1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 1)
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE YEAR ENDED DECEMBER 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------- -------------
COMMISSION FILE NUMBER 1-9718
PNC BANK CORP.
(Exact name of registrant as specified in its charter)
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)
2
By filing this amendment ("Amendment No. 1"), the undersigned registrant hereby
amends its Annual Report on Form 10-K for the year ended December 31, 1995
("1995 Form 10-K"), to include, as permitted by Rule 15d-21 under the Securities
Exchange Act of 1934, as amended ("Exchange Act"), the financial statements and
exhibits required by Form 11-K with respect to the PNC Bank Corp. Incentive
Savings Plan, as amended ("PNC Plan") and the Midlantic Savings and Investment
Plan, as amended ("Midlantic Plan").
In accordance with Rule 12b-15 of the Exchange Act, Item 14 of Part IV of the
1995 Form 10-K is hereby amended and restated to read in its entirety as
follows:
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
The following report of independent auditors of the Corporation and
consolidated financial statements, included in the Annual Report to
Shareholders at the page indicated, are incorporated herein by reference.
PAGE OF
FINANCIAL STATEMENTS ANNUAL REPORT
- ---------------------------------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors 45
Consolidated Balance Sheet as of December 31, 1995 and 1994 46
Consolidated Statement of Income for the three years ended December 31, 1995 47
Consolidated Statement of Changes in Shareholders' Equity for the three years ended
December 31, 1995 48
Consolidated Statement of Cash Flows for the three years ended December 31, 1995 49
Notes to Consolidated Financial Statements 50-70
Quarterly Selected Financial Data 72
As permitted by Rule 15d-21 of the Exchange Act, the following financial
statements of the PNC Plan and report of independent auditors of the PNC Plan
and the financial statements of the Midlantic Plan and report of independent
auditors of the Midlantic Plan are filed with Amendment No. 1 at the page
indicated.
PAGE OF AMENDMENT NO. 1
-------------------------
FINANCIAL STATEMENTS PNC PLAN MIDLANTIC PLAN
- --------------------------------------------------------------------------------
Report of Independent Auditors 5 32
Statements of Net Assets Available for Plan Benefits 6 33
Statements of Changes in Net Assets Available for
Plan Benefits 7 34
Notes to Financial Statements 8 35
Schedule of Assets Held for Investment 17 43
Schedule of Reportable Transactions 30 44
FINANCIAL STATEMENT SCHEDULES
- --------------------------------------------------------------------------------
Not applicable.
REPORTS ON FORM 8-K
- --------------------------------------------------------------------------------
The following reports on Form 8-K were filed during the quarter ended December
31, 1995, or thereafter:
A Current Report on Form 8-K dated as of September 26, 1995, was filed pursuant
to Item 5 to report the Corporation's consolidated financial results for the
three months and nine months ended September 30, 1995, the receipt of
regulatory approvals in connection with the Midlantic merger and other
Midlantic merger-related matters, and the appointment of an additional director
to the Corporation's Board of Directors.
2
3
A Current Report on Form 8-K dated as of December 31, 1995, was filed pursuant
to Item 2 to report the effectiveness of the merger with Midlantic and the
appointment of 4 additional directors to the Corporation's Board of Directors.
The Form 8-K also reported pursuant to Item 5 the completion of actions that
accelerated the repositioning of the Corporation's balance sheet and provided
an estimate of combined earnings for 1995 giving effect to the Midlantic
transaction. The following financial statements were reported as having been
previously filed: (a) audited consolidated financial statements of Midlantic as
of December 31, 1994 and 1993, and for each of the three years in the period
ended December 31, 1994, including the independent auditor's report thereon;
(b) unaudited consolidated interim financial statements of Midlantic as of
September 30, 1995 and 1994, and for the three months and nine months ended
September 30, 1995 and 1994; (c) pro forma consolidated financial information
(unaudited) as of September 30, 1995 and for the nine months ended September
30, 1995 and 1994, giving effect to the Midlantic merger; and (d) pro forma
consolidated financial information (unaudited) for each of the three years in
the period ended December 31, 1994, giving effect to the Midlantic merger.
A Current Report on Form 8-K dated January 24, 1996, was filed pursuant to Item
5 to report the Corporation's consolidated financial results for the three
months and year ended December 31, 1995.
EXHIBITS
- --------------------------------------------------------------------------------
The exhibits listed on the Exhibit Index on pages 47 and 48 of this Form 10-K/A
are filed herewith or are incorporated herein by reference.
3
4
PNC Bank Corp.
Incentive Savings Plan
Audited Financial Statements
Years ended December 31, 1995 and 1994
CONTENTS
Report of Independent Auditors ................................................5
Audited Financial Statements
Statements of Net Assets Available for Plan Benefits ..........................6
Statements of Changes in Net Assets Available for Plan Benefits ...............7
Notes to Financial Statements .................................................8
Schedules
Schedule of Assets Held for Investment .......................................17
Schedule of Reportable Transactions...........................................30
4
5
REPORT OF INDEPENDENT AUDITORS
Administrative Committee
PNC Bank Corp.
Incentive Savings Plan
We have audited the accompanying statements of net assets available for plan
benefits of the PNC Bank Corp. Incentive Savings Plan (Plan) as of December 31,
1995 and 1994, and the related statements of changes in net assets available
for plan benefits for the years 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 audits.
We conducted our audits 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 audits provide 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
at December 31, 1995 and 1994, and the changes in its net assets available for
plan benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were 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 as of December 31, 1995, and reportable
transactions for the year ended December 31, 1995, are presented for purposes
of complying with the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974, and
are not a required part of the basic financial statements. The supplemental
schedules have been subjected to the auditing procedures applied in our audit
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
June 18, 1996
Pittsburgh, Pennsylvania
5
6
PNC Bank Corp.
Incentive Savings Plan
Statements of Net Assets Available for Plan Benefits
DECEMBER 31
1995 1994
---------------------------------------
ASSETS
Investments at fair value:
Common stock:
PNC Bank Corp. (1995 cost--$258,667,697;
1994 cost--$235,167,672) $411,707,599 $261,982,282
PNC Bank Corp. preferred stock (1995 cost--
$8,247; 1994 cost--$8,247) 42,224 29,638
Short-term investment funds (1995 cost--$67,302,448;
1994 cost--$76,553,303) 67,302,448 76,553,303
Registered investment companies (1995 cost--
$147,451,321; 1994 cost--$118,138,611) 161,214,839 117,510,777
Participant loans, at current outstanding principal
balance 22,417,465 24,551,533
--------------------------------
Total investments 662,684,575 480,627,533
Cash -- 1,132
Contribution receivable 1,137,814 4,001,640
Accrued income 342,424 2,204,411
Other accruals 3,341,963 --
--------------------------------
Total assets 667,506,776 486,834,716
LIABILITIES
ESOP note payable to PNC Bank Corp. 84,600,000 98,600,000
Accrued interest payable 2,474,860 --
--------------------------------
Net assets available for plan benefits $580,431,916 $388,234,716
================================
See accompanying notes.
6
7
PNC Bank Corp.
Incentive Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits
YEAR ENDED DECEMBER 31
1995 1994
------------------------------
Additions:
Investment income:
Interest $6,521,484 $5,445,713
Dividends:
PNC Bank Corp. 18,717,784 16,455,147
Other 9,700,904 4,976,152
------------------------------
34,940,172 26,877,012
Contributions (employer):
Cash 9,461,406 8,683,382
PNC Bank Corp. Common Stock 5,081,098 4,100,738
Contributions (employee) 26,821,384 24,783,410
------------------------------
Total additions 76,304,060 64,444,542
Deductions:
Payments to participants or beneficiaries 51,796,135 33,282,068
ESOP note interest expense 4,949,720 3,937,737
------------------------------
Total deductions 56,745,855 37,219,805
Net realized and unrealized appreciation (depreciation)
in fair value of investments 160,333,717 (102,892,080)
Net assets received in connection with mergers 12,305,278 13,804,880
------------------------------
Net increase (decrease) 192,197,200 (61,862,463)
Net assets available for plan benefits at beginning
of year 388,234,716 450,097,179
------------------------------
Net assets available for plan benefits at end of year $580,431,916 $388,234,716
==============================
See accompanying notes.
