1
Exhibit 99
PNC BANK CORP. EARNINGS INCREASE 33 PERCENT
PITTSBURGH, April 17, 1996--PNC Bank Corp. (NYSE: PNC) today reported
that 1996 first quarter net income increased 33 percent to $238.3 million, or
$.69 per fully diluted share, compared with $179.5 million, or $.52 per fully
diluted share, a year ago. Returns on average assets and average common
shareholders' equity were 1.34 percent and 16.65 percent, respectively,
compared with 0.97 percent and 12.81 percent a year ago. The after-tax profit
margin was 25.4 percent compared with 21.5 percent in the first quarter of
1995.
Thomas H. O'Brien, chairman and chief executive officer, said, "This
quarter's strong results were driven by substantial revenue growth and expense
discipline and reflect the benefits of our 1995 balance sheet repositioning and
the Midlantic merger. The integration with Midlantic is proceeding very well,
and we continue to believe we will exceed our original cost savings estimate."
Taxable-equivalent net interest income increased 11.8 percent to
$616.1 million and the net interest margin widened to 3.73 percent in the
first quarter of 1996. Net interest income and margin were $551.1 million and
3.16 percent, respectively, in the first quarter of 1995. The net interest
income and margin reflect the benefits of the balance sheet repositioning
completed in 1995 combined with a $5.1 billion increase in average loans.
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PNC Bank Corp. Earnings Increase 33 Percent Page 2
Noninterest income increased $36.0 million, or 12.6 percent, when
compared with the year-earlier period. Investment management and trust income
increased 33.8 percent to $120.9 million, reflecting the BlackRock acquisition,
new business and an increase in the value of managed assets. Discretionary
assets under management totaled $103 billion at March 31, 1996, compared with
$85 billion a year ago. Service fees increased 7.2 percent, to $130.3 million,
primarily due to higher deposit and brokerage revenue.
Mortgage banking revenue was positively impacted by higher than
expected mortgage origination volumes, but declined in the comparison due to
servicing sales in the prior-year period. At March 31, 1996, the corporation
serviced $40.4 billion of mortgages, including $28.1 billion serviced for
others. Other noninterest income increased $3.8 million to $31.5 million,
primarily due to higher venture capital income.
Noninterest expense was 2.2 percent higher when compared with the
prior-year quarter. Excluding acquisitions and the benefit of lower Federal
deposit insurance premiums, noninterest expense was flat in the comparison. The
efficiency ratio improved to 60.3 percent compared with 66.1 percent in the
first quarter of 1995.
PNC Bank's average total assets and average earning assets were
$71.7 billion and $65.7 billion, respectively, during the first quarter of 1996
compared with $74.8 billion and $69.5 billion, respectively, a year ago. The
declines reflect the corporation's actions to downsize the securities
portfolio, partially offset by loan growth. Average loans were $48.6 billion
compared with $43.7 billion in the first quarter of 1995. Excluding
acquisitions, average loans increased 6.2 percent in the year-to-year
comparison. As a percent of average earning assets, average loans were 74.0
percent during the first quarter of 1996 compared with 62.9 percent a year ago.
Average securities declined $9.2 billion to $14.8 billion compared with the
prior-year period.
Average deposits were $45.6 billion compared with $43.7 billion a year
ago. Wholesale funds represented 28.5 percent of total sources of funds in the
first quarter of 1996, compared with 35.3 percent in the year-earlier period.
The allowance for credit losses totaled $1.2 billion at March 31, 1996
and was 329 percent of nonperforming loans compared with 265 percent at
March 31, 1995. Net charge-offs
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PNC Bank Corp. Earnings Increase 33 Percent Page 3
totaled $34 million in the first quarter of 1996 compared with $36 million in
the year-earlier period. Nonperforming assets totaled $540 million at March 31,
1996, compared with $702 million at the end of the first quarter 1995. The
ratio of nonperforming assets to total loans and foreclosed assets was 1.10
percent at March 31, 1996 and 1.58 percent at March 31, 1995.
Shareholders' equity totaled $5.8 billion at March 31, 1996. The
leverage capital ratio was 6.90 percent, and Tier I and total risk-based
capital ratios are estimated to be 8.1 percent and 11.6 percent, respectively.
