<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
JULY 15, 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 Second Quarter Financial Results
On July 15, 1996, PNC Bank Corp. ("Corporation") reported results of
operations for the three months and six months ended June 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: July 17, 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 July 15, 1996,
with respect to the results of operations for the three months and six
months ended June 30, 1996, is filed herewith.
3
<PAGE> 1
Exhibit 99
CONTACTS:
MEDIA:
- ------
Jonathan Williams
(412) 762-4550
INVESTORS:
- ----------
William H. Callihan
(412) 762-8257
PNC BANK CORP. EARNINGS INCREASE 28 PERCENT
PITTSBURGH, July 15, 1996 -- PNC Bank Corp. (NYSE: PNC) today
reported second quarter 1996 earnings increased 28% compared with the same
period in 1995. Net income totaled $248.1 million or $0.72 per fully diluted
share compared with $194.0 million or $0.56 per fully diluted share for the
second quarter of 1995. Return on average assets and average common
shareholders' equity improved to 1.38% and 17.33%, respectively, from 1.03% and
13.65% a year ago.
"Our second quarter earnings were generated by solid performance
from our major businesses including growth in fee-based revenues led by asset
management, brokerage and corporate finance. This quarter's strong results also
reflect the benefits of previous actions taken to reposition our balance
sheet," said Thomas H. O'Brien, chairman and chief executive officer. "In
addition, we continue to be enthusiastic about the progress of the Midlantic
integration and the value this combination is creating for our shareholders."
SECOND QUARTER HIGHLIGHTS
o Net interest income increased 15.9% and net interest margin
widened 66 basis points to 3.72% compared with the second quarter
of 1995.
o Noninterest income before securities gains increased 13.1%
excluding the impact of alliances in credit card and merchant
services.
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<PAGE> 2
PNC Bank Corp. Earnings Increase 28 Percent Page 2
o The efficiency ratio improved to 59.0% reflecting aggressive
management of operating expenses.
o Asset quality remained strong. Net charge-offs were 0.29% of
average loans and consumer net charge-offs declined compared
with the first quarter of 1996.
o The integration of Midlantic's operations is proceeding on
schedule and will be substantially completed by the end of the
third quarter of 1996.
INCOME STATEMENT REVIEW
Taxable-equivalent net interest income for the second quarter of
1996 increased $85.2 million to $619.9 million and net interest margin widened
to 3.72% compared with $534.7 million and 3.06%, respectively, in the
year-earlier period. The increase in net interest income was due to loan
growth, the Chemical Bank, New Jersey acquisition and the balance sheet
repositioning. The improvement in net interest margin is primarily due to a
higher proportion of loans to earning assets and an increase in lower-cost
consumer deposits relative to total sources of funds.
Noninterest income increased 7.4% to $336.6 million for the second
quarter of 1996 compared with the year-earlier period. Excluding the impact of
alliances in credit card and merchant services, noninterest income before
securities gains increased 13.1%.
Asset management and trust revenue increased $15.4 million or 14.1%
due to growth in mutual fund and personal trust services and an increase in the
value of assets under administration. Discretionary assets totaled $104.5
billion at June 30, 1996 compared with $89.3 billion a year ago.
Service fees increased 12.2% to $133.6 million. Deposit fees
increased $14.1 million primarily due to growth in treasury management revenue
and acquisitions. Brokerage and corporate finance fees increased 48.8% and
23.7%, respectively. Credit card and merchant services declined $11.0 million
in the quarter-to-quarter comparison as a result of alliances with third
parties for these businesses. Excluding this impact service fees increased
23.7%.
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<PAGE> 3
PNC Bank Corp. Earnings Increase 28 Percent Page 3
Mortgage banking revenue declined in the comparison primarily due
to lower servicing sales and the impact of an increasingly competitive market
for mortgage originations. Mortgage originations totaled $1.6 billion in the
second quarter of 1996 and, at June 30, 1996, the corporation serviced $40.6
billion of mortgages, including $28.1 billion serviced for others. Other
noninterest income increased $12.6 million to $38.8 million, primarily due to
higher venture capital income.