7
8
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES
VALUATION
Marketable securities are stated at fair value. Securities are valued at the
last public sale price of the securities listed on the New York Stock Exchange.
If no sales were reported, and in the case of securities traded over the
counter, the last bid price at the close of business is used. The value of any
security not listed or quoted on any exchange is determined by the last closing
bid price, reference to the bid price of any published quotations in common
use, or by the quotation of a reputable broker. For certain investments that do
not have an established fair value, such value is established based on the
opinion of the trustee.
The fair value of the participation units in the short-term investment funds
and registered investment companies are based on quoted redemption values on
the last business day of the plan year. Loans are valued at the amount of
principal outstanding.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results may differ from such estimates and such differences may
be material to the financial statements.
2. DESCRIPTION OF THE PLAN
PNC Bank Corp. (PNC Bank) is the sponsor of the Incentive Savings Plan (Plan).
The Plan covers substantially all eligible salaried employees of PNC Bank and
certain subsidiaries.
The Plan allows participants to contribute from 1 to 15 percent of their
biweekly base compensation on a pretax 401(k) basis. PNC Bank matches 100
percent of employee contributions up to 6 percent of base compensation, subject
to Internal Revenue Service (IRS) limitations. Participants are fully vested in
their balances, including the employer contributions. Plan income is allocated
to participants based on an average participant investment balance on a
quarterly basis.
8
9
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Participants in the Plan may invest any voluntary contributions and balances
rolled over from any prior plans in any of four investment options: Fund A (an
equity fund), Fund B (an intermediate-term income fund), Fund C (a short-term
fixed income fund), and/or Fund D (PNC Bank Corp. Common Stock fund). At
December 31, total participants in each fund were as follows:
1995 1994
----------------------------
Fund A 10,433 9,042
Fund B 8,610 7,739
Fund C 9,654 9,354
Fund D 15,597 14,353
Employer matching contributions for participants whose age is 55 years or under
are made in PNC Bank Common Stock. Participants over age 55 can choose to have
their matching contribution made in PNC Bank Corp. Common Stock or in cash to
invest in the other three funds.
Benefits to participants for withdrawals requested but yet to be paid were
$9,821,077 and $8,957,966 at December 31, 1995 and 1994, respectively.
The Plan has a loan feature that allows participants to borrow against their
balance in accordance with the loan policies established by the Administrative
Committee. Such borrowings are reflected in the Loan Fund. At December 31,
1995, the Plan was committed to fund approximately $3.2 million in participant
loans, of which approximately $1.4 million represents existing loan refinances.
Under certain circumstances, the Plan permits withdrawals by participants.
Although it has not expressed an interest to do so, PNC Bank has the right
under the Plan to discontinue contributions at any time and to terminate the
Plan subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
9
10
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
The Plan includes a leveraged employee stock ownership plan (ESOP). In
September 1989, the ESOP borrowed $140 million from PNC Bank and purchased
approximately 7,350,000 shares of PNC Bank Common Stock through open market
purchases. The unallocated shares of PNC Bank Common Stock are pledged as
security on the ESOP note. The ESOP shares are used to match a portion of the
PNC Bank's matching contributions to the Plan.
PNC Bank is obligated to make annual contributions sufficient to fund principal
and interest payments on the ESOP note net of investment income and realized
gains and losses in the unallocated ESOP fund. Shares of PNC Bank Common Stock
allocated to participants totaled 743,277 in 1995 and 567,884 in 1994.
The effective interest rate on the ESOP fixed rate notes was 5.02% in 1995.
Principal payments are due on an annual basis and interest payments are due on
a semiannual basis. The following is a schedule of debt maturities:
1996 $16,900,000
1997 20,100,000
1998 23,900,000
1999 23,700,000
-----------
$84,600,000
===========
At December 31, 1995, the ESOP held 3,825,106 unallocated shares of PNC Bank
Common Stock with a market value of $123,359,669 and $678,245 in short-term
investment funds. These assets will be used to match future participant
contributions.
3. INVESTMENTS
The Plan is comprised of investment funds representing both the employer's and
the participants' contributions. Records are maintained to account for the
noncontributory and the voluntary portion of each fund.
10
11
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
Net realized and unrealized appreciation (depreciation) in aggregate fair value
of securities was as follows:
NET REALIZED AND UNREALIZED APPRECIATION
(DEPRECIATION) IN FAIR VALUE FOR YEAR ENDED
DECEMBER 31
---------------------------------------
1995 1994
---------------------------------------
Common stock $139,580,381 $(98,058,741)
Preferred stock 12,586 (9,612)
Corporate obligations -- (508,043)
U.S. Government and agency securities -- (1,770,357)
Collective funds--Mutual Funds 20,740,750 (2,540,362)
Other -- (4,965)
----------------------------------------
$160,333,717 $(102,892,080)
========================================
The fair values of individual investments that represent 5 percent or
more of the Plan's net assets are as follows:
DECEMBER 31
---------------------------------------
1995 1994
---------------------------------------
PNC Bank Corp. Common Stock $411,707,599 $261,982,282
PNC Money Market Portfolio Fund 67,302,448 76,553,303
PNC Index Equity Portfolio Fund -- 19,701,378
PNC Value Equity Portfolio Fund -- 23,877,171
PNC Managed Income Fund 31,003,125 23,252,746
PNC Core Equity Portfolio Fund 29,285,309 --
11
12
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The net assets available for plan benefits for the Plan's investment funds were
as follows:
December 31, 1995
INTERMEDIATE- PNC PNC
TERM FIXED SHORT-TERM PNC BANK BANK CORP. BANK CORP.
EQUITY INCOME-- FIXED INCOME CORP. STOCK ALLOCATED UNALLOCATED LOAN
FUND A FUND B --FUND C --FUND D ESOP FUND ESOP FUND FUND TOTAL
--------------------------------------------------------------------------------------------------------
Investments at fair
value:
PNC Bank common stock $ -- $ -- $ -- $194,709,309 $93,638,621 $123,359,669 $ -- $411,707,599
PNC Bank preferred stock -- -- -- 42,224 -- -- -- 42,224
Short-term investment
funds 4,015,003 1,625,480 55,358,999 -- 5,123,759 678,245 500,962 67,302,448
Registered investment
companies:
PNC Fund--Small Cap
Growth Equity Portfolio 7,672,930 -- -- -- -- -- -- 7,672,930
PNC Fund--International
Equity Portfolio 22,319,064 -- -- -- -- -- -- 22,319,064
PNC Fund--Small Cap
Value Equity Portfolio 6,810,828 -- -- -- -- -- -- 6,810,828
PNC Fund--International
Emerging Portfolio 4,185,333 -- -- -- -- -- -- 4,185,333
PNC Fund--Growth Equity
Portfolio 17,151,237 -- -- -- -- -- -- 17,151,237
PNC Fund--Intermediate
Term Bond Portfolio -- 18,139,072 -- -- -- -- -- 18,139,072
PNC Fund--Managed
Income Portfolio -- 31,003,125 -- -- -- -- -- 31,003,125
PNC Fund--Core Equity
Portfolio 29,285,309 -- -- -- -- -- -- 29,285,309
PNC Fund--Value Equity
Portfolio 24,647,941 -- -- -- -- -- -- 24,647,941
Participant loans -- -- -- -- -- -- 22,417,465 22,417,465
--------------------------------------------------------------------------------------------------------
Total investments 116,087,645 50,767,677 55,358,999 194,751,533 98,762,380 124,037,914 22,918,427 662,684,575
Contribution receivable -- -- -- 1,137,814 -- -- -- 1,137,814
Accrued income 15,671 6,081 261,423 9,757 20,207 26,671 2,614 342,424
Other accruals 1,622,887 (375,962) (1,761,640) 3,856,678 -- -- -- 3,341,963
Due to (from) fund 39,534 167,041 2,607,759 (3,322,960) (1,663,861) 2,172,487 -- --
--------------------------------------------------------------------------------------------------------
Total assets 117,765,737 50,564,837 56,466,541 196,432,822 97,118,726 126,237,072 22,921,041 667,506,776
ESOP note payable -- -- -- -- -- (84,600,000) -- (84,600,000)
Accrued interest payable -- -- -- -- -- (2,474,860) -- (2,474,860)
--------------------------------------------------------------------------------------------------------
Net assets available for
plan benefits $117,765,737 $50,564,837 $56,466,541 $196,432,822 $97,118,726 $39,162,212 $22,921,041 $580,431,916
========================================================================================================
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13
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The net assets available for plan benefits for the Plan's investment funds were
as follows:
December 31, 1994
INTERMEDIATE- PNC PNC
TERM FIXED SHORT-TERM PNC BANK BANK CORP. BANK CORP.
