<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 16, 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
Second Quarter 1997 Financial Results
On July 16, 1997, PNC Bank Corp. ("Corporation") reported results of
operations for the three months and six months ended June 30, 1997. 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 16, 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 July 16, 1997, with
respect to the results of operations for the three months and six
months ended June 30, 1997, is filed herewith.
3
<PAGE> 1
Exhibit 99
CONTACTS:
MEDIA:
- -----
Jonathan Williams
(412) 762-4550
[email protected]
INVESTORS:
- ---------
William H. Callihan
(412) 762-8257
[email protected]
PNC BANK CORP. REPORTS 13% INCREASE IN EPS
FOR SECOND QUARTER 1997
PITTSBURGH, July 16, 1997 -- PNC Bank Corp. (NYSE: PNC) today
reported second quarter 1997 earnings per share increased 13% to $0.81 per fully
diluted share compared with $0.72 per fully diluted share in the second quarter
of 1996. Net income was $259 million compared with $248 million in the
year-earlier period. Returns on average common shareholders' equity and average
assets were 20.21% and 1.47%, respectively, compared with 17.33% and 1.38% in
the prior-year quarter.
"Our second quarter results reflect a 21% increase in fee-based
revenue led by growth in asset management, private banking, treasury management
and capital markets," said Thomas H. O Brien, chairman and chief executive
officer. "These businesses are among the growth opportunities we have been
pursuing for some time that are now making a more meaningful contribution to our
financial performance."
HIGHLIGHTS
* Revenue increased 10% in the quarter-to-quarter comparison led by
growth in fee-based businesses.
* Noninterest income increased to more than 40% of total revenue
compared with 35% a year ago.
* Marketing of financial products is underway to 26 million AAA
members nationwide with over $2 billion of loans outstanding.
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<PAGE> 2
PNC Bank Corp. Reports 13% Increase in EPS For Second Quarter 1997--Page 2
* Asset quality remained strong. Net charge-offs were .44% of
loans and consumer asset quality trends were stable.
* During the second quarter, 8.1 million common shares were
repurchased.
INCOME STATEMENT REVIEW
Taxable-equivalent net interest income for the second quarter of
1997 was $621 million, substantially consistent with the prior-year quarter.
The net interest margin widened to 3.84% compared with 3.72%. The impact of a
$2.2 billion decline in average earning assets resulting from a continued
reduction of the securities portfolio was offset by loan growth and the benefit
of a higher-yielding earning asset mix. Compared with the first quarter of
1997, net interest income declined $17 million and net interest margin narrowed
14 basis points primarily due to incentives associated with credit card
portfolio growth and common share repurchases.
Noninterest income increased $96 million to $433 million in the
second quarter of 1997 compared with $337 million in the year-earlier period.
Asset management fees increased $22 million or 17% primarily due to higher
investment advisory, private banking and mutual fund servicing revenue.
Managed assets increased to approximately $122 billion at June 30, 1997
compared with $104 billion a year ago. Service fees increased $43 million or
33% primarily from growth in credit card, deposit and treasury management
services and capital markets fee income.
Mortgage banking revenue declined due to lower origination volumes
and servicing sales. Mortgage originations totaled $1.3 billion in the second
quarter of 1997 compared with $1.6 billion in the year-earlier period. At June
30, 1997, the corporation serviced approximately $40.4 billion of mortgages
including $30.0 billion serviced for others.
Other noninterest income increased $26 million in the comparison
primarily due to asset securitization and other income partially offset by
lower venture capital income.
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<PAGE> 3
PNC Bank Corp. Reports 13% Increase in EPS For Second Quarter 1997--Page 3
Noninterest expense increased $75 million to $639 million in the
second quarter of 1997 largely due to $49 million of incremental costs
associated with AAA and credit card-related initiatives. The remaining increase
was attributable to higher incentive compensation commensurate with revenue
growth and the cost of trust preferred capital securities. The efficiency ratio
was 60.6% for the second quarter of 1997 compared with 59.0% a year ago.
