-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B1Lq1jhWYG8IWbjIpep6ga6bWN7VTUmshVqI8c0dqh1wJzBOY3/T2tyRq4E+Cnvi Ha4CyaMRScs08lkgjRGT4w== 0000950109-97-000419.txt : 19970124 0000950109-97-000419.hdr.sgml : 19970124 ACCESSION NUMBER: 0000950109-97-000419 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970122 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970123 SROS: NYSE SROS: PHLX 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-06879 FILM NUMBER: 97509550 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 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Act of 1934 Date of Report (Date of earliest event reported): January 22, 1997 CoreStates Financial Corp ---------------------------------------------------------------- (Exact name of registrant specified in its Charter) Pennsylvania 0-6879 23-1899716 ----------------------------------------------------------------- (State or other (Commission (IRS Employee jurisdiction of File Number) identification No.) incorporation) Centre Square West, 1500 Market Street Philadelphia, Pennsylvania 19101 ------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone, including area code: (215) 973-7488 -------------- ------------------------------------------------------------------ (Former name and former address, if changed since last report) 1 of 11 Item 5. Other Events. ------------- The information set forth in the earnings news release of CoreStates Financial Corp as Exhibit 99(a) and the consolidated financial highlights (unaudited) of CoreStates Financial Corp as Exhibit 99(b) are incorporated by reference and made a part hereof. Item 7. Exhibits. --------- 99(a) CoreStates Financial Corp Earnings News Release dated January 22, 1997. 99(b) CoreStates Financial Corp Consolidated Financial Highlights (Unaudited) for three months and twelve months ended December 31, 1996 and 1995. SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CORESTATES FINANCIAL CORP (Registrant) By /s/ Christopher J. Carey ------------------------------ Christopher J. Carey Senior Vice President Dated: January 22, 1997 2 of 11 Exhibit Index ------------- Exhibit No. Page - ----------- ---- 99(a) CoreStates Financial Corp Earnings News Release dated January 22, 1997 4 99(b) CoreStates Financial Corp Consolidated Financial Highlights (Unaudited) for three months and twelve months ended December 31, 1996 and 1995. 9 3 of 11 EX-99.A 2 RELEASE DATED 1/22/97 Exhibit 99(a) Contact Gary Brooten or George Biechler [LOGO OF CORESTATES (215) 973-3546 APPEARS HERE] For Release Immediately Upon Receipt CoreStates Reports Continued Strong Operating Results Philadelphia, January 22, 1997--CoreStates Financial Corp today reported operating earnings, excluding significant and unusual items detailed in footnotes at the end of this release, of $201,595,000 or 93 cents per share for the fourth quarter and $780,789,000 or $3.57 per share for the full year 1996. The comparable 1995 numbers were $196,100,000 or 89 cents per share for the quarter and $727,028,000 or $3.28 per share for the full year. Net income including the significant and unusual items was $195,546,000 or 91 cents per share for the quarter and $649,144,000 or $2.97 per share for the full year 1996. The comparable numbers for 1995 were $192,145,000 or 87 cents per share and $655,176,000 or $2.95 per share, respectively. All 1995 numbers were restated for the April 9, 1996 acquisition of Meridian Bancorp. Based on operating earnings, CoreStates' 1996 performance ratios for the fourth quarter and full year again rank among the best for large U.S. banks. Return on average assets was 1.81% for the quarter and 1.78% for the year, while return on average equity was 21.03% for the quarter and 20.07% for the year. Chairman Terrence A. Larsen characterized the year's operating results as a "productive beginning for the new CoreStates," which has grown by approximately 4 of 11 50% as a result of the merger. "During 1996 we substantially remade the company as we integrated the results of two major re-engineering programs and consolidated the largest merger in our history. While the company is different than it was a year ago, our operating returns of more than 20% on equity and approximately 1.8% on assets in both the quarter and the year reflect the same outstanding effort on the part of our 19,000 people," Larsen said. "Overall we continued the strong operating