EQUITY INCOME-- FIXED INCOME CORP. STOCK ALLOCATED UNALLOCATED LOAN
FUND A FUND B --FUND C --FUND D ESOP FUND ESOP FUND FUND TOTAL
--------------------------------------------------------------------------------------------------------
Investments at fair
value:
PNC Bank common stock $ -- $ -- $ -- $110,059,372 $55,416,875 $96,506,035 $ -- $261,982,282
PNC Bank preferred
stock -- -- -- 29,638 -- -- -- 29,638
Short-term investment
funds 7,717,236 3,868,123 54,366,600 8,405,457 -- 1,793,661 402,226 76,553,303
Registered investment
companies:
PNC Fund--Small Cap
Growth Equity Portfolio 5,568,797 -- -- -- -- -- -- 5,568,797
PNC Fund--International
Equity Portfolio 16,456,280 -- -- -- -- -- -- 16,456,280
PNC Fund--Small Cap
Value Equity Portfolio 4,902,460 -- -- -- -- -- -- 4,902,460
PNC Fund--Index Equity
Portfolio 19,701,378 -- -- -- -- -- -- 19,701,378
PNC Fund--Growth Equity
Portfolio 8,733,812 -- -- -- -- -- -- 8,733,812
PNC Fund--Intermediate
Term Bond Portfolio -- 15,018,133 -- -- -- -- -- 15,018,133
PNC Fund--Managed Income
Portfolio -- 23,252,746 -- -- -- -- -- 23,252,746
PNC Fund--Value Equity
Portfolio 23,877,171 -- -- -- -- -- -- 23,877,171
Participant loans -- -- -- -- -- -- 24,551,533 24,551,533
--------------------------------------------------------------------------------------------------------
Total investments 86,957,134 42,139,002 54,366,600 118,494,467 55,416,875 98,299,696 24,953,759 480,627,533
Cash -- -- 1,132 -- -- -- -- 1,132
Contribution receivable 49,455 52,745 74,551 3,824,889 -- -- -- 4,001,640
Accrued income 32,715 16,413 251,370 1,875,645 7,367 19,137 1,764 2,204,411
Due to (from) fund (2,194,620) (966,637) 1,361,512 4,343,628 3,547,204 (6,107,506) 16,419 --
--------------------------------------------------------------------------------------------------------
Total assets 84,844,684 41,241,523 56,055,165 128,538,629 58,971,446 92,211,327 24,971,942 486,834,716
ESOP note payable -- -- -- -- -- (98,600,000) -- (98,600,000)
--------------------------------------------------------------------------------------------------------
Net assets available for
plan benefits $84,844,684 $41,241,523 $56,055,165 $128,538,629 $58,971,446 $(6,388,673) $24,971,942 $388,234,716
========================================================================================================
13
14
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The changes in net assets available for plan benefits for the Plan's investment
funds were as follows:
Year ended December 31, 1995
INTERMEDIATE- PNC PNC
TERM FIXED SHORT-TERM PNC BANK BANK CORP. BANK CORP.
EQUITY INCOME-- FIXED INCOME CORP. STOCK ALLOCATED UNALLOCATED LOAN
FUND A FUND B --FUND C --FUND D ESOP FUND ESOP FUND FUND TOTAL
--------------------------------------------------------------------------------------------------------
Net assets available for
plan benefits at
January 1, 1995 $84,844,684 $41,241,523 $56,055,165 $128,538,629 $58,971,446 $(6,388,673) $24,971,942 $388,234,716
Additions:
Interest and
dividends 7,078,293 3,393,605 3,301,774 8,115,915 3,755,857 7,643,759 1,650,969 34,940,172
Contributions:
Employer 337,875 234,303 364,228 5,081,098 -- 8,525,000 -- 14,542,504
Employee 10,853,233 5,054,317 4,968,154 5,945,680 -- -- -- 26,821,384
Deductions:
Payments to
participants or
beneficiaries (9,401,501) (5,443,852) (9,734,173) (16,950,926) (6,547,113) -- (3,718,570) (51,796,135)
Net transfers 3,264,705 565,126 (1,889,202) (1,724,997) (1,533,238) 1,315,047 2,559 --
ESOP activity:
Interest expense -- -- -- -- -- (4,949,720) -- (4,949,720)
Other ESOP
activity -- -- -- (2,666,394) 10,336,081 (7,669,687) -- --
Net realized and
unrealized appreciation 17,252,318 3,488,432 -- 66,770,788 32,135,693 40,686,486 -- 160,333,717
Acquisitions 3,536,130 2,031,383 3,400,595 3,323,029 -- -- 14,141 12,305,278
--------------------------------------------------------------------------------------------------------
Net assets available for
plan benefits at
December 31, 1995 $117,765,737 $50,564,837 $56,466,541 $196,432,822 $97,118,726 $39,162,212 $22,921,041 $580,431,916
========================================================================================================
14
15
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The changes in net assets available for plan benefits for the Plan's investment
funds were as follows:
Year ended December 31, 1994
INTERMEDIATE- PNC PNC
TERM FIXED SHORT-TERM PNC BANK BANK CORP. BANK CORP.
EQUITY INCOME-- FIXED INCOME CORP. STOCK ALLOCATED UNALLOCATED LOAN
FUND A FUND B --FUND C --FUND D ESOP FUND ESOP FUND FUND TOTAL
--------------------------------------------------------------------------------------------------------
Net assets available for
plan benefits at
January 1, 1994 $74,869,155 $40,210,371 $51,339,343 $160,372,423 $61,900,878 $39,475,136 $21,929,873 $450,097,179
Additions:
Interest and
dividends 3,735,759 2,746,838 2,165,379 7,149,082 2,917,633 6,702,346 1,459,975 26,877,012
Contributions:
Employer 379,285 273,114 415,983 4,100,738 -- 7,615,000 -- 12,784,120
Employee 8,523,507 4,297,217 4,604,632 5,504,924 -- -- -- 22,930,280
Rollover 736,161 483,623 241,548 391,798 -- -- -- 1,853,130
Deductions:
Payments to
participants or
beneficiaries (5,657,217) (3,810,151) (6,106,363) (14,237,379) (1,931,421) -- (1,539,537) (33,282,068)
Net transfers 1,551,666 (2,023,907) (2,390,922) (258,471) 1,599,616 (1,599,613) 3,121,631 --
ESOP activity:
Interest expense -- -- -- -- -- (3,937,737) -- (3,937,737)
Other ESOP
activity -- -- -- 3,460,972 14,982,094 (18,443,066) -- --
Net realized and
unrealized depreciation (1,663,564) (3,639,287) -- (40,891,136) (20,497,354) (36,200,739) -- (102,892,080)
Acquisitions 2,369,932 2,703,705 5,785,565 2,945,678 -- -- -- 13,804,880
--------------------------------------------------------------------------------------------------------
Net assets available for
plan benefits at
December 31, 1994 $84,844,684 $41,241,523 $56,055,165 $128,538,629 $58,971,446 $(6,388,673) $24,971,942 $388,234,716
========================================================================================================
15
16
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements (continued)
4. TRANSACTIONS WITH PARTIES-IN-INTEREST
The asset management group of PNC Bank, N.A., a wholly-owned indirect subsidiary
of PNC Bank, administers the plan assets, maintains discretionary investment
power, and is the safekeeping agent. PNC Bank pays administrative costs incurred
by the Plan. The asset management group of PNC Bank, Ohio, N.A., a wholly-owned
indirect subsidiary of PNC Bank, administers the ESOP assets of the Plan. The
Plan also holds shares of registered investment companies which are sponsored
and administered by wholly owned subsidiaries of PNC Bank Corp. or its
subsidiaries.
