SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) of the SECURITIES
EXCHANGE ACT OF 1934.
For the fiscal year ended December 31, 1998.
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period _______________ to _______________
Commission File No.: 0-17286
PRIME BANCORP, INC.
-------------------------------------------------
(Exact Name of Issuer as Specified in its Charter)
Delaware 23-2860688
- ------------------------ ----------------
(State of Incorporation) (IRS Employer
Identification No.)
7111 Valley Green Road, Fort Washington, PA 19034-2209
-------------------------------------------------------
(Address of Principal Executive Offices)
Prime Bancorp, Inc. Retirement Savings Plan
-------------------------------------------
(Full Title of the Plan)
<PAGE>
REQUIRED INFORMATION
(a) Prime Bancorp, Inc. Retirement Savings Plan is subject to the Employee
Retirement Income Security Act of 1974 ("ERISA"). Therefore in lieu of items
1-3 on Form 11-K, the statements of net assets available for plan benefits as of
December 31, 1998 and 1997 and the related statements of changes in net assets
available for plan benefits for each of the years in the three year period ended
December 31, 1998 and the schedule of assets held for investment purposes as of
December 31, 1998, which have been prepared in accordance with the financial
reporting requirements of ERISA, are attached hereto as Appendix 1 and
incorporated herein by this reference.
(b) The following Exhibit is filed as part of this Annual Report on Form 11-k:
23.1 Consent of Ernst & Young LLP
23.2 Consent of KPMG LLP
23.3 Independent Auditors' Report
23.4 Management's Comments on Year 2000
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees(or other persons who administer the employee benefit plan) have duly
caused this Annual Report to be signed on its behalf by the undersigned hereunto
duly authorized.
Dated: June 29, 1998 Prime Bancorp, Inc. Retirement
Savings Plan
By: /s/ Harry Dingler, Jr.
-------------------------
Harry Dingler, Jr.
Plan Administrator
Appendix 1
Financial Statements
and Supplemental Schedules
Prime Bancorp, Inc.
Retirement Savings Plan
Years ended December 31, 1998 and 1997
with Report of Independent Auditors
<PAGE>
Prime Bancorp, Inc. Retirement Savings Plan
Financial Statements and Supplemental Schedules
Years ended December 31, 1998 and 1997
Contents
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . . . . . . .1
Audited Financial Statements
Statements of Net Assets Available for Plan Benefits. . . . . . . . . . . . . .3
Statements of Changes in Net Assets Available for Plan Benefits . . . . . . . .5
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . .7
Supplemental Schedules
Item 27a - Schedule of Assets Held for Investment Purposes. . . . . . . . . . 15
Item 27d - Schedule of Reportable Transactions. . . . . . . . . . . . . . . . 16
<PAGE>
Report of Independent Auditors
To the Trustees and Administrator
Prime Bancorp, Inc. Retirement Savings Plan
We have audited the accompanying statement of net assets available for plan
benefits of the Prime Bancorp, Inc. Retirement Savings Plan as of December 31,
1998, and the related statement of changes in net assets available for plan
benefits for the year then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audit. The financial
statements of the Prime Bancorp, Inc. Retirement Savings Plan for the year ended
December 31, 1997, were audited by other auditors whose report dated June 1,
1998, expressed an unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the 1998 financial statements referred to above present fairly,
in all material respects, the net assets available for plan benefits of the
Prime Bancorp, Inc. Retirement Savings Plan at December 31, 1998, and the
changes in net assets available for plan benefits for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1998, and reportable
transactions for the year then ended are presented for purposes of additional
analysis and are not a required part of the basic financial statements, but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The fund information in the statement of net assets available
for plan benefits and the statement of changes in net assets available
1
<PAGE>
for plan benefits is presented for purpose of additional analysis rather than to
present the net assets available for plan benefits and changes in net assets
available for plan benefits of each fund. The supplemental schedules and the
1998 fund information have been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, are fairly
presented in all material respects in relation to the basic financial statements
taken as a whole.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
June 25, 1999
2
<PAGE>
Prime Bancorp, Inc. Retirement Savings Plan
Statements of Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
December 31, 1998
- ------------------------------------------------------------------------------------------------------
Money Growth and Certificates Prime
Market Growth Income of Common Bond Participant
Funds Funds Funds Deposit Stock Funds Loans Total
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments at
fair value:
AIM International
Equity Fund $ - $ 70,133 $ - $ - $ - $ - $ - $ 70,133
American Century
Income & Growth
Fund - - 451,816 - - - - 451,816
Fidelity Puritan
Fund - - 562,077 - - - - 562,077
Neuberger &
Berman Genesis
Fund - 197,758 - - - - - 197,758
Participant Loans - - - - - - 196,149 196,149
Prime Bancorp, Inc.