PNC Bank Corp., headquartered in Pittsburgh, is one of the largest
financial services organizations in the United States, with banking
subsidiaries in Pennsylvania, New Jersey, Delaware, Ohio, Kentucky, Indiana,
Massachusetts, and Florida. Its major businesses include consumer banking,
corporate banking, mortgage banking, real estate banking and asset management.
[TABULAR MATERIAL FOLLOWS]
4
PNC BANK CORP. AND SUBSIDIARIES
Consolidated Financial Highlights
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March 31 December 31 March 31
1996 1995 1995
...............................................................................................................
FINANCIAL PERFORMANCE
Three months ended (Dollars in thousands, except per share data)
Net interest income (taxable-equivalent basis) $616,108 $563,825 $551,136
Net income (loss) 238,320 (176,177) 179,547
Fully diluted earnings (loss) per common share .69 (.52) .52
Return on average total assets 1.34% (.92)% .97%
Return on average common shareholders' equity 16.65 (11.92) 12.81
Net interest margin 3.73 3.22 3.16
After-tax profit margin 25.42 (30.01) 21.46
Efficiency ratio 60.32 140.66 66.14
AVERAGE BALANCES
Three months ended (In millions)
Assets $71,733 $75,707 $74,841
Earning assets 65,705 69,681 69,486
Loans, net of unearned income 48,625 48,304 43,710
Securities 14,818 19,450 23,984
Deposits 45,553 46,216 43,667
Shareholders' equity 5,764 5,893 5,710
PERIOD END BALANCES (In millions)
Assets $72,668 $73,404 $75,750
Earning assets 66,041 66,772 69,369
Loans, net of unearned income 48,800 48,653 44,192
Securities 14,692 15,839 23,487
Deposits 45,621 46,899 43,598
Shareholders' equity 5,786 5,768 5,758
SELECTED RATIOS
Capital ratios
Book value per common share
As reported $16.88 $16.87 $16.90
Excluding net unrealized securities gains/losses 17.16 16.79 17.10
Leverage 6.90% 6.37% 6.88%
Common shareholders' equity to assets 7.94 7.83 7.51
Average common shareholders' equity to average assets 8.01 7.76 7.54
Asset quality ratios
Net charge-offs to average loans .28 .45 .33
Nonperforming loans to loans .76 .74 1.12
Nonperforming assets to loans and foreclosed assets 1.10 1.10 1.58
Nonperforming assets to total assets .74 .73 .93
Allowance for credit losses to loans 2.51 2.59 2.98
Allowance for credit losses to nonperforming loans 328.88 351.68 265.19
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5
PNC BANK CORP. AND SUBSIDIARIES
Consolidated Statement of Income
=====================================================================================================================
Three months ended March 31 December 31 March 31
In thousands, except per share data 1996 1995 1995
.....................................................................................................................
INTEREST INCOME
Loans and fees on loans $980,836 $983,267 $887,421
Securities 237,442 283,703 345,404
Other 37,060 33,032 28,452
.....................................................................................................................
Total interest income 1,255,338 1,300,002 1,261,277
INTEREST EXPENSE
Deposits 370,983 400,962 357,721
Borrowed funds 112,457 177,403 211,129
Notes and debentures 165,041 168,889 153,147
.....................................................................................................................
Total interest expense 648,481 747,254 721,997
Net interest income 606,857 552,748 539,280
Provision for credit losses 1,500 1,500
.....................................................................................................................
Net interest income less provision for credit losses 606,857 551,248 537,780
NONINTEREST INCOME
Investment management and trust 120,877 111,524 90,368
Service fees 130,269 130,803 121,472
Mortgage banking 35,982 39,427 44,723
Net securities gains (losses) 2,943 (288,958) 1,254
Other 31,491 30,490 27,740
.....................................................................................................................
Total noninterest income 321,562 23,286 285,557
NONINTEREST EXPENSES
Staff expense 278,657 266,962 263,401
Net occupancy and equipment 93,283 88,063 86,734
Intangible asset and MSR amortization 23,664 41,387 23,335
Federal deposit insurance 3,190 7,662 24,320
Other 166,852 161,827 155,561
Special charges 259,926
.....................................................................................................................
Total noninterest expenses 565,646 825,827 553,351
.....................................................................................................................
Income before income taxes (benefits) 362,773 (251,293) 269,986
Applicable income taxes (benefits) 124,453 (75,116) 90,439
.....................................................................................................................
