Exhibit 99
CONTACTS:
MEDIA:
Jonathan Williams
(412) 762-4550
pubrela@pncmail.com
INVESTORS:
William H. Callihan
(412) 762-8257
invrela@pncmail.com
PNC BANK CORP. REPORTS FIRST QUARTER 1998 EARNINGS
PITTSBURGH, April 14, 1998 - PNC Bank Corp. (NYSE: PNC) today
reported first quarter 1998 earnings of $269 million or $0.87 per diluted share
compared with $266 million or $0.80 per diluted share in the first quarter of
1997.
Returns on average common shareholders' equity and average assets
were 21.10% and 1.51% for the first quarter of 1998 compared with 19.48% and
1.54% for the prior-year quarter.
"First quarter results reflect solid performance from our major
businesses including significant growth in asset management, mutual fund
servicing and mortgage banking," said Thomas H. O'Brien, chairman and chief
executive officer. "Our fee-based financial services businesses continue to have
a very positive impact on our revenue stream with noninterest income rising to
46% of total revenue during the quarter compared with 40% in 1997."
HIGHLIGHTS
* Revenue increased 11% in the quarter-to-quarter comparison driven
by 24% growth in noninterest income.
* Asset management, mutual fund servicing and mortgage banking
revenue grew 32%, 24% and 93%, respectively, from the first
quarter of 1997.
* PNC Bank's fixed-income, equity and liquidity capabilities were
consolidated under BlackRock, Inc. creating one of the largest
asset managers in the U.S.
* The acquisition of Midland Loan Services, L.P. was completed on
April 3, 1998 creating a fully-integrated commercial real estate
business with capabilities to originate, warehouse, securitize
and service commercial mortgages.
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PNC Bank Corp. Reports First Quarter 1998 Earnings
Page 2
INCOME STATEMENT REVIEW
Total revenue increased to $1.2 billion in the quarter-to-quarter
comparison driven by growth in noninterest income.
Taxable-equivalent net interest income increased $7 million to $644
million in the first quarter of 1998. The net interest margin was 3.96% compared
with 3.98% in the first quarter of 1997.
The provision for credit losses was $30 million for the first
quarter of 1998 compared with $10 million last year.
Noninterest income was $539 million in the first quarter of 1998, a
$106 million or 24% increase from the prior-year quarter driven by growth in
asset management, mutual fund servicing and mortgage banking.
Asset management and mutual fund servicing grew 32% and 24%,
respectively, from the first quarter of 1997 reflecting significant new business
and strong financial markets. Managed assets increased to approximately $148
billion at March 31, 1998 compared with $115 billion a year ago.
Mortgage banking revenue grew primarily due to higher marketing
gains and origination volume reflecting significant mortgage refinance activity
in the first quarter of 1998. Mortgage originations totaled $2.3 billion
compared with $1.1 billion in the year-earlier period. At March 31, 1998, the
corporation serviced approximately $42.5 billion of mortgages including $33.6
billion serviced for others.
Net securities gains were $23 million in the first quarter of 1998
including $9 million from sales of securities that hedged mortgage servicing
rights ("MSR").
The increase in other income reflects the impact of the sale of
equity in the new BlackRock to management.
Noninterest expense increased $97 million to $741 million in the
first quarter of 1998 primarily due to MSR amortization, incentive compensation
commensurate with growth in fee-based revenue and higher marketing costs
associated with national consumer banking initiatives.
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PNC Bank Corp. Reports First Quarter 1998 Earnings
Page 3
BALANCE SHEET REVIEW
Total assets were $72.4 billion at March 31, 1998. Average earning
assets increased $1.4 billion from the prior-year quarter to $65.2 billion as
higher loans and mortgages held for sale more than offset securities portfolio
reductions. Average loans grew 4.2% to $54.1 billion, a $2.2 billion increase
from the prior year. Loans represented 83.0% of average earning assets compared
with 81.4% a year ago. Growth in credit cards and middle market commercial loans
more than offset the downsizing of the indirect automobile lending portfolio and
the impact of loan securitizations. The increase in average mortgages held for
sale was $1.4 billion reflecting higher production volume. Average securities
decreased $2.3 billion to $7.8 billion or 11.9% of average earning assets.
Average deposits increased $497 million to $44.6 billion in the
first quarter of 1998 representing 61.9% of total sources of funds. The ratio of
wholesale funds to total sources of funds was 28.3% for the first quarter of
1998 compared with 27.9% a year ago.
Shareholders' equity totaled $5.5 billion at March 31, 1998. The
leverage ratio was 7.36% and Tier I and total risk-based capital ratios are
estimated to be 7.7% and 11.2%, respectively.