5. INCOME TAX STATUS
The Internal Revenue Service ruled June 21, 1995 that the Plan qualifies under
Section 401(a) of the Internal Revenue Code (IRC) and, therefore, the related
trust is not subject to tax under present income tax law. Once qualified, the
Plan is required to operate in conformity with the IRC to maintain its
qualification. The Plan Administrator is not aware of any course of action or
series of events that have occurred that might adversely affect the Plan's
qualified status.
6. PLAN MERGERS
In 1995, defined contribution plans merged into the Plan included the BlackRock
Financial Management L.P. Assets, the Gateway Federal Savings and Loan
Association Retirement and Pre-tax Savings Plan and the PNC Mortgage Bank N.A.
Capital Accumulation Plan with assets of $2.9 million, $.6 million and $8.8
million, respectively.
16
17
Pnc Bank Corp.
Incentive Savings Plan
Schedule of Assets Held for Investment
December 31, 1995
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- -------------------------------------------------------------------------------------------------------------------
EQUITY--FUND A
REGISTERED INVESTMENT COMPANIES
The PNC Fund--Small Cap
Growth Equity Portfolio
Fund 093 Institutional Class 475,104 units $4,611,121 $7,672,930
The PNC Fund--International
Equity Portfolio Fund 065
Institutional Class 1,745,040 units 22,376,005 22,319,064
The PNC Fund--Small Cap
Value Portfolio Fund 046
Institutional Class 464,269 units 6,326,076 6,810,828
The PNC Fund--International
Emerging Markets
Portfolio Fund 015
Institutional Class 542,142 units 4,501,341 4,185,333
The PNC Fund--Growth
Equity Portfolio Fund 029
Institutional Class 1,324,420 units 13,257,539 17,151,237
The PNC Fund--Core
Equity Portfolio Fund 095
Institutional Class 2,412,299 units 28,410,657 29,285,309
The PNC Fund--Value
Equity Portfolio Fund 089
Institutional Class 1,784,789 units 20,951,892 24,647,941
PNC Money Market
Institutional Class 4,015,003 units 4,015,003 4,015,003
------------------------------------------
Total Equity--Fund A $104,449,634 $116,087,645
17
18
Schedule of Assets Held for Investment (continued)
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- -------------------------------------------------------------------------------------------------------------------
INTERMEDIATE-TERM FIXED INCOME--FUND B
REGISTERED INVESTMENT COMPANIES
The PNC Fund--Intermediate
Term Bond Portfolio
Fund 090 Institutional Class 1,895,410 units $17,443,714 $18,139,072
The PNC Fund--Managed
Income Portfolio Fund 013
Institutional Class 2,938,685 units 29,572,976 31,003,125
INTEREST-BEARING CASH
PNC Money Market
Institutional Class 1,625,480 units 1,625,480 1,625,480
---------------------------------------
Total Intermediate-Term Fixed Income--Fund B $48,642,170 $50,767,677
18
19
Schedule of Assets Held for Investment (continued)
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- -------------------------------------------------------------------------------------------------------------------
SHORT-TERM FIXED INCOME--FUND C
INTEREST-BEARING CASH
PNC Money Market
Institutional Class 55,358,999 units $55,358,999 $55,358,999
19
20
Schedule of Assets Held for Investment (continued)
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- -------------------------------------------------------------------------------------------------------------------
PNC BANK CORP. STOCK--FUND D
COMMON STOCK
PNC Bank Corp. 6,037,498 shares $130,380,920 $194,709,309
PREFERRED STOCK
PNC Bank Corp. 812 shares 8,247 42,224
----------------------------------------
Total PNC Bank Corp. Stock--Fund D $130,389,167 $194,751,533
20
21
Schedule of Assets Held for Investment (continued)
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- -------------------------------------------------------------------------------------------------------------------
ESOP ACCOUNT
COMMON STOCK
PNC Bank Corp:
Allocated Account 2,903,523 shares $55,495,010 $93,638,621
Unallocated Account 3,825,106 shares 72,791,767 123,359,669
INTEREST-BEARING CASH
PNC Money Market
Institutional Class 10,631,172 units 5,802,004 5,802,004
---------------------------------------
Total ESOP Account $134,088,781 $222,800,294
21
22
Schedule of Assets Held for Investment (continued)
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- -------------------------------------------------------------------------------------------------------------------
LOAN FUND
Participant Loans
INSTALLMENT LOANS
91-01 418,100 par
Effective January, 1991
10.00% $904 $904
91-02 643,300 par
Effective February, 1991
9.50% 762 762
91-03 714,000 par
Effective March, 1991
9.00% 4,107 4,107
91-04 572,900 par
Effective April, 1991
9.00% 3,087 3,087
91-05 1,270,800 par
Effective May, 1991
9.00% 4,183 4,183
91-06 955,200 par
Effective June, 1991
8.50% 4,156 4,156
91-07 954,400 par
Effective July, 1991
8.50% 8,704 8,704
91-08 1,507,100 par
Effective August, 1991
8.50% 13,375 13,375
91-09 1,579,700 par
Effective September, 1991
8.50% 24,657 24,657
22
23
Schedule of Assets Held for Investment (continued)
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- -------------------------------------------------------------------------------------------------------------------
91-12 2,235,000 par
Effective December, 1991
8.00% 24,016 24,016
CCNB-92-01 74,547 par
Effective January, 1992
At various rates 5,230 5,230
92-03 3,968,900 par
Effective March, 1992
6.50% 178,922 178,922
92-06 3,931,400 par
Effective June, 1992
6.50% 122,942 122,942
92-09 4,333,500 par
Effective September, 1992
6.50% 249,095 249,095
92-12 2,505,000 par
Effective December, 1992
6.00% 144,997 144,997
93-03 3,459,000 par
Effective March, 1993
6.00% 323,970 323,970
93-06 4,122,800 par
Effective June, 1993
6.00% 440,430 440,430
93-09 4,677,500 par
Effective September, 1993
6.00% 683,976 683,976
93-12 3,370,500 par
Effective December, 1993
6.00% 695,035 695,035
23
24
Schedule of Assets Held for Investment (continued)
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- -------------------------------------------------------------------------------------------------------------------
94-03 4,255,100 par
Effective March, 1994
6.00% 1,248,753 1,248,753
94-06 4,602,200 par
Effective June, 1994
6.25% 1,525,559 1,525,559
94-09 4,999,100 par
Effective September, 1994
7.25% 1,902,154 1,902,154
94-12 2,765,400 par
Effective December, 1994
7.75% 1,418,228 1,418,228
95-03 3,333,300 par
Effective March, 1995
8.50% 2,639,136 2,639,136
95-03BR 14,141 par
Effective March, 1995
At various rates 13,802 13,802
95-03MC 98,200 par
Effective March, 1995
8.50% 80,511 80,511
95-06 4,195,800 par
Effective June, 1995
9.00% 3,687,691 3,687,691
95-09 4,391,100 par
Effective March, 1995
9.00% 4,171,717 4,171,717
----------------------------------------
$19,620,099 $19,620,099
24
25
Schedule of Assets Held for Investment (continued)
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- -------------------------------------------------------------------------------------------------------------------
MORTGAGE LOANS
89-01-M 15,000 par
Effective January, 1989
10.50% $7,220 $7,220
89-03CFC-M 41,300 par
Effective February, 1989
10.50% 7,306 7,306
CFC88-M 349,104 par
Effective February, 1989
At various rates 5,067 5,067
89-03-M 19,700 par
Effective March, 1989
11.50% 3,354 3,354
89-06-M 85,300 par
Effective June, 1989
11.50% 7,597 7,597
89-09-M 119,900 par
Effective September, 1989
10.50% 26,360 26,360
90-02-M 12,800 par
Effective February, 1990
10.00% 2,939 2,939
90-03-M 88,100 par
Effective March, 1990
10.00% 28,052 28,052
90-04-M 66,600 par
Effective April, 1990
10.00% 15,101 15,101
25
26
Schedule of Assets Held for Investment (continued)
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- -------------------------------------------------------------------------------------------------------------------
90-05-M 38,700 par
Effective May, 1990
10.00% 9,829 9,829
90-06-M 41,000 par
Effective June, 1990
10.00% 18,252 18,252
90-07-M 49,500 par
Effective July, 1990
10.00% 5,813 5,813
90-08-M 80,200 par
Effective August, 1990
10.00% 62,037 62,037
90-12-M 11,200 par
Effective December, 1990
10.00% 9,140 9,140
91-02-M 83,400 par
Effective February, 1991
9.50% 38,976 38,976