Net income (loss) $238,320 $(176,177) $179,547
.....................................................................................................................
EARNINGS (LOSSES) PER COMMON SHARE
Primary $.69 $(.52) $.52
Fully diluted .69 (.52) .52
CASH DIVIDENDS DECLARED PER COMMON SHARE .35 .35 .35
AVERAGE COMMON SHARES OUTSTANDING
Primary 342,872 336,954 341,740
Fully diluted 347,367 336,954 347,008
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6
PNC BANK CORP. AND SUBSIDIARIES
Details of Net Interest Income and Net Interest Margin
NET INTEREST INCOME
========================================================================================================================
Three months ended
Taxable-equivalent basis March 31 December 31 September 30 June 30 March 31
In thousands 1996 1995 1995 1995 1995
........................................................................................................................
Interest income/expense
before financial derivatives
Interest income $1,236,277 $1,318,461 $1,312,720 $1,314,090 $1,278,832
Loan fees 24,457 17,965 23,115 21,354 19,589
Taxable-equivalent adjustment 9,251 11,077 11,790 11,919 11,856
........................................................................................................................
Total interest income 1,269,985 1,347,503 1,347,625 1,347,363 1,310,277
Interest expense 647,197 739,819 760,001 762,064 717,411
........................................................................................................................
Net interest income before financial derivatives 622,788 607,684 587,624 585,299 592,866
Effect of financial derivatives on
Interest income (5,396) (36,424) (42,326) (40,801) (37,144)
Interest expense 1,284 7,435 6,489 9,757 4,586
........................................................................................................................
Total effect of financial derivatives (6,680) (43,859) (48,815) (50,558) (41,730)
........................................................................................................................
Net interest income $616,108 $563,825 $538,809 $534,741 $551,136
========================================================================================================================
NET INTEREST MARGIN
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Three months ended March 31 December 31 September 30 June 30 March 31
Taxable-equivalent basis 1996 1995 1995 1995 1995
........................................................................................................................
Book-basis yield on earning assets 7.51 % 7.50 % 7.49 % 7.49 % 7.34 %
Effect of loan fees .15 .10 .13 .12 .11
Taxable-equivalent adjustment .06 .06 .07 .07 .07
........................................................................................................................
Taxable-equivalent yield on earnings assets 7.72 7.66 7.69 7.68 7.52
Rate on interest-bearing liabilities 4.74 4.98 5.11 5.09 4.86
........................................................................................................................
Interest rate spread 2.98 2.68 2.58 2.59 2.66
Noninterest-bearing sources .79 .79 .79 .77 .74
........................................................................................................................
Net interest margin before financial derivatives 3.77 3.47 3.37 3.36 3.40
Effect of financial derivatives on
Interest income (.03) (.20) (.24) (.23) (.21)
Interest expense .01 .05 .04 .07 .03
........................................................................................................................
Total effect of financial derivatives (.04) (.25) (.28) (.30) (.24)
........................................................................................................................
Net interest margin 3.73 % 3.22 % 3.09 % 3.06 % 3.16 %
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7
PNC BANK CORP. AND SUBSIDIARIES
Details of Noninterest Income and Noninterest Expense
NONINTEREST INCOME
======================================================================================================================
Three months ended
In thousands March 31 December 31 September 30 June 30 March 31
1996 1995 1995 1995 1995
......................................................................................................................
Investment management and trust
Trust $76,891 $69,175 $68,288 $69,826 $58,519
Mutual funds 43,986 42,349 40,829 39,325 31,849
......................................................................................................................
Total investment management and trust 120,877 111,524 109,117 109,151 90,368
Service fees
Deposit 65,518 62,843 60,722 58,326 58,387
Credit card and merchant 8,918 10,888 9,649 11,321 15,331
Corporate finance 13,415 14,592 13,133 13,021 12,384
Brokerage 13,642 11,587 10,113 10,311 9,342
Consumer 13,458 14,821 14,437 11,839 12,326
Insurance 6,772 6,599 6,764 6,062 5,406
Other 8,546 9,473 8,465 8,211 8,296
......................................................................................................................
Total service fees 130,269 130,803 123,283 119,091 121,472
Mortgage banking
Servicing 29,038 28,488 30,215 29,772 31,126
Sale of servicing 350 1,046 10,745 9,672 12,258
Marketing 6,594 9,893 10,649 11,414 1,339
......................................................................................................................
