference is hereby made. The
summary contained herein of the terms of the Series F Preferred Stock does not
purport to be complete and is subject to and qualified in its entirety by
reference to all of the provisions of PNC's Articles of Incorporation, as
amended to date, and the resolutions relating to the Series F Preferred Stock,
copies of which are or will be on file with the SEC by October 9, 1996. Certain
terms not defined in this description are defined in the Prospectus.
GENERAL
The Series F Preferred Stock is a single series consisting of 6,000,000
shares. The holders of Series F Preferred Stock will have no preemptive rights.
The Series F Preferred Stock, upon issuance against full payment of the purchase
price therefor, will be fully paid and nonassessable. Each share of Series F
Preferred Stock has a par value of $1.00.
The Series F Preferred Stock will, on the date of original issuance, rank
on a parity as to payment of dividends and distribution of assets upon voluntary
or involuntary liquidation of PNC with each other outstanding series of
Preferred Stock. See "Description of Preferred Stock" in the Prospectus. The
Series F Preferred Stock, together with each other series of Preferred Stock,
will rank prior to the Common Stock as to the payment of dividends and
distribution of assets upon liquidation of PNC.
The Series F Preferred Stock will not be convertible into shares of Common
Stock of PNC and will not be subject to any sinking fund or other obligation of
PNC to repurchase shares of Series F Preferred Stock.
DIVIDENDS
General
Holders of shares of Series F Preferred Stock will be entitled to receive
cash dividends, as, if and when declared by the PNC Board or a duly authorized
committee thereof out of funds legally available for payment. The initial
dividend for the dividend period commencing October 9, 1996 to (but not
including) December 31, 1996 will be $.6806 per share and will be payable on
December 31, 1996. Thereafter, dividends on the Series F Preferred Stock will be
payable quarterly, as, if and when declared by the PNC Board or a duly
authorized committee thereof, on March 31, June 30, September 30 and December 31
of each year (each a "Dividend Payment Date") at the annual rate of 6.05% or
$3.025 per share to September 30, 2001. After September 30, 2001, dividends on
the Series F Preferred Stock will be payable quarterly, as, if and when declared
by the PNC Board or a duly authorized committee thereof on each Dividend Payment
Date at the Applicable Rate from time to time in effect. The Applicable Rate per
annum for any dividend period beginning on or after September 30, 2001 will be
equal to .35% plus the highest of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate and the Thirty Year Constant Maturity Rate (each as defined below
under "Adjustable Rate Dividends"), as determined in advance of such dividend
period. The Applicable Rate per share per annum for any dividend period
beginning on or after September 30, 2001 will not be less than 6.55% nor greater
than 12.55% (without taking into account any adjustments as described below
under "Changes in the Dividend Received Percentage"). See also "Adjustable Rate
Dividends."
S-5
<PAGE> 6
If a Dividend Payment Date is not a business day, dividends (if declared)
on the Series F Preferred Stock will be paid on the immediately preceding
business day. A dividend period with respect to a Dividend Payment Date is the
period commencing on the immediately preceding Dividend Payment Date and ending
on the day immediately prior to the next succeeding Dividend Payment Date. Each
such dividend will be payable to holders of record as they appear on the stock
records of PNC on such record dates, not more than 30 nor less than 15 days
preceding the payment dates thereof, as will be fixed by the PNC Board or a duly
authorized committee thereof.
Dividends on the Series F Preferred Stock will not be cumulative and no
rights will accrue to the holders of the Series F Preferred Stock by reason of
the fact that PNC may fail to declare or pay dividends on the Series F Preferred
Stock in any amount in any year, whether or not the earnings of PNC in any year
were sufficient to pay such dividends in whole or in part.