performance that CoreStates has delivered consistently during the 1990s." The Fourth Quarter Operating earnings were up year to year by 4.5% on a per share basis, driven by moderate loan growth and significant reductions in non-financial expenses. Average loans were up nearly $1 billion or 3.0% from a year ago, and would have been higher save for loan sales during 1996 totaling more than $1.3 billion. "Our loan growth has been encouraging considering the extremely competitive market for most types of commercial lending all year," Larsen said. He noted that CoreStates for credit quality reasons has continued to abstain from soliciting pre-approved credit card accounts, which had been a CoreStates strategy until late 1994, and as a result average credit card outstandings grew by only $150 million. Net interest income was down slightly as a result of a year-to-year decline of 4 basis points in the net interest margin for the quarter. The margin remains among the best in the industry at 5.46% for the quarter. Growth of 14.7% in international fees was offset by declines elsewhere, so 5 of 11 that both revenues from fee-based services and total non-interest income were flat. Larsen said non-financial expenses on an operating basis fell 4.8% from $428.4 million to $407.7 million for the quarter, fueled by merger-related efficiencies. The expense ratio declined to 53.43% for the quarter, compared to 54.99% in 1995. Full Year 1996 Operating earnings were up 8.8% per share. The primary driver of the earnings growth was a decrease of $124 million, or 7.1%, in total non-financial expenses. The decrease included all of the merger efficiencies planned for 1996, with the rest coming from completion of the re-engineering projects undertaken by both CoreStates and Meridian prior to their merger agreement. The full-year expense ratio was 53.71%, down from 57.07% for the full year 1995. Other components of the full-year earnings were essentially flat. Net interest income was down slightly; though average loans increased by more than $670 million and the net interest margin increased by 6 basis points to 5.53%, total average earning assets decreased by more than $1 billion. Non-interest income also was flat compared to 1995. Credit Quality and Capital Condition Indicators of credit quality continued strong. Non-performing assets at December 31 were $245 million, down from $264 million at September 30, 1996 and $268 million at December 31, 1995. The 1996 year-end non-performing assets represented 0.75% of total loans plus real estate foreclosed and 0.54% of total assets. The provision for loan losses was $40.0 million in the fourth quarter and 6 of 11 $228.8 million for the full year 1996, compared to $38.2 million and $144.0 million respectively in 1995. Net charge-offs were $37.9 million for the fourth quarter and $188.7 million for the full year 1996, compared to $54.5 million and $154.9 million, respectively, a year earlier. The 1996 full-year figures included a $70 million provision for loan losses related to the Meridian acquisition, and a $5.8 million charge-off related to a policy change to charge off delinquent credit card loans at 150 days instead of the industry-norm 180 days. The reserve for possible loan losses at December 31 was $710 million, or 2.17% of total loans and 322% of non-performing loans. Consolidated total assets at December 31 were $45.5 billion, including consolidated net loans of $32.8 billion. Consolidated total deposits were $33.7 billion. The comparable figures for December 31, 1995 were $46.0 billion, $31.7 billion and $34.0 billion, respectively. Shareholders' equity at December 31 was $3.7 billion or 8.1% of total assets. The Tier 1 leverage ratio (Tier 1 or "core" capital as a percentage of quarterly average assets) was 8.46% for the fourth quarter. Tier 1 capital at December 31 was 9.45% of risk-adjusted assets and total capital was 13.23% of risk-adjusted assets, well above regulatory minimums of 4% and 8% respectively. Shareholders' equity and shares outstanding at year-end were reduced by the repurchase of shares in connection with the repurchase program authorized by the directors in October. That program authorizes repurchase of a total of 22 million shares, exclusive of purchases for compensation and benefit programs, by the end of 1997. 7 of 11 CoreStates Financial Corp (In thousands, except per share)