Total mortgage banking 35,982 39,427 51,609 50,858 44,723
Other 31,491 30,490 54,273 26,184 27,740
......................................................................................................................
Total noninterest income before securities
transactions 318,619 312,244 338,282 305,284 284,303
Net securities gains (losses) 2,943 (288,958) 44 7,966 1,254
......................................................................................................................
Total $321,562 $23,286 $338,326 $313,250 $285,557
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NONINTEREST EXPENSES
======================================================================================================================
Three months ended
In thousands March 31 December 31 September 30 June 30 March 31
1996 1995 1995 1995 1995
......................................................................................................................
<C
Compensation $228,233 $221,645 $218,934 $213,879 $208,693
Employee benefits 50,424 45,317 50,345 51,536 54,708
......................................................................................................................
Total staff expense 278,657 266,962 269,279 265,415 263,401
Net occupancy 50,572 42,424 46,542 45,771 45,661
Equipment 42,711 45,639 40,188 38,766 41,073
Intangible assets and MSR amortization 23,664 41,387 26,094 23,855 23,335
Federal deposit insurance 3,190 7,662 1,470 24,217 24,320
Taxes other than income 14,630 13,796 12,856 13,107 13,098
Other 152,222 148,031 151,006 131,532 142,463
......................................................................................................................
Total noninterest expense before special charges 565,646 565,901 547,435 542,663 553,351
Special charges 259,926
......................................................................................................................
Total $565,646 $825,827 $547,435 $542,663 $553,351
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8
PNC BANK CORP. AND SUBSIDIARIES
Consolidated Balance Sheet
==============================================================================================================
March 31 December 31 March 31
Dollars in millions, except share data 1996 1995 1995
..............................................................................................................
ASSETS
Cash and due from banks $3,251 $3,679 $3,490
Short-term investments 1,170 1,611 1,253
Loans held for sale 1,369 659 437
Securities available for sale 14,692 15,839 3,915
Investment securities, fair value of $18,846 19,572
Loans, net of unearned income of $380, $403 and $389 48,800 48,653 44,192
Allowance for credit losses (1,225) (1,259) (1,318)
..............................................................................................................
Net loans 47,575 47,394 42,874
Goodwill and other intangibles 1,019 997 742
Mortgage servicing rights 316 268 287
Other 3,276 2,957 3,180
..............................................................................................................
Total assets $72,668 $73,404 $75,750
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LIABILITIES
Deposits
Noninterest-bearing $9,899 $10,707 $9,177
Interest-bearing 35,722 36,192 34,421
..............................................................................................................
Total deposits 45,621 46,899 43,598
Borrowed funds
Federal funds purchased 3,434 3,817 2,987
Repurchase agreements 2,754 2,851 7,981
Commercial paper 447 753 825
Other 1,369 1,244 2,996
..............................................................................................................
Total borrowed funds 8,004 8,665 14,789
Notes and debentures 11,448 10,398 9,972
Other 1,809 1,674 1,633
..............................................................................................................
Total liabilities 66,882 67,636 69,992
SHAREHOLDERS' EQUITY
Preferred stock 1 1 51
Common stock-$5 par value
Authorized: 450,000,000 shares
Issued: 341,858,521, 340,863,348 and 344,209,552 shares 1,709 1,704 1,721
Capital surplus 563 545 694
Retained earnings 3,689 3,571 3,620
Deferred benefit expense (77) (79) (83)
Net unrealized securities gains (losses) (98) 26 (68)
Common stock held in treasury at cost:
15,291 and 7,598,485 shares (1) - (177)
..............................................................................................................
Total shareholders' equity 5,786 5,768 5,758
..............................................................................................................
Total liabilities and shareholders' equity $72,668 $73,404 $75,750
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COMMON SHAREHOLDERS' EQUITY $5,769 $5,750 $5,690
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9
PNC BANK CORP. AND SUBSIDIARIES
Condensed Consolidated Average Balance Sheet
=========================================================================================================================
Three months ended March 31 December 31 September 30 June 30 March 31
In millions 1996 1995 1995 1995 1995
.........................................................................................................................