BALANCE SHEET REVIEW
Total assets were $72.0 billion at June 30, 1997, unchanged from a
year ago. Average earning assets declined $2.2 billion to $64.2 billion,
reflecting a continued reduction of the securities portfolio partially offset
by loan growth. Average securities declined $5.7 billion to $9.1 billion and
represented 14.1% of average earning assets compared with 22.2% a year ago.
Average loans increased $3.6 billion to $52.8 billion primarily due to
significant growth in credit cards partially offset by reductions in indirect
lending and the impact of loan securitizations. Excluding purchased credit
card portfolios and loan securitizations, loans grew at an annual rate of 6.0%.
Loans represented 82.3% of average earning assets compared with 74.1% a year
ago.
Average interest-bearing funding sources declined $1.1 billion to
$54.0 billion in the second quarter of 1997 primarily due to lower borrowed
funds associated with the securities portfolio reduction. Deposits represented
63.3% of total sources of funds for the second quarter of 1997 compared with
62.6% a year ago.
Shareholders' equity totaled $5.4 billion at June 30, 1997. The
leverage ratio was 7.35% and Tier I and total risk-based capital ratios are
estimated to be 7.7% and 11.0%, respectively. During the second quarter of
1997, the corporation repurchased 8.1 million common shares and issued $300
million of trust preferred capital securities.
Asset quality remained strong. Nonperforming assets declined to $442
million at June 30, 1997 compared with $509 million at June 30, 1996. The
ratio of nonperforming assets to total loans and foreclosed assets was 0.83% at
June 30, 1997 and 1.03% a year ago.
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<PAGE> 4
PNC Bank Corp. Reports 13% Increase in EPS For Second Quarter 1997--Page 4
The allowance for credit losses was $1.1 billion at June 30, 1997 and
represented 310% of nonperforming loans compared with 312% a year ago. Net
charge-offs increased to $59 million or 0.44% of average loans in the second
quarter of 1997 compared with $36 million and 0.29%, respectively, in the
year-earlier period. The increase was in line with expectations and was
primarily due to charge-offs associated with purchased credit card portfolios.
YEAR TO DATE RESULTS
For the first six months of 1997, earnings per share increased 14% to
$1.61 per fully diluted share compared with $1.41 per fully diluted share for
the first six months of 1996 and net income increased 8% in the comparison to
$525 million for the first six months of 1997 compared with $486 million a year
ago. Returns on average common shareholders' equity and average assets were
19.84% and 1.50%, respectively, compared with 16.99% and 1.36%, respectively,
for the first six months of 1996.
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 businesses include consumer banking, private
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]
<PAGE> 5
PNC BANK CORP. AND SUBSIDIARIES Page 5
Consolidated Financial Highlights
<TABLE>
<CAPTION>
Three months ended June 30 Six months ended June 30
-----------------------------------------------------------
As of June 30 or for the 1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FINANCIAL PERFORMANCE (dollars in thousands, except per share data)
Revenue
Net interest income (taxable-equivalent basis) $620,581 $619,926 $1,257,864 $1,236,034
Noninterest income 433,407 336,585 858,523 658,147
Total revenue 1,053,988 956,511 2,116,387 1,894,181
Net income 259,075 248,050 525,384 486,370
Per common share
Fully diluted earnings .81 .72 1.61 1.41
Book value 16.51 17.07 16.51 17.07
Cash dividends declared .37 .35 .74 .70
SELECTED RATIOS
Performance ratios
Return on average
Common shareholders' equity 20.21% 17.33% 19.84% 16.99%
Assets 1.47 1.38 1.50 1.36
Net interest margin 3.84 3.72 3.92 3.72
After-tax profit margin 24.58 25.93 24.82 25.68
Efficiency ratio 60.61 59.00 60.25 59.65
Capital ratios
Leverage 7.35 6.96 7.35 6.96
Common shareholders' equity to assets 7.04 8.08 7.04 8.08