common stock - - - - 3,188,288 - - 3,188,288
Prime Bancorp, Inc.
Stock Money Market
Fund - - - - 671 - - 671
Vanguard Money
Market Prime
Fund 946,102 - - - - - - 946,102
Vanguard
Intermediate U.S.
Treasury Fund - - - - - 273,383 - 273,383
Vanguard U.S.
Growth Fund - 359,246 - - - - - 359,246
----------------------------------------------------------------------------------------
Total
investments 946,102 627,137 1,013,893 - 3,188,959 273,383 196,149 6,245,623
----------------------------------------------------------------------------------------
Receivables:
Employer's
Contributions 46,844 77,640 83,754 - 177,556 28,142 - 413,936
Participants'
Contributions 2,308 12,195 12,948 - 23,832 3,763 - 55,046
----------------------------------------------------------------------------------------
Total
receivables 49,152 89,835 96,702 - 201,388 31,905 - 468,982
----------------------------------------------------------------------------------------
Net assets available
for plan
benefits $999,254 $716,972 $1,110,595 $ - $3,390,347 $305,288 $196,149 $6,714,605
=========================================================================================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
Prime Bancorp, Inc. Retirement Savings Plan
Statements of Net Assets Available for Plan Benefits (continued)
<TABLE>
<CAPTION>
December 31, 1997
---------------------------------------------------------------------------------------
Money Growth and Certificates Prime
Market Growth Income of Common ,Bond Participant
Funds Funds Funds Deposit Stock Funds Loans Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments at
fair value:
Benham GNMA
Income Fund $ - $ - $ - $ - $ - $ 68,826 $ - $ 68,826
Dreyfus Short
Interest Government
Fund - - - - - 81,817 - 81,817
Kaufmann Fund - 164,432 - - - - - 164,432
Money Market
Fund 3,530 - - - - - - 3,530
Bernman
Focus Fund - 193,711 - - - - - 193,711
Guardian Fund - - 82,101 - - - - 82,101
Participant Loans - - - - - - 69,034 69,034
Prime Bancorp, Inc.
common stock - - - - 3,463,777 - - 3,463,777
Prime Bank
Certificates of
Deposit - - - 837,701 - - - 837,701
Vanguard
Wellington Fund - - 339,714 - - - - 339,714
----------------------------------------------------------------------------------------
Total
investments 3,530 358,143 421,815 837,701 3,463,777 150,643 69,034 5,304,643
----------------------------------------------------------------------------------------
Receivables:
Employer's
Contributions - 3,396 4,220 1,833 8,458 1,625 - 19,532
Participants'
Contributions - 6,640 9,100 3,279 17,924 3,640 - 40,583
----------------------------------------------------------------------------------------
Total
receivables - 10,036 13,320 5,112 26,382 5,265 - 60,115
----------------------------------------------------------------------------------------
Net assets available
for plan
benefits $ 3,530 $368,179 $ 435,135 $842,813 $3,490,159 $155,908 $ 69,034 $5,364,758
=========================================================================================
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
Prime Bancorp, Inc. Retirement Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
December 31, 1998
---------------------------------------------------------------------------------------
Money Growth and Certificates Prime
Market Growth Income of Common Bond Participant
Funds Funds Funds Deposit Stock Funds Loans Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to
net assets
attributable to:
Net realized
and unrealized
depreciation $ - $ 53,409 $ 64,826 $ - $ (664,366) $ 11,526 $ - $ (534,605)
Dividend income - 26,569 70,470 - 57,362 - - 154,401
Interest income 35,455 181 231 - 386 9,344 7,662 53,259
---------------------------------------------------------------------------------------
Net Investment
income 35,455 80,159 135,527 - (606,618) 20,870 7,662 (326,945)
Contributions:
Employer 113,495 217,472 228,545 - 381,592 68,047 - 1,009,151
Participants 33,534 129,491 130,927 - 209,137 32,917 - 536,006
---------------------------------------------------------------------------------------