Noninterest expense increased 4.0% compared with the second quarter
of 1995 due to acquisitions, investments in alternative delivery capabilities
and incentive compensation related to higher levels of fee-based revenue. The
increases were partially offset by lower Federal deposit insurance premiums.
Excluding acquisitions, noninterest expense declined slightly in the
comparison. The efficiency ratio improved to 59.0% for the second quarter of
1996 compared with 64.0% a year ago.
BALANCE SHEET REVIEW
Average earning assets declined $3.1 billion to $66.4 billion
compared to the second quarter of 1995. The decline results from the
corporation's initiative to downsize the securities portfolio and reduce
associated wholesale funding. Average securities declined $8.4 billion to $14.7
billion which represents 22.2% of average earning assets compared with 33.3% a
year ago.
Average loans increased $4.4 billion to $49.2 billion, representing
74.1% of average earning assets compared with 64.4% a year ago. Excluding
acquisitions, average loans increased 5.0% in the comparison. Consumer loan
growth was tempered by competitive pricing pressures and the corporation's
assessment of national asset quality trends in consumer lending.
Average deposits increased $1.0 billion to $45.4 billion for the
second quarter of 1996. Higher levels of retail deposits from acquisitions were
partially offset by lower wholesale liabilities. Excluding acquisitions and
wholesale deposits, average deposits increased 1.3% in the comparison. Average
deposits represented 62.6% of total sources of funds in the second quarter of
1996 compared with 58.9% a year ago.
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<PAGE> 4
PNC Bank Corp. Earnings Increase 28 Percent Page 4
The corporation's asset quality remained strong during the second
quarter of 1996. The allowance for credit losses was $1.2 billion at June 30,
1996, representing 312% of nonperforming loans compared with 273% at June 30,
1995. Net charge-offs were $36 million, or 0.29% of average loans in the second
quarter of 1996 compared with $26 million and 0.23%, respectively, a year ago.
Consumer net charge-offs were 0.79% compared with 0.90% in the first quarter of
1996 and 0.52% a year ago. Nonperforming assets declined to $509 million at
June 30, 1996, compared with $673 million at the end of the second quarter
1995. The ratio of nonperforming assets to total loans and foreclosed assets
was 1.03% at June 30, 1996 and 1.47% at June 30, 1995.
Shareholders' equity totaled $5.8 billion or $17.07 per common
share at June 30, 1996. The leverage capital ratio was 6.96%, and Tier I and
total risk-based capital ratios are estimated to be 8.5% and 12.0%,
respectively. During the second quarter of 1996, approximately 1.6 million
common shares were repurchased as part of a systematic program for employee
benefit and dividend reinvestment plans.
YEAR-TO-DATE RESULTS
Net income for the first six months of 1996 totaled $486.4 million
or $1.41 per fully diluted share compared with $373.5 million or $1.08 per
fully diluted share for the first six months of 1995. Return on average assets
and average common shareholders' equity were 1.36% and 16.99%, respectively,
compared with 1.00% and 13.24%, respectively, for the first six months of 1995.
