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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
DECEMBER 31, 1995
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
COMMISSION FILE NUMBER 1-9718
PNC BANK CORP.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-1435979
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE PNC PLAZA
24th FLOOR
249 FIFTH AVENUE
PITTSBURGH, PENNSYLVANIA 15265
(Address of principal executive offices)
(Zip Code)
(412) 762-1553
(Registrant's telephone number, including area code)
ONE PNC PLAZA
FIFTH AVENUE AND WOOD STREET
PITTSBURGH, PENNSYLVANIA 15265
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Merger with Midlantic Corporation
PNC Bank Corp. ("Corporation") completed, effective December 31, 1995,
its merger with Midlantic Corporation ("Midlantic"), a bank holding
company headquartered in New Jersey. Under the terms of the merger
agreement, each outstanding share of Midlantic's common stock was
converted into 2.05 shares of the Corporation's common stock with cash
being paid in lieu of fractional shares, for a total of approximately
112 million shares of the Corporation's stock. At closing, Midlantic had
total assets and deposits of $13.6 billion and $11.0 billion,
respectively. The transaction was accounted for as a pooling of
interests.
Midlantic was merged with and into PNC Bancorp, Inc., a wholly-owned
subsidiary of the Corporation. Midlantic Bank, N.A., Midlantic's
principal subsidiary, will continue to operate under its present name
until integration and consolidation plans are fully implemented in
1996. As previously reported, certain operational changes are
anticipated.
Additional Directors
In accordance with the merger agreement, effective December 31, 1995,
four additional directors were appointed to the Corporation's Board of
Directors, increasing the number of directors to twenty-two. The four
are as follows: David F. Girard-diCarlo, managing partner of the law
firm of Blank, Rome, Comisky & McCauley; Arthur J. Kania, principal of
Tri-Kan Associates; Bruce C. Lindsay, chairman and managing director of
Brin-Lindsay & Co., Inc.; and Garry J. Scheuring, chairman, president,
and chief executive officer of Midlantic, who will become vice chairman
and a member of the office of the chairman of the Corporation.
ITEM 5. OTHER EVENTS
Announcement of Balance Sheet Actions and Estimate of 1995 Earnings
On January 2, 1996, the Corporation reported it had completed actions to
accelerate the repositioning of its balance sheet and provided an
estimate of combined earnings for 1995 giving effect to the Midlantic
transaction. A copy of the press release issued by the Corporation is
attached hereto as Exhibit 99 and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
(i) Audited consolidated financial statements of Midlantic as of
December 31, 1994 and 1993, and for each of the three years in
the period ended December 31, 1994, and the independent
auditors' report thereon, included on pages 42 - 70 of
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Midlantic's 1994 Annual Report to Shareholders and incorporated
by reference in Midlantic's Annual Report on Form 10-K for the
year ended December 31, 1994 (File No. 0-15870) were previously
incorporated by reference in the Corporation's Form 8-K/A
(Amendment No. 1) dated July 10, 1995 ("Form 8-K/A"). The
consent of Coopers & Lybrand, L.L.P., independent auditors of
Midlantic, to the incorporation by reference of their report on
such financial statements was previously filed as Exhibit 23 to
the Corporation's Form 8-K/A.
(ii) Unaudited consolidated interim financial statements of
Midlantic as of September 30, 1995 and 1994 and for the three
months and nine months ended September 30, 1995 and 1994 were
previously incorporated by reference to Midlantic's Form 10-Q
for the quarterly period ended September 30, 1995 (File No.
0-15870) in the Corporation's Form 10-Q/A, Amendment No. 1 to
the Corporation's Form 10-Q for the quarterly period ended
September 30, 1995 ("Form 10-Q").
(b) Pro Forma Financial Information
Pro forma consolidated financial information (unaudited) as of
September 30, 1995 and for the nine months ended September 30, 1995
and 1994 giving effect to the merger of Midlantic were previously
filed as Exhibit 99.2 to the Corporation's Form 10-Q.
Pro forma consolidated financial information (unaudited) for each of
the three years in the period ended December 31, 1994 giving effect
to the merger of Midlantic were previously filed as Exhibit 99.4
to the Corporation's Form 8-K/A.