Asset quality ratios
Net charge-offs to average loans .44 .29 .46 .29
Nonperforming assets to loans and foreclosed assets .83 1.03 .83 1.03
Allowance for credit losses to loans 2.01 2.42 2.01 2.42
Allowance for credit losses to nonperforming loans 310.34 312.19 310.34 312.19
AVERAGE BALANCES (in millions)
Assets $70,821 $72,440 $70,562 $72,087
Earning assets 64,201 66,356 64,014 66,030
Loans, net of unearned income 52,813 49,191 52,370 48,908
Securities 9,055 14,740 9,569 14,779
Deposits 44,814 45,379 44,475 45,465
Borrowed funds 18,675 19,720 18,635 19,306
Shareholders' equity 5,360 5,767 5,558 5,766
Common shareholders' equity 5,044 5,750 5,242 5,749
June 30 March 31 December 31 June 30
1997 1997 1996 1996
- -------------------------------------------------------------------------------------------------------------------------------
PERIOD-END BALANCES (in millions)
Assets $71,973 $71,166 $73,260 $71,961
Earning assets 64,297 64,255 65,439 65,234
Loans, net of unearned income 53,497 52,575 51,798 49,223
Securities 8,396 9,593 11,917 14,107
Deposits 45,216 44,902 45,676 44,852
Borrowed funds 19,066 18,547 19,604 19,325
Shareholders' equity 5,384 5,478 5,869 5,832
Common shareholders' equity 5,068 5,162 5,553 5,815
===============================================================================================================================
</TABLE>
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<PAGE> 6
PNC BANK CORP. AND SUBSIDIARIES Page 6
Consolidated Statement of Income
<TABLE>
<CAPTION>
Three months ended June 30 Six months ended June 30
-------------------------------------------------------
In thousands, except per share data 1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans and fees on loans $1,078,776 $971,829 $2,134,685 $1,952,665
Securities 139,036 232,251 295,240 469,693
Other 39,348 39,062 69,391 76,122
-------------------------------------------------------
Total interest income 1,257,160 1,243,142 2,499,316 2,498,480
INTEREST EXPENSE
Deposits 368,000 351,891 714,155 722,874
Borrowed funds 275,985 280,471 542,061 557,969
-------------------------------------------------------
Total interest expense 643,985 632,362 1,256,216 1,280,843
-------------------------------------------------------
Net interest income 613,175 610,780 1,243,100 1,217,637
Provision for credit losses 15,000 25,000
-------------------------------------------------------
Net interest income less provision for credit losses 598,175 610,780 1,218,100 1,217,637
NONINTEREST INCOME
Asset management 146,018 124,515 285,590 245,392
Service fees 177,097 133,598 344,518 263,867
Mortgage banking 32,149 35,758 64,194 71,740
Other 64,773 38,810 134,425 70,301
-------------------------------------------------------
Total noninterest income before net securities gains 420,037 332,681 828,727 651,300
Net securities gains 13,370 3,904 29,796 6,847
-------------------------------------------------------
Total noninterest income 433,407 336,585 858,523 658,147
NONINTEREST EXPENSE
Staff expense 294,161 284,281 596,862 562,938
Net occupancy and equipment 91,781 92,182 181,065 185,465
Amortization 39,527 28,062 69,358 51,726
Other 203,496 159,797 410,928 329,839
Distributions on capital securities 9,867 16,823
-------------------------------------------------------
Total noninterest expense 638,832 564,322 1,275,036 1,129,968
Income before income taxes 392,750 383,043 801,587 745,816
Applicable income taxes 133,675 134,993 276,203 259,446
-------------------------------------------------------
Net income $259,075 $248,050 $525,384 $486,370
- -------------------------------------------------------------------------------------------------------------------------------
Net income applicable to common shareholders $255,295 $248,915 $517,836 $488,093
EARNINGS PER COMMON SHARE
Primary $.81 $.72 $1.62 $1.42
Fully diluted .81 .72 1.61 1.41
CASH DIVIDENDS DECLARED PER COMMON SHARE .37 .35 .74 .70
AVERAGE COMMON SHARES OUTSTANDING