91-03-M 58,700 par
Effective March, 1991
9.00% 27,463 27,463
91-04-M 59,000 par
Effective April, 1991
9.00% 24,967 24,967
91-05-M 57,000 par
Effective May, 1991
9.00% 24,668 24,668
91-07-M 118,700 par
Effective July, 1991
8.50% 41,390 41,390
26
27
Schedule of Assets Held for Investment (continued)
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- -------------------------------------------------------------------------------------------------------------------
91-08-M 60,100 par
Effective August, 1991
8.50% 19,476 19,476
91-09-M 42,800 par
Effective September, 1991
8.50% 13,324 13,324
91-12-M 92,200 par
Effective December, 1991
8.00% 37,457 37,457
92-03-M 504,700 par
Effective March, 1992
6.50% 191,185 191,185
92-06-M 347,100 par
Effective June, 1992
At various rates 202,492 202,492
92-09-M 287,300 par
Effective September, 1992
6.50% 118,750 118,750
92-12-M 148,700 par
Effective December, 1992
6.00% 79,318 79,318
93-03-M 203,200 par
Effective March, 1993
6.00% 98,206 98,206
93-06-M 309,100 par
Effective June, 1993
6.00% 141,508 141,508
93-09-M 379,300 par
Effective June, 1993
6.00% 320,851 320,851
27
28
Schedule of Assets Held for Investment (continued)
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- -------------------------------------------------------------------------------------------------------------------
93-12-M 185,600 par
Effective December, 1993
6.00% 123,873 123,873
94-03-M 296,900 par
Effective March, 1994
6.00% 210,702 210,702
94-06-M 252,100 par
Effective June, 1994
6.25% 197,138 197,138
94-09-M 70,800 par
Effective September, 1994
7.25% 64,943 64,943
94-12-M 91,700 par
Effective December, 1994
7.75% 48,010 48,010
95-03-M 178,100 par
Effective March, 1995
8.50% 165,436 165,436
95-03-MCM 4,100 par
Effective March, 1995
8.50% 3,988 3,988
95-06-M 199,900 par
Effective June, 1995
9.00% 197,244 197,244
95-09-M 199,500 par
Effective September, 1995
9.00% 197,934 197,934
---------------------------------------
$2,797,366 $2,797,366
28
29
Schedule of Assets Held for Investment (continued)
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- -------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT FUNDS
PNC Money Market Portfolio 500,962 units 500,962 500,962
---------------------------------------
Total Loan Fund $22,918,427 $22,918,427
---------------------------------------
Total PNC Bank Corp. Incentive Savings Plan $495,847,178 $662,684,575
=======================================
29
30
PNC Bank Corp.
Incentive Savings Plan
Schedule of Reportable Transactions
Year ended December 31, 1995
FAIR VALUE
COST OF ASSETS ON NET
PURCHASE SELLING OF TRANSACTION GAIN
DESCRIPTION OF ASSETS PRICE PRICE ASSETS DATE (LOSS)
- -------------------------------------------------------------------------------------------------------------------
CATEGORY (III)--SERIES OF SECURITIES TRANSACTIONS
PNC MONEY MARKET PORTFOLIO #1--INSTITUTIONAL CLASS
76,527,658 units $76,527,658 $76,527,658 $76,527,658 $
-
86,221,790 units $86,221,790 $86,221,790 $86,221,790 $
-
PNC BANK CORP. COMMON STOCK
780,524 shares $19,358,607 $19,358,607 $19,358,607 $
-
87,816 shares $2,447,871 $1,703,139 $2,447,871 $744,732
THE PNC FUND--CORE EQUITY PORTFOLIO FUND 095--INSTITUTIONAL CLASS
2,412,299 units $28,410,657 $28,410,657 $28,410,657 $
-
THE PNC FUND--INDEX EQUITY PORTFOLIO FUND 045--INSTITUTIONAL CLASS
141,142 units $1,573,450 $1,573,450 $1,573,450 $
-
1,978,957 units $26,471,536 $20,078,561 $26,471,536 $6,392,975
There were no category (i), (ii) or (iv) reportable transactions during 1995.
30
31
Midlantic Savings and
Investment Plan
Audited Financial Statements
CONTENTS
Report of Independent Auditors ....................................... 32
Audited Financial Statements
Statements of Net Assets Available for Plan Benefits
as of December 31, 1995 and 1994 .................................... 33
Statements of Changes in Net Assets Available for Plan Benefits
for the year ended December 31, 1995 ................................ 34
Notes to Financial Statements ....................................... 35
Schedules
Schedule of Assets Held for Investment................................ 43
Schedule of Reportable Transactions................................... 44
31
32
Report of Independent Auditors
Benefit Plans Committee
Midlantic Savings and
Investment Plan
We have audited the accompanying statements of net assets available for benefits
of the Midlantic Savings and Investment Plan (Plan) as of December 31, 1995 and
1994, and the related statement of changes in net assets available for benefits
for the year ended December 31, 1995. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 audits provide 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 benefits of the Plan at
December 31, 1995 and 1994, and the changes in its net assets available for
benefits for the year ended December 31, 1995, in conformity with generally
accepted accounting principles.
Our audits were 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 as of December 31, 1995, and reportable
transactions for the year ended December 31, 1995, are presented for purposes
of complying with the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974, and
are not a required part of the basic financial statements. The supplemental
schedules have been subjected to the auditing procedures applied in our audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
June 14, 1996
Pittsburgh, Pennsylvania
32
33
Midlantic Savings and Investment Plan
Statements of Net Assets Available for Plan Benefits
DECEMBER 31
1995 1994
---------------------------
ASSETS
Investments at fair value:
Compass Growth Fund (1995 cost--$8,052,737; 1994
cost--$6,133,077) $9,443,510 $6,142,202
Compass Fixed Income Fund (1995 cost--$5,722,767; 1994
cost--$3,651,623) 5,973,714 3,428,457
Midlantic Corporation common stock (1994 cost--$20,099,976) -- 21,705,143
PNC Bank Corp. common stock (1995 cost--$20,937,356) 53,231,585 --
Compass Cash Reserve Fund 9,472,135 8,009,973
Compass Equity Income Fund (1995 cost--$10,801,479; 1994
cost--$5,930,627) 11,808,394 5,392,959
Compass Short/Intermediate Fund (1995 cost--$4,798,846; 1994
cost--$3,553,719) 4,855,079 3,430,660
Compass Balanced Fund (1995 cost--$830,672) 879,741 --
---------------------------
Total investments 95,664,158 48,109,394
Due from broker for securities sold 656,342 --
Accrued income 10,431 --
---------------------------
Total assets 96,330,931 48,109,394
LIABILITIES
Due to broker for securities purchased 1,719,905 1,005,931
---------------------------
Net assets available for plan benefits $94,611,026 $47,103,463
===========================
See accompanying notes.
33
34
Midlantic Savings and Investment Plan
Statements of Changes in Net Assets Available for Plan Benefits
Years ended December 31, 1995
Additions:
Investment income:
Interest $403,084
Dividends:
Midlantic Corporation 1,001,430
Other 717,339
-------------
2,121,853
Contributions (employer) 5,186,082
Contributions (employee and rollover) 7,080,721
-------------
Total additions 14,388,656
Deductions:
Payments to participants or beneficiaries (cash and
Midlantic Corporation common stock) 4,632,538
Administrative expense 35,654
-------------
Total deductions 4,668,192
Net miscellaneous disbursements (203)
Net realized and unrealized appreciation in
fair value of investments 37,787,302
-------------
Net increase 47,507,563
Net assets available for plan benefits at beginning of year 47,103,463
-------------
Net assets available for plan benefits at end of year $94,611,026
=============
See accompanying notes.
34
35
Midlantic Savings and Investment Plan
Notes to Financial Statements
December 31, 1995
1. DESCRIPTION OF THE PLAN
Effective December 31, 1995, Midlantic Corporation was merged into a wholly
owned subsidiary of PNC Bank Corp. and all outstanding common shares of
Midlantic Corporation common stock were exchanged for 2.05 shares of PNC Bank
Corp. common stock. The subsidiaries of the former Midlantic Corporation are now
wholly owned indirect subsidiaries of PNC Bank Corp. Concurrent with the merger,
PNC Bank Corp. became the sponsor of the Midlantic Savings and Investment Plan
("Plan"). Prior to the merger, the Plan sponsor was Midlantic Corporation.