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]
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PNC BANK CORP. AND SUBSIDIARIES Page 5
Consolidated Financial Highlights
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
--------------------------------------------------
1996 1995 1996 1995
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<S> <C> <C> <C> <C>
FINANCIAL PERFORMANCE (Dollars in thousands, except per share data)
Net interest income (taxable-equivalent basis) $619,926 $534,741 $1,236,034 $1,085,877
Net income 248,050 193,953 486,370 373,500
Fully diluted earnings per common share .72 .56 1.41 1.08
Return on average total assets 1.38% 1.03% 1.36% 1.00%
Return on average common shareholders' equity 17.33 13.65 16.99 13.24
Net interest margin 3.72 3.06 3.72 3.12
After-tax profit margin 25.93 22.87 25.68 22.17
Efficiency ratio 59.00 63.99 59.65 65.06
AVERAGE BALANCES (In millions)
Assets $72,440 $75,343 $72,087 $75,092
Earning assets 66,356 69,495 66,030 69,490
Loans, net of unearned income 49,191 44,765 48,908 44,240
Securities 14,740 23,137 14,779 23,558
Deposits 45,379 44,365 45,465 44,018
Shareholders' equity 5,767 5,727 5,766 5,719
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</TABLE>
<TABLE>
<CAPTION>
June 30 March 31 December 31 June 30
As of or for the three months ended 1996 1996 1995 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PERIOD-END BALANCES (In millions)
Assets $71,961 $72,668 $73,404 $76,519
Earning assets 65,234 66,041 66,772 69,623
Loans, net of unearned income 49,223 48,800 48,653 45,491
Securities 14,107 14,692 15,839 22,397
Deposits 44,852 45,621 46,899 46,177
Shareholders' equity 5,832 5,786 5,768 5,793
SELECTED RATIOS
Capital ratios
Leverage 6.96% 6.90% 6.37% 6.79%
Common shareholders' equity to assets 8.08 7.94 7.83 7.55
Average common shareholders' equity to average assets 7.94 8.01 7.76 7.51
Asset quality ratios
Net charge-offs to average loans .29 .28 .45 .23
Nonperforming loans to loans .77 .76 .74 1.05
Nonperforming assets to loans and foreclosed assets 1.03 1.10 1.10 1.47
Nonperforming assets to total assets .71 .74 .73 .88
Allowance for credit losses to loans 2.42 2.51 2.59 2.86
Allowance for credit losses to nonperforming loans 312.19 328.88 351.68 272.54
Book value per common share
As reported $17.07 $16.88 $16.87 $17.24
Excluding net unrealized securities gains/losses 17.49 17.16 16.79 17.35
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</TABLE>
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<PAGE> 6
PNC BANK CORP. AND SUBSIDIARIES Page 6
Consolidated Statement of Income
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
----------------------------------------------------
In thousands, except per share data 1996 1995 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans and fees on loans $971,829 $927,370 $1,952,665 $1,814,791
Securities 232,251 337,595 469,693 682,999
Other 39,062 29,678 76,122 58,130
----------------------------------------------------
Total interest income 1,243,142 1,294,643 2,498,480 2,555,920
INTEREST EXPENSE
Deposits 351,891 390,754 722,874 748,475
Borrowed funds 107,702 226,279 220,159 437,246
Notes and debentures 172,769 154,788 337,810 308,097
----------------------------------------------------
Total interest expense 632,362 771,821 1,280,843 1,493,818
----------------------------------------------------
Net interest income 610,780 522,822 1,217,637 1,062,102
Provision for credit losses 1,500 3,000
----------------------------------------------------
Net interest income less provision for credit losses 610,780 521,322 1,217,637 1,059,102
NONINTEREST INCOME
Asset management and trust 124,515 109,151 245,392 199,519
Service fees 133,598 119,091 263,867 240,563
Mortgage banking 35,758 50,858 71,740 95,581
Net securities gains 3,904 7,966 6,847 9,220
Other 38,810 26,184 70,301 53,924
----------------------------------------------------
Total noninterest income 336,585 313,250 658,147 598,807