Primary 311,968 343,022 317,938 342,949
Fully diluted 315,877 347,343 321,891 347,306
===============================================================================================================================
</TABLE>
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<PAGE> 7
PNC BANK CORP. AND SUBSIDIARIES Page 7
Details of Net Interest Income
NET INTEREST INCOME
<TABLE>
<CAPTION>
Taxable-equivalent basis Three months ended June 30 Six months ended June 30
-------------------------------------------------------
In thousands 1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income
Loans $1,084,532 $978,528 $2,146,067 $1,965,942
Securities 140,618 234,618 298,488 474,670
Other interest-earning assets 39,416 39,142 69,525 76,265
-------------------------------------------------------
Total interest income 1,264,566 1,252,288 2,514,080 2,516,877
Interest expense
Deposits 368,000 351,891 714,155 722,874
Borrowed funds 275,985 280,471 542,061 557,969
-------------------------------------------------------
Total interest expense 643,985 632,362 1,256,216 1,280,843
-------------------------------------------------------
Net interest income $620,581 $619,926 $1,257,864 $1,236,034
===============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Taxable-equivalent basis June 30 March 31 December 31 September 30 June 30
Three months ended - in thousands 1997 1997 1996 1996 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income
Loans $1,084,532 $1,061,535 $1,017,982 $985,235 $978,528
Securities 140,618 157,870 183,013 209,526 234,618
Other interest-earning assets 39,416 30,109 30,533 29,877 39,142
------------------------------------------------------------------
Total interest income 1,264,566 1,249,514 1,231,528 1,224,638 1,252,288
Interest expense
Deposits 368,000 346,155 354,985 350,912 351,891
Borrowed funds 275,985 266,076 250,906 256,788 280,471
------------------------------------------------------------------
Total interest expense 643,985 612,231 605,891 607,700 632,362
------------------------------------------------------------------
Net interest income $620,581 $637,283 $625,637 $616,938 $619,926
===============================================================================================================================
</TABLE>
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<PAGE> 8
PNC BANK CORP. AND SUBSIDIARIES Page 8
Details of Net Interest Margin
NET INTEREST MARGIN
<TABLE>
<CAPTION>
Three months ended June 30 Six months ended June 30
-------------------------------------------------------
Taxable-equivalent basis 1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rates earned/paid
Yield on earning assets
Loans 8.19% 7.94% 8.20% 8.02%
Securities 6.21 6.37 6.25 6.42
Other interest-earning assets 6.76 6.47 6.72 6.52
-------------------------------------------------------
Total yield on earning assets 7.85 7.53 7.86 7.61
Rate on interest-bearing liabilities
Deposits 4.18 4.00 4.12 4.08
Borrowed funds 5.88 5.69 5.82 5.78
-------------------------------------------------------
Total rate on interest-bearing liabilities 4.77 4.59 4.71 4.67
-------------------------------------------------------
Interest rate spread 3.08 2.94 3.15 2.94
Impact of noninterest-bearing sources .76 .78 .77 .78
-------------------------------------------------------
Net interest margin 3.84% 3.72% 3.92% 3.72%
===============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Taxable-equivalent basis June 30 March 31 December 31 September 30 June 30
Three months ended 1997 1997 1996 1996 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Rates earned/paid
Yield on earning assets
Loans 8.19% 8.20% 8.07% 8.01% 7.94%
Securities 6.21 6.27 6.32 6.39 6.37
Other interest-earning assets 6.76 6.68 6.84 6.87 6.47
----------------------------------------------------------------
Total yield on earning assets 7.85 7.86 7.71 7.64 7.53
Rate on interest-bearing liabilities
Deposits 4.18 4.06 4.05 4.01 4.00
Borrowed funds 5.88 5.76 5.79 5.83 5.69