Adjustable Rate Dividends
Except as provided below in this paragraph, the "Applicable Rate" per share
per annum for any dividend period beginning on or after September 30, 2001 will
be equal to .35% plus the Effective Rate (as defined below), but not less than
6.55% nor greater than 12.55% (without taking into account any adjustments as
described below under "Changes in the Dividends Received Percentage"). The
"Effective Rate" for any dividend period beginning on or after September 30,
2001 will be equal to the highest of the Treasury Bill Rate, the Ten Year
Constant Maturity Rate or the Thirty Year Constant Maturity Rate (each as
defined below) for such dividend period. In the event that PNC determines in
good faith that for any reason: (i) any of the Treasury Bill Rate, the Ten Year
Constant Maturity Rate or the Thirty Year Constant Maturity Rate cannot be
determined for any dividend period, then the Effective Rate for such dividend
period will be equal to the higher of whichever two of such rates can be so
determined; (ii) only one of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate or the Thirty Year Constant Maturity Rate can be determined for
any dividend period, then the Effective Rate for such dividend period will be
equal to whichever such rate can be so determined; or (iii) none of the Treasury
Bill Rate, the Ten Year Constant Maturity Rate or the Thirty Year Constant
Maturity Rate can be determined for any dividend period, then the Effective Rate
for the preceding dividend period will be continued for such dividend period.
Except as described below in this paragraph, the "Treasury Bill Rate" for
each dividend period will be the arithmetic average of the two most recent
weekly per annum market discount rates (or the one weekly per annum market
discount rate, if only one such rate is published during the relevant Calendar
Period (as defined below)) for three-month U.S. Treasury bills, as published
weekly by the Federal Reserve Board (as defined below) during the Calendar
Period immediately preceding the last 10 calendar days preceding the dividend
period for which the dividend rate on the Series F Preferred Stock is being
determined. In the event that the Federal Reserve Board does not publish such a
weekly per annum market discount rate during any such Calendar Period, then the
Treasury Bill Rate for such dividend period will be the arithmetic average of
the two most recent weekly per annum market discount rates (or the one weekly
per annum market discount rate, if only one such rate is published during the
relevant Calendar Period) for three-month U.S. Treasury bills, as published
weekly during such Calendar Period by any Federal Reserve Bank or by any U.S.
Government department or agency selected by PNC. In the event that a per annum
market discount rate for three-month U.S. Treasury bills is not published by the
Federal Reserve Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Treasury Bill Rate
for such dividend period will be the arithmetic average of the two most recent
weekly per annum market discount rates (or the one weekly per annum market
discount rate, if only one such rate is published during the relevant Calendar
Period) for all of the U.S. Treasury bills then having remaining maturities of
not less than 80 nor more than 100 days, as published during such Calendar
Period by the Federal Reserve Board or, if the Federal Reserve Board does not
publish such rates, by any Federal Reserve Bank or by any U.S. Government
department or agency selected by PNC. In the event that PNC determines in good
faith that for any reason no such U.S. Treasury bill rates are published as
provided above during such Calendar Period, then the Treasury Bill Rate for such
dividend period will be the arithmetic average of the per annum market discount
rates based upon the closing bids during such Calendar Period for each of the
issues of marketable non-interest-bearing
S-6
<PAGE> 7
U.S. Treasury securities with a remaining maturity of not less than 80 nor more
than 100 days from the date of each such quotation, as chosen and quoted daily
for each business day in New York City (or less frequently if daily quotations
are not generally available) to PNC by at least three recognized dealers in U.S.
Government securities selected by PNC. In the event that PNC determines in good
faith that for any reason PNC cannot determine the Treasury Bill Rate for any
dividend period as provided above in this paragraph, the Treasury Bill Rate for
such dividend period will be the arithmetic average of the per annum market
discount rates based upon the closing bids during such Calendar Period for each
of the issues of marketable interest-bearing U.S. Treasury securities with a
remaining maturity of not less than 80 or more than 100 days, as chosen and
quoted daily for each business day in New York City (or less frequently if daily
quotations are not generally available) to PNC by at least three recognized
dealers in U.S. Government securities selected by PNC.