NONINTEREST EXPENSE
Staff expense 284,281 265,415 562,938 528,816
Net occupancy and equipment 92,182 84,537 185,465 171,271
Intangible asset and MSR amortization 28,062 23,855 51,726 47,190
Federal deposit insurance 3,435 24,217 6,625 48,537
Other 156,362 144,639 323,214 300,200
----------------------------------------------------
Total noninterest expense 564,322 542,663 1,129,968 1,096,014
----------------------------------------------------
Income before income taxes 383,043 291,909 745,816 561,895
Applicable income taxes 134,993 97,956 259,446 188,395
----------------------------------------------------
Net income $248,050 $193,953 $486,370 $373,500
----------------------------------------------------
EARNINGS PER COMMON SHARE
Primary $.72 $.57 $1.42 $1.09
Fully diluted .72 .56 1.41 1.08
CASH DIVIDENDS DECLARED PER COMMON SHARE .35 .35 .70 .70
AVERAGE COMMON SHARES OUTSTANDING
Primary 343,022 337,458 342,949 339,608
Fully diluted 347,343 342,479 347,306 345,057
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<PAGE> 7
PNC BANK CORP. AND SUBSIDIARIES Page 7
Details of Net Interest Income
<TABLE>
<CAPTION>
Three months ended Six months ended
Taxable-equivalent basis June 30 June 30
---------------------------------------------------
In thousands 1996 1995 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income/expense before hedging activities
Interest income $1,224,852 $1,314,090 $2,461,129 $2,592,922
Loan fees 20,828 21,354 45,285 40,943
Taxable-equivalent adjustment 9,146 11,919 18,397 23,775
--------------------------------------------------
Total interest income 1,254,826 1,347,363 2,524,811 2,657,640
Interest expense 632,229 762,064 1,279,426 1,479,475
--------------------------------------------------
Net interest income before hedging activities 622,597 585,299 1,245,385 1,178,165
Effect of hedging activities on
Interest income (2,538) (40,801) (7,934) (77,945)
Interest expense 133 9,757 1,417 14,343
--------------------------------------------------
Total effect of hedging activities (2,671) (50,558) (9,351) (92,288)
--------------------------------------------------
Net interest income $619,926 $534,741 $1,236,034 $1,085,877
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</TABLE>
<TABLE>
<CAPTION>
Three months ended
Taxable-equivalent basis June 30 March 31 December 31 September 30 June 30
In thousands 1996 1996 1995 1995 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income/expense before hedging activities
Interest income $1,224,852 $1,236,277 $1,318,461 $1,312,720 $1,314,090
Loan fees 20,828 24,457 17,965 23,115 21,354
Taxable-equivalent adjustment 9,146 9,251 11,077 11,790 11,919
-----------------------------------------------------------------
Total interest income 1,254,826 1,269,985 1,347,503 1,347,625 1,347,363
Interest expense 632,229 647,197 739,819 760,001 762,064
-----------------------------------------------------------------
Net interest income before hedging activities 622,597 622,788 607,684 587,624 585,299
Effect of hedging activities on
Interest income (2,538) (5,396) (36,424) (42,326) (40,801)
Interest expense 133 1,284 7,435 6,489 9,757
-----------------------------------------------------------------
Total effect of hedging activities (2,671) (6,680) (43,859) (48,815) (50,558)
-----------------------------------------------------------------
Net interest income $619,926 $616,108 $563,825 $538,809 $534,741
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<PAGE> 8
PNC BANK CORP. AND SUBSIDIARIES Page 8
Details of Net Interest Margin
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
----------------------------------------------
Taxable-equivalent basis 1996 1995 1996 1995
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<S> <C> <C> <C> <C>
Rates earned/paid before hedging activities
Book-basis yield on earning assets 7.37% 7.49% 7.44% 7.46%
Effect of loan fees .12 .12 .14 .12
Taxable-equivalent adjustment .06 .07 .06 .07