The ratio of nonperforming assets to total loans and foreclosed assets
was 0.61% at March 31, 1998 compared with 0.82% at March 31, 1997. Nonperforming
assets were $335 million at March 31, 1998 compared with $429 million a year
ago.
The allowance for credit losses was $912 million at March 31, 1998,
and represented 321% of nonperforming loans compared with 346% at March 31,
1997. Net charge-offs were $90 million or 0.67% of average loans in the first
quarter of 1998 compared with $60 million and 0.47%, respectively, in the
year-earlier period. The increases were primarily associated with higher credit
card outstandings.
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PNC Bank Corp. Reports First Quarter 1998 Earnings
Page 4
PNC Bank Corp., headquartered in Pittsburgh, is one of the largest
diversified financial services organizations in the United States. Its major
businesses include National Consumer Banking, Regional Community Banking,
Private Banking, Secured Lending, Asset Management and Servicing, Corporate
Banking and Mortgage Banking.
Visit PNC Bank on the World Wide Web at http://www.pncbank.com
[TABULAR MATERIAL FOLLOWS]
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PNC BANK CORP. AND SUBSIDIARIES Page 5
Consolidated Financial Highlights
March 31 December 31 March 31
Three months ended 1998 1997 1997
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL PERFORMANCE (in thousands, except per share data)
Revenue
Net interest income (taxable-equivalent basis) $644,230 $638,912 $637,283
Noninterest income 538,915 518,063 433,303
Total revenue 1,183,145 1,156,975 1,070,586
Net income 269,260 265,489 266,309
Per common share
Diluted earnings .87 .85 .80
Cash dividends declared .39 .39 .37
SELECTED RATIOS
Return on
Average common shareholders' equity 21.10% 20.28% 19.48%
Average assets 1.51 1.49 1.54
Net interest margin 3.96 3.95 3.98
Noninterest income to total revenue 45.55 44.78 40.47
After-tax profit margin 22.76 22.95 24.88
Efficiency ratio (excluding distributions on capital securities) 61.53 60.69 59.54
Net charge-offs to average loans .67 .59 .47
March 31 December 31 September 30 June 30 March 31
1998 1997 1997 1997 1997
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET DATA (in millions)
Assets $72,355 $75,120 $71,828 $71,973 $71,166
Earning assets 65,210 66,688 64,208 64,297 64,255
Loans, net of unearned income 54,511 54,245 53,651 53,497 52,575
Securities 7,511 8,522 8,000 8,396 9,593
Deposits 46,068 47,649 44,788 45,216 44,902
Borrowed funds 18,375 19,622 19,052 19,066 18,547
Shareholders' equity 5,487 5,384 5,476 5,384 5,478
Common shareholders' equity 5,173 5,069 5,161 5,068 5,162
CAPITAL RATIOS
Leverage 7.36% 7.30% 7.46% 7.35% 7.17%
Common shareholders' equity to assets 7.15 6.75 7.18 7.04 7.25
ASSET QUALITY RATIOS
Nonperforming assets to loans and foreclosed assets .61% .61% .73% .83% .82%
Allowance for credit losses to loans 1.67 1.79 1.91 2.01 2.13
Allowance for credit losses to nonperforming loans 320.96 351.79 324.25 310.34 346.11
Book value per common share $17.20 $16.87 $16.92 $16.51 $16.45
===================================================================================================================================
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PNC BANK CORP. AND SUBSIDIARIES Page 6
Consolidated Statement of Income
March 31 December 31 March 31
Three months ended - in thousands, except per share data 1998 1997 1997
- ----------------------------------------------------------------------------------------------------------------
INTEREST INCOME
Loans and fees on loans $1,118,644 $1,117,551 $1,055,908
Securities 115,253 119,366 156,205
Other 57,610 44,426 30,043
-------------------------------------
Total interest income 1,291,507 1,281,343 1,242,156
INTEREST EXPENSE
Deposits 361,522 369,572 346,155
Borrowed funds 292,581 279,570 266,076
-------------------------------------
Total interest expense 654,103 649,142 612,231
-------------------------------------
Net interest income 637,404 632,201 629,925
Provision for credit losses 30,000 25,000 10,000
-------------------------------------
Net interest income less provision for credit losses 607,404 607,201 619,925
NONINTEREST INCOME
Asset management 141,065 128,916 106,899
Mutual fund servicing 40,521 37,493 32,673
Service charges on deposits 39,964 42,546 41,754
Consumer service fees 88,943 94,351 76,311
Corporate finance and capital markets 51,712 55,891 49,356
Mortgage banking 77,694 57,905 40,232
Net securities gains 22,842 21,434 16,426