ASSETS
Interest-earning assets
Short-term investments $1,102 $950 $815 $1,042 $1,333
Securities available for sale 14,818 9,349 3,222 3,754 4,206
Investment securities 10,101 18,823 19,383 19,778
Loans, net of unearned income
Consumer 13,370 13,188 11,822 11,603 11,520
Residential mortgage 11,619 11,462 11,066 10,629 10,060
Commercial 16,806 16,590 15,914 15,620 15,139
Commercial real estate 4,885 5,029 5,096 5,016 5,034
Other 1,945 2,035 1,748 1,897 1,957
.........................................................................................................................
Total loans, net of unearned income 48,625 48,304 45,646 44,765 43,710
Other interest-earning assets 1,160 977 952 551 459
.........................................................................................................................
Total interest-earning assets 65,705 69,681 69,458 69,495 69,486
Other 6,028 6,026 5,808 5,848 5,355
.........................................................................................................................
Total assets $71,733 $75,707 $75,266 $75,343 $74,841
=========================================================================================================================
LIABILITIES
Interest-bearing liabilities
Deposits $35,872 $36,577 $35,945 $35,407 $34,954
Borrowed funds 7,823 11,511 14,016 14,140 13,902
Notes and debentures 11,068 10,637 8,829 9,586 10,109
.........................................................................................................................
Total interest-bearing liabilities 54,763 58,725 58,790 59,133 58,965
Noninterest-bearing deposits 9,681 9,639 9,132 8,958 8,713
Other 1,525 1,450 1,542 1,525 1,453
.........................................................................................................................
Total liabilities 65,969 69,814 69,464 69,616 69,131
SHAREHOLDERS' EQUITY 5,764 5,893 5,802 5,727 5,710
.........................................................................................................................
Total liabilities and shareholders' equity $71,733 $75,707 $75,266 $75,343 $74,841
=========================================================================================================================
COMMON SHAREHOLDERS' EQUITY $5,747 $5,875 $5,784 $5,660 $5,641
=========================================================================================================================
10
PNC BANK CORP. AND SUBSIDIARIES
Asset Quality Data
LOAN PORTFOLIO
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March 31 December 31 September 30 June 30 March 31
In millions 1996 1995 1995 1995 1995
.............................................................................................................
Consumer $13,566 $13,539 $11,954 $11,930 $11,641
Residential mortgage 11,620 11,689 11,444 10,999 10,518
Commercial 16,950 16,812 15,789 16,010 15,401
Commercial real estate
Commercial mortgage 2,737 2,775 2,799 2,838 2,833
Real estate project 2,137 2,139 2,261 2,233 2,153
Other 2,170 2,102 2,044 1,874 2,035
.............................................................................................................
Total loans 49,180 49,056 46,291 45,884 44,581
Unearned income (380) (403) (390) (393) (389)
.............................................................................................................
Loans, net of unearned income $48,800 $48,653 $45,901 $45,491 $44,192
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ALLOWANCE FOR CREDIT LOSSES
=============================================================================================================
Three months ended March 31 December 31 September 30 June 30 March 31
In millions 1996 1995 1995 1995 1995
.............................................................................................................
Beginning balance $1,259 $1,285 $1,300 $1,318 $1,352
Charge-offs (55) (77) (48) (53) (62)
Recoveries 21 22 31 27 26
.............................................................................................................
Net charge-offs (34) (55) (17) (26) (36)
Provision for credit losses 1 2 2 1
Acquisitions 28 6 1
.............................................................................................................
Ending balance $1,225 $1,259 $1,285 $1,300 $1,318
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NONPERFORMING ASSETS
=============================================================================================================
March 31 December 31 September 30 June 30 March 31
In millions 1996 1995 1995 1995 1995
.............................................................................................................
Nonaccrual loans
Commercial $141 $118 $126 $148 $193
Commercial real estate
Commercial mortgage 116 108 109 113 107
Real estate project 40 45 89 103 81
Consumer 7 10 17 14 16
Residential mortgage 51 54 55 54 54
.............................................................................................................
Total nonaccrual loans 355 335 396 432 451
Restructured loans 17 23 45 45 46
.............................................................................................................
Total nonperforming loans 372 358 441 477 497
Foreclosed assets
Commercial real estate 98 105 115 119 122
Residential 26 24 25 26 29
Other 44 49 50 51 54
.............................................................................................................
Total foreclosed assets 168 178 190 196 205
.............................................................................................................
Total nonperforming assets $540 $536 $631 $673 $702
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