----------------------------------------------------------------
Total rate on interest-bearing liabilities 4.77 4.66 4.62 4.60 4.59
----------------------------------------------------------------
Interest rate spread 3.08 3.20 3.09 3.04 2.94
Impact of noninterest-bearing sources .76 .78 .83 .81 .78
----------------------------------------------------------------
Net interest margin 3.84% 3.98% 3.92% 3.85% 3.72%
===============================================================================================================================
</TABLE>
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<PAGE> 9
PNC BANK CORP. AND SUBSIDIARIES Page 9
Details of Noninterest Income
NONINTEREST INCOME
<TABLE>
<CAPTION>
Three months ended June 30 Six months ended June 30
-------------------------------------------------------
In thousands 1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Asset management
Asset management and trust $110,500 $94,269 $217,399 $187,697
Mutual fund servicing 35,518 30,246 68,191 57,695
-------------------------------------------------------
Total asset management 146,018 124,515 285,590 245,392
Service fees
Deposit 79,817 72,403 160,675 137,921
Credit card and merchant services 21,960 282 41,064 9,200
Corporate finance and capital markets 21,090 16,106 37,682 29,521
Consumer 17,988 14,370 35,285 27,828
Brokerage 12,731 15,344 25,973 28,986
Insurance 9,659 6,872 18,805 13,644
Other 13,852 8,221 25,034 16,767
-------------------------------------------------------
Total service fees 177,097 133,598 344,518 263,867
Mortgage banking
Servicing 27,963 30,443 55,412 59,481
Marketing 3,692 4,683 7,113 11,277
Sale of servicing 494 632 1,669 982
-------------------------------------------------------
Total mortgage banking 32,149 35,758 64,194 71,740
Other 64,773 38,810 134,425 70,301
-------------------------------------------------------
Total noninterest income before net securities gains 420,037 332,681 828,727 651,300
Net securities gains 13,370 3,904 29,796 6,847
-------------------------------------------------------
Total $433,407 $336,585 $858,523 $658,147
===============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
June 30 March 31 December 31 September 30 June 30
Three months ended - in thousands 1997 1997 1996 1996 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Asset management
Asset management and trust $110,500 $106,899 $97,588 $92,569 $94,269
Mutual fund servicing 35,518 32,673 31,460 29,730 30,246
-----------------------------------------------------------------
Total asset management 146,018 139,572 129,048 122,299 124,515
Service fees
Deposit 79,817 80,858 77,571 74,104 72,403
Credit card and merchant services 21,960 19,104 14,903 5,656 282
Corporate finance and capital markets 21,090 16,592 16,449 19,645 16,106
Consumer 17,988 17,297 19,246 16,602 14,370
Brokerage 12,731 13,242 12,392 12,432 15,344
Insurance 9,659 9,146 8,706 7,712 6,872
Other 13,852 11,182 8,778 8,295 8,221
-----------------------------------------------------------------
Total service fees 177,097 167,421 158,045 144,446 133,598
Mortgage banking
Servicing 27,963 27,449 30,064 29,361 30,443
Marketing 3,692 3,421 8,022 4,339 4,683
Sale of servicing 494 1,175 9,446 700 632
-----------------------------------------------------------------
Total mortgage banking 32,149 32,045 47,532 34,400 35,758
Other 64,773 69,652 46,399 39,507 38,810
-----------------------------------------------------------------
Total noninterest income before net securities gains 420,037 408,690 381,024 340,652 332,681
Net securities gains 13,370 16,426 7,555 7,722 3,904
-----------------------------------------------------------------
Total $433,407 $425,116 $388,579 $348,374 $336,585
===============================================================================================================================
</TABLE>
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<PAGE> 10
PNC BANK CORP. AND SUBSIDIARIES Page 10
Details of Noninterest Expense
NONINTEREST EXPENSE