----------------------------------------------
Taxable-equivalent yield on earning assets 7.55 7.68 7.64 7.65
Rate on interest-bearing liabilities 4.59 5.09 4.67 5.03
----------------------------------------------
Interest rate spread 2.96 2.59 2.97 2.62
Noninterest-bearing sources .78 .77 .78 .76
----------------------------------------------
Net interest margin before hedging activities 3.74 3.36 3.75 3.38
Effect of hedging activities on
Interest income (.02) (.23) (.03) (.22)
Interest expense .07 .04
----------------------------------------------
Total effect of hedging activities (.02) (.30) (.03) (.26)
----------------------------------------------
Net interest margin 3.72% 3.06% 3.72% 3.12%
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</TABLE>
<TABLE>
<CAPTION>
Three months ended June 30 March 31 December 31 September 30 June 30
Taxable-equivalent basis 1996 1996 1995 1995 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Rates earned/paid before hedging activities
Book-basis yield on earning assets 7.37% 7.51% 7.50% 7.49% 7.49%
Effect of loan fees .12 .15 .10 .13 .12
Taxable-equivalent adjustment .06 .06 .06 .07 .07
----------------------------------------------------------
Taxable-equivalent yield on earning assets 7.55 7.72 7.66 7.69 7.68
Rate on interest-bearing liabilities 4.59 4.74 4.98 5.11 5.09
----------------------------------------------------------
Interest rate spread 2.96 2.98 2.68 2.58 2.59
Noninterest-bearing sources .78 .79 .79 .79 .77
----------------------------------------------------------
Net interest margin before hedging activities 3.74 3.77 3.47 3.37 3.36
Effect of hedging activities on
Interest income (.02) (.03) (.20) (.24) (.23)
Interest expense .01 .05 .04 .07
----------------------------------------------------------
Total effect of hedging activities (.02) (.04) (.25) (.28) (.30)
----------------------------------------------------------
Net interest margin 3.72% 3.73% 3.22% 3.09% 3.06%
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<PAGE> 9
PNC BANK CORP. AND SUBSIDIARIES Page 9
Details of Noninterest Income
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
----------------------------------------------
In thousands 1996 1995 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Asset management and trust
Asset management services $24,284 $20,811 $49,933 $33,324
Mutual fund services 45,671 39,325 89,657 71,174
Trust 54,560 49,015 105,802 95,021
----------------------------------------------
Total asset management and trust 124,515 109,151 245,392 199,519
Service fees
Deposit 72,403 58,326 137,921 116,713
Brokerage 15,344 10,311 28,986 19,653
Consumer 14,370 11,839 27,828 24,165
Corporate finance 16,106 13,021 29,521 25,405
Credit card and merchant services 282 11,321 9,200 26,652
Insurance 6,872 6,062 13,644 11,468
Other 8,221 8,211 16,767 16,507
----------------------------------------------
Total service fees 133,598 119,091 263,867 240,563
Mortgage banking
Servicing 30,443 29,772 59,481 60,898
Marketing 4,683 11,414 11,277 12,753
Sale of servicing 632 9,672 982 21,930
----------------------------------------------
Total mortgage banking 35,758 50,858 71,740 95,581
Net securities gains 3,904 7,966 6,847 9,220
Other 38,810 26,184 70,301 53,924
----------------------------------------------
Total $336,585 $313,250 $658,147 $598,807
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</TABLE>
<TABLE>
<CAPTION>
Three months ended June 30 March 31 December 31 September 30 June 30
In thousands 1996 1996 1995 1995 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Asset management and trust
Asset management services $24,284 $25,649 $18,890 $20,814 $20,811
Mutual fund services 45,671 43,986 42,349 40,829 39,325
Trust 54,560 51,242 50,285 47,474 49,015
-----------------------------------------------------------
Total asset management and trust 124,515 120,877 111,524 109,117 109,151
Service fees
Deposit 72,403 65,518 62,843 60,722 58,326
