<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
JANUARY 15, 1997
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 Financial Results
On January 15, 1997, PNC Bank Corp. ("Corporation") reported results
of operations for the three months and year ended December 31,
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: January 15, 1997 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 January 15, 1997,
with respect to the results of operations for the three months and
year ended December 31, 1996, is filed herewith.
3
<PAGE> 1
Exhibit 99
MEDIA:
Jonathan Williams
(412) 762-4550
[email protected]
INVESTORS:
William H. Callihan
(412) 762-8257
[email protected]
PNC BANK CORP. REPORTS RECORD EARNINGS FOR 1996
PITTSBURGH, Jan. 15, 1997 -- PNC Bank Corp. (NYSE: PNC) today
reported record earnings for 1996 of $992.2 million or $2.87 per fully diluted
share compared with $408.1 million and $1.19 per fully diluted share in 1995.
Returns on average common shareholders' equity and average assets for 1996 were
17.18% and 1.40%, respectively, compared with 7.05% and 0.54% a year ago.
Excluding a one-time special assessment to recapitalize the Savings Association
Insurance Fund (SAIF), 1996 earnings were $1.015 billion or $2.94 per fully
diluted share.
The corporation also reported record quarterly earnings for the
fourth quarter of 1996 of $271.9 million or $0.79 per fully diluted share.
Returns on average common shareholders' equity and average assets for the
quarter were 18.58% and 1.56%, respectively.
"Our record 1996 performance reflects significant progress in
achieving our strategic objectives and is in line with expectations," said
Thomas H. O'Brien, chairman and chief executive officer. "Our objectives for
1997 include continued focus on a number of growth initiatives, such as our
AAA-affinity business, and aggressive capital management."
HIGHLIGHTS
o Net interest income grew 13% and noninterest revenues increased
11% reflecting the impact of initiatives to reduce reliance on
wholesale investment activities and substantial growth in
attractive fee-based businesses.
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<PAGE> 2
PNC Bank Corp. Reports Record Earnings for 1996 Page 2
o Net interest margin widened 68 basis points to 3.83% as the
proportion of average loans to earning assets increased to 76%
from 66% a year ago.
o The Midlantic integration was successfully completed with cost
savings ahead of expectations.
o In the fourth quarter of 1996, the corporation acquired
AAA-affinity credit card portfolios totaling $1.6 billion and is
positioned to market a full range of products and services to AAA
members nationwide.
o Asset quality remained strong. Nonperforming assets continued to
decline, representing 0.88% of loans and foreclosed assets at Dec.
31, 1996, and net charge-offs were 0.33% of average loans.
o The corporation aggressively pursued capital management
initiatives including the repurchase of approximately 23 million
common shares during 1996.
INCOME STATEMENT REVIEW
The 1996 results include a $22.4 million after-tax third quarter
charge for a one-time special assessment mandated by Congress to recapitalize
the SAIF. The 1995 results include $380.2 million of after-tax charges
recorded during the fourth quarter in connection with the Midlantic merger
and actions taken to reposition the corporation's balance sheet. Results
excluding these charges are:
<TABLE>
<CAPTION>
1996 1995 Change
----------------------------
<S> <C> <C> <C>
Earnings (in millions) $1,015 $788 29%
Fully diluted earnings per common share 2.94 2.29 28
Return on
Average common shareholders' equity 17.58% 13.67%
Average assets 1.43 1.05
----------------------------
</TABLE>
Taxable-equivalent net interest income for 1996 increased $290.1
million to $2.5 billion and net interest margin widened to 3.83% compared with
$2.2 billion and 3.15%, respectively, a year ago. These increases primarily
result from changes in balance sheet composition and the Oct. 1995 Chemical
Bank, New Jersey acquisition.