<TABLE>
<CAPTION>
Three months ended June 30 Six months ended June 30
-------------------------------------------------------
In thousands 1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Staff expense
Compensation $243,602 $234,542 $488,297 $462,775
Employee benefits 50,559 49,739 108,565 100,163
-------------------------------------------------------
Total staff expense 294,161 284,281 596,862 562,938
Net occupancy 46,071 49,192 93,311 99,764
Equipment 45,710 42,990 87,754 85,701
Goodwill amortization 13,274 13,244 26,542 25,938
Other amortization 26,253 14,818 42,816 25,788
Taxes other than income 13,832 13,391 28,867 28,021
Distributions on capital securities 9,867 16,823
Other 189,664 146,406 382,061 301,818
-------------------------------------------------------
Total $638,832 $564,322 $1,275,036 $1,129,968
===============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
June 30 March 31 December 31 September 30 June 30
Three months ended - in thousands 1997 1997 1996 1996 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Staff expense
Compensation $243,602 $244,695 $234,690 $232,161 $234,542
Employee benefits 50,559 58,006 34,543 45,600 49,739
-----------------------------------------------------------------
Total staff expense 294,161 302,701 269,233 277,761 284,281
Net occupancy 46,071 47,240 49,681 47,530 49,192
Equipment 45,710 42,044 43,274 42,699 42,990
Goodwill amortization 13,274 13,268 15,118 13,244 13,244
Other amortization 26,253 16,563 21,583 15,768 14,818
Taxes other than income 13,832 15,035 12,360 12,972 13,391
Distributions on capital securities 9,867 6,956 1,391
Other 189,664 192,397 173,850 185,418 146,406
-----------------------------------------------------------------
Total $638,832 $636,204 $586,490 $595,392 $564,322
===============================================================================================================================
</TABLE>
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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 1997 1996 1996
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks $3,676 $4,016 $3,232
Short-term investments 1,159 774 841
Loans held for sale 1,235 941 1,053
Securities available for sale 8,396 11,917 14,107
Loans, net of unearned income of $392, $385 and $358 53,497 51,798 49,223
Allowance for credit losses (1,075) (1,166) (1,189)
-----------------------------------------
Net loans 52,422 50,632 48,034
Other 5,085 4,980 4,694
-----------------------------------------
Total assets $71,973 $73,260 $71,961
=========================================
LIABILITIES
Deposits
Noninterest-bearing $10,662 $10,937 $10,245
Interest-bearing 34,554 34,739 34,607
-----------------------------------------
Total deposits 45,216 45,676 44,852
Borrowed funds
Bank notes and senior debt 9,192 8,093 8,885
Federal funds purchased 2,516 3,933 1,766
Repurchase agreements 757 645 2,188
Other borrowed funds 5,250 5,576 5,128
Subordinated debt 1,351 1,357 1,358
-----------------------------------------
Total borrowed funds 19,066 19,604 19,325
Other 1,657 1,761 1,952
-----------------------------------------
Total liabilities 65,939 67,041 66,129
Mandatorily Redeemable Capital Securities of Subsidiary Trusts 650 350
SHAREHOLDERS' EQUITY
Preferred stock 7 7 1
Common stock 1,737 1,726 1,711
Capital surplus 1,004 939 571
Retained earnings 4,356 4,075 3,817
Deferred benefit expense (62) (60) (77)
Net unrealized securities losses (83) (67) (141)
Common stock held in treasury (1,575) (751) (50)
-----------------------------------------
Total shareholders' equity 5,384 5,869 5,832
-----------------------------------------
Total liabilities, capital securities and shareholders' equity $71,973 $73,260 $71,961
=================================================================================================================================
</TABLE>
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<PAGE> 12
PNC BANK CORP. AND SUBSIDIARIES Page 12
Consolidated Average Balance Sheet Data
