<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, 1998
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
1997 Financial Results
On January 15, 1998, PNC Bank Corp. ("Corporation") reported results
of operations for the three months and year ended December 31, 1997.
A copy of the earnings press release issued by the Corporation is
attached as Exhibit 99.1 and incorporated herein by reference.
Bank Mergers
The Corporation reports that by year-end 1997, the following bank
subsidiaries merged with and into PNC Bank, National Association: PNC
Bank, Indiana, Inc.; PNC Bank, Kentucky, Inc.; PNC Mortgage Bank,
N.A.; PNC Bank New York, National Association (formerly PNC Trust
Company of New York); and PNC Bank, Ohio, National Association. The
mergers with PNC Mortgage Bank, N.A. and PNC Bank New York, National
Association were effective November 30, 1997 and December 1, 1997,
respectively. The other mergers were effective December 31, 1997.
The Corporation also reports that PNC National Bank of Delaware
merged with and into PNC Bank, Delaware effective November 30, 1997.
Forward-Looking Statements
From time to time the Corporation has made and may continue to make
various forward-looking statements about financial and business
matters, including AAA Financial Services. Many factors could cause
actual results for such matters to differ materially from such
forward-looking statements, including the extent and timing of
customers' responses to marketing initiatives and the related
acceptance of the Corporation's offered products and services, as
well as the extent and timing of competitor's responses and changes
in economic conditions.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
The exhibits listed on the Exhibit Index on page 3 of this Form 8-K
are 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, 1998 By: /s/ Robert L. Haunschild
---------------------------
Robert L. Haunschild
Senior Vice President and
Chief Financial Officer
2
<PAGE> 3
EXHIBIT INDEX
99.1 Earnings press release issued by the Corporation on January 15, 1998,
with respect to the results of operations for the three months and year
ended December 31, 1997, filed herewith.
99.2 By-laws of the Corporation, effective November 20, 1997, filed
herewith.
3
<PAGE> 1
Exhibit 99.1
CONTACTS:
MEDIA:
Jonathan Williams
(412) 762-4550
[email protected]
INVESTORS:
William H. Callihan
(412) 762-8257
[email protected]
PNC BANK CORP. REPORTS STRONG FOURTH QUARTER,
LEADING TO RECORD EARNINGS FOR 1997
PITTSBURGH, Jan. 15, 1998 - PNC Bank Corp. (NYSE: PNC) today
reported strong fourth quarter 1997 earnings of $265 million or $0.85 per
diluted share and record full year earnings of $1.052 billion or $3.28 per
diluted share. Comparable 1996 results were $272 million or $0.79 per diluted
share for the fourth quarter and $992 million or $2.88 per diluted share for the
year.
Return on average common shareholders' equity was 20.28% for the
fourth quarter and 20.01% for the year compared with 18.58% and 17.18%,
respectively for the prior year. Return on average assets was 1.49% for both the
last quarter and full year compared with 1.56% and 1.40% for the respective 1996
periods.
"Our record performance reflects solid revenue growth," said Thomas
H. O'Brien, chairman and chief executive officer. "Our aggressive investments
over the past several years in fee-based businesses such as Asset Management,
Treasury Management, Capital Markets and Mutual Fund Servicing have generated
significant contributions to our performance. Noninterest revenues represented
more than 44% of total revenues in the fourth quarter and we expect that
relative contribution to increase to over 50% by 2000."
<PAGE> 2
PNC Bank Corp. Reports Strong Fourth Quarter,
Leading To Record Earnings For 1997 -- Page 2
HIGHLIGHTS
o Revenue increased 12% in the year-to-year comparison.
o Noninterest income grew $413 million led by fee-based revenue growth
of 21%.
o The relationship of noninterest income to total revenue was 42% for
1997 and increased to 44% for the fourth quarter.
o The net interest margin widened 11 basis points to 3.94% during 1997.
o Significant investments were made in national consumer businesses,
including the AAA initiative which is expected to become profitable
in the fourth quarter of 1998.
o Asset quality improved significantly. Nonperforming assets declined
15% from the third quarter and 27% since last year and finished the
year at 0.61% of loans and foreclosed assets. Net charge-offs for
1997 were 0.51% of average loans.
o Continued aggressive reduction in the securities portfolio and
related wholesale funding while maintaining a balance sheet that is
essentially neutral to changes in interest rates.
o Capital management activities for 1997 included reducing the
securities portfolio to $8.5 billion or 12.8% of earning assets and
repurchasing 29.3 million common shares or 9.0% of shares
outstanding.
INCOME STATEMENT REVIEW
Taxable-equivalent net interest income was $2.524 billion for 1997,
a $46 million increase over 1996. The net interest margin widened to 3.94%
compared with 3.83% in the prior year primarily resulting from a higher-yielding
earning asset mix.
The provision for credit losses was $70 million for 1997. No
provision was recorded in the prior year.
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<PAGE> 3
PNC Bank Corp. Reports Strong Fourth Quarter,
Leading To Record Earnings For 1997 -- Page 3
Noninterest income totaled $1.808 billion in 1997 and represented
42% of total revenue compared with $1.395 billion and 36%, respectively, in
1996. Growth in investment advisory, private banking and mutual fund servicing
contributed to a $106 million or 21% increase in asset management fees. Managed
assets increased to approximately $137 billion at Dec. 31, 1997 compared with
$109 billion a year ago. Service fees increased $146 million or 26% primarily
from growth in credit card, corporate finance, insurance, deposit, treasury
management and consumer services.
Mortgage banking revenue grew primarily due to higher income from
securitization activities. Mortgage originations totaled $6.1 billion in 1997
compared with $5.6 billion a year ago. At Dec. 31, 1997, the corporation
serviced approximately $40.7 billion of mortgages, including $31.7 billion
serviced for others.
Other noninterest income increased $132 million in the comparison
primarily due to higher venture capital and asset securitization income.
Noninterest expense increased $303 million to $2.615 billion in 1997
largely due to $187 million of incremental costs associated with AAA and credit
card-related initiatives. The remaining increase was attributable to higher
incentive compensation commensurate with growth in fee-based revenue and the
cost of trust preferred capital securities. The efficiency ratio was 59.4% for
1997 compared with 59.6% a year ago.
BALANCE SHEET REVIEW
Total assets were $75.1 billion at Dec. 31, 1997. Average earning
assets declined $708 million during the year to $64.0 billion as loan growth was
more than offset by securities portfolio reductions. Average loans grew 7.7% to
$52.9 billion, a $3.8 billion increase from the prior year. Loans represented
82.6% of average earning assets compared with 75.9% a year ago. Growth in credit
cards, residential mortgages and middle market commercial loans more than offset
downsizing of the indirect automobile lending portfolio and the impact of loan
securitizations. Since 1994, the corporation has aggressively downsized the
securities portfolio and related wholesale funding. As a result, average
securities have been reduced to $8.8 billion or 13.7% of average earning assets.