Brokerage 15,344 13,642 11,587 10,113 10,311
Consumer 14,370 13,458 14,821 14,437 11,839
Corporate finance 16,106 13,415 14,592 13,133 13,021
Credit card and merchant services 282 8,918 10,888 9,649 11,321
Insurance 6,872 6,772 6,599 6,764 6,062
Other 8,221 8,546 9,473 8,465 8,211
-----------------------------------------------------------
Total service fees 133,598 130,269 130,803 123,283 119,091
Mortgage banking
Servicing 30,443 29,038 28,488 30,215 29,772
Marketing 4,683 6,594 9,893 10,649 11,414
Sale of servicing 632 350 1,046 10,745 9,672
-----------------------------------------------------------
Total mortgage banking 35,758 35,982 39,427 51,609 50,858
Net securities gains (losses) 3,904 2,943 (288,958) 44 7,966
Other 38,810 31,491 30,490 54,273 26,184
-----------------------------------------------------------
Total $336,585 $321,562 $23,286 $338,326 $313,250
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<PAGE> 10
PNC BANK CORP. AND SUBSIDIARIES Page 10
Details of Noninterest Expense
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
---------------------------------------------------
In thousands 1996 1995 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Compensation $234,542 $213,879 $462,775 $422,572
Employee benefits 49,739 51,536 100,163 106,244
---------------------------------------------------
Total staff expense 284,281 265,415 562,938 528,816
Net occupancy 49,192 45,771 99,764 91,432
Equipment 42,990 38,766 85,701 79,839
Intangible asset and MSR amortization 28,062 23,855 51,726 47,190
Taxes other than income 13,391 13,107 28,021 26,205
Federal deposit insurance 3,435 24,217 6,625 48,537
Other 142,971 131,532 295,193 273,995
---------------------------------------------------
Total $564,322 $542,663 $1,129,968 $1,096,014
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</TABLE>
<TABLE>
<CAPTION>
Three months ended June 30 March 31 December 31 September 30 June 30
In thousands 1996 1996 1995 1995 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Compensation $234,542 $228,233 $221,645 $218,934 $213,879
Employee benefits 49,739 50,424 45,317 50,345 51,536
---------------------------------------------------------------
Total staff expense 284,281 278,657 266,962 269,279 265,415
Net occupancy 49,192 50,572 42,424 46,542 45,771
Equipment 42,990 42,711 45,639 40,188 38,766
Intangible asset and MSR amortization 28,062 23,664 41,387 26,094 23,855
Taxes other than income 13,391 14,630 13,796 12,856 13,107
Federal deposit insurance 3,435 3,190 7,662 1,470 24,217
Other 142,971 152,222 148,031 151,006 131,532
---------------------------------------------------------------
Total noninterest expense before special charges 564,322 565,646 565,901 547,435 542,663
Special charges 259,926
---------------------------------------------------------------
Total $564,322 $565,646 $825,827 $547,435 $542,663
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<PAGE> 11
PNC BANK CORP. AND SUBSIDIARIES Page 11
Consolidated Balance Sheet
<TABLE>
<CAPTION>
June 30 December 31 June 30
Dollars in millions, except par values 1996 1995 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks $3,232 $3,679 $3,446
Short-term investments 841 1,611 950
Loans held for sale 1,053 659 773
Securities available for sale 14,107 15,839 3,261
Investment securities, fair value of $18,935 19,136
Loans, net of unearned income of $358, $403 and $393 49,223 48,653 45,491
Allowance for credit losses (1,189) (1,259) (1,300)
---------------------------------------
Net loans 48,034 47,394 44,191
Goodwill and other intangibles 1,004 997 756
Mortgage servicing rights 323 268 280
Other 3,367 2,957 3,726
---------------------------------------
Total assets $71,961 $73,404 $76,519
---------------------------------------
LIABILITIES
Deposits
Noninterest-bearing $10,245 $10,707 $9,458
Interest-bearing 34,607 36,192 36,719
---------------------------------------
Total deposits 44,852 46,899 46,177
Borrowed funds