<TABLE>
<CAPTION>
Three months ended June 30 Six months ended June 30
-------------------------------------------------------
In millions 1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Interest-earning assets
Securities $9,055 $14,740 $9,569 $14,779
Loans, net of unearned income
Consumer
Credit card 3,502 979 3,274 983
Other consumer 11,239 12,264 11,531 12,324
-------------------------------------------------------
Total consumer 14,741 13,243 14,805 13,307
Residential mortgage 13,164 11,883 12,974 11,751
Commercial 18,494 17,190 18,204 16,998
Commercial real estate 4,530 4,831 4,562 4,858
Other 1,884 2,044 1,825 1,994
-------------------------------------------------------
Total loans, net of unearned income 52,813 49,191 52,370 48,908
Other interest-earning assets 2,333 2,425 2,075 2,343
-------------------------------------------------------
Total interest-earning assets 64,201 66,356 64,014 66,030
Noninterest-earning assets 6,620 6,084 6,548 6,057
-------------------------------------------------------
Total assets $70,821 $72,440 $70,562 $72,087
=======================================================
LIABILITIES
Interest-bearing liabilities
Deposits $35,313 $35,383 $34,925 $35,627
Borrowed funds 18,675 19,720 18,635 19,306
-------------------------------------------------------
Total interest-bearing liabilities 53,988 55,103 53,560 54,933
Noninterest-bearing deposits 9,501 9,996 9,550 9,838
Other 1,480 1,574 1,473 1,550
-------------------------------------------------------
Total liabilities 64,969 66,673 64,583 66,321
Mandatorily Redeemable Capital Securities of Subsidiary Trusts 492 421
SHAREHOLDERS' EQUITY 5,360 5,767 5,558 5,766
-------------------------------------------------------
Total liabilities, capital securities and shareholders' equity $70,821 $72,440 $70,562 $72,087
===============================================================================================================================
</TABLE>
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<PAGE> 13
PNC BANK CORP. AND SUBSIDIARIES Page 13
Consolidated Balance Sheet Data
AVERAGE BALANCES
<TABLE>
<CAPTION>
June 30 March 31 December 31 September 30 June 30
Three months ended - in millions 1997 1997 1996 1996 1996
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets
Securities $9,055 $10,089 $11,569 $13,097 $14,740
Loans, net of unearned income
Consumer
Credit card 3,502 3,043 1,683 1,007 979
Other consumer 11,239 11,827 12,084 12,047 12,264
--------------------------------------------------------------------
Total consumer 14,741 14,870 13,767 13,054 13,243
Residential mortgage 13,164 12,781 12,361 12,325 11,883
Commercial 18,494 17,916 17,584 17,049 17,190
Commercial real estate 4,530 4,591 4,630 4,712 4,831
Other 1,884 1,764 1,631 1,573 2,044
--------------------------------------------------------------------
Total loans, net of unearned income 52,813 51,922 49,973 48,713 49,191
Other interest-earning assets 2,333 1,814 1,780 1,735 2,425
--------------------------------------------------------------------
Total interest-earning assets 64,201 63,825 63,322 63,545 66,356
Noninterest-earning assets 6,620 6,476 6,214 6,001 6,084
--------------------------------------------------------------------
Total assets $70,821 $70,301 $69,536 $69,546 $72,440
====================================================================
LIABILITIES
Interest-bearing liabilities
Deposits $35,313 $34,533 $34,829 $34,794 $35,383
Borrowed funds 18,675 18,594 17,110 17,558 19,720
--------------------------------------------------------------------
Total interest-bearing liabilities 53,988 53,127 51,939 52,352 55,103
Noninterest-bearing deposits 9,501 9,600 10,003 9,922 9,996
Other 1,480 1,466 1,501 1,506 1,574
------------------------------------------------------------------
Total liabilities 64,969 64,193 63,443 63,780 66,673
Mandatorily Redeemable Capital Securities of Subsidiary
Trusts 492 350 76
SHAREHOLDERS' EQUITY 5,360 5,758 6,017 5,766 5,767
