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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT 0F 1934
For the quarterly period ended June 30, 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
FIFTH AVENUE AND WOOD STREET
PITTSBURGH, PENNSYLVANIA 15265
(Address of principal executive offices)
(Zip Code)
(412) 762-1553
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
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Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practical date.
Common Stock ($5 par value): 228,316,293 shares outstanding at July 31, 1995.
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PART I--FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following consolidated financial information of PNC Bank Corp.
and subsidiaries ("Corporation") is incorporated herein by reference
to the 1995 Second Quarter Corporate Financial Review ("Financial
Review") which is filed herewith as Exhibit 99.1. Page references
are to such Financial Review.
FINANCIAL INFORMATION PAGE REFERENCE
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Consolidated Balance Sheet as of June 30, 1995
and December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Consolidated Statement of Income for the three months
and six months ended June 30, 1995 and 1994 . . . . . . . . . . . . . . . . . . 24
Consolidated Statement of Cash Flows for the
six months ended June 30, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . 25
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . 26-31
The statistical disclosure under the caption "Average Consolidated
Balance Sheet and Net Interest Analysis" in the Financial Review
at pages 32 and 33 is incorporated herein by reference. Certain
other statistical disclosure is included below in Part I, Item 2,
Management's Discussion and Analysis of Financial Condition and
Results of Operations, as permitted by Guide 3, Statistical
Disclosures by Bank Holding Companies.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The information contained under the caption "Corporate Financial
Review" in the Financial Review at pages 2 through 22 is
incorporated herein by reference.
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PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
A purported class action lawsuit was filed in July 1995 in the
Superior Court of New Jersey, Middlesex County, against Midlantic
Corporation ("Midlantic"), Midlantic's chief executive officer and
its directors and the Corporation, on behalf of a purported class of
persons who own securities of Midlantic. The amended complaint
alleges, among other things, that the proposed merger announced on
July 10, 1995, pursuant to which the Corporation will acquire
Midlantic, is unfair to Midlantic's public shareholders and that
consideration to be paid in the merger is grossly unfair,
inadequate, and substantially below the fair or inherent value of
Midlantic. The Corporation is alleged to have aided and abetted the
breach of fiduciary duties by the other defendants. The lawsuit
seeks, among other things: an injunction preliminarily and then
permanently enjoining the merger; in the event the merger is
consummated, rescission of the merger; an accounting for all profits
realized and to be realized by defendants as a result of the merger;
an order requiring defendants to permit a shareholders'
committee to participate in any process undertaken in connection
with the sale of Midlantic; and unquantified compensatory damages.
Management believes that the allegations contained in the amended
complaint are without merit and intends to defend them vigorously.
ITEM 4. SUBMISSION OF MATTERS FOR A VOTE OF SECURITY HOLDERS
An annual meeting of shareholders of the Corporation was held
on April 25, 1995 for the purpose of electing seventeen directors.
All seventeen nominees were elected. A summary of the votes cast
with respect to the election of directors is filed herewith as
Exhibit 99.2 and incorporated herein by reference.
ITEM 5. OTHER INFORMATION
As previously reported, on July 10, 1995, the Corporation
entered into a definitive merger agreement with Midlantic, a
regional bank holding company headquartered in Edison, New Jersey.
The agreement, provides, among other things, for (i) the merger (the
"Merger') of Midlantic with and into a wholly owned subsidiary of
the Corporation and (ii) the exchange of each outstanding share of
Midlantic common stock for 2.05 shares of the Corporation's common
stock. The transaction is valued at approximately $3 billion and
will be accounted for as a pooling of interests. The Merger is
expected to be completed by year-end 1995, pending approval by
shareholders of both companies and various regulatory agencies.
Unaudited consolidated interim financial statements of
Midlantic as of June 30, 1995 and for the six months ended June 30,
1995 and 1994 are incorporated herein by reference to Midlantic's
Form 10-Q for the quarterly period ended June 30, 1995 (File No.
0-15870).
FDIC ASSESSMENTS
Since the deposits of the Corporation's banking subsidiaries are
insured by the Federal Deposit Insurance Corporation (the "FDIC"),
such banking subsidiaries are subject to FDIC insurance assessments.