Total
contributions 147,029 346,963 359,472 - 590,729 100,964 - 1,545,157
Transfer in from
First Sterling
Plan 89,065 475,545 64,273 - - 25,327 30,336 684,546
Rollovers 65,640 1,607 15,118 - 27,976 10,207 - 120,548
---------------------------------------------------------------------------------------
Total additions 337,189 904,274 574,390 - 12,087 157,368 37,998 2,023,306
Reductions in net
assets attributable to:
Withdrawals (132,019) (109,066) (51,174) - (370,754) (10,446) - (673,459)
Total interfund
transfers 786,554 (446,415) 152,244 (842,813) 258,855 2,458 89,117 -
---------------------------------------------------------------------------------------
Net increase
(decrease) 991,724 348,793 675,460 (842,813) (99,812) 149,380 127,115 1,349,847
Net assets available
for plan benefits:
Beginning of
Year 3,530 368,179 435,135 842,813 3,490,159 155,908 69,034 5,364,758
----------------------------------------------------------------------------------------
End of Year $995,254 $716,972 $1,110,595 $ - $3,390,347 $305,288 $196,149 $6,741,605
========================================================================================
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
Prime Bancorp, Inc. Retirement Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits (continued)
<TABLE>
<CAPTION>
December 31, 1997
---------------------------------------------------------------------------------------
Money Growth and Certificates Prime
Market Growth Income of Common Bond Participant
Funds Funds Funds Deposit Stock Funds Loans Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to
net assets
attributable to:
Net realized
and unrealized
depreciation $ - $ 15,408 $ 32,415 $ - $1,684,118 $ 778 $ - $1,732,719
Dividend income - 29,603 38,116 - 67,000 - - 134,719
Interest income 51 - - 48,298 - 7,847 4,375 60,571
-------------------------------------------------------------------------------------
Net Investment
income 51 45,011 70,531 48,298 1,751,118 8,625 4,375 1,928,009
Contributions:
Employer 448 50,281 62,268 44,559 127,391 24,302 - 309,289
Participants 1,502 52,107 70,875 33,652 151,701 27,538 - 337,375
--------------------------------------------------------------------------------------
Total
contributions 1,990 102,388 133,143 78,211 279,092 51,840 - 646,664
Rollovers - 4,955 4,955 - 33,537 - - 43,447
---------------------------------------------------------------------------------------
Total additions 2,041 152,354 208,629 126,509 2,063,747 60,465 4,375 2,618,120
Reductions in net
assets attributable to:
Withdrawals (406) (13,778) (12,582) (37,396) (428,016) (6,950) - (499,128)
Total interfund
transfers 328 30,607 2,168 (24,956) (52,327) 3,492 40,688 -
---------------------------------------------------------------------------------------
Net increase 1,963 169,183 198,215 64,157 1,583,404 57,007 45,063 2,118,992
Net assets available
for plan benefits:
Beginning of
Year 1,567 198,996 239,920 778,656 1,906,755 98,901 23,971 3,245,766
----------------------------------------------------------------------------------------
End of Year $ 3,530 $368,179 $ 435,135 $842,813 $3,490,159 $155,908 $ 69,034 $5,364,758
========================================================================================
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
Prime Bancorp, Inc. Retirement Savings Plan
Notes to Financial Statements
December 31, 1998
1. Description of Plan
The following description provides only general information about
the Prime Bancorp, Inc. (the Company) Retirement Savings Plan (the
Plan) which became effective July 1, 1984. Participants should
refer to the Plan agreement for a more complete description of the
Plan's provisions.
The Plan changed its trustee and recordkeeper from Charles Schwab
and Fidelity Federal, respectively, to Delaware Charter Guaranty
and Trust effective January 1, 1998.
The Company merged with First Sterling Bancorp, Inc. on December
31, 1996. As a result, all First Sterling employees as of December
31, 1996 became employees of the Company and adopted the Plan.