-more-
<PAGE> 4
PNC Bank Corp. Reports Strong Fourth Quarter,
Leading To Record Earnings For 1997 -- Page 4
Average interest-bearing funding was substantially unchanged at $53.5
billion in 1997. Deposits represented 63.0% of total sources of funds for 1997
compared with 63.7% a year ago.
Shareholders' equity totaled $5.4 billion at Dec. 31, 1997. The
leverage ratio was 7.3% and Tier I and total risk-based capital ratios are
estimated to be 7.4% and 11.0%, respectively. During 1997, the corporation
repurchased 29.3 million common shares. During the fourth quarter, the board of
directors approved a 5.4% increase in the quarterly common dividend to $0.39 per
share.
The ratio of nonperforming assets to total loans and foreclosed assets
declined to 0.61% at Dec. 31, 1997, compared with 0.73% at Sept. 30, 1997, and
0.88% a year ago. Nonperforming assets declined to $333 million at Dec. 31,
1997, compared with $394 million at Sept. 30, 1997, and $459 million at Dec. 31,
1996.
The allowance for credit losses was $972 million at Dec. 31, 1997, and
represented 352% of nonperforming loans compared with 334% a year ago. Net
charge-offs were $272 million or 0.51% of average loans in 1997 compared with
$164 million and 0.33%, respectively, a year ago. The increase was primarily
associated with higher credit card outstandings.
PNC Bank Corp., headquartered in Pittsburgh, is one of the largest
diversified financial services organizations in the United States. Its major
businesses include consumer banking, corporate banking, private banking,
mortgage banking, secured lending and asset management.
Visit PNC Bank on the World Wide Web at http://www.pncbank.com
Our SEC reports, accessible on our website, identify factors that can affect
forward looking statements.
[TABULAR MATERIAL FOLLOWS]
<PAGE> 5
PNC BANK CORP. AND SUBSIDIARIES Page 5
Consolidated Financial Highlights
<TABLE>
<CAPTION>
Three months ended
December 31 Year ended December 31
1997 1996 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FINANCIAL PERFORMANCE (in thousands, except per share data)
Revenue
Net interest income (taxable-equivalent basis) $638,912 $625,637 $2,524,207 $2,478,609
Noninterest income 503,993 388,579 1,808,166 1,395,100
Total revenue 1,142,905 1,014,216 4,332,373 3,873,709
Net income 265,489 271,903 1,052,468 992,226
Per common share
Diluted earnings .85 .79 3.28 2.88
Cash dividends declared .39 .37 1.50 1.42
SELECTED RATIOS
Return on
Average common shareholders' equity 20.28% 18.58% 20.01% 17.18%
Average assets 1.49 1.56 1.49 1.40
Net interest margin 3.95 3.92 3.94 3.83
After-tax profit margin 23.23 26.81 24.29 25.61
Efficiency ratio (excluding distributions on capital securities) 60.20 57.69 59.36 59.64
Net charge-offs to average loans .59 .45 .51 .33
</TABLE>
<TABLE>
<CAPTION>
December 31 September 30 June 30 March 31 December 31
1997 1997 1997 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (in millions)
Assets $75,120 $71,828 $71,973 $71,166 $73,260
Earning assets 66,688 64,208 64,297 64,255 65,439
Loans, net of unearned income 54,245 53,651 53,497 52,575 51,798
Securities 8,522 8,000 8,396 9,593 11,917
Deposits 47,649 44,788 45,216 44,902 45,676
Borrowed funds 19,622 19,052 19,066 18,547 19,604
Shareholders' equity 5,384 5,476 5,384 5,478 5,869
Common shareholders' equity 5,069 5,161 5,068 5,162 5,553
CAPITAL RATIOS
Leverage 7.27% 7.46% 7.35% 7.17% 7.70%
Common shareholders' equity to assets 6.75 7.18 7.04 7.25 7.58
ASSET QUALITY RATIOS
Nonperforming assets to loans and foreclosed assets .61 .73 .83 .82 .88
Allowance for credit losses to loans 1.79 1.91 2.01 2.13 2.25
Allowance for credit losses to nonperforming loans 351.79 324.25 310.34 346.11 334.40
Book value per common share $16.87 $16.92 $16.51 $16.45 $17.13
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 6
PNC BANK CORP. AND SUBSIDIARIES Page 6
Consolidated Statement of Income
<TABLE>
<CAPTION>
Three months ended
December 31 Year ended December 31
-------------------------- --------------------------
In thousands, except per share data 1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans and fees on loans $1,117,551 $1,011,871 $4,353,744 $3,943,586
Securities 119,366 181,264 539,953 858,686
Other 44,426 30,490 157,306 136,463
----------------------------------------------------
Total interest income 1,281,343 1,223,625 5,051,003 4,938,735
INTEREST EXPENSE
Deposits 369,572 354,985 1,456,587 1,428,771
Borrowed funds 279,570 250,906 1,099,198 1,065,663
----------------------------------------------------
Total interest expense 649,142 605,891 2,555,785 2,494,434
----------------------------------------------------
Net interest income 632,201 617,734 2,495,218 2,444,301
Provision for credit losses 25,000 70,000
----------------------------------------------------
Net interest income less provision for credit losses 607,201 617,734 2,425,218 2,444,301
NONINTEREST INCOME
Asset management 166,409 129,048 602,804 496,739
Service fees 192,788 158,045 712,452 566,358
Mortgage banking 45,741 47,532 156,486 153,672
Other 77,621 46,399 287,851 156,207
----------------------------------------------------
Total noninterest income before net securities gains 482,559 381,024 1,759,593 1,372,976
Net securities gains 21,434 7,555 48,573 22,124
----------------------------------------------------
Total noninterest income 503,993 388,579 1,808,166 1,395,100
NONINTEREST EXPENSE
Staff expense 312,339 269,233 1,208,175 1,109,932
Net occupancy and equipment 97,611 92,955 369,380 368,649
Amortization 56,104 36,701 173,921 117,439
Other 222,014 186,210 820,171 714,439
Distributions on capital securities 13,123 1,391 43,138 1,391
----------------------------------------------------
Total noninterest expense 701,191 586,490 2,614,785 2,311,850
Income before income taxes 410,003 419,823 1,618,599 1,527,551
Applicable income taxes 144,514 147,920 566,131 535,325
----------------------------------------------------
Net income $265,489 $271,903 $1,052,468 $992,226
- -------------------------------------------------------------------------------------------------------------------------------
Net income applicable to common shareholders $261,675 $268,662 $1,037,324 $991,558
EARNINGS PER COMMON SHARE
Basic $.86 $.80 $3.33 $2.91
Diluted .85 .79 3.28 2.88
CASH DIVIDENDS DECLARED PER COMMON SHARE .39 .37 1.50 1.42
AVERAGE COMMON SHARES OUTSTANDING
Basic 303,207 332,266 310,147 338,568
Diluted 309,533 338,678 316,221 344,576
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 7
PNC BANK CORP. AND SUBSIDIARIES Page 7
