10-K/A: Annual report pursuant to Section 13 and 15(d)
Published on December 22, 1999
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 2)
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT 0F 1934
FOR THE YEAR ENDED DECEMBER 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT 0F 1934
For the transition period from to
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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. 2"), the undersigned
registrant hereby further amends its Annual Report on Form 10-K for the
year ended December 31, 1998, ("1998 Form 10-K"), as amended by Form
10-K/A ("Amendment No. 1") 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 Retirement Savings Plan ("Retirement Plan").
In accordance with Rule 12b-15 of the Exchange Act, Item 14 of Part IV
of the 1998 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 PNC Bank Corp.
("Corporation") and consolidated financial information of the
Corporation, included in the Annual Report to Shareholders at the page
indicated, are incorporated herein by reference.
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As permitted by Rule 15d-21 of the Exchange Act, the following
financial statements of the Retirement Plan and report of independent
auditors thereon are filed with Amendment No. 2 at the page indicated.
FINANCIAL STATEMENT SCHEDULES
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Not applicable.
REPORTS ON FORM 8-K
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The following reports on Form 8-K were filed during the quarter ended
December 31, 1998, or thereafter:
Form 8-k dated as of October 15, 1998, reporting the Corporation's
consolidated financial results for the three and nine months ended
September 30, 1998, filed pursuant to Item 5.
Form 8-K dated as of December 23, 1998, reporting developments
regarding the Corporation's credit card business, filed pursuant to
Item 5.
Form 8-K dated as of January 19, 1999, reporting the Corporation's
consolidated financial results for the three months and year ended
December 31, 1998, filed pursuant to Item 5.
Form 8-K dated as of February 16, 1999, reporting the public offering
of $250,000,000 of 6 1/8% subordinated notes due 2009, filed pursuant
to Item 5.
EXHIBITS
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The exhibits listed on the Exhibit Index on pages 19 and 20 of this
Amendment No. 2 are filed herewith or are incorporated herein by
reference.
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PNC Retirement Savings Plan
Audited Financial Statements
Years ended June 30, 1999 and 1998
CONTENTS
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Report of Independent Auditors
Administrative Committee
PNC Bank Corp.
Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the PNC Retirement Savings Plan as of June 30, 1999 and 1998, and the related
statements of changes in net assets available for 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 benefits of the Plan at June
30, 1999 and 1998, and the changes in its net assets available for benefits for
the years then ended, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes and (overdue) loans or fixed income obligations as
of June 30, 1999, and reportable transactions for the year then ended, are
presented for purpose of additional analysis and are not a required part of the
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in our audits
of the financial statements and, in our opinion, are fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
November 24, 1999
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PNC Retirement Savings Plan
Statements of Net Assets Available for Benefits
See accompanying Notes to Financial Statements.
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PNC Retirement Savings Plan
Statements of Changes in Net Assets Available for Benefits
See accompanying Notes to Financial Statements.
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PNC Retirement Savings Plan
Notes to Financial Statements
June 30, 1999
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.
The fair values 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 Retirement Savings Plan's assets are concentrated in the stock and bond
markets. Realization of the respective values is subject to the results of these
markets.
USE OF ESTIMATES
The preparation of financial statements, in conformity with generally accepted
accounting principles, requires management to make estimates that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
Certain prior year amounts have been reclassified to conform with the current
year presentation.
2. DESCRIPTION OF THE PLAN
The following description of the PNC Retirement Savings Plan ("the Plan")
provides only general information. Participants should refer to the plan
prospectus for a more complete description of the Plan's provisions.
PNC Bank Corp. ("PNC Bank") is the sponsor of the Plan. The Plan covers
substantially all eligible employees of the following PNC Bank subsidiaries: PNC
Mortgage Corp. of America and PNC Mortgage Securities Corp. Effective November
30, 1997, PNC Mortgage Bank, N.A.
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2. DESCRIPTION OF THE PLAN (CONTINUED)
was merged with and into PNC Bank, N.A. Former employees of PNC Mortgage Bank,
N.A. were transferred to other subsidiaries that participate in the Plan.
Account balances of eligible employees who formerly participated in PNC Bank
Corp. Incentive Savings Plan (ISP) sponsored by PNC Bank prior to the effective
date of the Plan were automatically transferred to this Plan. Certain eligible
employees who were deemed grandfathered as defined in the ISP and PNC Bank Corp.
Pension Plan (Pension Plan) had the option to remain in the ISP and Pension Plan
or transfer their accumulated balance to this Plan.
The Plan allows participants to contribute from 1% to 12% of their biweekly
compensation as defined in the Plan on a pretax 401(k) basis subject to Internal
Revenue Code limitations. PNC Bank will match 100% of employee contributions up
to 6% of compensation (as defined in the Plan) and will contribute 2% of base
compensation (as defined in the Plan) if certain criteria as specified in the
Plan are met. Effective for plan years beginning after July 1, 1997, the 6%
matching contributions will be made by the ISP. As such, participants in the
Plan are participants in the ISP with respect to such matching contributions. In
addition, PNC Bank may make discretionary contributions to the Plan. No
discretionary contributions were made for the year ended June 30, 1999. For the
year ended June 30, 1998, an additional matching contribution of $892,000 was
made to eligible participants. Participants are fully vested in their balances,
including employer contributions. Plan income is allocated to participants based
on an average participant investment balance on a quarterly basis. Generally,
beginning July 1, 1998, plan income is reflected on a daily basis with the
pricing of mutual funds. Income from the BlackRock Money Market Portfolio and
the BlackRock Core Bond Portfolio is allocated monthly. Capital gain income is
allocated once the gain is declared by the actual fund.