Other 76,174 79,527 69,652
-------------------------------------
Total noninterest income 538,915 518,063 433,303
NONINTEREST EXPENSE
Staff expense 354,284 322,188 308,432
Net occupancy and equipment 95,809 97,611 89,284
Amortization 57,179 56,104 29,831
Marketing 37,396 10,742 22,841
Distributions on capital securities 13,193 13,123 6,956
Other 183,379 215,493 187,047
-------------------------------------
Total noninterest expense 741,240 715,261 644,391
Income before income taxes 405,079 410,003 408,837
Income taxes 135,819 144,514 142,528
-------------------------------------
Net income $269,260 $265,489 $266,309
- ----------------------------------------------------------------------------------------------------------------
Net income applicable to common shareholders $265,249 $261,675 $262,541
EARNINGS PER COMMON SHARE
Basic $.88 $.86 $.81
Diluted .87 .85 .80
CASH DIVIDENDS DECLARED PER COMMON SHARE .39 .39 .37
AVERAGE COMMON SHARES OUTSTANDING
Basic 300,567 303,207 321,752
Diluted 306,148 309,533 327,917
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PNC BANK CORP. AND SUBSIDIARIES Page 7
Details of Net Interest Income and Net Interest Margin
NET INTEREST INCOME
Taxable-equivalent basis March 31 December 31 September 30 June 30 March 31
Three months ended - in thousands 1998 1997 1997 1997 1997
- -----------------------------------------------------------------------------------------------------------------------------
Interest income
Loans $1,124,112 $1,123,127 $1,107,250 $1,084,532 $ 1,061,535
Securities 116,507 120,395 127,053 140,618 157,870
Other 57,714 44,532 43,555 39,416 30,109
---------------------------------------------------------------
Total interest income 1,298,333 1,288,054 1,277,858 1,264,566 1,249,514
Interest expense
Deposits 361,522 369,572 372,860 368,000 346,155
Borrowed funds 292,581 279,570 277,567 275,985 266,076
---------------------------------------------------------------
Total interest expense 654,103 649,142 650,427 643,985 612,231
---------------------------------------------------------------
Net interest income $644,230 $638,912 $627,431 $620,581 $637,283
=============================================================================================================================
NET INTEREST MARGIN
Taxable-equivalent basis March 31 December 31 September 30 June 30 March 31
Three months ended 1998 1997 1997 1997 1997
- -------------------------------------------------------------------------------------------------------------------------------
Rates earned/paid
Yield on earning assets
Loans 8.36% 8.27% 8.23% 8.19% 8.20%
Securities 6.01 6.19 6.17 6.21 6.27
Other 6.96 6.68 6.83 6.76 6.68
Total yield on earning assets 8.00 7.96 7.92 7.85 7.86
Rate on interest-bearing liabilities
Deposits 4.19 4.23 4.23 4.18 4.06
Borrowed funds 5.85 5.91 5.92 5.88 5.76
Total rate on interest-bearing liabilities 4.79 4.82 4.82 4.77 4.66
-------------------------------------------------------
Interest rate spread 3.21 3.14 3.10 3.08 3.20
Impact of noninterest-bearing sources .75 .81 .79 .76 .78
-------------------------------------------------------
Net interest margin 3.96% 3.95% 3.89% 3.84% 3.98%
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PNC BANK CORP. AND SUBSIDIARIES Page 8
Details of Noninterest Income and Noninterest Expense
NONINTEREST INCOME
March 31 December 31 September 30 June 30 March 31
Three months ended - in thousands 1998 1997 1997 1997 1997
- ----------------------------------------------------------------------------------------------------------------------------
Asset management $141,065 $128,916 $115,197 $110,500 $106,899
Mutual fund servicing 40,521 37,493 35,608 35,518 32,673
Service charges on deposits 39,964 42,546 42,875 42,379 41,754
Consumer service fees
Credit card 26,492 28,802 23,292 21,960 19,104
Brokerage 15,156 14,230 14,138 12,731 13,242
Insurance 9,989 10,543 10,421 9,659 9,146
Other 37,306 40,776 37,428 38,386 34,819
-------------------------------------------------------------
Total consumer service fees 88,943 94,351 85,279 82,736 76,311
Corporate finance and capital markets 51,712 55,891 46,992 51,982 49,356
Mortgage banking
Servicing 29,194 30,503 30,316 27,963 27,449
Origination 17,260 14,070 13,597 10,960 8,187
Marketing 24,522 12,869 27,360 3,848 3,421
Sales of servicing 6,718 463 683 494 1,175
-------------------------------------------------------------
Total mortgage banking 77,694 57,905 71,956 43,265 40,232
Net securities gains (losses) 22,842 21,434 (2,657) 13,370 16,426
