-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, QUt79+nyoZGI7yEc/1fb7NBJ/WU52huHb9S8CRWBZsvlX/WDA+NAsIoxuhRtFbYN +L0N2UVchLOKgl3Cumz8QQ== 0000950109-94-001885.txt : 19941020 0000950109-94-001885.hdr.sgml : 19941020 ACCESSION NUMBER: 0000950109-94-001885 CONFORMED SUBMISSION TYPE: 424B2 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19941019 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORESTATES FINANCIAL CORP CENTRAL INDEX KEY: 0000069952 STANDARD INDUSTRIAL CLASSIFICATION: 6021 IRS NUMBER: 231899716 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B2 SEC ACT: 1933 Act SEC FILE NUMBER: 033-54049 FILM NUMBER: 94554055 BUSINESS ADDRESS: STREET 1: CENTRE SQ W STREET 2: 1500 MARKET ST CITY: PHILADELPHIA STATE: PA ZIP: 19101 BUSINESS PHONE: 2159733806 MAIL ADDRESS: STREET 1: 1500 MARKET ST CITY: PHILADELPHIA STATE: PA ZIP: 19101 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL CENTRAL FINANCIAL CORP DATE OF NAME CHANGE: 19830517 424B2 1 FORM 424(B)(2) Rule 424 (b) (2) File Nos. 33-54049 Pricing Supplement No. 93 Dated October 19, 1994 (To Prospectus dated September 15, 1994 and Prospectus Supplement dated September 15, 1994). $1,000,000,000 CORESTATES CAPITAL CORP Senior Medium-Term Floating Rate Notes Due Nine Months or More From Date of Issue Unconditionally Guaranteed as to Payment of Principal, Premium, if any, and Interest by CORESTATES FINANCIAL CORP Cusip: 21869EDX0 Principal Amount: $21,000,000.00 Settlement Date: 10/19/94 Base Rate: Libor (pg. 3750) Index Maturity: 1 MONTH Initial Interest Rate: 5.08 INITIAL RATE (5.00%) PER 10/19/94 TELERATE Pg. 3750 Spread or Spread Multiplier, if applicable: PLUS 8 BPS. Interest Rate Reset Dates: WEEKLY (EVERY MONDAY) * use libor set on same day NOTE: IF MONDAY IS A HOLIDAY USE RATE AVAILABLE ON PRIOR BUSINESS DAY. Interest Payment Dates: THIRD WEDNESDAY OF EACH MONTH FIRST COUPON 11/16/94 Stated Maturity Date: 10/18/99 Maximum Interest Rate, if any: Minimum Interest Rate, if any: Alternate Rate Event Spread, if any: Initial Redemption Date, if any: Initial Redemption Percentage, if any: Annual Redemption Percentage Reduction, if any: Optional Repayment Dates, if any: PAGE 1 OF 3 MTN Pricing Supplement RECENT DEVELOPMENTS The following is unaudited consolidated financial information for CoreStates Financial Corp ("CoreStates") and its subsidiaries for the three and six-month periods ended June 30, 1994 and 1993. The following financial information should be read in conjunction with the second quarter of 1994 Form 10-Q and with the financial information for the three and six-month periods ended June 30, 1994 contained in CoreStates' current report on Form 8-K dated August 22, 1994. These reports are incorporated by reference in the accompanying prospectus. See "Incorporation of Certain Documents by Reference" in the accompanying prospectus. Prior year data have been restated to include the consolidated accounts of Constellation Bancorp ("Constellation"), which was acquired on March 16, 1994, and Independence Bancorp, Inc. ("Independence"), which was acquired on June 27, 1994. Both transactions were accounted for as pooling of interests. Financial data for the fourth quarter of 1993 and the first quarter of 1994 have been restated subsequent to the release of 1994 first quarter earnings to reflect merger-related charges of $127.8 million after-tax, or $0.89 per share, related to the Constellation acquisition in the first quarter of 1994, rather than in the fourth quarter of 1993 as previously reported. This restatement was made in response to a comment provided by the Securities and Exchange Commission staff who believe that these charges should be reflected in the quarter that the acquisition was consummated. This restatement has no effect on CoreStates' financial position as reported for either March 31, 1994 or June 30, 1994. It also has no effect on CoreStates' basic operating results, excluding the one-time merger-related charges, over the last three quarters. During the first quarter of 1994, Independence recognized a $3,430,000, or $0.02 per share, after-tax impairment loss on certain mortgage securities as a cumulative effect of a change in accounting principle. The loss was the result of a write-down to fair value of these securities, which were deemed to be impaired. This resulted from the Financial Accounting Standards Board's ("FASB") 1994 interpretation of Statement of Financial Accounting Standards No. 115 ("FAS 115"). The interpretation, reached by a consensus of the FASB Emerging Issues Task Force in March 1994, requires more definitive criteria for recognition of impairment losses on these types of securities.