(c) Exhibits
The exhibits listed on the Exhibit Index on page 4 of this Form 8-K
are filed herewith, previously filed, or incorporated herein by
reference.
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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: January 5, 1996 By /s/ ROBERT L. HAUNSCHILD
--------------------------
Robert L. Haunschild
Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
2.1 Agreement and Plan of Reorganization dated as of July 10, 1995, by and
among Midlantic, the Corporation and PNC Bancorp, Inc., including Agreement
and Plan of Merger (Annex A), incorporated by reference to Exhibit 2 to
the Corporation's Current Report on Form 8-K dated July 10, 1995.*
2.2 Amendment Agreement dated as of August 16, 1995, by and among Midlantic,
the Corporation and PNC Bancorp, Inc., incorporated by reference to Exhibit
2 to the Corporation's Form 10-Q for the quarterly period ended September
30, 1995.
2.3 Second Amendment dated as of November 17, 1995, by and among Midlantic, the
Corporation and PNC Bancorp, Inc., filed herewith.
23 Consent of Coopers & Lybrand, L.L.P., independent auditors of Midlantic,
previously filed as Exhibit 23 to the Corporation's Form 8-K/A (Amendment
No. 1) dated July 10, 1995.
99 Press release issued by the Corporation on January 2, 1996,
filed herewith.
* The exhibits of the agreements have been omitted. They are (a) Exhibit
4.9(a) - form of Midlantic affiliate letter, (b) Exhibit 4.9(b) - form of
Corporation affiliate letter, (c) Exhibit 5.2(f) - form of opinion of
Corporation counsel, and (d) Exhibit 5.3(g) - form of opinion of
Midlantic counsel. The Corporation agrees to furnish supplementally a
copy of any omitted exhibit to the Commission upon request.
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EXHIBIT 2.3
SECOND AMENDMENT AGREEMENT
THIS SECOND AMENDMENT AGREEMENT ("Second Amendment") is entered into as of
November 17, 1995, by and among MIDLANTIC CORPORATION ("MC"), a New jersey
corporation having its principal executive office at Metro Park Plaza, P.O. Box
600, Edison, New Jersey 08818, PNC BANK CORP. ("PNC"), a Pennsylvania
corporation having its principal executive office at One PNC Plaza, Pittsburgh,
Pennsylvania 15265, and PNC BANCORP, INC. ("Bancorp"), a Delaware corporation
and a wholly owned subsidiary of PNC, having its principal executive office at
222 Delaware Avenue, Wilmington, Delaware 19899.
WITNESSETH
WHEREAS, MC, PNC and Bancorp previously have entered into an Agreement and
Plan or Reorganization dated as of July 10, 1995, and amended as of August 16,
1995 (as amended, the "Reorganization Agreement"); and
WHEREAS, MC, PNC and Bancorp wish to further amend the Reorganization
Agreement in certain respects;
NOW, THEREFORE, MC, PNC and Bancorp agree as follows:
1. Section 4.8 of the Reorganization Agreement is amended by:
(a) Changing the location of the Closing from the executive offices of
PNC to the offices of Arnold & Porter at 399 Park Avenue, New York, New
York 10022-4690; and
(b) Specifying December 29, 1995, as the Closing Date, it being the
intention of the parties that December 31, 1995, will be the Effective
Date specified in the respective certificates of merger to be delivered
to the New Jersey and Delaware Secretaries of State.
2. From the date hereof, this Second Amendment shall be read and construed
along with the Reorganization Agreement and such agreement shall, along
with all the terms, covenants and conditions thereof, be and continue to
be in full force and effect, save as hereby amended.
3. This Second Amendment shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania applicable to agreements
made and entirely to be performed within such jurisdiction, except to the
extent federal law may be applicable.
4. This Second Amendment may be executed in any number of counterparts,
each of which shall constitute an original and all of which when taken
together shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
caused this Second Amendment to be executed in counterparts by their duly
authorized officers thereunto duly authorized, all as of the day and year first
above written.
PNC BANK CORP.
By: /s/ WALTER E. GREGG, JR.
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Walter E. Gregg, Jr.
Executive Vice President
PNC BANCORP, INC.
By: /s/ WALTER E. GREGG, JR.
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Walter E. Gregg, Jr.