Prior to July 1998, participants in the Plan could invest voluntary
contributions and balances rolled over from prior plans in any of the following
four investment options: Fund A (an equity fund,) Fund B (an intermediate-term
fixed income fund,) Fund C (a short-term fixed income fund,) and Fund D (PNC
Bank Corp. common stock fund). Effective July 1, 1998, balances in the old funds
were transferred or re-named to the following:
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2. DESCRIPTION OF THE PLAN (CONTINUED)
In addition, seven new investment fund options were added to the Plan as
follows: BlackRock Index Equity Portfolio, BlackRock Small Cap Growth Equity
Portfolio, BlackRock Large Cap Value Equity Portfolio, BlackRock Small Cap Value
Equity Portfolio, BlackRock International Equity Portfolio, PNC Conservative
Profile Fund, and PNC Balanced Profile Fund. Employer matching contributions for
participants whose age is less than 55 (50 effective April 1, 1999) are made in
PNC Bank common stock. Participants age 55 (age 50 effective April 1, 1999) or
older can choose to have their matching contribution made in PNC Bank common
stock or in cash to invest in the other funds.
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 as participant loans. 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 and to terminate the Plan subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
3. TRANSACTIONS WITH PARTIES-IN-INTEREST
PNC Bank, N.A., a wholly owned subsidiary of PNC Bank, is the Plan's trustee.
Investments under the Plan are participant directed. Investment options include
various portfolios of the BlackRock Funds, which are registered investment
companies (mutual funds) from which PNC Bank affiliates, including BlackRock
Financial Management, Inc. and PFPC Inc., receive compensation for providing
services, such as investment advisory, custodial and transfer agency services.
Prior to February 12, 1998, PNC Bank paid administrative costs incurred by the
Plan. Effective February 12, 1998, certain plan administrative expenses are paid
by the Plan.
4. INVESTMENTS
Plan's investments are in a Master Trust, which was established on July 1, 1998
for the investment of assets of the Plan and the PNC Bank Corp. Incentive
Savings Plan. Each participating retirement plan has an undivided interest in
the Master Trust. At June 30, 1999, the Plan's interest in the net assets of the
Master Trust was approximately 3%. Investment income and expenses are allocated
to the Plan based upon its pro rata share in the net assets of the Master Trust.
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4. INVESTMENTS (CONTINUED)
The following table presents the fair value of investments in the Master Trust:
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4. INVESTMENTS (CONTINUED)
NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the net assets and the significant components of the changes
in net assets relating to the nonparticipant-directed investments is as follows:
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4. INVESTMENTS (CONTINUED)
NONPARTICIPANT-DIRECTED INVESTMENTS (CONTINUED)
Individual investments that represent 5% or more of the Plan's net assets are as
follows:
(a) Included in Master Trust
* Nonparticipant-directed
5. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated May 26, 1998, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the Code) and, therefore, the related trust is exempt
from taxation. Once qualified, the Plan is required to operate in conformity
with the Code to maintain its qualification. The Plan has been amended since the
date of the determination letter. The plan administrator believes that the Plan
is being operated in compliance with the applicable requirements of the Code
and, therefore, believes that the Plan is qualified and the related trust is
tax-exempt.
6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits at June
30, 1999 and 1998 per the financial statements to the Form 5500:
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6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 (CONTINUED)
The following is a reconciliation of benefits paid to participants per the
financial statements for the year ended June 30, 1999 to the Form 5500:
Amounts allocated to withdrawn participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to June
30 but not yet paid.
7. SUBSEQUENT EVENTS
Effective July 1, 1999, the Plan will change its year-end to a calendar
year-end.
Effective January 1, 2000, the Employer Matching Contribution will be made as of
each pay period versus annually and the Employer Basic Contribution will change
from 2% of the participant's base compensation, as defined in the Plan, to
1-1/2%.
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PNC Retirement Savings Plan
Plan 003
EIN 25-1674164
Line 27a--Schedule of Assets Held for Investment Purposes
June 30, 1999
*Party-in-interest
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PNC Retirement Savings Plan
Plan 003
EIN 25-1674164
Line 27b--Schedule of (Overdue) Loans or Fixed Income Obligations
June 30, 1999
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PNC Retirement Savings Plan
Plan 003
EIN 25-1674164
Line 27d--Schedule of Reportable Transactions
Year ended June 30, 1999
There were no category (i), (ii) or (iv) reportable transactions during the year
ended June 30, 1999.
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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
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Robert L. Haunschild
Senior Vice President and
Chief Financial Officer
Date: December 22, 1999
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EXHIBIT INDEX
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+ Except where otherwise expressly noted, incorporated document references are
to Commission File No. 1-9718.
* Denotes management contract or compensatory plan.
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