The Plan covers substantially all eligible employees of the former Midlantic
Corporation and subsidiaries. Employees are eligible on the first day of the
month coinciding with, or immediately following, the date on which three
continuous months of service was completed.
The Plan allows participants to contribute from 1 to 15 percent of their
compensation on a pretax 401(k) basis. The Plan sponsor matches 100
percent of employee contributions up to 3 percent of compensation, subject to
Internal Revenue Service (IRS) limitations. Additionally, The Plan sponsor
may also make a discretionary matching contribution on the next 2 percent of
compensation. For the year ended December 31, 1995, The Plan sponsor
elected to contribute a discretionary match of 2 percent of compensation of
eligible participants which totaled $1,489,616.
All participant contributions to the Plan are 100 percent vested
(nonforfeitable) at all times. For participants hired on or prior to April 1,
1993, any contributions made by the Plan sponsor under the Plan are 100 percent
vested. Participants hired after April 1, 1993 become vested in the
participating employer's matching contributions evenly over three years of
employment.
Benefits to participants for distributions requested but yet to be paid were
$1,011,342 and $155,494 at December 31, 1995 and 1994, respectively. Plan income
is allocated to participants based on an average participant investment balance
on a monthly basis. Under certain circumstances, the Plan permits withdrawals by
participants.
35
36
Midlantic Savings and Investment Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
All participant and Plan sponsor contributions are held in a trust fund (Trust).
In addition, all distributions which participants did not elect to receive in
cash from the Midlantic Profit Sharing Plan, a predecessor plan, and balances
rolled over from any prior plans are held in the Trust. The Trust Department of
Midlantic Bank, N.A., a wholly owned indirect subsidiary of PNC Bank Corp., has
been appointed to act as custodian and trustee for the principal and income of
the Plan. The Trust is divided into seven funds for investment purposes: Fund A
(Compass Growth Fund), Fund B ( Compass Fixed Income Fund), Fund C (PNC Bank
Corp. common stock), Fund D (Compass Cash Reserve Fund), Fund E (Compass Equity
Income Fund), Fund F (Compass Short/Intermediate Fund), and Fund G (Compass
Balanced Fund). Each participant designates the funds into which his/her share
of the contributions will be invested.
Benefits not yet paid to participants who have separated from service amounted
to $6,287,283 as of December 31, 1995.
Midlantic Corporation has the right under the Plan to discontinue contributions
at any time and to terminate the Plan subject to the provisions of the Employee
Retirement Income Security Act of 1974.
2. SIGNIFICANT ACCOUNTING POLICIES
VALUATION
Marketable securities are stated at fair value. Securities are valued at the
last public sale price of the securities listed on the New York Stock Exchange.
If no sales were reported, the last bid price is used.
The fair value of the participation units in the Compass Funds are based on
quoted redemption values on the last business day of the plan year.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results may differ from such estimates and such differences may
be material to the financial statements.
36
37
Midlantic Savings and Investment Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
Net realized and unrealized appreciation (depreciation) in aggregate fair value
of investments was as follows:
NET REALIZED AND
UNREALIZED APPRECIATION
(DEPRECIATION) IN FAIR
VALUE FOR YEAR ENDED
DECEMBER 31
-----------------------
1995
-----------------------
Compass Growth Fund $1,713,803
Compass Fixed Income Fund 474,191
PNC Bank Corp./Midlantic Corporation
common stock 33,390,416
Compass Equity Income Fund 1,970,201
Compass Short/Intermediate Fund 175,744
Compass Balanced Fund 62,997
Other (50)
-------------
$37,787,302
=============
37
38
Midlantic Savings and Investment Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The fair values of individual investments that represent 5 percent or more of
the Plan's net assets are as follows:
DECEMBER 31
1995 1994
-----------------------------
Compass Growth Fund $9,443,510 $6,142,202
Compass Fixed Income Fund 5,973,714 3,428,457
Midlantic Corporation common stock -- 21,705,143
PNC Bank Corp. common stock 53,231,585 --
Compass Cash Reserve Fund 9,472,135 8,009,973
Compass Equity Income Fund 11,808,394 5,392,959
Compass Short/Intermediate Fund 4,855,079 3,430,660
Effective January 12, 1996, the Compass Funds were merged with the funds from
PNC Bank Corp. The new funds are called Compass Capital Funds and equate to
the current Midlantic Corporation funds as follows:
Midlantic Corporation PNC Bank Corp.
Fund Compass Funds Compass Capital Funds
- ------------------------------------------------------------------------------
A Growth Fund Growth Equity Portfolio
B Fixed Income Fund Core Bond Portfolio
D Cash Reserve Fund Money Market Portfolio
E Equity Income Fund Value Equity Portfolio
F Short/Intermediate Fund Short-Term Government Bond Portfolio
G Balanced Fund Balanced Portfolio
38
39
Midlantic Savings and Investment Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The net assets available for plan benefits for the Plan's investment funds were
as follows:
COMPASS COMPASS PNC BANK COMPASS
GROWTH FIXED CORP. COMMON CASH
FUND-- INCOME FUND-- STOCK-- RESERVE FUND--
FUND A FUND B FUND C FUND D
----------------------------------------------------------------
December 31, 1995
- ----------------------------
Investments at fair value:
Compass Growth Fund $9,443,510 $ -- $ -- $ --
Compass Fixed Income Fund -- 5,973,714 -- --
PNC Bank Corp. common stock -- -- 53,231,585 --
Compass Cash Reserve Fund 283,224 268,543 421,659 7,727,571
Compass Equity Income Fund -- -- -- --
Compass Short/Intermediate
Fund -- -- -- --
Compass Balanced Fund -- -- -- --
----------------------------------------------------------------
Total investments 9,726,734 6,242,257 53,653,244 7,727,571
Due from broker for
securities sold -- -- 656,342 --
Accrued income 175 160 291 9,371
----------------------------------------------------------------
Total assets 9,726,909 6,242,417 54,309,877 7,736,942
Due to broker for securities
purchased 324,924 376,843 -- --
----------------------------------------------------------------
Net assets available for plan
benefits $9,401,985 $5,865,574 $54,309,877 $7,736,942
================================================================
COMPASS COMPASS SHORT/ COMPASS
EQUITY INTERMEDIATE BALANCED
INCOME FUND-- FUND-- FUND--
FUND E FUND F FUND G TOTAL
-------------------------------------------------------------------------
December 31, 1995
- ----------------------------
Investments at fair value:
Compass Growth Fund $ -- $ -- $ -- $9,443,510
Compass Fixed Income Fund -- -- -- 5,973,714
PNC Bank Corp. common stock -- -- -- 53,231,585
Compass Cash Reserve Fund 555,822 176,948 38,368 9,472,135
Compass Equity Income Fund 11,808,394 -- -- 11,808,394
Compass Short/Intermediate
Fund -- 4,855,079 -- 4,855,079
Compass Balanced Fund -- -- 879,741 879,741
-------------------------------------------------------------------------
Total investments 12,364,216 5,032,027 918,109 95,664,158
Due from broker for
securities sold -- -- -- 656,342
Accrued income 301 114 19 10,431
-------------------------------------------------------------------------
Total assets 12,364,517 5,032,141 918,128 96,330,931
Due to broker for securities
purchased 627,922 276,548 113,668 1,719,905
-------------------------------------------------------------------------
Net assets available for plan