Details of Net Interest Income
<TABLE>
<CAPTION>
Three months ended
NET INTEREST INCOME December 31 Year ended December 31
Taxable-equivalent basis -------------------------------------------------------
In thousands 1997 1996 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income
Loans $1,123,127 $1,017,982 $4,376,444 $3,969,159
Securities 120,395 183,013 545,936 867,209
Other interest-earning assets 44,532 30,533 157,612 136,675
---------------------------------------------------------
Total interest income 1,288,054 1,231,528 5,079,992 4,973,043
Interest expense
Deposits 369,572 354,985 1,456,587 1,428,771
Borrowed funds 279,570 250,906 1,099,198 1,065,663
---------------------------------------------------------
Total interest expense 649,142 605,891 2,555,785 2,494,434
---------------------------------------------------------
Net interest income $638,912 $625,637 $2,524,207 $2,478,609
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Taxable-equivalent basis December 31 September 30 June 30 March 31 December 31
Three months ended - in thousands 1997 1997 1997 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income
Loans $1,123,127 $1,107,250 $1,084,532 $1,061,535 $1,017,982
Securities 120,395 127,053 140,618 157,870 183,013
Other interest-earning assets 44,532 43,555 39,416 30,109 30,533
---------------------------------------------------------------------
Total interest income 1,288,054 1,277,858 1,264,566 1,249,514 1,231,528
Interest expense
Deposits 369,572 372,860 368,000 346,155 354,985
Borrowed funds 279,570 277,567 275,985 266,076 250,906
---------------------------------------------------------------------
Total interest expense 649,142 650,427 643,985 612,231 605,891
---------------------------------------------------------------------
Net interest income $638,912 $627,431 $620,581 $637,283 $625,637
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 8
PNC BANK CORP. AND SUBSIDIARIES Page 8
Details of Net Interest Margin
<TABLE>
<CAPTION>
Three months ended
December 31 Year ended December 31
NET INTEREST MARGIN -----------------------------------------------------
Taxable-equivalent basis 1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rates earned/paid
Yield on earning assets
Loans 8.27% 8.07% 8.27% 8.08%
Securities 6.19 6.32 6.22 6.40
Other interest-earning assets 6.68 6.84 6.75 6.64
----------------------------------------------------
Total yield on earning assets 7.96 7.71 7.93 7.68
Rate on interest-bearing liabilities
Deposits 4.23 4.05 4.18 4.06
Borrowed funds 5.91 5.79 5.91 5.82
----------------------------------------------------
Total rate on interest-bearing liabilities 4.82 4.62 4.78 4.66
----------------------------------------------------
Interest rate spread 3.14 3.09 3.15 3.02
Impact of noninterest-bearing sources .81 .83 .79 .81
----------------------------------------------------
Net interest margin 3.95% 3.92% 3.94% 3.83%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Taxable-equivalent basis December 31 September 30 June 30 March 31 December 31
Three months ended 1997 1997 1997 1997 1996
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Rates earned/paid
Yield on earning assets
Loans 8.27% 8.23% 8.19% 8.20% 8.07%
Securities 6.19 6.17 6.21 6.27 6.32
Other interest-earning assets 6.68 6.83 6.76 6.68 6.84
----------------------------------------------------------------
Total yield on earning assets 7.96 7.92 7.85 7.86 7.71
Rate on interest-bearing liabilities
Deposits 4.23 4.23 4.18 4.06 4.05
Borrowed funds 5.91 5.92 5.88 5.76 5.79
----------------------------------------------------------------
Total rate on interest-bearing liabilities 4.82 4.82 4.77 4.66 4.62
----------------------------------------------------------------
Interest rate spread 3.14 3.10 3.08 3.20 3.09
Impact of noninterest-bearing sources .81 .79 .76 .78 .83
----------------------------------------------------------------
Net interest margin 3.95% 3.89% 3.84% 3.98% 3.92%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 9
PNC BANK CORP. AND SUBSIDIARIES Page 9
Details of Noninterest Income
<TABLE>
<CAPTION>
Three months ended
December 31 Year ended December 31
NONINTEREST INCOME -----------------------------------------------------
In thousands 1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Asset management
Asset management and trust $128,916 $97,588 $461,512 $377,854
Mutual fund servicing 37,493 31,460 141,292 118,885
----------------------------------------------------
Total asset management 166,409 129,048 602,804 496,739
Service fees
Deposit 78,408 77,571 317,489 289,596
Credit card and merchant services 28,802 14,903 93,158 29,759
Corporate finance and capital markets 27,194 16,449 83,356 65,615
Consumer 19,965 19,246 74,783 63,676
Brokerage 14,230 12,392 54,341 53,810
Insurance 10,543 8,706 39,769 30,062
Other 13,646 8,778 49,556 33,840
----------------------------------------------------
Total service fees 192,788 158,045 712,452 566,358
Mortgage banking
Servicing 30,503 30,064 116,231 118,906
Marketing 14,775 8,022 37,440 23,638
Sale of servicing 463 9,446 2,815 11,128
----------------------------------------------------
Total mortgage banking 45,741 47,532 156,486 153,672
Other 77,621 46,399 287,851 156,207
----------------------------------------------------
Total noninterest income before net securities gains 482,559 381,024 1,759,593 1,372,976
Net securities gains 21,434 7,555 48,573 22,124
----------------------------------------------------
Total $503,993 $388,579 $1,808,166 $1,395,100
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
December 31 September 30 June 30 March 31 December 31
Three months ended - in thousands 1997 1997 1997 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Asset management
Asset management and trust $128,916 $115,197 $110,500 $106,899 $97,588
Mutual fund servicing 37,493 35,608 35,518 32,673 31,460
-----------------------------------------------------------------
Total asset management 166,409 150,805 146,018 139,572 129,048
Service fees
Deposit 78,408 78,406 79,817 80,858 77,571
Credit card and merchant services 28,802 23,292 21,960 19,104 14,903
Corporate finance and capital markets 27,194 18,480 21,090 16,592 16,449
Consumer 19,965 19,533 17,988 17,297 19,246
Brokerage 14,230 14,138 12,731 13,242 12,392
Insurance 10,543 10,421 9,659 9,146 8,706
Other 13,646 10,876 13,852 11,182 8,778
-----------------------------------------------------------------
Total service fees 192,788 175,146 177,097 167,421 158,045
Mortgage banking
Servicing 30,503 30,316 27,963 27,449 30,064
