SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
(Mark One)
[X] Annual report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1996
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ___________ to ___________
PNC BANK CORP.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-1435979
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
ONE PNC PLAZA
249 FIFTH AVENUE
PITTSBURGH, PENNSYLVANIA 15222-2707
(Address of principal executive offices)
Registrant's telephone number, including area code - (412) 762-1553
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- -------------------
COMMON STOCK, PAR VALUE $5.00 New York Stock Exchange
$1.60 CUMULATIVE CONVERTIBLE PREFERRED STOCK-SERIES C, PAR VALUE $1.00 New York Stock Exchange
$1.80 CUMULATIVE CONVERTIBLE PREFERRED STOCK-SERIES D, PAR VALUE $1.00 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
$1.80 CUMULATIVE CONVERTIBLE PREFERRED STOCK - SERIES A, PAR VALUE $1.00
$1.80 CUMULATIVE CONVERTIBLE PREFERRED STOCK - SERIES B, PAR VALUE $1.00
8.25% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2008
8 1/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2010
9.875% SUBORDINATED CAPITAL NOTES DUE 1999
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___
Indicate by check mark if the disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant amounted to approximately $12.9 billion at February 28, 1997.
Number of shares of Registrant's common stock outstanding at February 28, 1997:
321,728,962
DOCUMENTS INCORPORATED BY REFERENCE
Portions of PNC Bank Corp.'s Annual Report to Shareholders for the year ended
December 31, 1996 ("Annual Report to Shareholders") are incorporated by
reference into Parts I and II and portions of the definitive Proxy Statement of
PNC Bank Corp. for the annual meeting of shareholders to be held on April 22,
1997 ("Proxy Statement") are incorporated by reference into Part III of this
Form 10-K. The incorporation by reference herein of portions of the Proxy
Statement shall not be deemed to specifically incorporate by reference the
information referred to in Item 402(a)(8) of Regulation S-K.
TABLE OF CONTENTS
PART I Page
-------
Item 1 Business 2
Item 2 Properties 5
Item 3 Legal Proceedings 5
Item 4 Submission of Matters to a Vote of Security
Holders *
PART II
Item 5 Market for Registrant's Common Equity and
Related Stockholder Matters 6
Item 6 Selected Financial Data 6
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of 6
Operations
Item 8 Financial Statements and Supplementary Data 6
Item 9 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure *
PART III
Item 10 Directors and Executive Officers of the 6
Registrant
Item 11 Executive Compensation 7
Item 12 Security Ownership of Certain Beneficial
Owners and Management 7
Item 13 Certain Relationships and Related 7
Transactions
PART IV
Item 14 Exhibits, Financial Statement Schedules and
Reports on Form 8-K 7
SIGNATURES 8
EXHIBIT INDEX E-1
* Not applicable
PART I
ITEM 1 - BUSINESS
BUSINESS OVERVIEW PNC Bank Corp. ("PNC Bank" or "Corporation") is a bank
holding company registered under the Bank Holding Company Act of 1956, as
amended ("BHC Act"). PNC Bank was incorporated under the laws of the
Commonwealth of Pennsylvania in 1983 with the consolidation of Pittsburgh
National Corporation and Provident National Corporation. Since 1983, PNC Bank
has diversified its geographical presence and product capabilities through
strategic bank and nonbank acquisitions and the formation of various nonbanking
subsidiaries.
The Corporation is one of the largest diversified financial services companies
in the United States and operates five lines of business: Consumer Banking,
Corporate Banking, Real Estate Banking, Mortgage Banking and Asset Management.
Each line of business focuses on specific customer segments and offers
financial products and services in PNC Bank's primary geographic locations in
Pennsylvania, New Jersey, Delaware, Ohio and Kentucky and nationally through
retail distribution networks and alternative delivery channels. At December 31,
1996, the Corporation's consolidated total assets, deposits and shareholders'
equity were $73.3 billion, $45.7 billion and $5.9 billion, respectively.
