-----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, S0DBBraKnu5L1/AP7fTdRVd+hxnh2WMeOviRGouWZJ0iA0JWc0vxmJac0bWrDTCF ImmUVlK+ljAu35XqWxqt7Q== 0000950109-95-002290.txt : 19950614 0000950109-95-002290.hdr.sgml : 19950614 ACCESSION NUMBER: 0000950109-95-002290 CONFORMED SUBMISSION TYPE: 424B2 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950613 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORESTATES FINANCIAL CORP CENTRAL INDEX KEY: 0000069952 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [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: 95546656 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 MEDIUM TERM NOTE Rule 424 (b) (2) File Nos. 33-54049 Pricing Supplement No. 106 Dated June 12, 1995 (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: 21869EEL5 Principal Amount: $50,000,000.00 Settlement Date: 06/14/95 Base Rate: LIBOR (TELERATE PG. 3750) Index Maturity: 1 MONTH LIBOR Initial Interest Rate: 6.02031% (6.07031% telerate pg. 3750 6/12/95) Spread or Spread Multiplier, if applicable: MINUS 5 BPS. Interest Rate Reset Dates: THIRD WEDNESDAY OF EACH MONTH Interest Payment Dates: THIRD WEDNESDAY OF EACH MONTH First Coupon: 07/19/95 Day Count: ACT/360 Stated Maturity Date: 06/18/97 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 4 MTN Pricing Supplement RECENT DEVELOPMENTS The following is unaudited consolidated financial information for CoreStates Financial Corp ("CoreStates") and its subsidiaries for the three-month periods ended March 31, 1995 and 1994. The following financial information should be read in conjunction with the first quarter of 1995 Form 10-Q and with the financial information for the twelve months ended December 31, 1994 contained in CoreStates' Annual Report on Form 10-K. These reports are incorporated by reference in the accompanying prospectus. See "Incorporation of Certain Documents by Reference" in the accompanying prospectus. Operating results, key financial ratios and per share information are summarized in the following table (in millions, except per share):
Three Months Ended Percentage March 31, Increase ------------------ ---------- 1995 1994 ------ ------ Net interest income (taxable equivalent basis)......................... $369.3 $334.0 10.6% ====== ====== Income (loss) before the cumulative effect of a change in accounting principle................................. $ 55.4 $(30.0) Add back after-tax restructuring charge.................................... 70.0 - Less after-tax EPS gain.................... (11.8) - Add back after-tax merger-related charges................................... - 127.8 ------ ------ Operating earnings......................... $113.6 $ 97.8 16.2 ====== ====== Operating earnings per share............... $ 0.79 $ 0.68 16.2 ====== ====== Return on average equity (a)............... 19.63% 16.45% Return on average assets (a)............... 1.63 1.43 Net interest margin........................ 5.93 5.56 Average common shares outstanding.......... 144.246 144.612
(a) Calculated based on "operating earnings". See definition of operating earnings in "First Quarter Results". The ratio of earnings from continuing operations before income taxes to fixed charges of continuing operations for the three months ended March 31, 1995 was as follows: Combined CoreStates (parent company) and CoreStates Capital........................... 1.65X CoreStates consolidated: Excluding interest on deposits................... 2.40X Including interest on deposits................... 1.46X
MTN Pricing Supplement RECENT DEVELOPMENTS - continued First Quarter Results - --------------------- In the first quarter of 1995, CoreStates Financial Corp ("CoreStates") recorded net income of $55.4 million or $0.38 per share. "Operating earnings" for the first quarter of 1995, which has been defined for purposes of this discussion as net income excluding a restructuring charge and a gain related to changes in an investment in an affiliate joint venture, was $113.6 million, or $0.79 per share. This represents a 16.2% increase when compared to first quarter of 1994 operating earnings of $97.8 million, or $0.68 per share. Operating earnings for the first quarter of 1994 excludes merger-related charges of $127.8 million after-tax, or $0.89 per share, and the cumulative effect of a change in accounting principle. The $15.8 million improvement in operating earnings for the first quarter of 1995, as compared to the first quarter of 1994, was primarily due to an increase in taxable equivalent net interest income of $35.3 million, or 