Three Months Ended Six Months Ended June 30, June 30, -------------------- -------------------- 1994 1993 1994 1993 ---- ---- ---- ---- (in thousands, except per share amounts) Selected income data: Net interest income........................ $349,665 $331,667 $678,003 $653,617 Provision for losses on loan............... 49,995 30,825 196,900 61,550 Income before cumulative effect of a change in accounting principle.................... 63,091/(a)/ 91,391 33,096/(a)/ 171,672 Net Income.................................. 63,091 91,391 29,666/(b)/ 158,662/(c)/ Per Share: Income before cumulative effect of a change in accounting principle.................... 0.44 0.63 0.23 1.18 Net income.................................. 0.44 0.63 0.21/(b)/ 1.09/(c)/
/(a)/Excluding after-tax merger-related charges of $127.8 million or $0.89 per share recorded in the first quarter of 1994 for the Constellation acquisition and $39.6 million or $0.28 per share recorded in the second quarter of 1994 for the Independence acquisition, selected financial results for the second quarter and six months of 1994 follows:
1994 -------------------------------- Three Months Six Months ------------ ------------ Income before cumulative effect a change in accounting principle..... $102,738 $200,543 Per share............................. $0.72 $1.40
/(b)/Reflects Independence's writedown to fair value for certain mortgage securities deemed to be impaired under FASB's 1994 interpretation of FAS 115. /(c)/Reflects the adoption of Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits" ("FAS 112"). As required under FAS 112, CoreStates recognized the January 1, 1993 transitional liability of $20.0 million pre-tax, $13.0 million after-tax, as the cumulative effect of a change in accounting principle in the first quarter of 1993. PAGE 2 OF 3 MTN Pricing Supplement RECENT DEVELOPMENTS - continued The ratio of earnings from continuing operations before income taxes to fixed charges of continuing operations for the six months ended June 30, 1994 was as follows: Combined CoreStates (parent company) and CoreStates Capital................. 1.86x CoreStates consolidated: Excluding interest on deposits......... 1.65 Including interest on deposits......... 1.22 Second Quarter Results - ---------------------- CoreStates consummated its acquisition of Independence on June 27, 1994 and its acquisition of Constellation Bancorp on March 16, 1994. Upon consummation of the Independence acquisition, Independence recorded merger-related charges in the second quarter of 1994 in connection with a change in strategic direction related to problem assets and to conform its consumer lending charge-off policies to those of CoreStates, and for expenses attributable to the acquisition. These merger-related charges totalled $39.9 million after-tax, or $0.28 per share. On a pre-tax basis, the merger-related charges consisted of a $25.0 million provision for loan losses, a $4.0 million addition to the OREO reserve, and $29.7 million for expenses directly attributable to the acquisition. Net income for the second quarter of 1994 was $63.1 million, or $0.44 per share, compared to $91.4 million, or $0.63 per share for the second quarter of 1993. Excluding the Independence merger-related charges recorded in the second quarter of 1994, which totalled $39.9 million after-tax, or $0.28 per share, income for the second quarter of 1994 was $102.7 million, or $0.72 per share. Total non-interest income for the second quarter of 1994 increased $1.7 million, or 1.2%, from the second quarter of 1993. Excluding the impact of securities gains, non-interest income decreased $2.1 million, or 1.5% compared to the prior year second quarter. This 1.5% decrease resulted principally from a $1.6 million, or 6.2% decrease in trust income and a $9.0 million, or 27.9% decrease in other operating income reflecting a $5.0 million gain recorded on the prepayment of long-term debt in the second quarter of 1993. However, the second quarter of 1994 does reflect continuing increases in revenues from CoreStates' fee-based businesses other than trust including a $1.5 million, or 3.4%, increase in service charges on deposit accounts and a $2.2 million, or 13.0%, increase in fees for international services. Also contributing to the second quarter of 1994 was income related to CoreStates' investment in Electronic Payment Services, Inc. ("EPS"). That investment was restructured in December 1993, adding $3.0 million to revenue each quarter for the next ten years, representing recognition of deferred gains from CoreStates' contribution of its former electronic payment service businesses to EPS. Investment securities gains in the second quarter of 1994 were $3.0 million compared to $0.7 million of losses in the prior year second quarter. The second quarter of 1994 includes gains of $4.6 million recorded on sales of certain bank stock investments. The prior year second quarter principally reflects the net losses recorded on domestic equity investments. Total non-financial expenses were $341.1 million in the second quarter of 1994, an increase of $35.8 million, or 11.7% from the second quarter of 1993, primarily reflecting $33.7 million in merger-related charges for the Independence acquisition. Excluding the merger-related charges, non-financial expenses increased less than 1%. Excluding the $25.0 million provision recorded by Independence resulting from a change in strategy related to problem assets, the provision for losses on loans for the second quarter of 1994 was $5.8 million lower than the provision recorded for the second quarter of 1993. The decrease in the provision for losses on loans resulted from the continued improvement in credit quality outlook and credit quality indicators, including a decline in non-performing assets of $148.9 million, or 29.7%, from March 31, 1994. The decline in non-performing assets from March 31, 1994 resulted primarily from a bulk sale of loans and charge-offs reflecting actions related to the strategy to dispose of problem assets acquired with Constellation. At June 30, 1994 non-performing assets were $352.1 million, compared to $501.0 million at March 31, 1994 and $438.7 million at December 31, 1993. Consolidated total assets at June 30, 1994 were $27.5 billion. The June 30, 1994 tier 1 capital ratio, total capital ratio and tier 1 leverage ratio at 9.0%, 13.1% and 7.6% respectively, were well in excess of regulatory guidelines. PAGE 3 OF 3 -----END PRIVACY-ENHANCED MESSAGE-----