Except as described below in this paragraph, the "Ten Year Constant
Maturity Rate" for each dividend period will be the arithmetic average of the
two most recent weekly per annum Ten Year Average Yields (as defined below) (or
the one weekly per annum Ten Year Average Yield, if only one such yield is
published during the relevant Calendar Period), as published weekly by the
Federal Reserve Board during the Calendar Period immediately preceding the last
10 calendar days preceding the dividend period for which the dividend rate on
the Series F Preferred Stock is being determined. In the event that the Federal
Reserve Board does not publish such a weekly per annum Ten Year Average Yield
during such Calendar Period, then the Ten Year Constant Maturity Rate for such
dividend period will be the arithmetic average of the two most recent weekly per
annum Ten Year Average Yields (or the one weekly per annum Ten Year Average
Yield, if only one such yield is published during the relevant Calendar Period),
as published weekly during such Calendar Period by any Federal Reserve Bank or
by any U.S. Government department or agency selected by PNC. In the event that a
per annum Ten Year Average Yield is not published by the Federal Reserve Board
or by any Federal Reserve Bank or by any U.S. Government department or agency
during such Calendar Period, then the Ten Year Constant Maturity Rate for such
dividend period will be the arithmetic average of the two most recent weekly per
annum average yields to maturity (or the one weekly per annum average yield to
maturity, if only one such yield is published during the relevant Calendar
Period) for all of the actively traded marketable U.S. Treasury fixed interest
rate securities (other than Special Securities (as defined below)) then having
remaining maturities of not less than eight nor more than 12 years, as published
during such Calendar Period by the Federal Reserve Board or, if the Federal
Reserve Board does not publish such yields, by any Federal Reserve Bank or by
any U.S. Government department or agency selected by PNC. In the event that PNC
determines in good faith that for any reason PNC cannot determine the Ten Year
Constant Maturity Rate for any dividend period as provided above in this
paragraph, then the Ten Year Constant Maturity Rate for such dividend period
will be the arithmetic average of the per annum average yields to maturity based
upon the closing bids during such Calendar Period for each of the issues of
actively traded marketable U.S. Treasury fixed interest rate securities (other
than Special Securities) with a final maturity date not less than eight nor more
than 12 years from the date of each such quotation, as chosen and quoted daily
for each business day in New York City (or less frequently if daily quotations
are not generally available) to PNC by at least three recognized dealers in U.S.
Government securities selected by PNC.
Except as described below in this paragraph, the "Thirty Year Constant
Maturity Rate" for each dividend period will be the arithmetic average of the
two most recent weekly per annum Thirty Year Average Yields (as defined below)
(or the one weekly per annum Thirty Year Average Yield, if only one such yield
is published during the relevant Calendar Period), as published weekly by the
Federal Reserve Board during the Calendar Period immediately preceding the last
10 calendar days preceding the dividend period for which the dividend rate on
the Series F Preferred Stock is being determined. In the event that the Federal
Reserve Board does not publish such a weekly per annum Thirty Year Average Yield
during such Calendar Period, then the Thirty Year Constant Maturity Rate for
such dividend period will be the arithmetic average of the two most recent
weekly per annum Thirty Year Average Yields (or the one weekly per annum Thirty
Year Average Yield, if only one such yield is published during the relevant
Calendar Period), as published weekly during such Calendar Period by any Federal
Reserve Bank or by any U.S. Government department or agency selected by PNC. In
the event that a per annum Thirty Year Average Yield is not published by the
Federal Reserve Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Thirty Year Constant
Maturity Rate for such dividend period will be the arithmetic
S-7
<PAGE> 8
average of the two most recently weekly per annum average yields to maturity (or
the one weekly per annum average yield to maturity, if only one such yield is
published during the relevant Calendar Period) for all of the actively traded
marketable U.S. Treasury fixed interest rate securities (other than Special
Securities) then having remaining maturities of not less than 28 nor more than
30 years, as published during such Calendar Period by the Federal Reserve Board
or, if the Federal Reserve Board does not publish such yields, by any Federal
Reserve Bank or by any U.S. Government department or agency selected by PNC. In
the event that PNC determines in good faith that for any reason PNC cannot
determine the Thirty Year Constant Maturity Rate for any dividend period as
provided above in this paragraph, then the Thirty Year Constant Maturity Rate
for such dividend period will be the arithmetic average of the per annum average
yields to maturity based upon the closing bids during such Calendar Period for
each of the issues of actively traded marketable U.S. Treasury fixed interest
rate securities (other than Special Securities) with a final maturity date not
less than 28 nor more than 30 years from the date of each such quotation, as
chosen and quoted daily for each business day in New York City (or less
frequently if daily quotations are not generally available) to PNC by at least
three recognized dealers in U.S. Government securities selected by PNC.