LINES OF BUSINESS Information relating to Consumer Banking, Corporate Banking,
Real Estate Banking, Mortgage Banking and Asset Management is set forth under
the captions "Business Strategies" and "Line of Business Results" in the
"Corporate Financial Review" included on pages 27 through 28 and 29 through 34,
respectively, of the Annual Report to Shareholders, which is incorporated
herein by reference.
SUBSIDIARY BANKS While the Corporation manages five lines of business, the
corporate legal structure currently consists of 10 subsidiary banks and over
140 active nonbank subsidiaries. PNC Bank, National Association, headquartered
in Pittsburgh, Pennsylvania is the Corporation's only bank subsidiary which is
a significant subsidiary within the meaning of Rule 1-02(v) of Regulation S-X.
At December 31, 1996, PNC Bank, N. A. had total assets of $58 billion,
representing 79% of the Corporation's consolidated assets. For additional
information on subsidiaries, see Exhibit 21 to this Form 10-K which is
incorporated herein by reference.
STATISTICAL DISCLOSURES BY BANK HOLDING COMPANIES The following statistical
information is included on the indicated pages of the Annual Report to
Shareholders and is incorporated herein by reference:
Page of
Annual
Report
- ---------------------------------------------------------------
Analysis of Year-to-Year Changes in Net Interest
Income 71
Average Consolidated Balance Sheet and Net Interest
Analysis 72
Book Values of Securities 45 and 55
Maturities and Weighted-Average Yield of Securities 55
Loan Types 56
Loan Maturities and Interest Sensitivity 74
Nonaccrual, Past Due and Restructured Loans 57
Potential Problem Loans 40
Summary of Loan Loss Experience 74
Allocation of Allowance for Credit Losses 75
Average Amount and Average Rate Paid on Deposits 72
Time Deposits of $100,000 or More 75
Selected Consolidated Financial Data 69
Borrowed Funds 75
- ---------------------------------------------------------------
2
RISK MANAGEMENT The Corporation's ordinary course of business involves varying
degrees of risk taking, the most significant of which are credit, liquidity and
interest rate risk. Although it cannot eliminate these risks, PNC Bank has risk
management processes designed to provide for risk identification, measurement,
monitoring and control. Information relating to credit, liquidity and interest
rate risk and the Corporation's risk management processes is set forth under
the section "Risk Management" in the "Corporate Financial Review" included on
pages 39 through 42 of the Annual Report to Shareholders, which is incorporated
herein by reference.
EFFECT OF GOVERNMENTAL MONETARY POLICIES The earnings and operations of bank
holding companies and their subsidiaries are affected by the monetary and
fiscal policies of the United States government and its agencies, including the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board").
An important function of the Federal Reserve Board is to regulate the national
supply of bank credit. The Federal Reserve Board employs open market operations
in U.S. Government securities, changes in the discount rate on bank borrowings
and changes in reserve requirements on bank deposits to implement its monetary
policy objectives. These instruments of monetary policy are used in varying
combinations to influence the overall level of bank loans, investments and
deposits, the interest rates charged on loans and paid for deposits, the price
of the dollar in foreign exchange markets and the level of inflation. The
monetary policies of the Federal Reserve Board have had a significant effect on
the operating results of banking institutions in the past and are expected to
continue to do so in the future. It is not possible to predict the nature or
timing of future changes in monetary and fiscal policies or the effect that
they may have on the Corporation's business and earnings.
SUPERVISION AND REGULATION The Corporation and its subsidiaries are subject to
numerous governmental regulations, some of which are highlighted below and in
"Note 19 - Regulatory Matters" of the "Notes to Consolidated Financial
Statements" included on page 64 of the Annual Report to Shareholders ("Note 19
- - Regulatory Matters"), which is incorporated herein by reference. The coverage
of the regulations range from activity, investment and dividend limitations on
the bank holding company and its subsidiaries to consumer-related protections
for loan, deposit, brokerage and mutual fund customers.