Marketing 14,775 15,552 3,692 3,421 8,022
Sale of servicing 463 683 494 1,175 9,446
-----------------------------------------------------------------
Total mortgage banking 45,741 46,551 32,149 32,045 47,532
Other 77,621 75,805 64,773 69,652 46,399
-----------------------------------------------------------------
Total noninterest income before net securities gains
(losses) 482,559 448,307 420,037 408,690 381,024
Net securities gains (losses) 21,434 (2,657) 13,370 16,426 7,555
-----------------------------------------------------------------
Total $503,993 $445,650 $433,407 $425,116 $388,579
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 10
PNC BANK CORP. AND SUBSIDIARIES Page 10
Details of Noninterest Expense
<TABLE>
<CAPTION>
Three months ended
December 31 Year ended December 31
NONINTEREST EXPENSE -----------------------------------------------------
In thousands 1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Staff expense
Compensation $276,768 $234,690 $1,015,898 $929,626
Employee benefits 35,571 34,543 192,277 180,306
----------------------------------------------------
Total staff expense 312,339 269,233 1,208,175 1,109,932
Net occupancy 49,813 49,681 189,345 196,975
Equipment 47,798 43,274 180,035 171,674
Goodwill amortization 13,143 15,118 52,795 54,300
Other amortization 42,961 21,583 121,126 63,139
Taxes other than income 13,730 12,360 56,476 53,353
Distributions on capital securities 13,123 1,391 43,138 1,391
Other 208,284 173,850 763,695 661,086
----------------------------------------------------
Total $701,191 $586,490 $2,614,785 $2,311,850
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
December 31 September 30 June 30 March 31 December 31
Three months ended - in thousands 1997 1997 1997 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Staff expense
Compensation $276,768 $250,833 $243,602 $244,695 $234,690
Employee benefits 35,571 48,141 50,559 58,006 34,543
-----------------------------------------------------------------
Total staff expense 312,339 298,974 294,161 302,701 269,233
Net occupancy 49,813 46,221 46,071 47,240 49,681
Equipment 47,798 44,483 45,710 42,044 43,274
Goodwill amortization 13,143 13,110 13,274 13,268 15,118
Other amortization 42,961 35,349 26,253 16,563 21,583
Taxes other than income 13,730 13,879 13,832 15,035 12,360
Distributions on capital securities 13,123 13,192 9,867 6,956 1,391
Other 208,284 173,350 189,664 192,397 173,850
-----------------------------------------------------------------
Total $701,191 $638,558 $638,832 $636,204 $586,490
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 11
PNC BANK CORP. AND SUBSIDIARIES Page 11
Consolidated Balance Sheet
<TABLE>
<CAPTION>
December 31 December 31
In millions 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and due from banks $4,303 $4,016
Short-term investments 1,526 774
Loans held for sale 2,324 941
Securities available for sale 8,522 11,917
Loans, net of unearned income of $412 and $385 54,245 51,798
Allowance for credit losses (972) (1,166)
-------------------------
Net loans 53,273 50,632
Other 5,172 4,980
-------------------------
Total assets $75,120 $73,260
-------------------------
LIABILITIES
Deposits
Noninterest-bearing $10,158 $10,937
Interest-bearing 37,491 34,739
-------------------------
Total deposits 47,649 45,676
Borrowed funds
Bank notes and senior debt 9,826 8,093
Federal funds purchased 3,632 3,933
Repurchase agreements 714 645
Other borrowed funds 3,753 5,576
Subordinated debt 1,697 1,357
-------------------------
Total borrowed funds 19,622 19,604
Other 1,815 1,761
-------------------------
Total liabilities 69,086 67,041
Mandatorily redeemable capital securities of subsidiary trusts 650 350
SHAREHOLDERS' EQUITY
Preferred stock 7 7
Common stock - $5 par value
Authorized $450,000,000 shares
Issued 348,447,600 and 345,154,238 shares 1,742 1,726
Capital surplus 1,042 939
Retained earnings 4,641 4,075
Deferred benefit expense (41) (60)
Net unrealized securities losses (23) (67)
Common stock held in treasury at cost: 48,017,641 and 21,036,195 shares (1,984) (751)
-------------------------
Total shareholders' equity 5,384 5,869
-------------------------
Total liabilities, capital securities and shareholders' equity $75,120 $73,260
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 12
PNC BANK CORP. AND SUBSIDIARIES Page 12
Consolidated Average Balance Sheet Data
<TABLE>
<CAPTION>
Three months ended
December 31 Year ended December 31
-----------------------------------------------------
In millions 1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Interest-earning assets
Securities $7,769 $11,569 $8,774 $13,550
Loans, net of unearned income
Consumer
Credit card 3,803 1,683 3,558 1,165
Other consumer 11,108 12,084 11,224 12,192
----------------------------------------------------
Total consumer 14,911 13,767 14,782 13,357
Residential mortgage 12,966 12,361 13,105 12,049
Commercial 19,838 18,122 19,089 17,727
Commercial real estate 4,067 4,092 4,060 4,186
Other 1,881 1,631 1,871 1,797
----------------------------------------------------
Total loans, net of unearned income 53,663 49,973 52,907 49,116
Other interest-earning assets 2,655 1,780 2,336 2,059
----------------------------------------------------
Total interest-earning assets 64,087 63,322 64,017 64,725
Noninterest-earning assets 6,782 6,214 6,627 6,082
----------------------------------------------------
Total assets $70,869 $69,536 $70,644 $70,807
----------------------------------------------------
LIABILITIES
Interest-bearing liabilities
Deposits $34,655 $34,829 $34,864 $35,217
Borrowed funds 18,624 17,110 18,594 18,314
----------------------------------------------------
Total interest-bearing liabilities 53,279 51,939 53,458 53,531
Noninterest-bearing deposits 9,925 10,003 9,670 9,900
Other 1,601 1,501 1,501 1,529
----------------------------------------------------
Total liabilities 64,805 63,443 64,629 64,960
Mandatorily redeemable capital securities of subsidiary trusts 650 76 537 19
SHAREHOLDERS' EQUITY 5,414 6,017 5,478 5,828
----------------------------------------------------
Total liabilities, capital securities and shareholders' equity $70,869 $69,536 $70,644 $70,807
----------------------------------------------------
COMMON SHAREHOLDERS' EQUITY $5,099 $5,727 $5,162 $5,742
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 13
PNC BANK CORP. AND SUBSIDIARIES Page 13
Consolidated Balance Sheet Data
<TABLE>
<CAPTION>
AVERAGE BALANCES December 31 September 30 June 30 March 31 December 31