The amount of FDIC assessments paid by individual insured depository
institutions is based on their relative risk as measured by
regulatory capital ratios and certain other factors. Until recently,
FDIC regulations provided for a minimum assessment of 23 cents per
$100 of eligible deposits for the best-rated banks and savings
associations, with a maximum of 31 cents per $100 of eligible
deposits for the weakest-rated institutions. On August 8, 1995, the
FDIC's Board of Directors voted to reduce the assessment rates paid
by most banks and to keep existing assessment rates intact for
savings associations. Under the new rate structure, the best-rated
banks will pay 4 cents per $100 of deposits, while the weakest ones
would continue to pay 31 cents per $100 of deposits. The new rate
structure will apply from the first day of the month after which the
Bank Insurance Fund (the "BIF") was recapitalized. Such
recapitalization is expected to be confirmed by the FDIC in
September 1995. Assuming that the BIF recapitalized during the
second quarter of 1995, BIF members (including each of the
Corporation's banking subsidiaries) that have overpaid their
assessments based on the newly adopted premium rate can eaxpect to
receive a refund of any overpayment plus interest.
Under the old regulations, the rate assessed for each banking
subsidiary was 23 cents per $100 of eligible deposits. Under the new
rate structure, the rate assessed for such banks is 4 cents per $100
of eligible deposits. The assessment rate for any of the
Corporation's savings association deposits insured under the Savings
Association Insurance Fund ("SAIF") will continue to be 23 cents per
$100 of eligible deposits.
Congress and various governmental agencies are reported to be
considering a numbaer of proposals to recapitalize the SAIF,
including a one-time assessment of up to approximately $6.6 billion
of all SAIF-insured deposits or the merger of the SAIF and the BIF.
The Corporation cannot predict the likelihood of any of the
proposals being adopted or the effect, if any, that the adoption of
such proposals would have on the Corporation.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
A Registration Statement on Form S-3 (No. 33-61083) was filed on
July 17, 1995 to register 2,000,000 shares of the Corporation's
common stock to be issued in connection with the Corporation's
Dividend Reinvestment and Stock Purchase Plan.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The exhibits listed below are filed herewith:
11 Calculation of primary and fully diluted earnings per
common share for the three months and six months ended
June 30, 1995 and 1994, filed herewith.
12.1 Computation of Earnings to Fixed Charges for the six
months ended June 30, 1995 and for each of the five years
in the period ended December 31, 1994, filed herewith.
12.2 Computation of Earnings to Combined Fixed Charges and
Preferred Stock Dividends for the six months ended June
30, 1995 and for each of the five years in the period
ended December 31, 1994, filed herewith.
27 Financial Data Schedule, filed herewith.
99.1 1995 Second Quarter Corporate Financial Review as of and
for the three months and six months ended June 30, 1995
and 1994.
99.2 Summary of votes cast at the Corporation's 1995 Annual
Shareholders' Meeting, filed herewith.
99.3 Unaudited pro forma consolidated financial information
giving effect to the proposed merger of Midlantic with
and into a wholly-owned subsidiary of the Corporation,
filed herewith.
(b) The following Current Reports on Form 8-K were filed by the
Corporation:
A Current Report on Form 8-K dated as of April 17, 1995,
was filed pursuant to Item 5 to report the Corporation's
consolidated financial results for the three months ended March
31, 1995.
A Current Report on Form 8-K dated as of July 10, 1995,
was filed pursuant to Item 5 to report the execution of an
Agreement and Plan of Reorganization dated as of July 10, 1995,
by and among Midlantic, the Corporation and PNC Bancorp, Inc.,
a wholly-owned subsidiary of the Corporation and related
matters.
A Current Report on Form 8-K/A, Amendment No. 1 to the
form 8-K dated as of July 10, 1995, was filed pursuant to Item
5 to report unaudited pro forma consolidated financial
information giving effect to the proposed Merger of
Midlantic with and into PNC Bancorp, Inc. Such report also
included 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, and
the unaudited consolidated financial statements of Midlantic
as of March 31, 1995 and 1994.
A Current Report on Form 8-K dated as of July 20, 1995,
was filed pursuant to Item 5 to report the Corporation's
consolidated financial results for the three months and six
months ended June 30, 1995.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PNC BANK CORP.
(Registrant)
Date: August 14, 1995 By /s/ Robert L. Haunschild
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Robert L. Haunschild
Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
The following exhibits are filed herewith:
11 Calculation of Primary and Fully Diluted Earnings per Common Share.
12.1 Computation of Ratio of Earnings to Fixed Charges.
12.2 Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends.
27 Financial Data Schedule.
99.1 1995 Second Quarter Corporate Financial Review.
99.2 Summary of Votes Cast.
99.3 Pro forma consolidated financial information.
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