As a bank holding company registered under the BHC Act, the Corporation is
subject to the supervision and regular inspection by the Federal Reserve Board.
Under the BHC Act, the Federal Reserve Board's prior approval is required in
any case the Corporation proposes to acquire all or substantially all of the
assets of any bank, acquire direct or indirect ownership or control of more
than 5% of the voting shares of any bank, or merge or consolidate with any
other bank holding company. The BHC Act also prohibits, with certain
exceptions, the Corporation from acquiring direct or indirect ownership or
control of more than 5% of any class of voting shares of any nonbanking
corporation. Under the BHC Act, the Corporation may not engage in any business
other than managing and controlling banks or furnishing certain specified
services to subsidiaries, and may not acquire voting control of nonbanking
corporations, unless the Federal Reserve Board determines such businesses and
services to be closely related to banking. When reviewing bank acquisition
applications for approval, the Federal Reserve Board considers, among other
things, each subsidiary bank's record in meeting credit needs of the
communities it serves in accordance with the Community Reinvestment Act of
1977, as amended ("CRA"). At December 31, 1996, the Corporation's subsidiary
banks were rated "Outstanding" or "Satisfactory" with respect to CRA.
The Corporation's subsidiary banks are subject to supervision and examination
by applicable federal and state banking agencies, including such federal
agencies as the Office of the Comptroller of the Currency ("OCC") with respect
to its national banks, the Federal Reserve Board with respect to PNC Bank,
Kentucky, Inc., the Federal Deposit Insurance Corporation ("FDIC") with respect
to PNC Bank, Delaware and PNC Bank, New England, and the Office of Thrift
Supervision with respect to PNC Bank, FSB. The Corporation's subsidiary banks
are subject to various federal and state restrictions on their ability to pay
dividends to the Corporation, which constitutes the principal source of income
to the parent company as discussed under the caption "Liquidity" in the
"Corporate Financial Review" on page 41 of the Annual Report to Shareholders,
which is incorporated herein by reference. The Corporation's subsidiary banks
are also subject to federal laws limiting extension of credit to their parent
holding company and nonbank affiliates as discussed in "Note 19 - Regulatory
Matters."
The federal banking agencies possess broad powers to take corrective action as
deemed appropriate for an insured depository institution and its holding
company. The extent of these powers depends upon whether the institution in
question is considered "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" or "critically
undercapitalized." Generally, as an institution is deemed to be less well
capitalized, the scope and severity of the agencies' powers increase,
ultimately permitting the agency to appoint a receiver for the institution.
Business activities may also be influenced by an institution's capital
classification. For instance, only a "well capitalized" depository institution
may accept brokered deposits without prior regulatory approval and only an
"adequately capitalized" depository institution may accept brokered deposits
with prior regulatory approval. At December 31, 1996, all of the Corporation's
subsidiary banks exceeded the required ratios for classification as "well
capitalized."
3
Additional discussion of capital adequacy requirements is set forth under the
caption "Capital" in the "Corporate Financial Review" on page 39 of the Annual
Report to Shareholders, which is incorporated herein by reference.
All of the subsidiary banks are insured by the FDIC and subject to premium
assessments. The amount of FDIC assessments is based on the institution's
relative risk as measured by regulatory capital ratios and certain other
factors. Under current regulations, the Corporation's subsidiary banks are not
assessed a premium on deposits insured by either the Bank Insurance Fund or the
Savings Association Insurance Fund. However, insured depository institutions
will continue to pay premiums based on deposit levels to service debt on
Financing Corporation bonds.