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<PAGE> 3
PNC Bank Corp. Reports Record Earnings for 1996 Page 3
Noninterest income excluding securities transactions increased
$132.9 million or 10.7% to $1.4 billion in 1996. Asset management and trust
revenue increased $76.6 million or 18.2% due to new business and an increase in
the value of assets under administration. Managed assets increased to
approximately $109 billion at Dec. 31, 1996 compared with $96 billion a year ago
and assets under administration totaled approximately $329 billion at the end of
1996. Service fees increased 14.5% to $566.4 million primarily from growth in
brokerage, corporate finance and deposit services. Mortgage banking revenue
declined in the comparison primarily due to lower servicing sales. Mortgage
originations totaled $5.6 billion in 1996 and, at Dec. 31, 1996, the corporation
serviced approximately $39.5 billion of mortgages including $27.3 billion
serviced for others. Other noninterest income increased $17.5 million to $156.2
million, primarily due to higher venture capital income.
Net securities gains totaled $22.1 million in 1996 compared with
net losses of $279.7 million in the prior year. The 1995 losses were primarily
related to initiatives to reduce reliance on wholesale investment activities.
Noninterest expense totaled $2.3 billion in 1996 compared with $2.5
billion in 1995. Excluding the SAIF assessment in 1996 and one-time charges
taken in 1995, the efficiency ratio improved to 58.8% for 1996 compared with
64.3% a year ago.
The corporation continues to invest in AAA initiatives including
loan portfolio acquisitions and has begun to aggressively market products and
services to the organization's membership base. During the fourth quarter, the
corporation acquired AAA-affinity credit card portfolios totaling $1.6 billion.
BALANCE SHEET REVIEW
Total assets were $73.3 billion at Dec. 31, 1996 and $73.4 billion a
year ago. Average earning assets were $64.7 billion compared with $69.5 billion
in 1995, reflecting the securities portfolio downsizing partially offset by loan
growth and acquisitions. Average securities declined $8.6 billion to $13.6
billion and represented 20.9% of
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<PAGE> 4
PNC Bank Corp. Reports Record Earnings for 1996 Page 4
average earning assets compared with 31.8% a year ago. Average loans increased
$3.5 billion to $49.1 billion, representing 75.9% of average earning assets
compared with 65.6% a year ago. Excluding the Chemical acquisition, average
loans grew by 4.0%.
Average interest-bearing funding sources totaled $53.5 billion in
1996 compared with $58.9 billion a year ago. Average deposits increased
slightly to $45.1 billion for 1996 and represented 63.7% of total sources of
funds in 1996 compared with 59.7% a year ago. Average wholesale liabilities
were reduced to $19.5 billion during 1996 and represented 27.5% of total
sources of funds compared with 34.1% a year ago.
Asset quality remained strong. The allowance for credit losses was
$1.2 billion at Dec. 31, 1996, and represented 334% of nonperforming loans
compared with 352% at year-end 1995. Net charge-offs were $164 million or
0.33% of average loans in 1996 compared with $133 million and 0.29%,
respectively, a year ago. Nonperforming assets declined to $459 million at
Dec. 31, 1996, compared with $536 million at the end of 1995. The ratio of
nonperforming assets to total loans and foreclosed assets was 0.88% at Dec. 31,
1996 and 1.10% a year ago.
Shareholders' equity totaled $5.9 billion at Dec. 31, 1996. The
leverage ratio was 7.24% and Tier I and total risk-based capital ratios are
estimated to be 8.4% and 11.8%, respectively. During 1996, approximately 22.7
million common shares were repurchased and in the fourth quarter of 1996, the
board of directors approved a 5.7% increase in the common dividend to $0.37 per
share. In addition, the corporation issued $300 million of preferred stock and
$350 million of trust preferred securities.
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. PNC Bank Corp.'s major businesses include consumer banking,
corporate banking, mortgage banking, real estate banking and asset management.