Three months ended - in millions 1997 1997 1997 1997 1996
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets
Securities $7,769 $8,216 $9,055 $10,089 $11,569
Loans, net of unearned income
Consumer
Credit card 3,803 3,871 3,502 3,043 1,683
Other consumer 11,108 10,996 11,239 11,827 12,084
-----------------------------------------------------------------
Total consumer 14,911 14,867 14,741 14,870 13,767
Residential mortgage 12,966 13,503 13,164 12,781 12,361
Commercial 19,838 18,858 18,986 18,429 18,122
Commercial real estate 4,067 4,022 4,038 4,078 4,092
Other 1,881 1,952 1,884 1,764 1,631
-----------------------------------------------------------------
Total loans, net of unearned income 53,663 53,202 52,813 51,922 49,973
Other interest-earning assets 2,655 2,536 2,333 1,814 1,780
-----------------------------------------------------------------
Total interest-earning assets 64,087 63,954 64,201 63,825 63,322
Noninterest-earning assets 6,782 6,627 6,620 6,476 6,214
-----------------------------------------------------------------
Total assets $70,869 $70,581 $70,821 $70,301 $69,536
-----------------------------------------------------------------
LIABILITIES
Interest-bearing liabilities
Deposits $34,655 $34,952 $35,313 $34,533 $34,829
Borrowed funds 18,624 18,484 18,675 18,594 17,110
-----------------------------------------------------------------
Total interest-bearing liabilities 53,279 53,436 53,988 53,127 51,939
Noninterest-bearing deposits 9,925 9,654 9,501 9,600 10,003
Other 1,601 1,460 1,480 1,466 1,501
-----------------------------------------------------------------
Total liabilities 64,805 64,550 64,969 64,193 63,443
Mandatorily redeemable capital securities of subsidiary
trusts 650 650 492 350 76
SHAREHOLDERS' EQUITY 5,414 5,381 5,360 5,758 6,017
-----------------------------------------------------------------
Total liabilities, capital securities and shareholders'
equity $70,869 $70,581 $70,821 $70,301 $69,536
-----------------------------------------------------------------
COMMON SHAREHOLDERS' EQUITY $5,099 $5,066 $5,044 $5,442 $5,727
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
LOAN PORTFOLIO December 31 September 30 June 30 March 31 December 31
Period ended - in millions 1997 1997 1997 1997 1996
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Consumer
Credit card $3,830 $3,861 $3,693 $3,345 $2,776
Other consumer 11,205 11,206 10,983 11,356 12,092
Residential mortgage 12,785 13,064 13,494 13,056 12,703
Commercial 19,989 19,536 19,266 19,020 18,588
Commercial real estate
Commercial mortgage 1,848 1,926 1,880 1,894 1,941
Real estate project 2,126 2,159 2,123 2,137 2,157
Other 2,874 2,281 2,450 2,154 1,926
-----------------------------------------------------------------
Total loans 54,657 54,033 53,889 52,962 52,183
Unearned income (412) (382) (392) (387) (385)
-----------------------------------------------------------------
Loans, net of unearned income $54,245 $53,651 $53,497 $52,575 $51,798
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 14
PNC BANK CORP. AND SUBSIDIARIES Page 14
Asset Quality Data
<TABLE>
<CAPTION>
LOAN PORTFOLIO December 31 September 30 June 30 March 31 December 31
Three months ended - in millions 1997 1997 1997 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Beginning balance $1,027 $1,075 $1,119 $1,166 $1,152
Charge-offs
Consumer
Credit card (54) (53) (55) (46) (23)
Other consumer (27) (25) (25) (30) (28)
----------------------------------------------------------------
Total consumer (81) (78) (80) (76) (51)
Residential mortgage (1) (3) (3) (2) (2)
Commercial (18) (11) (10) (10) (17)
Commercial real estate (5) (3) (3) (1) (9)
----------------------------------------------------------------
Total charge-offs (105) (95) (96) (89) (79)
Recoveries
Consumer
Credit card 5 4 9 7 2
Other consumer 10 9 9 9 9
----------------------------------------------------------------
Total consumer 15 13 18 16 11
Residential mortgage 1 1
Commercial 4 7 18 9 7
Commercial real estate 6 2 1 3 3
----------------------------------------------------------------
Total recoveries 25 22 37 29 22
----------------------------------------------------------------
Net charge-offs (80) (73) (59) (60) (57)
Provision for credit losses 25 20 15 10
Acquisitions 5 3 71
----------------------------------------------------------------
Ending balance $972 $1,027 $1,075 $1,119 $1,166
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NONPERFORMING ASSETS December 31 September 30 June 30 March 31 December 31
Period ended - in millions 1997 1997 1997 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nonaccrual loans
Commercial $128 $142 $155 $135 $156
Commercial real estate
Commercial mortgage 84 94 106 113 109
Real estate project 10 28 33 24 25
Consumer 10 6 5 5 6
Residential mortgage 44 45 46 45 51
----------------------------------------------------------------
Total nonaccrual loans 276 315 345 322 347
Restructured loans 2 1 1 2
----------------------------------------------------------------
Total nonperforming loans 276 317 346 323 349
Foreclosed assets
Commercial real estate 27 37 55 66 71
Residential mortgage 21 23 23 24 22
Other 9 17 18 16 17
----------------------------------------------------------------
Total foreclosed assets 57 77 96 106 110
----------------------------------------------------------------
Total nonperforming assets $333 $394 $442 $429 $459
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 1
Exhibit 99.2
BY-LAWS
OF
PNC BANK CORP.
(EFFECTIVE NOVEMBER 20, 1997)
- -------------------------------------------------------------------------------
ARTICLE I. PRINCIPAL OFFICE
The principal office of the Corporation shall be located at One PNC Plaza,
Pittsburgh, Pennsylvania.
ARTICLE II. SHAREHOLDERS
1. ANNUAL MEETING
1.1 TIME AND PLACE.
An annual meeting of the shareholders for the election of
directors and the transaction of such other business as may properly come before
the meeting shall be held at 11 a.m. on the fourth Tuesday in April of each
year, or on such other date or hour as may be fixed by the Board of Directors.
1.2 NOMINATIONS AND OTHER BUSINESS.
(a) Nominations for the election of directors and other
proposals for action at an annual meeting of shareholders may be made only (i)
pursuant to the Corporation?s notice of such meeting, (ii) by the presiding
officer, (iii) by or at the direction of a majority of the Board of Directors,
or (iv) by one or more shareholders in accordance with applicable rules of the
Securities and Exchange Commission and the provisions of this Section 1.2.