benefits $11,736,595 $4,755,593 $804,460 $94,611,026
=========================================================================
39
40
Midlantic Savings and Investment Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
COMPASS COMPASS MIDLANTIC COMPASS
GROWTH FIXED CORPORATION CASH
FUND-- INCOME FUND-- COMMON STOCK-- RESERVE FUND--
FUND A FUND B FUND C FUND D
------------------------------------------------------------------
December 31, 1994
- ----------------------------
Investments at fair value:
Compass Growth Fund $6,142,202 $ -- $ -- $ --
Compass Fixed Income Fund -- 3,428,457 -- --
Midlantic Corporation
common stock -- -- 21,705,143 --
Compass Cash Reserve Fund 197,627 239,807 306,131 6,670,017
Compass Equity Income Fund -- -- -- --
Compass Short/Intermediate
Fund -- -- -- --
------------------------------------------------------------------
Total investments 6,339,829 3,668,264 22,011,274 6,670,017
------------------------------------------------------------------
Total assets 6,339,829 3,668,264 22,011,274 6,670,017
Due to broker for securities
purchased 208,610 185,991 -- --
------------------------------------------------------------------
Net assets available for plan
benefits $6,131,219 $3,482,273 $22,011,274 $6,670,017
==================================================================
COMPASS COMPASS SHORT/
EQUITY INTERMEDIATE
INCOME FUND-- FUND-
FUND E FUND F OTHER TOTAL
----------------------------------------------------------------
December 31, 1994
- ----------------------------
Investments at fair value:
Compass Growth Fund $ -- $ -- $ -- $6,142,202
Compass Fixed Income Fund -- -- -- 3,428,457
Midlantic Corporation
common stock -- -- -- 21,705,143
Compass Cash Reserve Fund 422,971 169,265 4,155 8,009,973
Compass Equity Income Fund 5,392,959 -- -- 5,392,959
Compass Short/Intermediate
Fund -- 3,430,660 -- 3,430,660
----------------------------------------------------------------
Total investments 5,815,930 3,599,925 4,155 48,109,394
----------------------------------------------------------------
Total assets 5,815,930 3,599,925 4,155 48,109,394
Due to broker for securities
purchased 459,107 152,223 -- 1,005,931
----------------------------------------------------------------
Net assets available for plan
benefits $5,356,823 $3,447,702 $4,155 $47,103,463
================================================================
40
41
Midlantic Savings and Investment Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The changes in net assets available for plan benefits for the Plan's investment
funds were as follows:
MIDLANTIC
COMPASS COMPASS CORPORATION/ COMPASS
GROWTH FIXED PNC BANK CORP. CASH
FUND-- INCOME FUND-- COMMON STOCK-- RESERVE FUND--
FUND A FUND B FUND C FUND D
-------------- ----------------- ------------------- ----------------
December 31, 1995
- ----------------------------
Net assets available for plan
benefits January 1, 1995 $6,131,219 $3,482,273 $22,011,274 $6,670,017
Additions:
Interest income 3,075 2,346 7,572 383,390
Dividends:
Midlantic Corporation 1,001,430
Others 59,198 250,274 -- --
Contributions:
Employer 765,557 755,814 1,086,967 447,460
Employee 982,475 987,239 1,350,907 566,124
Rollover 75,578 61,080 94,320 25,225
Deductions:
Payments to
participants(cash) (411,071) (237,997) (1,711,633) (792,409)
Payments to
participants(stock) (751,443)
Administrative expenses -- -- (34,279) --
Net miscellaneous receipts and
(disbursements) (1) (172) 1,698 1,289
Net transfers 82,152 90,526 (2,137,352) 435,846
Net realized and unrealized
appreciation (depreciation) 1,713,803 474,191 33,390,416 --
-------------------------------------------------------------------------
Net assets available for plan
benefits at December 31,
1995 $9,401,985 $5,865,574 $54,309,877 $7,736,942
=========================================================================
COMPASS COMPASS
EQUITY SHORT/ COMPASS
INCOME INTERMEDIATE BALANCED
FUND-- FUND-- FUND--
FUND E FUND F FUND G OTHER TOTAL
--------------------------------------------------------------------
December 31, 1995
- ----------------------------
Net assets available for plan
benefits January 1, 1995 $5,356,823 $3,447,702 $ -- $4,155 $47,103,463
Additions:
Interest income 4,465 1,898 223 115 403,084
Dividends:
Midlantic Corporation 1,001,430
Others 165,093 227,850 14,924 -- 717,339
Contributions:
Employer 1,506,509 536,047 87,728 -- 5,186,082
Employee 1,955,062 701,668 110,117 -- 6,653,592
Rollover 116,500 9,435 44,991 -- 427,129
Deductions:
Payments to
participants(cash) (476,548) (249,918) (1,519) -- (3,881,095)
Payments to
participants(stock) (751,443)
Administrative expenses -- -- -- (1,375) (35,654)
Net miscellaneous receipts and
(disbursements) (172) -- -- (2,845) (203)
Net transfers 1,138,662 (94,833) 484,999 -- --
Net realized and unrealized
appreciation (depreciation) 1,970,201 175,744 62,997 (50) 37,787,302
---------------------------------------------------------------------
Net assets available for plan
benefits at December 31,
1995 $11,736,595 $4,755,593 $804,460 $ -- $94,611,026
=====================================================================
41
42
Midlantic Savings and Investment Plan
Notes to Financial Statements (continued)
4. SUBSEQUENT EVENTS
The Midlantic Savings and Investment Plan will be merged with PNC Bank Corp.'s
Incentive Savings Plan by December 31, 1996. Effective January 2, 1996, the
401(k) Plan of the Bank of Old York Road (BOYR), a subsidiary of the former
Midlantic Corporation, merged with the Midlantic Savings and Investment Plan.
5. TRANSACTIONS WITH PARTIES-IN-INTEREST
Midlantic Bank, N.A. pays administrative costs incurred by the Plan. The Plan
also holds units in the Compass Capital Fund for which Midlantic Bank, N.A. acts
as investment advisor.
6. INCOME TAX STATUS
The Plan has received a favorable letter of determination from the IRS dated
October 19, 1994 which states that the plan qualifies under Section 401(a) of
the Internal Revenue Code. The Plan Administrator is not aware of any events or
actions that have occurred in the operation of the Plan that would result in its
disqualification.
42
43
Midlantic Savings and Investment Plan
Schedule of Assets Held for Investment
December 31, 1995
UNITS/ FAIR
DESCRIPTION OF INVESTMENT SHARES COST VALUE
- --------------------------------------------------------------------------------------------------------------------
Mutual Funds:
Compass Growth Fund (Fund A) 719,800 $8,052,737 $9,443,510
Compass Fixed Income Fund (Fund B) 547,043 5,722,767 5,973,714
Compass Cash Reserve Fund (Fund D) 9,472,135 9,472,135 9,472,135
Compass Equity Income Fund (Fund E) 838,069 10,801,479 11,808,394
Compass Short/Intermediate Fund (Fund F) 465,492 4,798,846 4,855,079
Compass Balanced Fund (Fund G) 75,905 830,672 879,741
---------------------------------
39,678,636 42,432,573
Common Stock:
PNC Bank Corp. common stock (Fund C) 1,650,592 20,937,356 53,231,585
---------------------------------
Total $60,615,992 $95,664,158
=================================
43
44
Midlantic Savings and Investment Plan
Schedule of Reportable Transactions
December 31, 1995
FAIR VALUE OF
INVESTMENTS ON NET
UNITS/ PURCHASE SELLING COST OF TRANSACTION GAIN
DESCRIPTION OF INVESTMENT SHARES PRICE PRICE INVESTMENTS DATE (LOSS)
- -------------------------------------------------------------------------------------------------------------------------
Category (i) - Individual
transactions in excess of
5% of plan assets
PNC Bank Corp. common
stock (Fund C):
Midlantic Corporation common
stock 805,167 $ -- $20,937,356 $20,937,356 $52,839,066 $ --
PNC Bank Corp. common
stock 1,650,592 20,937,356 -- 20,937,356 53,231,585 --
This transaction represents the exchange of the former Midlantic Corporation common stock for 2.05 shares of
PNC Bank Corp. common stock on December 31, 1995.