10.6%. The net interest margin for the first quarter of 1995 was 5.93%, an increase of 37 basis points when compared to first quarter of 1994 operating earnings of $97.8 million, or $0.68 per share. Operating earnings for the first quarter of 1994 excludes merger-related charges of $127.8 million after-tax, or 0.89 per share, and the cumulative effect of a change in accounting principle. Key performance measures, based on operating earnings, continued to be strong. Returns on average equity and assets were 19.63% and 1.63%, respectively, in the first quarter of 1995, compared to 16.45% and 1.43%, respectively, in the first quarter of 1994. In March 1995, CoreStates completed an intensive review of its operations and businesses and announced a corporate-wide process redesign plan, which restructures its banking services around customers and enhances employees' authority to make decisions to benefit customers. As a result of this process redesign, CoreStates recorded a $110.0 million pre-tax restructuring charge, $70.0 million after-tax or $0.49 per share in March 1995. The process redesign is expected to generate by late 1996, annual run-rate efficiencies which will reduce expenses by approximately $180 million and revenue enhancements which will net an addition of approximately $30 million to revenues, combining to improve net income at an annual rate of $0.90 per share. Also in March 1995, Electronic Payment Services, Inc. ("EPS") an affiliate joint venture formed in 1992 to combine the consumer electronic transaction processing businesses of CoreStates and three partners, admitted a fifth partner and increased the ownership interest of an existing partner. As a direct result of this change in its ownership interest, CoreStates recognized a pre-tax gain of $19.0 million, $11.8 million after-tax or $0.08 per share. MTN Pricing Supplement RECENT DEVELOPMENTS - continued First Quarter Results - continued - --------------------------------- Upon consummation of its acquisition by CoreStates on March 16, 1994, Constellation Bancorp ("Constellation") recorded merger-related charges in the first quarter of 1994 in connection with a change in strategic direction related to problem assets and to conform consumer lending charge-off policies to those of CoreStates, and for expenses directly attributable to the acquisition. In the first quarter of 1994, Constellation recorded merger-related charges totalling $127.8 million after-tax, or $0.89 per share. On a pre-tax basis, these merger-related charges consisted of a $120.0 million provision for loan losses, a $28.0 million addition to the OREO reserve, $13.0 million for the writedown of purchased mortgage servicing rights and related assets, and $34.0 million for expenses directly attributable to the acquisition including $8.0 million of severance costs related to approximately 370 employees. During the first quarter of 1994, CoreStates recognized a $3.4 million after-tax, or $0.02 per share, impairment loss on certain mortgage securities as a cumulative effect of a change in accounting principle. The loss was the results of a writedown to fair value of these securities, which were deemed to be impaired. This resulted from the Financial Accounting Standards No. 115 ("FAS 115"). The interpretation, reached by a consensus of the FASB Emerging Issues Task Force in March 1994, provides more definitive criteria for recognition of impairment losses on these types of securities. Total non-performing assets at March 31, 1995 decreased $12.2 million, or 3.9%, from December 31, 1994. Most of the decrease from December 31, 1994 was in the non-performing real estate portfolio which declined by $9.8 million. The provision for loan losses for the first quarter of 1995 was $25.0 million, a $1.9 million decline from the $26.9 million provision (excluding the $120.0 million Constellation merger-related provision) recorded in the prior year first quarter and unchanged from the 1994 fourth quarter provision. In the first quarter of 1994, Constellation recorded a $120.0 million provision for loan losses in connection with a change in strategy related to problem assets, and to conform its consumer lending charge-off policies to those of CoreStates. Consolidated total assets at March 31, 1995 were $26.2 billion, down slightly from the $27.0 billion at 1994 year-end. The March 31, 1995 tier 1 capital ratio, total capital ratio and tier 1 leverage ratio at 8.3%, 12.1% and 7.4%, respectively, were well in excess of regulatory guidelines. -----END PRIVACY-ENHANCED MESSAGE-----