The Treasury Bill Rate, the Ten Year Constant Maturity Rate, and the Thirty
Year Constant Maturity Rate will each be rounded to the nearest five hundredths
of a percent, with .025% being rounded upward.
The Applicable Rate with respect to each dividend period beginning on or
after September 30, 2001 will be calculated as promptly as practicable by PNC
according to the appropriate method described above. PNC will cause notice of
each Applicable Rate to be enclosed with the dividend payment checks next mailed
to the holders of Series F Preferred Stock.
As used above, the term "Calendar Period" means a period of 14 calendar
days; the term "Federal Reserve Board" means the Board of Governors of the
Federal Reserve System; the term "Special Securities" means securities which
can, at the option of the holder, be surrendered at face value in payment of any
Federal estate tax or which provide tax benefits to the holder and are priced to
reflect such tax benefits or which were originally issued at a deep or
substantial discount; the term "Ten Year Average Yield" means the average yield
to maturity for actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of ten years); and the term "Thirty
Year Average Yield" means the average yield to maturity for actively traded
marketable U.S. Treasury fixed interest rate securities (adjusted to constant
maturities of 30 years).
Changes in the Dividends Received Percentage
If one or more amendments to the Code are enacted that change the
percentage of the dividends received deduction (currently 70%) as specified in
Section 243(a)(1) of the Code or any successor provision (the "Dividends
Received Percentage"), as applicable to the Series F Preferred Stock, the amount
of each dividend payable per share of the Series F Preferred Stock for dividend
payments made on or after the later of the date of enactment or the effective
date of such change will be adjusted by multiplying the amount of the dividend
payable determined as described above under "Dividends--General" (before
adjustment) by a factor, which will be the number determined in accordance with
the following formula (the "DRD Formula"), and rounding the result to the
nearest cent:
1 - [.35(1 - .70)]
------------------
1 - [.35(1 - DRP)]
For purposes of the DRD Formula, "DRP" means the Dividends Received Percentage
applicable to the dividend in question. No amendment to the Code, other than a
change in the percentage of the dividends received deduction set forth in
Section 243(a)(1) of the Code or any successor provision, as applicable to the
Series F Preferred Stock, will give rise to an adjustment. Notwithstanding the
foregoing provisions, in the event that, with respect to any such amendment, PNC
receives either an unqualified opinion of nationally recognized independent tax
counsel selected by PNC and approved by Cravath, Swaine & Moore (which approval
will not be unreasonably withheld) or a private letter ruling or similar form of
authorization from the Internal Revenue Service to the effect that such an
amendment would not apply to dividends payable on the Series F Preferred Stock,
then any such amendment will not result in the adjustment provided for pursuant
to
S-8
<PAGE> 9
the DRD Formula. The opinion referenced in the previous sentence will be based
upon a specific provision in the legislation or upon a published pronouncement
of the Internal Revenue Service addressing such legislation. Unless the context
otherwise requires, references to dividends in this Prospectus Supplement will
mean dividends as adjusted by the DRD Formula. PNC's calculation of the
dividends payable as so adjusted and certified accurate as to calculation and
reasonable as to method by the independent certified public accountants then
regularly engaged by PNC, will be final and not subject to review.
If any amendment to the Code which reduces the Dividends Received
Percentage, as applicable to the Series F Preferred Stock, is enacted and
becomes effective after a dividend payable on a Dividend Payment Date has been
declared, the amount of dividend payable on such Dividend Payment Date will not
be increased; but instead, an amount, equal to the excess of (x) the product of
the dividends paid by PNC on such Dividend Payment Date and the DRD Formula
(where the DRP used in the DRD Formula would be equal to the reduced Dividends
Received Percentage) over (y) the dividends paid by PNC on such Dividend Payment
Date, will be payable to holders of record on the next succeeding Dividend
Payment Date in addition to any other amounts payable on such date.