Executive Vice President
MIDLANTIC CORPORATION
By: /s/ HOWARD I. ATKINS
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Howard I. Atkins
Executive Vice President and
Chief Financial Officer
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Exhibit 99
CONTACTS:
MEDIA:
- ------
Jonathan Williams
(412) 762-4550
INVESTORS:
- ----------
William H. Callihan
(412) 762-8257
PNC BANK CORP. PROVIDES PRELIMINARY ESTIMATE OF 1995 EARNINGS
REFLECTING BALANCE SHEET ACTIONS AND MIDLANTIC MERGER
PITTSBURGH, Jan. 2, 1996-PNC Bank Corp. (NYSE: PNC) today announced the
completion of actions taken during the fourth quarter of 1995 that enhanced the
corporation's balance sheet and are expected to positively impact future
operating results.
Commenting on the strategic importance of the fourth-quarter actions,
Thomas H. O'Brien, chairman and chief executive officer, said, "We have
accelerated our balance sheet restructuring by substantially reducing our
securities portfolio and related derivative positions. The acquisitions of
Midlantic Corporation and Chemical Bank New Jersey have provided us with more
stable consumer deposits, reducing the need for wholesale funding, and have
added attractive middle-market and consumer assets. These actions create a
financial institution with a more stable and consistent earnings stream, capable
of sustaining superior returns."
SECURITIES SALES AND OTHER BALANCE SHEET ACTIONS
The company reported that during the fourth quarter of 1995 it had
accelerated and substantially completed the repositioning of its balance sheet
through further reduction of the securities portfolio, to approximately 23
percent of earning assets, and related wholesale funding, to approximately 28
percent of total funding.
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PNC Bank Corp. Provides Preliminary Estimate of 1995 Earnings...--Page 2
All investment securities previously classified as held to maturity were
reclassified as available for sale, as permitted by recently issued guidance
from the Financial Accounting Standards Board (FASB). Subsequently, $1.9 billion
of U.S. Treasury securities and $4.1 billion of collateralized mortgage
obligations (CMOs) were liquidated at an after-tax net loss of approximately $40
million. In addition, PNC Bank terminated all remaining pay-fixed interest rate
swaps associated with such securities. As a result, after-tax losses
approximating $150 million were recognized from the termination of these swap
contracts, including accelerated recognition of deferred losses on contracts
previously terminated.
During the fourth quarter, PNC Bank also terminated $4.4 billion of
receive-fixed index amortizing swaps, resulting in a net after-tax loss of $8
million, which is being deferred and amortized.
MIDLANTIC MERGER
The corporation completed the merger with Midlantic Corporation effective
Dec. 31, 1995. Under the terms of the merger agreement, PNC Bank exchanged 2.05
shares of common stock for each share of Midlantic common stock, or a total of
approximately 112 million shares of PNC Bank stock. Letters of transmittal
informing Midlantic shareholders how to complete the exchange are being mailed
beginning today. The merger was accounted for as a pooling of interests;
accordingly, all combined financial information has been restated to account for
the transaction on this basis.
"The merger with Midlantic significantly expands our presence in the New
Jersey and greater Philadelphia markets and is expected to be accretive to
earnings in 1996," said O'Brien.
Midlantic Bank will continue to operate under its present name as a
subsidiary of PNC Bank Corp. until integration and consolidation plans are fully
implemented later this year.
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PNC Bank Corp. Provides Preliminary Estimate of 1995 Earnings...--Page 3
In connection with the merger, PNC Bank recorded after-tax charges of
approximately $190 million. These charges are primarily associated with
eliminating duplicative operations and facilities, the termination of interest
rate caps and the write-off of state-deferred tax assets.
ESTIMATED COMBINED 1995 EARNINGS
Prior to reflecting charges recorded in connection with the merger and
losses from the initiatives to reposition the balance sheet, the combined
earnings of the companies for 1995 are estimated to be $790 million or $2.28 per
fully diluted share. Reflecting these actions, PNC Bank Corp. expects to report
net income for the year of $410 million of $1.18 per fully diluted share. With
the completion of the Midlantic merger and reflecting the fourth-quarter balance
sheet actions, PNC Bank Corp. had assets of approximately $72 billion and
deposits of approximately $46 billion.
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 corporate banking, consumer banking,
mortgage banking and asset management.
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