Other 76,174 79,527 63,997 64,617 69,652
-------------------------------------------------------------
Total noninterest income $538,915 $518,063 $459,247 $444,367 $433,303
============================================================================================================================
NONINTEREST INCOME
March 31 December 31 September 30 June 30 March 31
Three months ended - in thousands 1998 1997 1997 1997 1997
- ----------------------------------------------------------------------------------------------------------------------------
Staff expense
Compensation $291,091 $286,617 $260,351 $251,274 $250,426
Employee benefits 63,193 35,571 48,141 50,559 58,006
-------------------------------------------------------------
Total staff expense 354,284 322,188 308,492 301,833 308,432
Net occupancy and equipment
Net occupancy 48,585 49,813 46,221 46,071 47,240
Equipment 47,224 47,798 44,483 45,710 42,044
-------------------------------------------------------------
Total net occupancy and equipment 95,809 97,611 90,704 91,781 89,284
Amortization
Goodwill 13,160 13,143 13,110 13,274 13,268
Mortgage servicing rights 33,105 32,230 24,681 16,556 7,355
Other 10,914 10,731 10,668 9,697 9,208
-------------------------------------------------------------
Total amortization 57,179 56,104 48,459 39,527 29,831
Marketing 37,396 10,742 11,376 25,436 22,841
Distributions on capital securities 13,193 13,123 13,192 9,867 6,956
Other 183,379 215,493 179,932 181,348 187,047
--------------------------------------------------------------
Total noninterest expense $741,240 $715,261 $652,155 $649,792 $644,391
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PNC BANK CORP. AND SUBSIDIARIES Page 9
Consolidated Balance Sheet
March 31 December 31 March 31
Dollars in millions, except par value 1998 1997 1997
- -------------------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and due from banks $2,581 $4,303 $3,096
Short-term investments 718 1,526 702
Loans held for sale 2,399 2,324 1,375
Securities available for sale 7,511 8,522 9,593
Loans, net of unearned income of $393, $412 and $387 54,511 54,245 52,575
Allowance for credit losses (912) (972) (1,119)
-------------------------------------
Net loans 53,599 53,273 51,456
Other 5,547 5,172 4,944
--------------------------------------
Total assets $72,355 $75,120 $71,166
-------------------------------------
LIABILITIES
Deposits
Noninterest-bearing $10,117 $10,158 $9,971
Interest-bearing 35,951 37,491 34,931
-------------------------------------
Total deposits 46,068 47,649 44,902
Borrowed funds
Bank notes and senior debt 9,503 9,826 8,813
Federal funds purchased 773 3,632 2,937
Repurchase agreements 1,827 714 531
Other borrowed funds 4,591 3,753 4,915
Subordinated debt 1,681 1,697 1,351
-------------------------------------
Total borrowed funds 18,375 19,622 18,547
Other 1,775 1,815 1,889
-------------------------------------
Total liabilities 66,218 69,086 65,338
Mandatorily redeemable capital securities of subsidiary trusts 650 650 350
SHAREHOLDERS' EQUITY
Preferred stock 7 7 7
Common stock - $5 par value
Authorized 450,000,000 shares
Issued 350,353,116; 348,447,600 and 347,037,481 shares 1,752 1,742 1,735
Capital surplus 1,088 1,042 984
Retained earnings 4,788 4,641 4,218
Deferred benefit expense (43) (41) (60)
Accumulated other comprehensive income (32) (23) (137)
Common stock held in treasury at cost: 49,543,007; 48,017,641 and 33,162,947 shares (2,073) (1,984) (1,269)
-------------------------------------
Total shareholders' equity 5,487 5,384 5,478
-------------------------------------
Total liabilities, capital securities and shareholders' equity $72,355 $75,120 $71,166
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PNC BANK CORP. AND SUBSIDIARIES Page 10
Consolidated Balance Sheet Data
AVERAGE BALANCES
March 31 December 31 September 30 June 30 March 31
Three months ended - in millions 1998 1997 1997 1997 1997
- ----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Interest-earning assets
Securities $7,784 $7,769 $8,216 $9,055 $10,089
Loans, net of unearned income
Consumer 11,186 11,108 10,996 11,239 11,827
Credit card 3,748 3,803 3,871 3,502 3,043
Residential mortgage 12,784 12,966 13,503 13,164 12,781
Commercial 20,665 19,838 18,858 18,986 18,429
Commercial real estate 3,624 4,067 4,022 4,038 4,078
Other 2,076 1,881 1,952 1,884 1,764
---------------------------------------------------------
Total loans, net of unearned income 54,083 53,663 53,202 52,813 51,922
Other 3,322 2,655 2,536 2,333 1,814