In addition, if prior to April 1, 1997, an amendment to the Code is enacted
that reduces the Dividends Received Percentage, as applicable to the Series F
Preferred Stock, and such reduction retroactively applies to a Dividend Payment
Date as to which PNC previously paid dividends on the Series F Preferred Stock
(each an "Affected Dividend Payment Date"), PNC will pay (if declared)
additional dividends (the "Additional Dividends") on the next succeeding
Dividend Payment Date (or if such amendment is enacted after the dividend
payable on such Dividend Payment Date has been declared, on the second
succeeding Dividend Payment Date following the date of enactment) to holders of
record on such succeeding Dividend Payment Date in an amount equal to the excess
of (x) the product of the dividends paid by PNC on each Affected Dividend
Payment Date and the DRD Formula (where the DRP used in the DRD Formula would be
equal to the Dividends Received Percentage applicable to each Affected Dividend
Payment Date) over (y) the dividends paid by PNC on each Affected Dividend
Payment Date.
Additional Dividends will not be paid in respect of the enactment of any
amendment to the Code on or after April 1, 1997 which retroactively reduces the
Dividends Received Percentage, or if prior to April 1, 1997, such amendment
would not result in an adjustment due to PNC having received either an opinion
of counsel or tax ruling referred to in the third preceding paragraph. PNC will
only make one payment of Additional Dividends.
In the event that the amount of dividend payable per share of the Series F
Preferred Stock will be adjusted pursuant to the DRD Formula and/or Additional
Dividends are to be paid, PNC will cause notice of each such adjustment and, if
applicable, any Additional Dividends, to be sent to the holders of the Series F
Preferred Stock.
In the event that the Dividends Received Percentage, as applicable to the
Series F Preferred Stock, is reduced to 40% or less, PNC may at its option
redeem the Series F Preferred Stock as a whole, but not in part, as described
below. See "Redemption by PNC." See also "Recent Tax Proposals" for a discussion
of certain Proposals (as defined below) to reduce the Dividends Received
Percentage.
VOTING RIGHTS
Holders of Series F Preferred Stock will have no voting rights except as
set forth below or as otherwise from time to time required by law.
If PNC shall have failed to pay, or declare and set apart for payment,
dividends on all outstanding shares of Preferred Stock in an amount equal to six
quarterly dividends at the rates payable upon such shares (including any series
with noncumulative dividends such as with the Series F Preferred Stock), the
number of directors of PNC shall be increased by two at the first annual meeting
of shareholders of PNC held thereafter, and at such meeting and at each
subsequent annual meeting until cumulative dividends payable for all past
dividend periods and continuous noncumulative dividends (as those under the
Series F Preferred Stock will be) for at least one year on all outstanding
shares of Preferred Stock entitled thereto shall have been paid, or
S-9
<PAGE> 10
declared and set apart for payment, in full, the holders of Preferred Stock of
all series shall have the right, voting as a class, to elect such two additional
members of the PNC Board to hold office for a term of one year. Upon such
payment, or such declaration and setting apart for payment, in full, the terms
of the two additional directors so elected shall forthwith terminate, and the
number of directors of PNC shall be reduced by two, and such voting right of the
holders of shares of Preferred Stock shall cease, subject to the increase in the
number of directors as aforesaid and to the revesting of such voting right in
the event of each and every additional failure in the payment of dividends in an
amount equal to six quarterly dividends.
PNC shall not, without the affirmative vote at a meeting, or the written
consent with or without a meeting, of the holders of at least two-thirds of the
then outstanding shares of Preferred Stock of all series (a) create or increase
the authorized number of shares of any class of stock ranking as to dividends or
assets prior to the Preferred Stock; or (b) change the preference
qualifications, privileges, limitations, restrictions or special or relative
rights granted to or imposed upon the shares of Preferred Stock in any material
respect adverse to the holders thereof, provided that if any such change will
affect any particular series materially and adversely as contrasted with the
effect thereof upon any other series, no such change may be made without, in
addition, such vote or consent of the holders of at least two-thirds of the then
outstanding shares of the particular series which would be so affected.