------------------------------------------------------------------
Total liabilities, capital securities and shareholders'
equity $70,821 $70,301 $69,536 $69,546 $72,440
=================================================================================================================================
</TABLE>
LOAN PORTFOLIO
<TABLE>
<CAPTION>
June 30 March 31 December 31 September 30 June 30
Period ended - in millions 1997 1997 1996 1996 1996
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Consumer
Credit card $3,693 $3,345 $2,776 $1,077 $987
Other consumer 10,983 11,356 12,092 12,264 12,191
Residential mortgage 13,494 13,056 12,703 12,642 12,139
Commercial 18,789 18,517 18,062 17,484 17,296
Commercial real estate
Commercial mortgage 2,357 2,397 2,467 2,544 2,644
Real estate project 2,123 2,137 2,157 2,090 2,193
Other 2,450 2,154 1,926 1,689 2,131
--------------------------------------------------------------------
Total loans 53,889 52,962 52,183 49,790 49,581
Unearned income (392) (387) (385) (347) (358)
--------------------------------------------------------------------
Loans, net of unearned income $53,497 $52,575 $51,798 $49,443 $49,223
===================================================================================================================================
</TABLE>
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<PAGE> 14
PNC BANK CORP. AND SUBSIDIARIES Page 14
Asset Quality Data
ALLOWANCE FOR CREDIT LOSSES
<TABLE>
<CAPTION>
June 30 March 31 December 31 September 30 June 30
Three months ended - in millions 1997 1997 1996 1996 1996
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Beginning balance $1,119 $1,166 $1,152 $1,189 $1,225
Charge-offs
Consumer
Credit card (55) (46) (23) (16) (14)
Other consumer (25) (30) (28) (23) (24)
--------------------------------------------------------------------
Total consumer (80) (76) (51) (39) (38)
Residential mortgage (3) (2) (2) (3) (2)
Commercial (10) (10) (17) (9) (17)
Commercial real estate (3) (1) (9) (4) (1)
--------------------------------------------------------------------
Total charge-offs (96) (89) (79) (55) (58)
Recoveries
Consumer
Credit card 9 7 2 2 2
Other consumer 9 9 9 8 10
--------------------------------------------------------------------
Total consumer 18 16 11 10 12
Residential mortgage 1 1
Commercial 18 9 7 7 6
Commercial real estate 1 3 3 1 4
--------------------------------------------------------------------
Total recoveries 37 29 22 18 22
--------------------------------------------------------------------
Net charge-offs (59) (60) (57) (37) (36)
Provision for credit losses 15 10
Acquisitions 3 71
--------------------------------------------------------------------
Ending balance $1,075 $1,119 $1,166 $1,152 $1,189
===================================================================================================================================
</TABLE>
NONPERFORMING ASSETS
<TABLE>
<CAPTION>
June 30 March 31 December 31 September 30 June 30
Period ended - in millions 1997 1997 1996 1996 1996
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nonaccrual loans
Commercial $155 $135 $156 $176 $169
Commercial real estate
Commercial mortgage 106 113 109 118 127
Real estate project 33 24 25 21 30
Consumer 5 5 6 5 6
Residential mortgage 46 45 51 54 46
--------------------------------------------------------------------
Total nonaccrual loans 345 322 347 374 378
Restructured loans 1 1 2 3 3
--------------------------------------------------------------------
Total nonperforming loans 346 323 349 377 381
Foreclosed assets
Commercial real estate 55 66 71 79 85
Residential mortgage 23 24 22 22 21
Other 18 16 17 23 22
--------------------------------------------------------------------
Total foreclosed assets 96 106 110 124 128
--------------------------------------------------------------------
Total nonperforming assets $442 $429 $459 $501 $509
===================================================================================================================================
</TABLE>