Visit PNC Bank on the World Wide Web at www.pncbank.com
[TABULAR MATERIAL FOLLOWS]
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<PAGE> 5
PNC BANK CORP. AND SUBSIDIARIES Page 5
Consolidated Financial Highlights
<TABLE>
<CAPTION>
Three months ended Year ended
December 31 December 31
-------------------------------------------------
1996 1995 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FINANCIAL PERFORMANCE (Dollars in thousands, except per share data)
Net interest income (taxable-equivalent basis) $625,637 $563,825 $2,478,609 $2,188,511
Net income (loss) 271,903 (176,177) 992,226 408,060
Fully diluted earnings (loss) per common share .79 (.52) 2.87 1.19
Return on average common shareholders' equity 18.58% (11.92)% 17.18% 7.05%
Return on average total assets 1.56 (.92) 1.40 .54
Net interest margin 3.92 3.22 3.83 3.15
After-tax profit margin 26.81 (30.01) 25.61 12.96
Efficiency ratio 57.83 140.66 59.68 78.42
AVERAGE BALANCES (In millions)
Assets $69,536 $75,707 $70,807 $75,131
Earning assets 63,322 69,681 64,725 69,535
Loans, net of unearned income 49,973 48,304 49,116 45,624
Securities 11,569 19,450 13,550 22,140
Deposits 44,832 46,216 45,117 44,830
Shareholders' equity 6,017 5,893 5,828 5,784
Common shareholders' equity 5,727 5,875 5,742 5,741
=================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
December 31 September 30 June 30 March 31 December 31
As of or for the three months ended 1996 1996 1996 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PERIOD-END BALANCES (In millions)
Assets $73,260 $69,662 $71,961 $72,668 $73,404
Earning assets 65,439 62,533 65,234 66,041 66,772
Loans, net of unearned income 51,798 49,443 49,223 48,800 48,653
Securities 11,917 11,243 14,107 14,692 15,839
Deposits 45,676 45,430 44,852 45,621 46,899
Shareholders' equity 5,869 5,798 5,832 5,786 5,768
Common shareholders' equity 5,553 5,781 5,815 5,769 5,750
SELECTED RATIOS
Capital ratios
Leverage 7.24% 7.18% 6.96% 6.90% 6.37%
Common shareholders' equity to assets 7.58 8.30 8.08 7.94 7.83
Average common shareholders' equity to average assets 8.24 8.27 7.94 8.01 7.76
Asset quality ratios
Net charge-offs to average loans .45 .30 .29 .28 .45
Nonperforming assets to loans and foreclosed assets .88 1.01 1.03 1.10 1.10
Nonperforming assets to total assets .63 .72 .71 .74 .73
Allowance for credit losses to loans 2.25 2.33 2.42 2.51 2.59
Allowance for credit losses to nonperforming loans 334.40 306.11 312.19 328.88 351.68
Book value per common share
As reported $17.13 $17.23 $17.07 $16.88 $16.87
Excluding net unrealized securities gains/losses 17.34 17.58 17.49 17.16 16.79
===================================================================================================================================
</TABLE>
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<PAGE> 6
PNC BANK CORP. AND SUBSIDIARIES Page 6
Consolidated Statement of Income
<TABLE>
<CAPTION>
Three months ended Year ended
December 31 December 31
----------------------------------------------------
In thousands, except per share data 1996 1995 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans and fees on loans $1,011,871 $983,267 $3,943,586 $3,742,877
Securities 181,264 283,703 858,686 1,282,929
Other 30,490 33,032 136,463 123,625
----------------------------------------------------
Total interest income 1,223,625 1,300,002 4,938,735 5,149,431
INTEREST EXPENSE
Deposits 354,985 400,962 1,428,771 1,551,816
Borrowed funds 80,811 177,403 381,103 834,654
Notes and debentures 170,095 168,889 684,560 621,092
----------------------------------------------------
Total interest expense 605,891 747,254 2,494,434 3,007,562
----------------------------------------------------
Net interest income 617,734 552,748 2,444,301 2,141,869
Provision for credit losses 1,500 6,000
----------------------------------------------------
Net interest income less provision for credit losses 617,734 551,248 2,444,301 2,135,869
NONINTEREST INCOME
Asset management and trust 129,048 111,524 496,739 420,160
Service fees 158,045 130,803 566,358 494,649
Mortgage banking 47,532 39,427 153,672 186,617
Other 46,399 30,490 156,207 138,687
----------------------------------------------------