LIQUIDATION RIGHTS
In the event of voluntary or involuntary liquidation of PNC, the holders of
shares of Series F Preferred Stock will be entitled to receive from the assets
of PNC (whether capital or surplus), prior to the payment of the holders of
Common Stock or of any class or series of stock of PNC ranking as to assets
subordinate to the Series F Preferred Stock, a liquidating distribution in the
amount of $50 per share, plus accrued and unpaid dividends (whether or not
earned or declared) from the immediately preceding Dividend Payment Date (but
without cumulation for unpaid dividends for prior dividend periods on the Series
F Preferred Stock) to the date on which payment thereof is made available. After
payment of such liquidating distribution, the holders of shares of Series F
Preferred Stock will not be entitled to any further participation in any
distribution of assets by PNC.
If, upon liquidation of PNC, its assets are not sufficient to pay in full
the amounts so payable to the holders of shares of all series of Preferred Stock
ranking equally as to its assets (which currently would include the Preferred
Stock-A, the Preferred Stock-B, the Preferred Stock-C, the Preferred Stock-D
and, upon issuance, the Series F Preferred Stock), all such shares will
participate ratably in the distribution of assets in proportion to the full
amounts to which they are respectively entitled. Neither a merger or a
consolidation of PNC into or with any other corporation nor a sale, transfer or
lease of all or part of the assets of PNC shall be deemed a liquidation of PNC
within the meaning of this section.
REDEMPTION BY PNC
The Series F Preferred Stock is not subject to any mandatory redemption,
sinking fund or other similar provisions. Prior to September 30, 2001, the
Series F Preferred Stock is not redeemable, except under certain limited
circumstances as described below. On and after such date, shares of Series F
Preferred Stock will be redeemable, in whole or in part, at the option of PNC,
at any time and from time to time upon not less than 30 nor more than 60 days'
notice, at $50 per share of Series F Preferred Stock, plus accrued and unpaid
dividends (whether or not earned or declared) from the immediately preceding
Dividend Payment Date (but without any cumulation for unpaid dividends for prior
dividend periods on the Series F Preferred Stock) to the date fixed for
redemption, including any changes in dividends payable due to changes in the
Dividends Received Percentage and Additional Dividends, if any.
Notwithstanding the preceding paragraph, if the Dividends Received
Percentage, as applicable to the Series F Preferred Stock, is equal to or less
than 40% and, as a result, the amount of dividends on the Series F Preferred
Stock payable on any Dividend Payment Date will be or is adjusted upwards as
described above under "Dividends--Changes in the Dividends Received Percentage,"
PNC, at its option, may redeem all, but not less than all, of the outstanding
shares of the Series F Preferred Stock, provided that, within 60 days of the
S-10
<PAGE> 11
date on which an amendment to the Code is enacted which reduces the Dividends
Received Percentage to 40% or less, PNC sends notice to holders of the Series F
Preferred Stock of such redemption. Any redemption of the Series F Preferred
Stock in accordance with this paragraph will take place on the date specified in
the notice, which will not be less than 30 nor more than 60 days from the date
such notice is sent to holders of Series F Preferred Stock. Any redemption of
the Series F Preferred Stock in accordance with this paragraph will be on notice
as aforesaid at the applicable redemption price set forth in the following
table, in each case plus accrued and unpaid dividends (whether or not earned or
declared) thereon from the immediately preceding Dividend Payment Date (but
without any cumulation for unpaid dividends for prior dividend periods on the
Series F Preferred Stock) to the date fixed for redemption, including any
changes in dividends payable due to changes in the Dividends Received Percentage
and Additional Dividends, if any.