The Corporation's subsidiary banks are subject to "cross-guarantee" provisions
under federal law that provide if one FDIC-insured depository institution of a
multi-bank holding company fails or requires FDIC assistance, the FDIC may
assess a "commonly controlled" depository institution for the estimated losses
suffered by the FDIC. Such liability could have a material adverse effect on
the financial condition of any assessed bank and the Corporation. While the
FDIC's claim is junior to the claims of depositors, holders of secured
liabilities, general creditors and subordinated creditors, it is superior to
the claims of shareholders and affiliates.
Under Federal Reserve Board policy, a bank holding company is expected to act as
a source of financial strength to each of its subsidiary banks and to commit
resources to support each such bank. Consistent with the "source of strength"
policy for subsidiary banks, the Federal Reserve Board has stated that, as a
matter of prudent banking, a bank holding company generally should not maintain
a rate of cash dividends unless its net income available to common shareholders
has been sufficient to fund fully the dividends, and the prospective rate of
earnings retention appears to be consistent with the corporation's capital
needs, asset quality and overall financial condition.
The Corporation's nonbank subsidiaries are subject to regulatory
restrictions imposed by the Federal Reserve Board and other federal and state
agencies as well. The Corporation's four registered broker-dealer subsidiaries
are regulated by the Securities and Exchange Commission ("SEC") and monitored
by the OCC in three instances and the Federal Reserve Board in the other
instance. They are also subject to rules and regulations promulgated by the
National Association of Securities Dealers, Inc., among others. Several nonbank
subsidiaries which are registered investment advisers are subject to the
regulations of the SEC and other agencies. Investment advisers which are
national bank subsidiaries are also subject to OCC supervision.
Over the past few years, the regulatory framework applicable to the Corporation
and its subsidiaries has been subject to extensive Congressional and agency
review, which has resulted in some liberalization and may result in further
reforms. Current proposals range from easing restrictions on a bank's insurance
and investment banking activities to easing bank ownership requirements.
Management currently cannot predict the outcome of these proposals or the
effect, if any, on the Corporation.
Since 1995, the BHC Act has permitted bank holding companies from any state to
acquire banks and bank holding companies located in any other state, subject to
certain conditions. Effective June 1, 1997, the Corporation's subsidiary banks
will have the ability, subject to certain restrictions, including state opt-out
provisions, to consolidate with one another or to acquire by acquisition or
merger branches outside their home state. Some states, including Delaware,
Kentucky, New Jersey, Ohio and Pennsylvania, have affirmatively opted to permit
such transactions earlier. Pursuant to these provisions, the Corporation merged
certain subsidiary banks during 1996 and may do so in the future. Competition
may increase further as banks branch across state lines and enter new markets.
COMPETITION The Corporation and subsidiaries are subject to vigorous and
intense competition from various financial institutions and increasingly from
"nonbank" entities that engage in similar activities without being subject to
bank regulatory supervision and restrictions. In making loans, the subsidiary
banks compete with traditional banking institutions as well as consumer finance
companies, leasing companies and other nonbank lenders. Loan pricing and credit
standards are under competitive pressure as lenders seek to deploy capital and
a broader range of borrowers have access to capital markets. Traditional
deposit activities are subject to pricing pressures and customer migration as
the competition for consumer investment dollars intensifies among banks and
other financial services companies. The Corporation's subsidiary banks compete
for deposits not only with other commercial banks, savings banks, savings and
loan associations and credit unions, but also insurance companies, issuers of
commercial paper and other securities, including mutual funds. Various non-bank
subsidiaries engaged in investment banking and venture capital activities
compete with commercial banks, investment banking firms, insurance companies
and venture capital firms. In providing asset management services, the
Corporation's subsidiaries compete with many large banks, trust companies,
brokerage houses, mutual fund managers, other registered investment advisers
and insurance companies.
The Corporation and its subsidiaries compete not only with financial
institutions headquartered in states in which the subsidiary banks are located,
but also a number of large out-of-state and foreign banks, bank holding
companies and other financial and nonbank institutions. Some of the financial
and other institutions operating in the same markets are engaged in national
and international operations and have more assets and personnel than the
Corporation.