Total noninterest income before net securities gains (losses) 381,024 312,244 1,372,976 1,240,113
Net securities gains (losses) 7,555 (288,958) 22,124 (279,694)
----------------------------------------------------
Total noninterest income 388,579 23,286 1,395,100 960,419
NONINTEREST EXPENSE
Staff expense 269,233 266,962 1,109,932 1,065,057
Net occupancy and equipment 92,955 88,063 368,649 346,064
Intangible asset and MSR amortization 36,701 41,387 117,439 114,671
Federal deposit insurance (3,720) 7,662 41,229 57,669
Other 191,321 161,827 674,601 625,889
----------------------------------------------------
Total noninterest expense before special charges 586,490 565,901 2,311,850 2,209,350
Special charges 259,926 259,926
----------------------------------------------------
Total noninterest expense 586,490 825,827 2,311,850 2,469,276
----------------------------------------------------
Income (loss) before income taxes 419,823 (251,293) 1,527,551 627,012
Applicable income taxes (benefits) 147,920 (75,116) 535,325 218,952
----------------------------------------------------
Net income (loss) $271,903 $(176,177) $992,226 $408,060
----------------------------------------------------
EARNINGS (LOSS) PER COMMON SHARE
Primary $.80 $(.52) $2.90 $1.19
Fully diluted .79 (.52) 2.87 1.19
CASH DIVIDENDS DECLARED PER COMMON SHARE .37 .35 1.42 1.40
AVERAGE COMMON SHARES OUTSTANDING
Primary 334,428 336,954 340,246 339,134
Fully diluted 338,707 336,954 345,354 344,922
==================================================================================================================================
</TABLE>
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<PAGE> 7
PNC BANK CORP. AND SUBSIDIARIES Page 7
Details of Net Interest Income
<TABLE>
<CAPTION>
Three months ended Year ended
Taxable-equivalent basis December 31 December 31
---------------------------------------------------
In thousands 1996 1995 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income/expense before financial derivatives
Interest income $1,205,319 $1,318,461 $4,856,671 $5,224,103
Loan fees 19,960 17,965 93,313 82,023
Taxable-equivalent adjustment 7,903 11,077 34,308 46,642
---------------------------------------------------
Total interest income 1,233,182 1,347,503 4,984,292 5,352,768
Interest expense 606,559 739,819 2,493,867 2,979,295
---------------------------------------------------
Net interest income before financial derivatives 626,623 607,684 2,490,425 2,373,473
Effect of financial derivatives on
Interest income (1,654) (36,424) (11,249) (156,695)
Interest expense (668) 7,435 567 28,267
---------------------------------------------------
Total effect of financial derivatives (986) (43,859) (11,816) (184,962)
---------------------------------------------------
Net interest income $625,637 $563,825 $2,478,609 $2,188,511
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Three months ended
Taxable-equivalent basis December 31 September 30 June 30 March 31 December 31
In thousands 1996 1996 1996 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income/expense before financial derivatives
Interest income $1,205,319 $1,190,223 $1,224,852 $1,236,277 $1,318,461
Loan fees 19,960 28,068 20,828 24,457 17,965
Taxable-equivalent adjustment 7,903 8,008 9,146 9,251 11,077
-----------------------------------------------------------------
Total interest income 1,233,182 1,226,299 1,254,826 1,269,985 1,347,503
Interest expense 606,559 607,882 632,229 647,197 739,819
-----------------------------------------------------------------
Net interest income before financial derivatives 626,623 618,417 622,597 622,788 607,684
Effect of financial derivatives on
Interest income (1,654) (1,661) (2,538) (5,396) (36,424)
Interest expense (668) (182) 133 1,284 7,435
-----------------------------------------------------------------
Total effect of financial derivatives (986) (1,479) (2,671) (6,680) (43,859)
-----------------------------------------------------------------
Net interest income $625,637 $616,938 $619,926 $616,108 $563,825
=================================================================================================================================
</TABLE>