Assets of the former First Sterling Plan were transferred to the
Plan, at their current value, with no recorded gain or loss, on
January 23, 1998.
General
The Plan is a salary reduction plan, also called a "401(k) plan,"
covering all full- and part-time employees of the Company who have
attained age twenty-one. Previous to January 1, 1998, participants
were also required to have completed one year of service. The Plan
is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
Contributions
Each year, participants may contribute up to 15% of pretax annual
compensation, as defined in the Plan, up to a maximum of $10,000.
The Company may contribute a matching contribution based on the
amount of the participant's elected salary reduction. Currently,
the Company matches 66-2/3% on the first 6% of the participants'
elected compensation. Additional amounts may be contributed at the
option of the Company's board of directors. Discretionary
contributions amounted to $385,000 in 1998 and $199,000 in 1997.
Participant Accounts
Each participant's account is credited with the participant's
contribution and allocation of (i) the Company's contribution and
(ii) Plan earnings. Allocations are based on participant earnings
or account balances, as defined. The benefit to which a participant
is entitled is the benefit that can be provided from the
participant's vested account.
7
<PAGE>
Prime Bancorp, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
Vesting
Participants are immediately vested in their contributions plus
actual earnings thereon. Vesting in the Company's matching and
discretionary contribution portion of their accounts plus actual
earnings thereon is based on years of continuous service. A
participant is 100% vested after five years of credited service.
Investment Options
Upon enrollment in the Plan, a participant may direct employee
contributions to various investment options. Effective January 1,
1998, participants holding plan investments at Charles Schwab were
required to transfer all investments, excluding Prime Bancorp, Inc.
common stock, to new investment options offered by the Plan.
Investment options available for each respective year are listed
below.
Growth Funds - The growth funds for the year ended December 31,
1998 included the AIM International Equity Fund, the Neuberger &
Berman Genesis Trust Fund, and the Vanguard U.S. Growth Fund. The
growth funds for the year ended December 31, 1997 included the
Kaufmann Fund and the Neuberger & Berman Focus Fund. These funds
aim for capital appreciation by investing in a broad range of
companies that are perceived to be undervalued and undergoing
positive changes or turnarounds.
Growth & Income Funds - The growth and income funds for the year
ended December 31, 1998 included the American Century Growth and
Income Fund and the Fidelity Puritan Fund. The growth and income
funds for the year ended December 31, 1997 included the Vanguard
Wellington Fund and the Neuberger & Berman Guardian Fund. These
funds' goals are to focus on long-term capital growth and growth of
income given strong current income. The funds typically invest in
securities (stocks and bonds) of dividend-paying companies with
continued earnings growth potential.
Prime Bank Certificates of Deposit - Interest-bearing certificates
issued by the Bank at terms ranging from 6 months to 60 months and
rates ranging from 4.4% to 6.30% for the year ended December 31,
1997. This option was not available for the year ended December 31,
1998.
8
<PAGE>
Prime Bancorp, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
Prime Bancorp, Inc. Common Stock - The plan sponsor seeks long-term
capital growth, current income and growth of income. If monies
available from contributions are insufficient to purchase a whole
share of Prime Bancorp, Inc. common stock, such amount is invested
on a short-term basis in a money market fund, which emphasizes
liquidity and preservation of capital by investing in short-term
instruments (maturing in one year or less). The money market fund
is not a direct participant investment option and was available for
the years ended December 31, 1998 and 1997.
Bond Funds - The bond funds for the year ended December 31, 1998
included the Vanguard Intermediate-Term U.S. Treasury Fund. The
bond fund for the year ended December 31, 1997 included the Benham
GNMA Income Fund and the Dreyfus Short Interest Government Fund.
These funds seek high income consistent with a high degree of
principal stability by investing primarily in intermediate-term
U.S. Government securities or in short-term, high-quality bonds
(rated AAA or AA) in 1997.
Previous to January 1, 1998, participants could change their investment
options quarterly. On January 1, 1998 and subsequent, investment
options could be changed at any time.
