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) 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 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 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 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 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 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 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 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 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 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 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 ========================================================================================================
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, 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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