4
EXECUTIVE OFFICERS OF THE REGISTRANT Information concerning each executive
officer of the Corporation as of March 1, 1997 is set forth below. Each
executive officer held the position indicated or another senior executive
position with the same entity or one of its affiliates or a predecessor
corporation for the past five years.
Position with Year
Name Age Corporation Employed(1)
- ---------------------------------------------------------------
Thomas H. O'Brien (2) 60 Chairman and Chief 1962
Executive Officer
James E. Rohr (2) 48 President and Director 1972
Walter E. Gregg, Jr. 55 Senior Executive Vice 1974
(2) President
Susan B. Bohn 52 Executive Vice President, 1986
Corporate Development
and Communications
Richard C. Caldwell 52 Executive Vice President, 1990
Asset Management
Frederick J. 54 Executive Vice President, 1976
Gronbacher Consumer Banking
Robert L. Haunschild 47 Senior Vice President and 1990
Chief Financial Officer
William J. Johns 49 Senior Vice President and 1974
Chief Accounting Officer
Ralph S. Michael III 42 Executive Vice President, 1979
Corporate Banking
Thomas E. Paisley III 49 Senior Vice President and 1972
Chairman, Corporate
Credit Policy Committee
Helen P. Pudlin 47 Senior Vice President and 1989
General Counsel
Bruce E. Robbins 52 Executive Vice President, 1973
Real Estate Banking
- ---------------------------------------------------------------
(1) Where applicable, refers to year first employed by predecessor company or
acquired company.
(2) Office of the Chairman member.
ITEM 2 - PROPERTIES
The executive and administrative offices of the Corporation and PNC Bank,
National Association ("PNC Bank, N.A."), are located at One PNC Plaza,
Pittsburgh, Pennsylvania. The thirty-story structure is owned by PNC Bank, N.A.
The Corporation and PNC Bank, N.A. occupy substantially all of the building. In
addition, PNC Bank, N.A. owns a thirty-four story structure adjacent to One PNC
Plaza, known as Two PNC Plaza, 620 Liberty Avenue, Pittsburgh, Pennsylvania,
that houses additional office space. PNC Bank, N.A. also owns a data processing
and telecommunications center located in a suburb of Pittsburgh, Pennsylvania.
The Corporation's subsidiaries also own or lease numerous other premises for
use in conducting business activities. The facilities owned or occupied under
lease by the Corporation's subsidiaries are considered by management to be
adequate.
Additional information pertaining to the Corporation's properties is set forth
in "Note 8 - Premises, Equipment and Leasehold Improvements" of the "Notes to
Consolidated Financial Statements" included on pages 57 and 58 of the Annual
Report to Shareholders, which is incorporated herein by reference.
ITEM 3 - LEGAL PROCEEDINGS
A consolidated class action complaint was filed in March 1995 in the United
States District Court for the Western District of Pennsylvania against the
Corporation, its Chairman and Chief Executive Officer and its Senior Vice
President and Chief Financial Officer. The lawsuit was consolidated from four
lawsuits filed in November and December 1994. The consolidated complaint
alleges violations of federal securities laws and common law relating to
disclosures regarding the Corporation's net interest income, interest rate
risk, future prospects, and related matters, and seeks, among other things,
unquantified damages. On August 7, 1996, the district court denied defendants'
motion to dismiss as to all claims except the negligent misrepresentation
claim, which was dismissed. On the same date, the district court certified the
case as a class action consisting of all persons who purchased the
Corporation's common stock from April 18, 1994 through November 15, 1994.
Management believes there are meritorious defenses to this consolidated lawsuit
and intends to defend it vigorously. Management believes that the final
disposition will not be material to the Corporation's financial position.
The Corporation, in the normal course of business, is subject to various other
pending and threatened lawsuits in which claims for monetary damages are
asserted. Management, after consultation with legal counsel, does not
anticipate that the ultimate aggregate liability, if any, arising out of such
other lawsuits will have a material effect on the Corporation's financial
position.