(b) A nomination for the election of a director or a proposal
for action at an annual meeting may be made by a shareholder only if written
notice of such nomination or proposal has been received by the Secretary of the
Corporation at its principal office not later than (i) 90 days prior to such
annual meeting (unless a different date for such notice has been stated in the
Corporation?s most recent proxy materials distributed to shareholders), or (ii)
if the annual meeting is to be held on a date other than the fourth Tuesday in
April, the close of business on the tenth day following the first public
disclosure of the date of such meeting. The first public disclosure of the date
of any annual meeting of shareholders shall be when public disclosure of such
meeting date is first made in a filing by the Corporation with the Securities
and Exchange Commission, in any notice given to the New York Stock Exchange, or
in a news release reported by any national news service.
<PAGE> 2
By-Laws - PNC Bank Corp.
Page 2
(c) Each such notice from a shareholder shall set forth: (i)
as to the shareholder giving the notice and the beneficial owner, if any, on
whose behalf the notice is given (A) the name and address of such shareholder
and of such beneficial owner, and (B) the class and number of shares of the
Corporation which are owned of record and beneficially by such shareholder and
such beneficial owner; and (ii) a representation that the shareholder is a
beneficial owner of stock of the Corporation entitled to vote at such meeting
and intends to be present at the meeting in person or by proxy to make such
nomination or proposal.
(d) Each notice of nomination for the election of a director
from a shareholder also shall set forth: (i) the name and address of the person
to be nominated; (ii) a description of all arrangements or understandings
between the shareholder and the nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination is to be made by the
shareholder; (iii) such other information regarding the nominee as would be
required to be included in proxy materials filed under applicable rules of the
Securities and Exchange Commission had the nominee been nominated by the Board
of Directors; and (iv) the written consent of the nominee to serve as a director
of the Corporation if so elected.
(e) Each notice of a proposal for action at an annual meeting
from a shareholder also shall set forth a brief description of the proposal, the
reasons for making such proposal, and any direct or indirect interest of the
shareholder, or any person on whose behalf the shareholder is acting, in making
such proposal.
(f) The presiding officer of the meeting may refuse to permit
any nomination for the election of a director or proposal to be made at an
annual meeting by a shareholder who has not complied with all of the foregoing
procedures.
2. SPECIAL MEETINGS
Special meetings of the shareholders may be called, at any time, only
by the Board of Directors, the Chairman of the Board, the President, or a Vice
Chairman of the Board. Only business brought before the meeting (a) pursuant to
the Corporation?s notice of such meeting, (b) by the presiding officer, or (c)
by or at the direction of a majority of the Board of Directors, shall be
conducted at a special meeting of the shareholders.
3. PLACE OF MEETINGS
Meetings of the shareholders shall be held at the principal office of
the Corporation or at such other place as the Board of Directors may designate.
<PAGE> 3
By-Laws - PNC Bank Corp.
Page 3
4. NOTICE OF MEETINGS
Written notice of every meeting of the shareholders shall be given to
each shareholder of record entitled to vote at the meeting at least five days
prior to the day named for the meeting, unless a greater period of notice is
required by law. The notice shall state the day, time and place of such meeting
and the general nature of the business to be transacted. Notice of a meeting may
be waived in writing and attendance at a meeting shall itself constitute a
waiver of notice of the meeting.
5. QUORUM
The presence, in person or by proxy, of shareholders entitled to cast
at least a majority of the votes which all shareholders are entitled to cast on
the particular matter shall constitute a quorum for the purpose of considering
such matter. At a duly organized meeting, except as may be otherwise specified
in the Articles of Incorporation or provided by law, each matter shall be
decided upon receiving the affirmative vote of a majority of the votes cast by
all shareholders entitled to vote thereon and, if any shareholders are entitled
to vote thereon as a class, upon receiving the affirmative vote of a majority of
the votes cast by the shareholders entitled to vote as a class.
6. RECORD DATE
The Board of Directors may fix a record date not more than ninety days
prior to the date of any meeting of shareholders, or the date fixed for the
payment of any dividend or distribution, or the date for the allotment of rights
or the date when any change or conversion or exchange of shares will be made or
go into effect. Only such shareholders as shall be shareholders of record at the
close of business on the record date shall be entitled to notice of, or to vote
at such meeting or to receive such allotment of rights or to exercise such
rights, as the case may be.
ARTICLE III. DIRECTORS
1. BOARD OF DIRECTORS
The business and offices of the Corporation shall be managed by the
Board of Directors, which shall consist of not less than five nor more than
thirty-six members as shall be established from time to time by the Board of
Directors.
2. TERM OF OFFICE
After elected by the shareholders, directors shall hold office until
the next succeeding annual meeting and until their successors shall have been
elected and qualified.
<PAGE> 4
By-Laws - PNC Bank Corp.
Page 4
3. VACANCY
Vacancies in the Board of Directors, including vacancies resulting from
an increase in the number of directors, may be filled by a majority of the
remaining directors though less than a quorum, and any director so elected shall
serve until the next annual meeting of the shareholders and until a successor
shall have been elected and qualified.
4. ORGANIZATION
As soon as practicable after the annual meeting of shareholders at
which they were elected, the Board of Directors shall meet for the purpose of
electing officers and the transaction of such other business as may be properly
brought before the meeting.
5. REGULAR MEETINGS
Regular meetings of the Board of Directors may be held without notice
at such times and at such places as the Board of Directors, by resolution, shall
establish. When a regular meeting falls on a business holiday, it shall be held
on the preceding or next following business day, as the Chief Executive Officer
shall select.
6. SPECIAL MEETINGS
Special meetings of the Board of Directors may be called by the
Chairman of the Board, the President, a Vice Chairman, or at the written request
of any three directors. Notice of special meetings shall be given to each
director personally or in writing, or by telephone, not later than during the
day immediately preceding the day of such meeting and shall include the general
nature of the business to be transacted at the meeting.
7. QUORUM
A majority of the directors shall constitute a quorum for the
transaction of business, and the acts of a majority of the directors present at
a meeting at which a quorum is present shall be the acts of the Board of
Directors. One or more directors may participate in a meeting of the Board of
Directors, or in a meeting of a Committee of the Board of Directors by means of
communication facilities enabling all persons participating in the meeting to
hear each other.
8. ACTION WITHOUT A MEETING
Any action which may be taken at a meeting of the Board of Directors
may be taken without a meeting if a written consent or consents setting forth
the action so taken is signed by all the directors and filed with the Secretary
of the Corporation.
<PAGE> 5
By-Laws - PNC Bank Corp.
Page 5
9. COMPENSATION OF DIRECTORS
Directors shall be compensated for their services and reimbursed for
their meeting attendance expenses, in such manner and at such time as the Board
of Directors may determine.