<TABLE>
<CAPTION>
REDEMPTION PRICE
REDEMPTION PERIOD PER SHARE
----------------- ---------
<S> <C>
October 9, 1996 through September 29, 1997................ $52.50
September 30, 1997 through September 29, 1998............. 52.00
September 30, 1998 through September 29, 1999............. 51.50
September 30, 1999 through September 29, 2000............. 51.00
September 30, 2000 through September 29, 2001............. 50.50
On or after September 30, 2001............................ 50.00
</TABLE>
Under certain circumstances, PNC may need the approval of the Federal
Reserve Board prior to exercising its right to redeem shares of Series F
Preferred Stock.
Holders of Series F Preferred Stock will have no right to require
redemption of the Series F Preferred Stock.
NO CONVERSION RIGHTS
Shares of Series F Preferred Stock will not be convertible into shares of
Common Stock or any other security of PNC.
TRANSFER AGENT AND REGISTRAR
The Chase Manhattan Bank, New York, New York, will be the transfer agent,
registrar, dividend disbursing agent and redemption agent for the Series F
Preferred Stock.
RECENT TAX PROPOSALS
On March 19, 1996, the Clinton Administration released a budget plan for
the fiscal year 1997 that includes certain tax proposals that may affect holders
of the Series F Preferred Stock. On August 27, 1996, the Clinton Administration
issued additional tax legislative proposals. (The various Clinton Administrative
legislative proposals are referred to hereinafter as the "Proposals.")
Under the Proposals, the Dividends Received Percentage that is currently
available to corporate shareholders for certain dividends received from another
corporation in which the shareholder owns less than a 20% interest (by vote and
value) would be reduced from 70% to 50%. As proposed, this provision would be
effective for dividends paid after 30 days from the enactment of the provision.
In addition, under the Proposals, the dividends received deduction would be
eliminated for "certain debt-like preferred stock" (including adjustable rate
preferred stock). As proposed, this provision would be effective for shares
issued after the date of enactment. Thus, if enacted in the future as currently
proposed, the Proposal to eliminate the Dividends Received Deduction for certain
preferred stock would not apply to the Series F Preferred Stock. Furthermore,
under current law, the dividends received deduction is allowed to a corporate
shareholder only if the shareholder satisfies a 46-day holding period for the
dividend-paying stock (or a 91-day period for certain dividends on preferred
stock). The holding period does not include certain periods, such as certain
circumstances where the holder has diminished its risk of loss with respect to
the Series F Preferred Stock. The Proposals provide that a taxpayer is not
entitled to a dividends received deduction if the taxpayer's holding
S-11
<PAGE> 12
period for the dividend-paying stock is not satisfied over a period immediately
before or immediately after the taxpayer becomes entitled to receive the
dividend.
To the extent the Dividends Received Percentage, as applicable to the
Series F Preferred Stock, is changed, the amount of dividends payable per share
may be adjusted as described under "Description of Series F Preferred
Stock--Dividends--Changes in the Dividends Received Percentage" and PNC may have
the right to redeem the Series F Preferred Stock as described under "Description
of Series F Preferred Stock--Redemption by PNC." Due to the inherently uncertain
nature of the legislative process with respect to proposed changes to the tax
law such as the Proposals, there can be no assurance as to whether or in what
form the Proposals may be enacted into law, as to the effective dates of any
such changes to the law or as to the effect of any changes to the law on the
holders of the Series F Preferred Stock. See "Description of Series F Preferred
Stock Dividends--Changes in the Dividends Received Percentage" and "--Redemption
by PNC."
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement") among PNC and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Morgan Stanley & Co. Incorporated, Salomon Brothers Inc and
Smith Barney Inc., PNC has agreed to sell to the Underwriters, and the
Underwriters have severally agreed to purchase, the respective number of shares
of Series F Preferred Stock set forth after their names below. The Underwriting
Agreement provides that the obligations of the Underwriters are subject to
certain conditions precedent and that the Underwriters will be obligated to
purchase all of the shares of Series F Preferred Stock if any are purchased.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
----------- ------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................................ 3,600,000
Morgan Stanley & Co. Incorporated................................ 800,000
Salomon Brothers Inc............................................. 800,000
Smith Barney Inc................................................. 800,000
---------
Total............................................... 6,000,000
=========
</TABLE>
The Underwriters have advised PNC that they propose initially to offer the
Series F Preferred Stock to the public at the public offering price set forth on
the cover page of the Prospectus Supplement, and to certain dealers at such
price less a concession not in excess of $.40 per share of Series F Preferred
Stock. The Underwriters may allow, and such dealers may reallow, a discount not
in excess of $.25 per share of Series F Preferred Stock to certain other
dealers. After the initial public offering, the public offering price,
concession and discount may be changed.