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<PAGE> 8
PNC BANK CORP. AND SUBSIDIARIES Page 8
Details of Net Interest Margin
<TABLE>
<CAPTION>
Three months ended Year ended
December 31 December 31
---------------------------------------------
Taxable-equivalent basis 1996 1995 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rates earned/paid before financial derivatives
Book-basis yield on earning assets 7.55% 7.50% 7.50% 7.51%
Effect of loan fees .12 .10 .14 .12
Taxable-equivalent adjustment .05 .06 .05 .07
---------------------------------------------
Taxable-equivalent yield on earning assets 7.72 7.66 7.69 7.70
Rate on interest-bearing liabilities 4.62 4.98 4.66 5.06
---------------------------------------------
Interest rate spread 3.10 2.68 3.03 2.64
Noninterest-bearing sources .83 .79 .81 .78
---------------------------------------------
Net interest margin before financial derivatives 3.93 3.47 3.84 3.42
Effect of financial derivatives on
Interest income (.01) (.20) (.01) (.23)
Interest expense .05 .04
---------------------------------------------
Total effect of financial derivatives (.01) (.25) (.01) (.27)
---------------------------------------------
Net interest margin 3.92% 3.22% 3.83% 3.15%
==================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Three months ended December 31 September 30 June 30 March 31 December 31
Taxable-equivalent basis 1996 1996 1996 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Rates earned/paid before financial derivatives
Book-basis yield on earning assets 7.55% 7.43% 7.37% 7.51% 7.50%
Effect of loan fees .12 .17 .12 .15 .10
Taxable-equivalent adjustment .05 .05 .06 .06 .06
----------------------------------------------------------------
Taxable-equivalent yield on earning assets 7.72 7.65 7.55 7.72 7.66
Rate on interest-bearing liabilities 4.62 4.60 4.59 4.74 4.98
----------------------------------------------------------------
Interest rate spread 3.10 3.05 2.96 2.98 2.68
Noninterest-bearing sources .83 .81 .78 .79 .79
----------------------------------------------------------------
Net interest margin before financial derivatives 3.93 3.86 3.74 3.77 3.47
Effect of financial derivatives on
Interest income (.01) (.01) (.02) (.03) (.20)
Interest expense .01 .05
----------------------------------------------------------------
Total effect of financial derivatives (.01) (.01) (.02) (.04) (.25)
----------------------------------------------------------------
Net interest margin 3.92% 3.85% 3.72% 3.73% 3.22%
=============================================================================================================================
</TABLE>
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<PAGE> 9
PNC BANK CORP. AND SUBSIDIARIES Page 9
Details of Noninterest Income
<TABLE>
<CAPTION>
Three months ended Year ended
December 31 December 31
----------------------------------------------
In thousands 1996 1995 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Asset management and trust
Asset management services $27,828 $18,890 $103,724 $73,028
Mutual fund services 46,198 42,349 178,955 154,352
Trust 55,022 50,285 214,060 192,780
----------------------------------------------
Total asset management and trust 129,048 111,524 496,739 420,160
Service fees
Deposit 77,571 62,843 289,596 240,278
Brokerage 12,392 11,587 53,810 41,353
Consumer 19,246 14,821 63,676 53,423
Corporate finance 16,449 14,592 65,615 53,130
Credit card and merchant services 14,903 10,888 29,759 47,189
Insurance 8,706 6,599 30,062 24,831
Other 8,778 9,473 33,840 34,445
----------------------------------------------
Total service fees 158,045 130,803 566,358 494,649
Mortgage banking
Servicing 30,064 28,488 118,906 119,601
Marketing 8,022 9,893 23,638 33,295
Sale of servicing 9,446 1,046 11,128 33,721
----------------------------------------------
Total mortgage banking 47,532 39,427 153,672 186,617
Other 46,399 30,490 156,207 138,687
----------------------------------------------
Total noninterest income before net securities gains (losses) 381,024 312,244 1,372,976 1,240,113
Net securities gains (losses) 7,555 (288,958) 22,124 (279,694)
----------------------------------------------