Category (iii) - Series of
securities transactions in excess
of 5% of plan assets
Compass Growth Fund (Fund A):
Compass Cash Reserve Fund 2,080,584 2,080,584 -- 2,080,584 2,080,584 --
Compass Cash Reserve Fund 1,994,986 -- 1,994,986 1,994,986 1,994,986 --
Compass Growth Fund 160,388 2,021,083 -- 2,021,083 2,021,083 --
Compass Growth Fund 9,324 -- 115,302 101,353 115,302 13,949
Compass Fixed Income Fund (Fund B):
Compass Cash Reserve Fund 2,260,540 2,260,540 -- 2,260,540 2,260,540 --
Compass Cash Reserve Fund 2,231,803 -- 2,231,803 2,231,803 2,231,803 --
Compass Fixed Income Fund 208,127 2,202,414 -- 2,202,414 2,202,414 --
Compass Fixed Income Fund 12,632 -- 131,263 131,270 131,263 (7)
PNC Bank Corp. common
stock (Fund C):
Compass Cash Reserve Fund 4,546,803 4,546,803 -- 4,546,803 4,546,803 --
Compass Cash Reserve Fund 4,431,275 -- 4,431,275 4,431,275 4,431,275 --
Midlantic Corporation common
stock 24,937 1,001,426 -- 1,001,426 1,001,426 --
Midlantic Corporation common
stock 893,142 -- 25,490,442 23,176,798 57,392,152 2,313,644
PNC Bank Corp. common
stock 1,650,592 20,937,356 -- 20,937,356 53,231,585 --
44
45
Midlantic Savings and Investment Plan
Schedule of Reportable Transactions (continued)
FAIR VALUE OF
INVESTMENTS ON NET
UNITS/ PURCHASE SELLING COST OF TRANSACTION GAIN
DESCRIPTION OF INVESTMENT SHARES PRICE PRICE INVESTMENTS DATE (LOSS)
- ---------------------------------------------------------------------------------------------------------------------------
Compass Cash Reserve Fund (Fund D):
Compass Cash Reserve Fund 2,720,668 2,720,668 -- 2,720,668 2,720,668 --
Compass Cash Reserve Fund 1,660,458 -- 1,660,458 1,660,458 1,660,458 --
Compass Equity Income Fund (Fund E):
Compass Cash Reserve Fund 4,738,224 4,738,224 -- 4,738,224 4,738,224 --
Compass Cash Reserve Fund 4,605,373 -- 4,605,373 4,605,373 4,605,373 --
Compass Equity Income Fund 368,635 4,978,816 -- 4,978,816 4,978,816 --
Compass Equity Income Fund 8,654 -- 118,200 107,964 118,200 10,236
Compass Short/Intermediate Fund
(Fund F):
Compass Cash Reserve Fund 1,812,085 1,812,085 -- 1,812,085 1,812,085 --
Compass Cash Reserve Fund 1,804,402 -- 1,804,402 1,804,402 1,804,402 --
Compass Short/Intermediate
Fund 156,449 1,608,868 -- 1,608,868 1,608,868 --
Compass Short/Intermediate
Fund 35,303 -- 360,129 363,740 360,129 (3,611)
Compass Balanced Fund (Fund G):
Compass Cash Reserve Fund 451,020 451,020 -- 451,020 451,020 --
Compass Cash Reserve Fund 412,652 -- 412,652 412,652 412,652 --
Compass Balanced Fund 83,167 907,428 -- 907,428 907,428 --
Compass Balanced Fund 7,262 -- 81,930 76,756 81,930 5,174
Note: The transactions identified in category in (i) are also included in
category (iii).
There were no category (ii) or (iv) reportable transactions during 1995.
45
46
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, PNC Bank Corp. has duly caused this amendment to be signed on its
behalf by the undersigned, thereunto duly authorized.
PNC BANK CORP.
(Registrant)
By /s/ ROBERT L. HAUNSCHILD
--------------------------------
Robert L. Haunschild
Senior Vice President and
Chief Financial Officer
Date: June 28, 1996
46
47
EXHIBIT INDEX
- --------------------------------------------------------------------------------
3.1 Articles of Incorporation of the Corporation, as amended, incorporated
herein by reference to Exhibit 3.1 of the Annual Report on Form 10-K
for the year ended December 31, 1993.
3.2 By-Laws of the Corporation, as amended, incorporated herein by
reference to Exhibit 4.2 to the Corporation's Registration Statement
on Form S-8 at File No. 33-62311.
4.1 Instruments defining the rights of holders of long-term debt of the
Corporation and its subsidiaries are not filed as Exhibits because the
amount of debt under each instrument is less than 10 percent of the
consolidated assets of the Corporation. The Corporation undertakes to
file these instruments with the Commission on request.
4.2 Designation of Series: $1.80 Cumulative Convertible Preferred Stock --
Series A, incorporated herein as part of Exhibit 3.1.
4.3 Designation of Series: $1.80 Cumulative Convertible Preferred Stock --
Series B, incorporated herein as part of Exhibit 3.1.
4.4 Designation of Series: $1.60 Cumulative Convertible Preferred Stock --
Series C, incorporated herein as part of Exhibit 3.1.
4.5 Designation of Series: $1.80 Cumulative Convertible Preferred Stock --
Series D, incorporated herein as part of Exhibit 3.1.
10.1 Supplemental Executive Retirement Income and Disability Plan of the
Corporation, incorporated herein by reference to Exhibit 10.2 of the
Annual Report on Form 10-K for the year ended December 31, 1990 ("1990
Form 10-K"). *
10.2 Supplemental Executive Life Insurance and Spouse's Benefit Plan of the
Corporation, incorporated herein by reference to Exhibit 10.3 of the
1990 Form 10-K. *
10.3 1992 Long-Term Incentive Award Plan of the Corporation, incorporated
herein by reference to Exhibit 4.3 of the Registration Statement on
Form S-8 at File No. 33-54960. *
10.4 1992 Director Share Incentive Plan, incorporated herein by reference
to Exhibit 10.6 of the Annual Report on Form 10-K for the year ended
December 31, 1992.*
10.5 PNC Bank Corp. 1994 Annual Incentive Award Plan, incorporated by
reference to Exhibit 10.6 of the Annual Report on Form 10-K for the
year ended December 31, 1994 ("1994 Form 10-K").*
10.6 PNC Bank Corp. Directors Retirement Plan, incorporated by reference to
Exhibit 10.7 of the 1994 Form 10-K.*
10.7 Employment Agreement dated as of December 29, 1995, between the
Corporation and Garry J. Scheuring, filed as Exhibit 10.7 to the 1995
Form 10-K.*
10.8 PNC Bank Corp. 1996 Executive Incentive Award Plan, filed as Exhibit
10.8 to the 1995 Form 10-K.*
11 Calculation of Primary and Fully Diluted Earnings Per Share, filed as
Exhibit 11 to the 1995 Form 10-K.
12.1 Computation of Ratio of Earnings to Fixed Charges, filed as Exhibit
12.1 to the 1995 Form 10-K.
12.2 Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Dividends, filed as Exhibit 12.2 to the 1995 Form 10-K.
47
48
13 Excerpts of the Annual Report to Shareholders for the year ended
December 31, 1995, filed as Exhibit 13 to the 1995 Form 10-K. Such
Annual Report, except for those portions thereof that are expressly
incorporated by reference herein, is furnished for information of the
Securities and Exchange Commission only and is not deemed to be
"filed" as part of this Form 10-K.
21 Schedule of Certain Subsidiaries of the Corporation, filed as Exhibit
21 to the 1995 Form 10-K.
23.1 Consent of Ernst & Young LLP, independent auditors for the
Corporation, filed as Exhibit 23 to the 1995 Form 10-K.
23.2 Consent of Ernst & Young LLP, independent auditors for the PNC Plan
and the Midlantic Plan, filed herewith.
24.1 Power of Attorney of certain directors and officers of the
Corporation, filed as Exhibit 24.1 to the 1995 Form 10-K.
24.2 Power of Attorney of Robert N. Clay, filed as Exhibit 24.2 to the 1995
Form 10-K.
24.3 Power of Attorney of David F. Girard-diCarlo, filed as Exhibit 24.3 to
the 1995 Form 10-K.
24.4 Power of Attorney of Thomas Marshall, filed as Exhibit 24.4 to the
1995 Form 10-K.
24.5 Power of Attorney of Donald I. Moritz, filed as Exhibit 24.5 to the
1995 Form 10-K.
24.6 Power of Attorney of Vincent A. Sarni, filed as Exhibit 24.6 to the
1995 Form 10-K.
24.7 Power of Attorney of Helge H. Wehmeier, filed as Exhibit 24.7 to the
1995 Form 10-K.
27.1 Financial Data Schedule, filed as Exhibit 27.1 to the 1995 Form 10-K.
27.2 Restated Financial Data Schedule, filed as Exhibit 27.2 to the 1995
Form 10-K.
* Denotes management contract or compensatory plan.
48