Loan Fund
Participants may borrow from their fund accounts any amount up to
a maximum equal to the lesser of (i) $50,000 or (ii) 50% of their
vested account balance. Loan transactions are treated as a transfer
to (from) the various investment funds from (to) the participants'
Loan Fund. Loan terms range from 1-5 years except for the purchase
of a primary residence, for which the range is 1-25 years.
The loans are secured by the balance in the participant's account
and bear interest at a rate commensurate with local prevailing
rates as determined quarterly by the Loan Committee. Principal and
interest are paid ratably through biweekly payroll deductions.
Payment of Benefits
On termination of service due to death, disability or retirement,
a participant will receive a lump-sum amount equal to the value of
the participant's vested interest in his or her account. For
termination of service due to other reasons, a participant receives
the value of the vested interest in his or her account as a lump-
sum distribution.
9
<PAGE>
Prime Bancorp, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
Forfeited Accounts
Forfeited nonvested accounts may be used to reduce future employer
contributions. There were no material forfeited nonvested accounts
in 1998 and 1997.
Rollovers
Participants are permitted to deposit into the Plan, distributions
received from other qualified plans (i.e., rollovers). Rollovers
from other plans are allocated to the various funds based on the
participant's direction. Participants are 100% vested in these
rollovers.
Administrative Fees
All administrative expenses incurred by the Plan are paid for by
the Company.
2. Summary of Significant Accounting Policies
Basis of Presentation
The financial statements of the Plan are prepared under the accrual
method of accounting. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those
estimates.
Investment Valuation and Income Recognition
Investments in mutual funds are carried at fair value,
measured by net asset value reported by the respective mutual
funds. The value of units of the mutual funds is based on the
underlying fair value of the investments within the funds.
Prime Bancorp, Inc. Common Stock is stated at fair value based
on quoted market price. The certificates of deposit are carried
at par which approximates fair value. Employee loans are stated
at their unpaid principal balance which approximates fair value.
10
<PAGE>
Prime Bancorp, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Securities transactions are recognized on the trade date. Realized
gains and losses on investments are based on the fair value of
shares or securities sold less the average historical cost. Changes
in unrealized appreciation (depreciation) are included in
investment income.
Payment of Benefits
Benefits are recorded when paid.
3. Investments
Investments as of December 31, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
1998 1997
----------------------------------------------------------
Historical Historical
Cost Fair Value Cost Fair Value
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Benham GNMA Income Fund; 6,444
shares at 12/31/97 $ - $ - $ 67,335 $ 68,826
Dreyfus Short Interest Government
Fund; 7,548 shares at 12/31/97 - - 81,665 81,817
Kaufmann Fund; 25,813 shares at
12/31/97 - - 152,010 164,432
Neuberger & Berman:
Focus Fund; 5,856 shares at
12/31/97 - - 190,549 193,711
Guardian Fund; 3,170 shares at
12/31/97 - - 82,578 82,101
Genesis Fund; 9,723 shares at
12/31/98 219,686 197,758 - -
Vanguard Money Market Prime
Portfolio; 946,102 shares at
12/31/98 946,102 946,102* - -
Vanguard Intermediate US
Treasury Portfolio; 24,540
shares at 12/31/98 264,308 273,383 - -
Vanguard US Growth Portfolio;
9,583 shares at 12/31/98 300,138 359,246* - -
Fidelity Puritan Fund; 28,006
shares at 12/31/98 573,447 562,077* - -
American Century Income &
Growth; 15,447 shares at
12/31/98 429,302 451,816* - -
Aim International Equity Fund;
3,769 shares at 12/31/98 68,117 70,133 - -
</TABLE>
11
<PAGE>
Prime Bancorp, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
3. Investments (continued)
<TABLE>
<CAPTION>
1998 1997
-------------------------------------------------
Historical Historical
Cost Fair Value Cost Fair Value
-------------------------------------------------
<S> <C> <C> <C> <C>
Prime Bancorp, Inc. Common Stock,
202,431 shares at 12/31/98; 185,558
shares at 12/31/97 $3,663,358 $3,188,288* $1,074,752 $3,463,777*
Prime Bank Certificates of Deposit,
$837,701 par value at 12/31/97 - - 837,701 837,701*
Prime Bancorp, Inc. Stock Money
Market Fund, 671 shares at
12/31/98; 3,530 shares at 12/31/97 639 671 3,530 3,530
Vanguard Wellington Fund, 11,535
shares at 12/31/97 - - 307,343 339,714
Participant l;oans, with interest rates
ranging from 7% to 10% and
maturity dates ranging from 1/31/98
to 7/30/23 196,149 196,149 69,034 69,034
------------------------------------------------
$6,661,246 $6,245,623 $2,866,497 $5,304,643
================================================
</TABLE>
* Individual investments that represent 5 percent or more of the
Plan's assets available for benefits.