The shares of Series F Preferred Stock are new securities with no
established trading market. The Underwriters have advised PNC that they intend
to make a market in the shares of Series F Preferred Stock. The Underwriters
will have no obligation to make a market in the shares of Series F Preferred
Stock, however, and may cease market making activities, if commenced, at any
time without notice. No assurance can be given as to the liquidity of the
trading market for the shares of Series F Preferred Stock.
The Underwriting Agreement provides that PNC will indemnify the several
Underwriters against certain liabilities under the Securities Act or contribute
payments the Underwriters may be required to make in respect thereof.
Certain of the Underwriters and their associates and affiliates may be a
customer of, engage in transactions with, and perform investment banking and
other financial services for, PNC and its subsidiaries in the ordinary course of
business. Among other things, Salomon Brothers Inc has assisted PNC in the past
in connection with its Common Stock repurchases and it is anticipated that it
will do so in the future. See "Use of Proceeds."
S-12
<PAGE> 13
LEGAL OPINIONS
The validity of the Series F Preferred Stock will be passed upon for PNC by
Melanie S. Cibik, Senior Counsel to PNC. As of June 30, 1996, Miss Cibik
beneficially owned 487 shares of PNC's Common Stock under PNC's employee plans.
The validity of the Series F Preferred Stock will be passed upon for the
Underwriters by Cravath, Swaine & Moore.
S-13
<PAGE> 14
===============================================================================
NO DEALER, SALESMAN OR OTHER PERSON IS AUTHORIZED IN CONNECTION WITH THE
OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT
CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITY OTHER THAN THE SERIES F PREFERRED STOCK OFFERED HEREBY TO ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR
SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS NOR ANY SALE MADE HEREBY SHALL UNDER ANY CIRCUMSTANCE IMPLY
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO
THE DATE HEREOF.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
PNC Bank Corp........................... S-2
Summary Consolidated Financial Data..... S-3
Consolidated Ratio of Earnings to
Combined Fixed Charges and
Preferred Stock Dividends............. S-4
Certain Updating Information............ S-4
Use of Proceeds......................... S-4
Outstanding Capital Stock............... S-4
Description of Series F Preferred
Stock................................. S-5
Recent Tax Proposals.................... S-11
Underwriting............................ S-12
Legal Opinions.......................... S-13
PROSPECTUS
Statement of Available Information...... 2
Incorporation of Certain Documents
by Reference.......................... 2
PNC Bank Corp........................... 2
PNC Funding Corp........................ 3
Certain Regulatory Considerations....... 3
Consolidated Ratio of Earnings to
Fixed Charges......................... 4
Consolidated Ratio of Earnings to
Combined Fixed Charges and
Preferred Stock Dividends............. 4
Application of Proceeds................. 5
Description of Debt Securities and
Guarantees............................ 5
Description of Preferred Stock.......... 15
Description of Depositary Shares........ 20
Description of Common Stock............. 23
Certain Tax Considerations.............. 24
Plan of Distribution.................... 24
Legal Opinions.......................... 25
Experts................................. 25
</TABLE>
===============================================================================
================================================================================
6,000,000 SHARES
PNC BANK CORP.
FIXED/ADJUSTABLE RATE NONCUMULATIVE
PREFERRED STOCK, SERIES F
LOGO
---------------------------
PROSPECTUS SUPPLEMENT
---------------------------
MERRILL LYNCH & CO.
MORGAN STANLEY & CO.
INCORPORATED
SALOMON BROTHERS INC
SMITH BARNEY INC.
OCTOBER 4, 1996
================================================================================