ARTICLE IV. OFFICERS
1. DESIGNATION
The officers of the Corporation shall be a Chairman of the Board, a
President, one or more Vice Chairmen, one or more Vice Presidents of whom one or
more may be designated Senior Executive Vice President, Executive Vice President
or Senior Vice President, a Secretary, a Treasurer, a Controller, a General
Auditor and such other officers, as the Board of Directors, the Chairman, the
President, or the Vice Chairman may from time to time designate. The Board of
Directors shall designate from among the Chairman of the Board, President, and
Vice Chairmen, one of those officers to be the Chief Executive Officer. All
officers having the rank of Senior Vice President or higher shall be elected by
the Board of Directors and shall hold office during the pleasure of the Board of
Directors. All other officers shall be appointed by the Chief Executive Officer,
or, in his absence, by such other officer or officers as may be designated by
the Board of Directors, and such appointments shall be reported to the Board of
Directors.
2. RESPONSIBILITIES OF THE SENIOR OFFICERS
2.1 CHIEF EXECUTIVE OFFICER
The Chief Executive Officer of the Corporation shall preside
at all meetings of the shareholders and the Board of Directors, and shall be ex
officio a member of all Committees except the Audit Committee, the Nominating
Committee, and the Personnel and Compensation Committee; subject to the
direction of the Board of Directors, the Chief Executive Officer shall have the
general supervision of the policies, business and operations of the Corporation,
and of the other officers, agents and employees of the Corporation and, except
as otherwise provided in these By-Laws or by the Board of Directors, shall have
all the other powers and duties as are usually incident to the Chief Executive
Officer of a corporation. In the absence of the Chief Executive Officer, his
rights and duties shall be performed by such other officer or officers as shall
be designated by the Board of Directors.
2.2 CHAIRMAN, PRESIDENT AND VICE CHAIRMAN
The Chairman, the President and the Vice Chairman if not
designated as the Chief Executive Officer shall have such duties and powers as
may be assigned to them from time to time by the Board of Directors or the Chief
Executive Officer.
<PAGE> 6
By-Laws - PNC Bank Corp.
Page 6
2.3 VICE PRESIDENTS
The Executive Vice Presidents, Senior Vice Presidents and the
Vice Presidents, if such are elected, shall have the duties and powers as may
from time to time be assigned to them by the Board of Directors, or by the Chief
Executive Officer in the absence of any assignment by the Board of Directors.
Any reference in these By-Laws to a Vice President will apply equally to an
Executive Vice President or a Senior Vice President unless the context requires
otherwise.
2.4 TREASURER
The Treasurer shall be responsible for the funding of the
Corporation and for all moneys, funds, securities, fidelity and indemnity bonds
and other valuables belonging to the Corporation; and shall perform such other
duties as may be assigned to him from time to time by the Board of Directors or
the Chief Executive Officer.
2.5 SECRETARY
The Secretary shall: attend the meetings of the shareholders,
of the Board of Directors, of the Executive Committee, and of such other
committees, and shall keep minutes thereof in suitable minute books; have charge
of the corporate records, papers and the corporate seal; have charge of the
stock and transfer records of the Corporation and shall keep a record of all
shareholders and give notices of all meetings of shareholders, special meetings
of the Board of Directors and of its Committees; and have such other duties as
the Board of Directors or the Chief Executive Officer shall assign.
2.6 CONTROLLER
The Controller, if a Controller is elected, shall cause to be
kept proper records of the transactions of the Corporation; shall be responsible
for the preparation of financial and tax reports required of the Corporation;
and shall perform such other duties as may be assigned to him from time to time
by the Board of Directors or the Chief Executive Officer.
2.7 GENERAL AUDITOR
The General Auditor shall have charge of auditing the books,
records and accounts and shall report directly to the Board of Directors or the
Audit Committee thereof.
2.8 ASSISTANT OFFICERS
Each assistant officer as shall be elected shall assist in the
performance of the duties of the officer to whom he is assistant and shall
perform such duties in the absence of the officer. He shall perform such
additional duties as the Board of Directors, the Chief Executive Officer, or the
officer to whom he is assistant, may from time to time assign to him.
<PAGE> 7
By-Laws - PNC Bank Corp.
Page 7
3. INCUMBENCY
Any officer elected by the Board of Directors may be removed by the
Board of Directors whenever, in its best judgment, the best interest of the
Corporation will be served thereby, without prejudice however to any contract
rights the person so removed may have with the Corporation or any of its
subsidiaries.
ARTICLE V. COMMITTEES
1. STANDING COMMITTEES
The Standing Committees which shall be appointed from time to time by
the Board of Directors shall be the Executive Committee, the Audit Committee,
the Credit Committee, the Asset and Liability Committee, the Nominating
Committee and the Personnel and Compensation Committee. The Board of Directors
may appoint such other Committees as the Board of Directors shall deem
advisable.
1.1 EXECUTIVE COMMITTEE
The Executive Committee shall consist of its Chairman and
Chief Executive Officer and such other directors, not less than five, all of
whom shall from time to time be appointed by the Board of Directors or the Chief
Executive Officer. The Committee shall meet at such time or times as may be
fixed by the Board of Directors, or upon call of its Chairman or the Chief
Executive Officer. In the absence of the Chairman of the Committee, the Chief
Executive Officer shall act as Chairman of the Executive Committee, unless the
Board of Directors shall appoint some other person. The Executive Committee
shall have and exercise in the intervals between the meetings of the Board of
Directors all the powers of the Board of Directors so far as may be permitted by
law. All acts done and powers conferred by the Executive Committee from time to
time shall be deemed to be, and may be certified as being, done and conferred
under authority of the Board of Directors. Five directors shall constitute a
quorum.
1.2 AUDIT COMMITTEE
The Board of Directors shall appoint annually the Audit
Committee consisting of not less than five directors, nor more than eight, none
of whom shall be an officer, or a former officer of the Corporation. The
Committee shall select a chairman from its membership, and may appoint a
secretary who need not be a director. The Committee shall meet on call of its
Chairman. The duties and responsibilities of the Committee shall be established
by the Board of Directors.
<PAGE> 8
By-Laws - PNC Bank Corp.
Page 8
1.3 CORPORATE GOVERNANCE COMMITTEE
The Board of Directors shall appoint annually the members of
the Committee, consisting of not fewer than three directors, none of whom shall
be an officer or former officer of the Corporation, and from these directors
appoint the Chairman. The Committee may appoint a Secretary, who need not be a
director. The Committee on Corporate Governance shall be responsible for
selecting the persons to be candidates for nomination for election or
appointment as directors of the Corporation, making recommendations with respect
thereto to the Board of Directors and monitoring and recommending enhancements
to the Corporation's corporate governance framework, particularly with respect
to the structure, processes and proceedings of the Board of Directors. The
Committee shall conduct its affairs in accordance with a charter approved by the
Board of Directors.