At the present time, management is not in a position to determine whether any
pending or threatened litigation will have a material adverse effect on the
Corporation's results of operations in any future reporting period.
5
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Corporation's common stock is listed on the New York Stock Exchange and is
traded under the symbol "PNC". At the close of business on February 28, 1997,
there were 65,642 common shareholders of record.
Holders of common stock are entitled to receive dividends when declared by the
Board of Directors out of funds legally available therefor. The Board of
Directors may not pay or set apart dividends on the common stock until
dividends for all past dividend periods on any series of outstanding preferred
stock have been paid or declared and set apart for payment. The Board presently
intends to continue the policy of paying quarterly cash dividends. However, the
amount of any future dividends will depend on earnings, the financial condition
of the Corporation and other factors including applicable government
regulations and policies (such as those relating to the ability of the
subsidiary banks and nonbank subsidiaries to upstream dividends to the parent
company). The Federal Reserve Board has the power to prohibit the Corporation
from paying dividends without prior regulatory approval. Further discussion
concerning dividend restrictions is set forth under the caption "Supervision
and Regulation" in Part I, Item 1 of this Form 10-K and in "Note 19 -
Regulatory Matters," which sections are incorporated herein by reference.
Additional information relating to the common stock is set forth under the
caption "Common Stock Prices/Dividends Declared" on page 76 of the Annual
Report to Shareholders, which is incorporated herein by reference.
ITEM 6 - SELECTED FINANCIAL DATA
"Selected Consolidated Financial Data" on page 69 of the Annual Report to
Shareholders is incorporated herein by reference.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The discussion of the Corporation's financial position and results of
operations set forth under the section "Corporate Financial Review" on pages 26
through 46 of the Annual Report to Shareholders is incorporated herein by
reference.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The "Report of Ernst & Young LLP, Independent Auditors," "Consolidated
Financial Statements" and "Selected Quarterly Financial Data" on pages 47, 48
through 51, and 70, respectively, of the Annual Report to Shareholders are
incorporated herein by reference.
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information relating to the principal occupations of directors of the
Corporation, their ages, directorships in other companies, and respective terms
of office, except for Donald L. Moritz and Arthur J. Kania who are not standing
for reelection, is set forth under the heading "Election of Directors -
Information Concerning Nominees" in the Proxy Statement and is incorporated
herein by reference. Mr. Moritz, age 69, has been a director of the Corporation
since 1985. He is a director and chairman of the Executive Committee of
Equitable Resources, Inc., an energy, gas and utility company. Mr. Kania, age
65, is a principal with Trikan Associates, a real estate management investment
firm, and became a director of the Corporation in connection with the Midlantic
Corporation merger effective December 31, 1995. Mr. Kania is also a partner
with Kania, Lindner, Lasak & Feeney, a law firm.
Information regarding compliance with Section 16(a) of the Securities Exchange
Act of 1934 set forth under the heading Section 16(a) Beneficial Ownership
Reporting Compliance in the Proxy Statement is incorporated herein by
reference.
Information regarding executive officers of the Corporation is included in Part
I of this Form 10-K under the caption "Executive Officers of the Registrant".
Information regarding the involvement of the Corporation's Chairman and Chief
Executive Officer and Senior Vice President and Chief Financial Officer in a
certain legal proceeding set forth under the heading "Legal Proceedings" in the
Proxy Statement is incorporated herein by reference.