12
<PAGE>
Prime Bancorp, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
3. Investments (continued)
The following table shows the participation in each of the
respective funds as of December 31, 1998, and includes participants
who elected more than one investment option:
Vanguard Money Market Prime Portfolio 177
Vanguard Intermediate US Treasury Portfolio 131
Vanguard US Growth Portfolio 147
Fidelity Puritan Fund 187
American Century Income & Growth 169
AIM International Equity Fund 83
Neuberger Berman Genesis Fund 138
Prime Bancorp, Inc. 219
The following table shows the participation in each of the
respective funds as of December 31, 1997, and includes participants
who elected more than one investment option:
Kaufmann Fund 82
Neuberger & Berman Focus Fund 78
Vanguard Wellington Fund 108
Neuberger & Berman Guardian Fund 46
Prime Bank Certificates of Deposit 131
Prime Bancorp, Inc. Common Stock 160
Benham GNMA Fund 38
Dreyfus Short Interest Government Fund 45
4. Income Tax Status
The Plan has received a determination letter from the Internal
Revenue service dated December 1, 1989, stating that the Plan is
qualified under Section 401(a) of the Internal Revenue Code (the
"Code") and, therefore, the related trust is exempt from taxation.
Additionally, an updated letter dated March 19, 1997 was received
from the Internal REvenue Service in connection with the plan
amendments adopted pursuant to section 401 (a) of the Code of 1986
as amended. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan
Administrator believes the Plan is being operated in compliance
with the applicable requirements of the Code and, therefore,
believes that the Plan is qualified and the related trust is
tax-exempt.
13
<PAGE>
Prime Bancorp, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
5. Description of Priorities Upon Plan Termination
Although the Company has not expressed any intention of terminating
the Plan, it may do so at any time. Upon termination, all amounts
credited to the participant accounts will become 100% vested. A
reduction in the value of the participant account would occur if
market value losses, surrender charges or deferred sales charges
are incurred when Plan investments are liquidated for distribution.
6. Subsequent Event
On February 17, 1999, the Company entered into a definitive
Agreement Plan of Merger pursuant to which Summit Bancorp, Inc.
("Summit") will acquire Prime. The transaction is subject to
customary regulatory approvals and is anticipated to be completed
in the third quarter of 1999.
14
<PAGE>
Prime Bancorp, Inc. Retirement Savings Plan
Item 27a - Schedules of Assets Held for Investment Purposes
<TABLE>
<CAPTION>
-------------------------
Historical Current
Cost Value
-------------------------
<S> <C> <C>
Vanguard Money Market Prime Portfolio, 946,102 units $ 946,102 $ 946,102
Vanguard Intermediate US Treasury Portfolio, 24,540
units 264,308 273,383
Vanguard US Growth Portfolio, 9,583 units 300,138 359,246
Fidelity Puritan Fund, 28,006 units 573,447 562,077
American Century Income & Growth, 15,447 units 429,302 451,816
AIM International Equity Fund, 3,769 units 68,117 70,133
Neuberger Berman Genesis Fund, 9,723 units 219,686 197,758
Prime Bancorp, Inc. Common Stock, 202,431 shares* 3,663,358 3,188,288
Prime Bancorp, Inc. Stock Money Market Fund,
671 units* 639 671
Participant loans, with interest rates ranging from 7%
to 10%, and maturity dates ranging from 1/31/99 to
7/30/24 - 196,149
-------------------------
Total investments $6,465,097 $6,245,623
=========================
</TABLE>
* Represents a party-in-interest to the Plan.