Total $388,579 $23,286 $1,395,100 $960,419
================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Three months ended December 31 September 30 June 30 March 31 December 31
In thousands 1996 1996 1996 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Asset management and trust
Asset management services $27,828 $25,963 $24,284 $25,649 $18,890
Mutual fund services 46,198 43,100 45,671 43,986 42,349
Trust 55,022 53,236 54,560 51,242 50,285
--------------------------------------------------------------
Total asset management and trust 129,048 122,299 124,515 120,877 111,524
Service fees
Deposit 77,571 74,104 72,403 65,518 62,843
Brokerage 12,392 12,432 15,344 13,642 11,587
Consumer 19,246 16,602 14,370 13,458 14,821
Corporate finance 16,449 19,645 16,106 13,415 14,592
Credit card and merchant services 14,903 5,656 282 8,918 10,888
Insurance 8,706 7,712 6,872 6,772 6,599
Other 8,778 8,295 8,221 8,546 9,473
--------------------------------------------------------------
Total service fees 158,045 144,446 133,598 130,269 130,803
Mortgage banking
Servicing 30,064 29,361 30,443 29,038 28,488
Marketing 8,022 4,339 4,683 6,594 9,893
Sale of servicing 9,446 700 632 350 1,046
--------------------------------------------------------------
Total mortgage banking 47,532 34,400 35,758 35,982 39,427
Other 46,399 39,507 38,810 31,491 30,490
--------------------------------------------------------------
Total noninterest income before net securities gains (losses) 381,024 340,652 332,681 318,619 312,244
Net securities gains (losses) 7,555 7,722 3,904 2,943 (288,958)
--------------------------------------------------------------
Total $388,579 $348,374 $336,585 $321,562 $23,286
==================================================================================================================================
</TABLE>
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<PAGE> 10
PNC BANK CORP. AND SUBSIDIARIES Page 10
Details of Noninterest Expense
<TABLE>
<CAPTION>
Three months ended Year ended
December 31 December 31
--------------------------------------------------
In thousands 1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Compensation $234,690 $221,645 $929,626 $863,151
Employee benefits 34,543 45,317 180,306 201,906
--------------------------------------------------
Total staff expense 269,233 266,962 1,109,932 1,065,057
Net occupancy 49,681 42,424 196,975 180,398
Equipment 43,274 45,639 171,674 165,666
Intangible asset and MSR amortization 36,701 41,387 117,439 114,671
Taxes other than income 12,360 13,796 53,353 52,857
Federal deposit insurance (3,720) 7,662 41,229 57,669
Other 178,961 148,031 621,248 573,032
--------------------------------------------------
Total noninterest expense before special charges 586,490 565,901 2,311,850 2,209,350
Special charges 259,926 259,926
--------------------------------------------------
Total $586,490 $825,827 $2,311,850 $2,469,276
===============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Three months ended December 31 September 30 June 30 March 31 December 31
In thousands 1996 1996 1996 1996 1995
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Compensation $234,690 $232,161 $234,542 $228,233 $221,645
Employee benefits 34,543 45,600 49,739 50,424 45,317
-------------------------------------------------------------------
Total staff expense 269,233 277,761 284,281 278,657 266,962
Net occupancy 49,681 47,530 49,192 50,572 42,424
Equipment 43,274 42,699 42,990 42,711 45,639
Intangible asset and MSR amortization 36,701 29,012 28,062 23,664 41,387
Taxes other than income 12,360 12,972 13,391 14,630 13,796
Federal deposit insurance (3,720) 38,324 3,435 3,190 7,662
Other 178,961 147,094 142,971 152,222 148,031
-------------------------------------------------------------------
Total noninterest expense before special charges 586,490 595,392 564,322 565,646 565,901
Special charges 259,926
-------------------------------------------------------------------
Total $586,490 $595,392 $564,322 $565,646 $825,827
===============================================================================================================================
</TABLE>
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<PAGE> 11