6
ITEM 11 - EXECUTIVE COMPENSATION
Information regarding compensation of directors and executive officers under
the captions "Election of Directors - Compensation of Directors," "Election of
Directors Common Stock Purchase Guideline" and "Compensation of Executive
Officers," excluding the "Personnel and Compensation Committee Report on
Executive Compensation," in the Proxy Statement is incorporated herein by
reference.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding the beneficial ownership of the equity securities of the
Corporation by all directors, each of the five highest compensated executive
officers, all directors and executive officers of the Corporation as a group
and certain other beneficial owners under the heading "Security Ownership of
Directors and Executive Officers and Certain Beneficial Owners" in the Proxy
Statement is incorporated herein by reference.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding transactions and relationships with certain directors and
executive officers of the Corporation and their associates under the heading
"Compensation of Executive Officers-Compensation Committee Interlocks and
Insider Participation" in the Proxy Statement is incorporated herein by
reference.
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
FINANCIAL STATEMENTS The following report of independent auditors and
consolidated financial statements of the Corporation included in the Annual
Report to Shareholders are incorporated herein by reference.
Page of
Annual
Financial Statements Report
- -------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors 47
Consolidated Statement of Income for the three
years ended December 31, 1996 48
Consolidated Balance Sheet as of December 31, 1996
and 1995 49
Consolidated Statement of Changes in
Shareholders' Equity for the three years 50
ended December 31, 1996
Consolidated Statement of Cash Flows for the
three years ended December 31, 1996 51
Notes to Consolidated Financial Statements 52-68
Quarterly Selected Financial Data 70
- -------------------------------------------------------------
No financial statement schedules are being filed.
REPORTS ON FORM 8-K The following reports on Form 8-K were filed during the
quarter ended December 31, 1996, or thereafter:
Form 8-K dated as of October 7, 1996, reporting a public offering of 6,000,000
shares by the Corporation of a newly authorized series of Preferred Stock,
filed pursuant to Item 5.
Form 8-K dated as of October 10, 1996, reporting the Corporation's consolidated
financial results for the three and nine months ended September 30, 1996, filed
pursuant to Item 5.
Form 8-K dated as of January 15, 1997, reporting the Corporation's consolidated
financial results for the three months and year ended December 31, 1996, filed
pursuant to Item 5.
EXHIBITS The exhibits listed on the Exhibit Index on pages E-1 and E-2 of this
Form 10-K are filed herewith or are incorporated herein by reference.
7
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant, PNC Bank Corp., has duly caused this report 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
March 21, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of PNC Bank
Corp. and in the capacity indicated on March 21, 1997.
/s/ THOMAS H. O'BRIEN
- ------------------------------------------------
Thomas H. O'Brien, Chairman, Chief Executive
Officer and Director
/s/ ROBERT L. HAUNSCHILD
- ------------------------------------------------
Robert L. Haunschild, Senior Vice President and
Chief Financial Officer
/s/ WILLIAM J. JOHNS
- ------------------------------------------------
William J. Johns, Senior Vice President and
Chief Accounting Officer
*
- ------------------------------------------------
Paul W. Chellgren, Director
*
- ------------------------------------------------
Robert N. Clay, Director
*
- ------------------------------------------------
George A. Davidson, Director
*
- ------------------------------------------------
David F. Girard-diCarlo, Director
*
- ------------------------------------------------
Dianna L. Green, Director
*
- ------------------------------------------------
C. G. Grefenstette, Director
*
- ------------------------------------------------
Arthur J. Kania, Director
*
- ------------------------------------------------
Bruce C. Lindsay, Director
*
- ------------------------------------------------
Thomas Marshall, Director
*
- ------------------------------------------------
W. Craig McClelland, Director
*
- ------------------------------------------------
Donald I. Moritz, Director
*
- ------------------------------------------------
Jackson H. Randolph, Director
*
- ------------------------------------------------
James E. Rohr, President and Director
*
- ------------------------------------------------
Roderic H. Ross, Director
*
- ------------------------------------------------
Vincent A. Sarni, Director
*
- ------------------------------------------------
Garry J. Scheuring, Director
*
- ------------------------------------------------
Richard P. Simmons, Director
*
- ------------------------------------------------
Thomas J. Usher, Director
*
- ------------------------------------------------
Milton A. Washington, Director
*
- ------------------------------------------------
Helge H. Wehmeier, Director
*By: /s/ MELANIE S. CIBIK
--------------------------------------------
Melanie S. Cibik, Attorney-in-fact,
pursuant to Powers of Attorney
filed herewith
8
EXHIBIT INDEX
3.1 Articles of Incorporation of the Corporation, as amended, incorporated
herein by reference to Exhibit 99.1 and 99.2 of the Current Report on
Form 8-K dated October 7, 1996.