Federal funds purchased 1,362 3,817 2,222
Repurchase agreements 2,188 2,851 6,578
Commercial paper 462 753 576
Other 3,070 1,244 3,893
---------------------------------------
Total borrowed funds 7,082 8,665 13,269
Notes and debentures 12,243 10,398 9,368
Other 1,952 1,674 1,912
---------------------------------------
Total liabilities 66,129 67,636 70,726
SHAREHOLDERS' EQUITY
Preferred stock - $1 par value
Authorized: 17,492,925, 17,529,342 and 17,562,360 shares
Issued and outstanding: 812,367, 848,784 and 881,802 shares 1 1 1
Common stock - $5 par value
Authorized: 450,000,000 shares
Issued: 340,634,415, 340,863,348 and 344,648,895 shares 1,711 1,704 1,723
Capital surplus 571 545 698
Retained earnings 3,817 3,571 3,717
Deferred benefit expense (77) (79) (83)
Net unrealized securities gains (losses) (141) 26 (37)
Common stock held in treasury at cost: 1,630,612 and 9,724,594 shares (50) (226)
---------------------------------------
Total shareholders' equity 5,832 5,768 5,793
---------------------------------------
Total liabilities and shareholders' equity $71,961 $73,404 $76,519
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PNC BANK CORP. AND SUBSIDIARIES Page 12
Condensed Consolidated Average Balance Sheet
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
--------------------------------------------------
In millions 1996 1995 1996 1995
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<S> <C> <C> <C> <C>
ASSETS
Interest-earning assets
Short-term investments $1,155 $1,042 $1,128 $1,187
Securities available for sale 14,740 3,754 14,779 3,978
Investment securities 19,383 19,580
Loans, net of unearned income 49,191 44,765 48,908 44,240
Other interest-earning assets 1,270 551 1,215 505
--------------------------------------------------
Total interest-earning assets 66,356 69,495 66,030 69,490
Other 6,084 5,848 6,057 5,602
--------------------------------------------------
Total assets $72,440 $75,343 $72,087 $75,092
--------------------------------------------------
LIABILITIES
Interest-bearing liabilities
Deposits $35,383 $35,407 $35,627 $35,182
Borrowed funds 7,816 14,140 7,819 14,018
Notes and debentures 11,904 9,586 11,487 9,848
--------------------------------------------------
Total interest-bearing liabilities 55,103 59,133 54,933 59,048
Noninterest-bearing deposits 9,996 8,958 9,838 8,836
Other 1,574 1,525 1,550 1,489
--------------------------------------------------
Total liabilities 66,673 69,616 66,321 69,373
SHAREHOLDERS' EQUITY 5,767 5,727 5,766 5,719
--------------------------------------------------
Total liabilities and shareholders' equity $72,440 $75,343 $72,087 $75,092
--------------------------------------------------
COMMON SHAREHOLDERS' EQUITY $5,750 $5,660 $5,749 $5,651
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Three months ended June 30 March 31 December 31 September 30 June 30
In millions 1996 1996 1995 1995 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets
Short-term investments $1,155 $1,102 $950 $815 $1,042
Securities available for sale 14,740 14,818 9,349 3,222 3,754
Investment securities 10,101 18,823 19,383
Loans, net of unearned income
Consumer 13,243 13,370 13,188 11,822 11,603
Residential mortgage 11,883 11,619 11,462 11,066 10,629
Commercial 17,190 16,806 16,590 15,914 15,620
Commercial real estate 4,831 4,885 5,029 5,096 5,016
Other 2,044 1,945 2,035 1,748 1,897
--------------------------------------------------------------
Total loans, net of unearned income 49,191 48,625 48,304 45,646 44,765
Other interest-earning assets 1,270 1,160 977 952 551
--------------------------------------------------------------
Total interest-earning assets 66,356 65,705 69,681 69,458 69,495
Other 6,084 6,028 6,026 5,808 5,848
--------------------------------------------------------------
Total assets $72,440 $71,733 $75,707 $75,266 $75,343
--------------------------------------------------------------
LIABILITIES
Interest-bearing liabilities