PNC BANK CORP. AND SUBSIDIARIES Page 11
Consolidated Balance Sheet
<TABLE>
<CAPTION>
December 31 December 31
Dollars in millions, except par values 1996 1995
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and due from banks $4,016 $3,679
Short-term investments 774 1,611
Loans held for sale 941 659
Securities available for sale 11,917 15,839
Loans, net of unearned income of $385 and $403 51,798 48,653
Allowance for credit losses (1,166) (1,259)
--------------------------
Net loans 50,632 47,394
Goodwill and other intangibles 1,309 997
Mortgage servicing rights 313 268
Other 3,358 2,957
--------------------------
Total assets $73,260 $73,404
--------------------------
LIABILITIES
Deposits
Noninterest-bearing $10,937 $10,707
Interest-bearing 34,739 36,192
--------------------------
Total deposits 45,676 46,899
Borrowed funds
Federal funds purchased 2,797 3,817
Repurchase agreements 645 2,851
Commercial paper 976 753
Other 3,442 1,244
--------------------------
Total borrowed funds 7,860 8,665
Notes and debentures 11,744 10,398
Other 1,761 1,674
--------------------------
Total liabilities 67,041 67,636
Mandatorily Redeemable Capital Securities of Subsidiary Trust 350
SHAREHOLDERS' EQUITY
Preferred stock - $1 par value
Authorized: 17,452,764 and 17,529,342 shares
Issued and outstanding: 6,789,964 and 848,784 shares 7 1
Common stock - $5 par value
Authorized: 450,000,000 shares
Issued: 345,154,238 and 340,863,348 shares 1,726 1,704
Capital surplus 939 545
Retained earnings 4,075 3,571
Deferred benefit expense (60) (79)
Net unrealized securities gains (losses) (67) 26
Common stock held in treasury at cost: 21,036,195 shares (751)
--------------------------
Total shareholders' equity 5,869 5,768
--------------------------
Total liabilities and shareholders' equity $73,260 $73,404
========================================================================================================
</TABLE>
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<PAGE> 12
PNC BANK CORP. AND SUBSIDIARIES Page 12
Condensed Consolidated Average Balance Sheet
<TABLE>
<CAPTION>
Three months ended Year ended
December 31 December 31
-------------------------------------------------
In millions 1996 1995 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Interest-earning assets
Securities $11,569 $19,450 $13,550 $22,140
Loans, net of unearned income 49,973 48,304 49,116 45,624
Other interest-earning assets 1,780 1,927 2,059 1,771
-------------------------------------------------
Total interest-earning assets 63,322 69,681 64,725 69,535
Other 6,214 6,026 6,082 5,596
-------------------------------------------------
Total assets $69,536 $75,707 $70,807 $75,131
=================================================
LIABILITIES
Interest-bearing liabilities
Deposits $34,829 $36,577 $35,217 $35,718
Borrowed funds 5,493 11,511 6,654 13,386
Notes and debentures 11,617 10,637 11,660 9,790
-------------------------------------------------
Total interest-bearing liabilities 51,939 58,725 53,531 58,894
Noninterest-bearing deposits 10,003 9,639 9,900 9,112
Other 1,501 1,450 1,529 1,341
-------------------------------------------------
Total liabilities 63,443 69,814 64,960 69,347
Mandatorily Redeemable Capital Securities of Subsidiary Trust 76 19
SHAREHOLDERS' EQUITY 6,017 5,893 5,828 5,784
-------------------------------------------------
Total liabilities and shareholders' equity $69,536 $75,707 $70,807 $75,131
=================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Three months ended December 31 September 30 June 30 March 31 December 31
In millions 1996 1996 1996 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets
Securities $11,569 $13,097 $14,740 $14,818 $19,450
Loans, net of unearned income
Consumer 13,767 13,054 13,243 13,370 13,188
Residential mortgage 12,361 12,325 11,883 11,619 11,462
Commercial 17,584 17,049 17,190 16,806 16,590
Commercial real estate 4,630 4,712 4,831 4,885 5,029
Other 1,631 1,573 2,044 1,945 2,035
-----------------------------------------------------------------
Total loans, net of unearned income 49,973 48,713 49,191 48,625 48,304
Other interest-earning assets 1,780 1,735 2,425 2,262 1,927