---------------------------------------------------------
Total interest-earning assets 65,189 64,087 63,954 64,201 63,825
Noninterest-earning assets 6,952 6,782 6,627 6,620 6,476
---------------------------------------------------------
Total assets $72,141 $70,869 $70,581 $70,821 $70,301
=========================================================
LIABILITIES
Interest-bearing liabilities
Deposits $34,945 $34,655 $34,952 $35,313 $34,533
Borrowed funds 19,989 18,624 18,484 18,675 18,594
---------------------------------------------------------
Total interest-bearing liabilities 54,934 53,279 53,436 53,988 53,127
Noninterest-bearing deposits 9,685 9,925 9,654 9,501 9,600
Other 1,474 1,601 1,460 1,480 1,466
---------------------------------------------------------
Total liabilities 66,093 64,805 64,550 64,969 64,193
Mandatorily redeemable capital securities of subsidiary 650 650 650 492 350
trusts
SHAREHOLDERS' EQUITY 5,398 5,414 5,381 5,360 5,758
---------------------------------------------------------
Total liabilities, capital securities and shareholders' equity $72,141 $70,869 $70,581 $70,821 $70,301
=========================================================
COMMON SHAREHOLDERS' EQUITY $5,083 $5,099 $5,066 $5,044 $5,442
=================================================================================================================================
LOAN PORTFOLIO
March 31 December 31 September 30 June 30 March 31
Period ended - in millions 1998 1997 1997 1997 1997
- ---------------------------------------------------------------------------------------------------------------------------------
Consumer $11,106 $11,205 $11,206 $10,983 $11,356
Credit card 3,729 3,830 3,861 3,693 3,345
Residential mortgage 12,351 12,785 13,064 13,494 13,056
Commercial 21,823 19,989 19,536 19,266 19,020
Commercial real estate 3,467 3,974 4,085 4,003 4,031
Other 2,428 2,874 2,281 2,450 2,154
------- ------- ------- ------- -------
Total loans 54,904 54,657 54,033 53,889 52,962
Unearned income (393) (412) (382) (392) (387)
------- ------- ------- ------- -------
Total loans, net of unearned income $54,511 $54,245 $53,651 $53,497 $52,575
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PNC BANK CORP. AND SUBSIDIARIES Page 11
Asset Quality Data
ALLOWANCE FOR CREDIT LOSSES
March 31 December 31 September 30 June 30 March 31
Three months ended - in millions 1998 1997 1997 1997 1997
- --------------------------------------------------------------------------------------------------------------------------------
Beginning balance $972 $1,027 $1,075 $1,119 $1,166
Charge-offs
Consumer (25) (27) (25) (25) (30)
Credit card (72) (54) (53) (55) (46)
Residential mortgage (2) (1) (3) (3) (2)
Commercial (6) (18) (11) (10) (10)
Commercial real estate (2) (5) (3) (3) (1)
-----------------------------------------------------------------
Total charge-offs (107) (105) (95) (96) (89)
Recoveries
Consumer 10 10 9 9 9
Credit card 3 5 4 9 7
Residential mortgage 1
Commercial 3 4 7 18 9
Commercial real estate 1 6 2 1 3
-----------------------------------------------------------------
Total recoveries 17 25 22 37 29
-----------------------------------------------------------------
Net charge-offs (90) (80) (73) (59) (60)
Provision for credit losses 30 25 20 15 10
Acquisitions 5 3
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Ending balance $912 $972 $1,027 $1,075 $1,119
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NONPERFORMING ASSETS
March 31 December 31 September 30 June 30 March 31
Period ended - in millions 1998 1997 1997 1997 1997
- --------------------------------------------------------------------------------------------------------------------------------
Nonaccrual loans
Commercial $145 $128 $142 $155 $135
Commercial real estate 81 94 122 139 137
Residential mortgage 51 44 45 46 45
Consumer 7 10 6 5 5
-----------------------------------------------------------------
Total nonaccrual loans 284 276 315 345 322
Restructured loans 2 1 1
-----------------------------------------------------------------
Total nonperforming loans 284 276 317 346 323
Foreclosed assets
Commercial real estate 23 27 37 55 66
Residential mortgage 19 21 23 23 24
Other 9 9 17 18 16
-----------------------------------------------------------------
Total foreclosed assets 51 57 77 96 106
-----------------------------------------------------------------
Total nonperforming assets $335 $333 $394 $442 $429
================================================================================================================================