3.2 By-Laws of the Corporation, as amended, incorporated herein by
reference to Exhibit 4.2 of 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.
4.6 Designation of Series: Fixed/Adjustable Rate Noncumulative Preferred
Stock - Series F, 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 Amendments to Supplemental Executive Retirement Income and Disability
Plan, filed herewith.*
10.3 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.*
10.4 November 21, 1996 Amendment to Supplemental Executive Life Insurance
and Spouse's Benefit Plan, filed herewith.*
10.5 1992 Long-Term Incentive Award Plan of the Corporation ("1992 Award
Plan"), incorporated herein by reference to Exhibit 4.3 of the
Corporation's Registration Statement on Form S-8 at File No. 33-54960.*
10.6 Form of Nonstatutory Stock Option Agreement under 1992 Award Plan,
filed herewith.*
10.7 Form of Incentive Share Agreement under 1992 Award Plan (June 1995),
as amended November 21, 1996, filed herewith.*
10.8 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").*
10.9 PNC Bank Corp. 1996 Executive Incentive Award Plan, incorporated by
reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996 ("3Q 1996 Form 10-Q").*
10.10 PNC Bank Corp. and Affiliates Deferred Compensation Plan, incorporated
by reference to Exhibit 4.2 to the Corporation's Registration
Statement on Form S-8 at File No. 333-18069.*
10.11 PNC Bank Corp. Supplemental Incentive Savings Plan, as amended,
incorporated by reference to Exhibit 4.1 to the Corporation's
Registration Statement on Form S-8 at File No. 333-18069.*
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10.12 PNC Bank Corp. Supplemental Pension Plan, as amended, filed herewith.*
10.13 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.*
10.14 PNC Bank Corp. Directors Retirement Plan, incorporated by reference to
Exhibit 10.7 of the 1994 Form 10-K.*
10.15 PNC Bank Corp. Directors Deferred Compensation Plan, incorporated by
reference to Exhibit 10.1 of the 3Q 1996 Form 10-Q.*
10.16 Employment Agreement dated as of December 29, 1995, between the
Corporation and Garry J. Scheuring, incorporated by reference to
Exhibit 10.7 of the 1995 Form 10-K.*
10.17 Form of Change in Control Severance Agreement, filed herewith.*
10.18 Amended and Restated Trust Agreement between the Corporation, as
Settlor, and NationsBank, N.A., as Trustee, filed herewith.*
11 Calculation of Primary and Fully Diluted Earnings Per Share, filed
herewith.
12.1 Computation of Ratio of Earnings to Fixed Charges, filed herewith.
12.2 Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Dividends, filed herewith.
13 Excerpts from the Annual Report to Shareholders for the year ended
December 31, 1996, filed herewith. Such Annual Report, except for
those portions thereof that are expressly incorporated by reference
herein, is furnished for information of the SEC only and is not deemed
to be "filed" as part of this Form 10-K.
21 Schedule of Certain Subsidiaries of the Corporation, filed herewith.
23 Consent of Ernst & Young LLP, independent auditors for the
Corporation, filed herewith.
24.1 Power of Attorney of certain directors and officers of the
Corporation, filed herewith.
24.2 Power of Attorney of Robert N. Clay, filed herewith.
24.3 Power of Attorney of Jackson H. Randolph, filed herewith.
24.4 Power of Attorney of Vincent A. Sarni, filed herewith.
27 Financial Data Schedule, filed herewith.
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* Denotes management contract or compensatory plan.
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