-----------------------------------------------------------------
Total interest-earning assets 63,322 63,545 66,356 65,705 69,681
Other 6,214 6,001 6,084 6,028 6,026
-----------------------------------------------------------------
Total assets $69,536 $69,546 $72,440 $71,733 $75,707
=================================================================
LIABILITIES
Interest-bearing liabilities
Deposits $34,829 $34,794 $35,383 $35,872 $36,577
Borrowed funds 5,493 5,510 7,816 7,823 11,511
Notes and debentures 11,617 12,048 11,904 11,068 10,637
-----------------------------------------------------------------
Total interest-bearing liabilities 51,939 52,352 55,103 54,763 58,725
Noninterest-bearing deposits 10,003 9,922 9,996 9,681 9,639
Other 1,501 1,506 1,574 1,525 1,450
-----------------------------------------------------------------
Total liabilities 63,443 63,780 66,673 65,969 69,814
Mandatorily Redeemable Capital Securities of Subsidiary Trust 76
SHAREHOLDERS' EQUITY 6,017 5,766 5,767 5,764 5,893
-----------------------------------------------------------------
Total liabilities and shareholders' equity $69,536 $69,546 $72,440 $71,733 $75,707
===================================================================================================================================
</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 December 31 September 30 June 30 March 31 December 31
In millions 1996 1996 1996 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Beginning balance $1,152 $1,189 $1,225 $1,259 $1,285
Charge-offs
Consumer (50) (38) (38) (39) (36)
Commercial (17) (8) (17) (10) (29)
Other (12) (9) (3) (6) (12)
-------------------------------------------------------------------
Total charge-offs (79) (55) (58) (55) (77)
Recoveries
Consumer 10 10 12 9 9
Commercial 7 6 6 9 8
Other 5 2 4 3 5
-------------------------------------------------------------------
Total recoveries 22 18 22 21 22
-------------------------------------------------------------------
Net charge-offs (57) (37) (36) (34) (55)
Provision for credit losses 1
Acquisitions 71 28
-------------------------------------------------------------------
Ending balance $1,166 $1,152 $1,189 $1,225 $1,259
================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
NONPERFORMING ASSETS
Period ended December 31 September 30 June 30 March 31 December 31
In millions 1996 1996 1996 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nonaccrual loans
Commercial $156 $176 $169 $141 $118
Commercial real estate
Commercial mortgage 109 118 127 116 108
Real estate project 25 21 30 40 45
Consumer 6 5 6 7 10
Residential mortgage 51 54 46 51 54
-------------------------------------------------------------------
Total nonaccrual loans 347 374 378 355 335
Restructured loans 2 3 3 17 23
-------------------------------------------------------------------
Total nonperforming loans 349 377 381 372 358
Foreclosed assets
Commercial real estate 71 79 85 98 105
Residential 22 22 21 26 24
Other 17 23 22 44 49
-------------------------------------------------------------------
Total foreclosed assets 110 124 128 168 178
-------------------------------------------------------------------
Total nonperforming assets $459 $501 $509 $540 $536
================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
LOAN PORTFOLIO
Period ended December 31 September 30 June 30 March 31 December 31
In millions 1996 1996 1996 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Consumer $14,868 $13,341 $13,178 $13,566 $13,539
Residential mortgage 12,703 12,642 12,139 11,620 11,689
Commercial 18,062 17,484 17,296 16,950 16,812
Commercial real estate
Commercial mortgage 2,467 2,544 2,644 2,737 2,775
Real estate project 2,157 2,090 2,193 2,137 2,139
Other 1,926 1,689 2,131 2,170 2,102
-------------------------------------------------------------------
Total loans 52,183 49,790 49,581 49,180 49,056
Unearned income (385) (347) (358) (380) (403)
-------------------------------------------------------------------
Loans, net of unearned income $51,798 $49,443 $49,223 $48,800 $48,653
================================================================================================================================
</TABLE>