Deposits $35,383 $35,872 $36,577 $35,945 $35,407
Borrowed funds 7,816 7,823 11,511 14,016 14,140
Notes and debentures 11,904 11,068 10,637 8,829 9,586
--------------------------------------------------------------
Total interest-bearing liabilities 55,103 54,763 58,725 58,790 59,133
Noninterest-bearing deposits 9,996 9,681 9,639 9,132 8,958
Other 1,574 1,525 1,450 1,542 1,525
--------------------------------------------------------------
Total liabilities 66,673 65,969 69,814 69,464 69,616
SHAREHOLDERS' EQUITY 5,767 5,764 5,893 5,802 5,727
--------------------------------------------------------------
Total liabilities and shareholders' equity $72,440 $71,733 $75,707 $75,266 $75,343
--------------------------------------------------------------
COMMON SHAREHOLDERS' EQUITY $5,750 $5,747 $5,875 $5,784 $5,660
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</TABLE>
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<PAGE> 13
PNC BANK CORP. AND SUBSIDIARIES Page 13
Asset Quality Data
<TABLE>
<CAPTION>
ALLOWANCE FOR CREDIT LOSSES
Three months ended June 30 March 31 December 31 September 30 June 30 March 31
In millions 1996 1996 1995 1995 1995 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Beginning balance $1,225 $1,259 $1,285 $1,300 $1,318 $1,352
Charge-offs
Consumer (38) (39) (36) (23) (27) (23)
Commercial (17) (10) (29) (11) (14) (30)
Other (3) (6) (12) (14) (12) (9)
-----------------------------------------------------------------------------
Total loans charged off (58) (55) (77) (48) (53) (62)
Recoveries
Consumer 12 9 9 10 12 10
Commercial 6 9 8 14 14 13
Other 4 3 5 7 1 3
-----------------------------------------------------------------------------
Total recoveries 22 21 22 31 27 26
-----------------------------------------------------------------------------
Net charge-offs (36) (34) (55) (17) (26) (36)
Provision for credit losses 1 2 2 1
Acquisitions 28 6 1
-----------------------------------------------------------------------------
Ending balance $1,189 $1,225 $1,259 $1,285 $1,300 $1,318
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</TABLE>
<TABLE>
<CAPTION>
NONPERFORMING ASSETS
June 30 March 31 December 31 September 30 June 30
In millions 1996 1996 1995 1995 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nonaccrual loans
Commercial $169 $141 $118 $126 $148
Commercial real estate
Commercial mortgage 127 116 108 109 113
Real estate project 30 40 45 89 103
Consumer 6 7 10 17 14
Residential mortgage 46 51 54 55 54
------------------------------------------------------------------
Total nonaccrual loans 378 355 335 396 432
Restructured loans 3 17 23 45 45
------------------------------------------------------------------
Total nonperforming loans 381 372 358 441 477
Foreclosed assets
Commercial real estate 85 98 105 115 119
Residential 21 26 24 25 26
Other 22 44 49 50 51
------------------------------------------------------------------
Total foreclosed assets 128 168 178 190 196
------------------------------------------------------------------
Total nonperforming assets $509 $540 $536 $631 $673
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</TABLE>
<TABLE>
<CAPTION>
LOAN PORTFOLIO
Period ended June 30 March 31 December 31 September 30 June 30
In millions 1996 1996 1995 1995 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Consumer $13,178 $13,566 $13,539 $11,954 $11,930
Residential mortgage 12,139 11,620 11,689 11,444 10,999
Commercial 17,296 16,950 16,812 15,789 16,010
Commercial real estate
Commercial mortgage 2,644 2,737 2,775 2,799 2,838
Real estate project 2,193 2,137 2,139 2,261 2,233
Other 2,131 2,170 2,102 2,044 1,874
------------------------------------------------------------------
Total loans 49,581 49,180 49,056 46,291 45,884
Unearned income (358) (380) (403) (390) (393)
------------------------------------------------------------------
Loans, net of unearned income $49,223 $48,800 $48,653 $45,901 $45,491
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