1.4 PERSONNEL AND COMPENSATION COMMITTEE
The Board of Directors shall appoint annually the members of
the Personnel and Compensation Committee, consisting of not fewer than five
directors, none of whom shall be an officer or former officer of the
Corporation. Further, upon appointment and at all times during his or her tenure
on the Committee, each Committee member shall satisfy such standards of
independence as may be prescribed for purposes of any federal securities or tax
laws relating to the Committees duties and responsibilities. The Committee
Chairman shall be appointed by the Board of Directors and the Committee may
appoint a Secretary, who need not be a director. The duties and responsibilities
of the Committee shall be as set forth in a charter approved by the Board of
Directors.
1.5 CREDIT COMMITTEE
The Board of Directors shall appoint annually the members of
the Credit Committee consisting of not less than five directors, including no
more than two officer-directors, and shall select a chairman from its
membership, who shall not be an officer. The Committee may appoint a secretary
who need not be a director. The duties and responsibilities of the Committee
shall be as set forth in a charter approved by the Board of Directors.
1.6 FINANCE COMMITTEE
The Board of Directors shall appoint annually the members of
the Finance Committee consisting of not less than five directors, including no
more than two officer-directors, and shall select a chairman from its
membership, who shall not be an officer. The Committee may appoint a secretary
who need not be a director. The duties and responsibilities of the Committee
shall be as set forth in a charter approved by the Board of Directors.
<PAGE> 9
By-Laws - PNC Bank Corp.
Page 9
2. OTHER COMMITTEES
The Board of Directors may authorize the appointment of such other
Committees as it shall deem advisable.
3. MINUTES
The Executive Committee and the Audit Committee shall keep minutes of
their meetings, and such minutes shall be submitted at a regular meeting of the
Board of Directors, and any action taken by the Board of Directors with respect
thereto shall be entered in the minutes of the Board of Directors. All other
Committees shall keep minutes of their meetings which shall be accessible to
inspection by the Board of Directors at all times.
4. PROCEDURE
Except as otherwise expressly provided for herein, each Committee may
appoint a secretary, adopt its own rules of procedure and, unless the Board of
Directors has acted with respect thereto, determine the date, place and hour for
its meetings. In the absence of any other provision herein to the contrary, a
majority of the members of any Committee shall constitute a quorum, and the
action of a majority of the members in attendance at a meeting shall constitute
the action of the body. Notice of meetings shall be given to each member
personally, or in writing addressed to the address of the director appearing on
the books of the Corporation on or before the day preceding the meeting.
5. ATTENDANCE
In the absence or disqualification of any member of a Committee, the
members thereof present at any meeting and not disqualified from voting, whether
or not they constitute a quorum, may unanimously appoint another director to act
at the meeting in place of any absent or disqualified member.
ARTICLE VI. STOCK CERTIFICATES
1. SIGNATURES
Certificates of stock of the Corporation shall be signed by the
Chairman of the Board, or the President, or any Vice Chairman, or any Vice
President and countersigned by the Secretary or the Treasurer or by any
Assistant Secretary or Assistant Treasurer, and sealed with the seal of the
Corporation, which may be a facsimile. Where any such certificate is signed
manually by a transfer agent or a registrar, the signatures of the officers may
be facsimiles.
<PAGE> 10
By-Laws - PNC Bank Corp.
Page 10
2. TRANSFERS
The shares of stock of the Corporation shall be transferable only on
its books upon surrender of the stock certificate for such shares properly
endorsed. The Board of Directors shall have power to appoint one or more
Transfer Agents and Registrars for the transfer and registration of certificates
of stock of any class, and may require that stock certificates shall be
countersigned and registered by one or more such Transfer Agents and Registrars.
3. LOST OR DESTROYED CERTIFICATES
If a stock certificate shall be lost, stolen or destroyed, the
shareholder may file with the Corporation an affidavit stating the circumstances
of the loss, theft or destruction and may request the issuance of a new
certificate. He shall give to the Corporation a bond which shall be in such sum,
contain such terms and provisions and have such surety or sureties as the Board
of Directors may direct. The Corporation may thereupon issue a new certificate
replacing the certificate lost, stolen or destroyed.
ARTICLE VII. DIRECTOR LIABILITY LIMITATION AND INDEMNIFICATION
1. LIMITATION OF DIRECTOR LIABILITY
A director of the Corporation shall, to the maximum extent permitted by
the laws of the Commonwealth of Pennsylvania, have no personal liability for
monetary damages for any action taken, or any failure to take any action as a
director, provided that this Section 1, Article VII shall not eliminate the
liability of a director in any case where such elimination is not permitted by
law.
2. INDEMNIFICATION
Each person who at any time is or shall have been a director or officer
of the Corporation, or is serving or shall have served at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, and his heirs, executors
and administrators, shall be indemnified by the Corporation in accordance with
and to the full extent permitted by the laws of the Commonwealth of Pennsylvania
as in effect at the time of such indemnification. The foregoing right of
indemnification shall constitute a contract between the Corporation and each of
its directors and officers and shall not be deemed exclusive of other rights to
which any director, officer, employee, agent or other person may be entitled in
any capacity as a matter of law or under any by-law, agreement, vote of
shareholders or directors, or otherwise. If authorized by the Board of
Directors, the Corporation may purchase and maintain insurance on behalf of any
person to the full extent permitted by the laws of the Commonwealth of
Pennsylvania.
<PAGE> 11
By-Laws - PNC Bank Corp.
Page 11
ARTICLE VIII. APPLICATION OF STATUTORY ANTI-TAKEOVER PROVISIONS
The following provisions of Title 15 of the Pennsylvania consolidated statutes
shall not be applicable to the Corporation: (1) Section 1715; (2) Subchapter G
of Chapter 25; and (3) Subchapter H of Chapter 25.
ARTICLE IX. EXERCISE OF AUTHORITY DURING EMERGENCIES
The Board of Directors or the Executive Committee may from time to time adopt
resolutions authorizing certain persons and entities to exercise authority on
behalf of this Corporation in time of emergency, and in the time of emergency
any such resolutions will be applicable, notwithstanding any provisions as to
the contrary contained in these By-Laws.
ARTICLE X. CHARITABLE CONTRIBUTIONS
The Board of Directors may authorize contributions to community funds,
or to charitable, philanthropic, or benevolent instrumentalities conducive to
public welfare in such sums as the Board of Directors may deem expedient and in
the interest of the Corporation.
ARTICLE XI. AMENDMENTS
These By-Laws may be altered, amended, added to or repealed by a vote
of a majority of the Board of Directors at any regular meeting of the Board of
Directors, or at any special meeting of the Board of Directors called for that
purpose.