15
<PAGE>
Prime Bancorp, Inc. Retirement Savings Plan
Item 27d - Schedule of Reportable Transactions
<TABLE>
<CAPTION>
Year ended December 31, 1998
- -----------------------------------------------------------------------------
Identity of
Party Purchase Net Gain
Involved Description of Asset Price Selling Price (Loss)
- -----------------------------------------------------------------------------
Category (iii) - Series of transactions in excess of 5 percent of plan assets:
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
* Vanguard Vanguard Money $1,723,792 $ 777,690 $ -
Market
* Vanguard Vanguard U.S. 283,896 19,775 40
Treasury
* Vanguard Vanguard U.S. 492,476 195,840 3,501
Growth
* Fidelity Fidelity Puritan 634,141 57,906 (2,789)
* American American Century
Century Income & Growth 512,274 78,707 (4,265)
* AIM AIM International
Equity 141,493 74,575 1,252
* Neuberger
& Bernman N & B Genesis Fund 328,841 105,312 (3,843)
** Prime Bancorp, Inc.
Common Stock 865,711 476,874 (123,970)
** Prime Bancorp, Inc.
Stock Money Market
Fund 909,147 908,476 -
* Vanguard Vanguard Wellington 9,268 372,096 29,510
* Prime Bancorp,
Inc. Prime CD 21,741 864,554 -
</TABLE>
* Party-in-interest to the Plan.
** Transactions made on the market.
There were no category (i), (ii), or (iv) reportable transactions
during 1998.
16
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION LOCATION
- ----------- ----------- --------
23.1 Consent of Ernst & Young LLP Filed herewith
23.2 Consent of KPMG LLP Filed herewith
23.3 Independent Auditors' Report Filed herewith
23.4 Management's Comments on Year 2000 Filed herewith
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration
Statements (Form S-8, Nos. 333-57637 and 33-33307) pertaining to the
Prime Bancorp, Inc. Retirement Savings Plan and in the related
prospectus of our report dated June 25, 1999, with respect to the
financial statements and schedules of the Prime Bancorp, Inc.
Retirement Savings Plan included in this Annual Report (Form 11-K)
for the year ended December 31, 1998.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
June 25, 1999
Consent of Independent Auditors
The Board of Directors
Prime Bancorp, Inc.
We consent to incorporation by reference in the Registration
Statements (Nos. 333-57637 and 33-33307) on Form S-8 of Prime
Bancorp, Inc. of our report dated June 1, 1998, relating to the
statement of net assets available for plan benefits of Prime
Bancorp, Inc. Retirement Savings Plan as of December 31, 1997
and the related statement of changes in net assets available
for plan benefits for the year then ended, which report appears
in the December 31, 1997 Annual Report on Form 11-K of Prime
Bancorp, Inc.
/s/ KMPG LLP
Philadelphia, Pennsylvania
June 25, 1999
Independent Auditors' Report
The Trustees and Administrator
Prime Bancorp, Inc. Retirement Savings Plan:
We have audited the accompanying statement of net assets available
for plan benefits of the Prime Bancorp, Inc. Retirement Savings Plan
as of December 31, 1997 and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1997.
These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan
benefits of the Plan as of December 31, 1997, and the changes in net
assets available for plan benefits for the year ended December 31,
1997, in conformity with generally accepted accounting principles.
/s/ KPMG LLP
Philadelphia, Pennsylvania
June 1, 1998
Management's Comments on Year 2000
The Plan is reliant on the Company and third parties for data
processing. The Company has undertaken a program to prepare and
convert its computer systems and applications to enable them to
function properly with respect to dates in the year 2000 and
thereafter (the "Program"). The Company has had discussions
with the third parties to determine the extent to which the Plan's
systems are vulnerable. The Plan's primary third-party processor
has informed the Company that, pursuant to its Year 2000 plan, it
expected software modifications to its core systems to have been
completed and tested by year-end 1998. In addition, it expects to
complete further testing throughout 1999 and is developing contingency
plans to handle unexpected issues. The Plan does not expect that
its results of operations will be significantly affected, as the
Company and its third-party processors do not intend to charge the
Plan for the costs of converting their computer systems. However, to
the extent that the Program is not completed timely, the Year 2000
issue could have a material impact on the operations of the Plan.