Three Months Ended Twelve Months Ended December 31, December 31, --------------------------- ---------------------------- 1996 1995(a) 1996 1995(a) -------- ---------- -------- ---------- Net interest income plus non-interest income........ $761,465 $771,778 $3,040,559 $3,049,147 ======== ======== ========== ========== Net income................... $195,546(b) $192,145(b) $649,144(b) $655,176 ======== ======== ========== ========== Net income per share......... $0.91(b) $0.87(b) $2.97(b) $2.95 ======== ======== ========== ========== Average number of shares outstanding......... 215,866 219,915 218,812 222,268 ======== ======== ========== ==========
(a) On April 9, 1996, CoreStates acquired Meridian Bancorp, Inc. ("Meridian") in a transaction accounted for as a pooling of interests. All prior period data presented has been restated to include Meridian. (b) Selected financial results for the three and nine months ended December 31, 1996 and 1995, excluding the significant items listed below, were as follows:
Three Months Ended Twelve Months Ended December 31, December 31, --------------------------- ---------------------------- 1996 1995(a) 1996 1995(a) -------- ---------- -------- ---------- Net income................... $195,546 $192,145 $649,144 $655,176 Exclude the following after tax items: Restructuring and merger- related charges.......... 6,049 4,911 150,840 92,151 Net investment gains....... - (956) (28,115) (8,638) SAIF Fund special assessment............... - - 8,920 - EPS gain................... - - - (11,761) -------- -------- -------- -------- Operating earnings........... $201,595 $196,100 $780,789 $727,028 ======== ======== ======== ======== Operating earnings per share. $0.93 $0.89 $3.57 $3.28 Return on average total assets..................... 1.81% 1.74% 1.78% 1.63% Return on average shareholders' equity....... 21.03% 20.36% 20.07% 19.43%
8 of 11 EX-99.B 3 CONSOLIDATED FINANCIAL HIGHLIGHTS CoreStates Financial Corp Consolidated Financial Highlights (Unaudited)
Three months ended Twelve months ended December 31, December 31, ------------------------------------------- ----------------------------------------- Percent Percent 1996 1995(a) change 1996 1995(a) change ------------- ------------- --------- -------------- ------------ -------- PER COMMON SHARE DATA - --------------------- Net income $0.91(b) $0.87(b) 4.6% $2.97(b) $2.95(b) 0.7% Cash dividends declared 0.47 0.42 11.9% 1.73 1.44 20.1% Book value 17.40 17.61 FINANCIAL RATIOS - ---------------- Return on average shareholders' equity 20.40%(b) 19.95%(b) 16.69%(b) 17.51%(b) Return on average total assets 1.75%(b) 1.71%(b) 1.48%(b) 1.47%(b) Net interest margin (FTE) 5.46% 5.50% 5.53% 5.47% Risk-based capital - Tier 1 9.45% 9.20% - Total capital 13.23% 12.71% Tier 1 leverage ratio 8.46% 7.99% Shareholders' equity / Total assets 8.12% 8.43% ASSET QUALITY (dollars in thousands) - ------------------------------------ Allowance for loan losses $710,327 $670,265 Allowance for loan losses / Loans 2.17% 2.11% Net charge-offs $37,912 $54,528 $188,705 $154,861 Net charge-offs / Average loans (annualized) 0.46% 0.69% 0.59% 0.50% Nonperforming assets $244,963 $268,306 Nonperforming assets / Total loans plus OREO 0.75% 0.85% Nonperforming assets / Total assets 0.54% 0.58% Allowance for loan losses / Nonperforming loans 321.72% 290.40% AVERAGE BALANCES (in millions) - ------------------------------ Loans, net of unearned discounts $32,620 $31,655 3.0% $31,939 $31,267 2.1% Earning assets 39,540 39,959 -1.0% 39,208 40,228 -2.5% Total assets 44,363 44,633 -0.6% 43,794 44,705 -2.0% Deposits 32,325 32,761 -1.3% 32,367 33,102 -2.2% Interest bearing liabilities 29,973 30,815 -2.7% 29,783 31,344 -5.0% Shareholders' equity 3,814 3,821 -0.2% 3,890 3,742 4.0% PERIOD END BALANCES (in millions) - --------------------------------- Loans $32,777 $31,714 3.4% Total assets 45,494 45,997 -1.1% Deposits 33,727 33,964 -0.7% Total liabilities 41,798 42,121 -0.8% Shareholders' equity 3,696 3,876 -4.6%
- ------------------------------------------------------------------- (a) Restated to include Meridian. (b) SELECTED FINANCIAL RESULTS EXCLUDING SIGNIFICANT ITEMS (in thousands, except ---------------------------------------------------------------------------- per share data) Selected financial results for the three and twelve month - -------------- periods ended December 31, 1996 and 1995, excluding the significant items listed below, were as follows:
Three Months Ended December 31, ----------------------------------------------------------------- Percent 1996 1995(a) change ------------- ------------- --------- Net income $195,546 $192,145 1.8% Exclude the following after-tax items: Restructuring and merger-related charges 6,049 4,911 Certain investment gains - (956) SAIF special assessment - - Gain on affiliate joint venture - - ------------- ------------- Operating earnings $201,595 $196,100 2.8% ============= ============= Operating earnings per share $0.93 $0.89 4.5% Return on average shareholders' equity 21.03% 20.36% Return on average total assets 1.81% 1.74% Twelve Months Ended December 31, ----------------------------------------------------------------- Percent 1996 1995(a) Change ------------- --------------- -------------- Net income $649,144 $655,176 -0.9% Exclude the following after-tax items: Restructuring and merger-related charges 150,840 92,251 Certain investment gains (28,115) (8,638) SAIF special assessment 8,920 - Gain on affiliate joint venture - (11,761) ------------- --------------- Operating earnings $780,789 $727,028 7.4% ============= =============== Operating earnings per share $3.57 $3.28 8.8% Return on average shareholders' equity 20.07% 19.43% Return on average total assets 1.78% 1.63%
9 of 11 CoreStates Financial Corp Consolidated Financial Highlights -- continued (Unaudited)
Three months ended December 31, ------------------------------------------- Percent 1996 1995(a) change ------------- ------------- --------- TAX EQUIVALENT INCOME STATEMENT - -------------------------------- (in thousands, except per share data) Net interest income $543,104 $554,264 -2.0% Provision for losses on loans 40,000 38,225 4.6% Non-Interest Income: Service charges on deposit accounts 61,927 61,883 0.1% Trust income 42,261 41,755 1.2% Fees for international services 26,956 23,496 14.7% Debit and credit card fees 18,656 22,444 -16.9% Income from investment in EPS, Inc. 7,710 7,548 2.1% Income from trading activities 9,336 8,658 7.8% Securities gains 4,036 5,729 Other operating income 53,495 53,839 -0.6% ------------- ------------- Total non-interest income 224,377 225,352 -0.4% ------------- ------------- Non-Financial Expenses: Salaries, wages and benefits 206,717 218,651 -5.5% Net occupancy 37,157 38,196 -2.7% Equipment expenses 30,242 30,883 -2.1% Restructuring and merger-related charges 9,602 2,037 Other operating expenses 133,570 140,693 -5.1% ------------- ------------- Total non-financial expenses 417,288 430,460 -3.1% ------------- ------------- Income Before Income Taxes 310,193 310,931 -0.2% Provision for income taxes 114,647 118,786 -3.5% ------------- ------------- Net Income $195,546 (b) $192,145 (b) 1.8% ============= ============= Twelve months ended December 31, --------------------------------------------- Percent 1996 1995(a) change -------------- -------------- --------- TAX EQUIVALENT INCOME STATEMENT - -------------------------------- (in thousands, except per share data) Net interest income $2,167,684 $2,200,195 -1.5% Provision for losses on loans 228,767 144,002 58.9% Non-Interest Income: Service charges on deposit accounts 243,696 244,439 -0.3% Trust income 167,138 162,776 2.7% Fees for international services 101,761 94,396 7.8% Debit and credit card fees 74,707 83,812 -10.9% Income from investment in EPS, Inc. 29,902 49,114 -39.1% Income from trading activities 25,216 35,403 -28.8% Securities gains 59,512 31,475 Other operating income 197,143 180,807 9.0% -------------- -------------- Total non-interest income 899,075 882,222 1.9% -------------- -------------- Non-Financial Expenses: Salaries, wages and benefits 826,442 904,377 -8.6% Net occupancy 157,358 159,530 -1.4% Equipment expenses 120,602 118,532 1.7% Restructuring and merger-related charges 139,702 138,600 Other operating expenses 532,724 564,489 -5.6% -------------- -------------- Total non-financial expenses 1,776,828 1,885,528 -5.8% -------------- -------------- Income Before Income Taxes 1,061,164 1,052,887 0.8% Provision for income taxes 412,020 397,711 3.6% -------------- -------------- Net Income $649,144 (b) $655,176 (b) -0.9% ============== ==============
- ----------------------------------------------- (a) Restated to include Meridian. (b) FOR SELECTED FINANCIAL RESULTS EXCLUDING SIGNIFICANT ITEMS - SEE FOOTNOTE (b), PAGE 1. 10 of 11 CoreStates Financial Corp and Subsidiaries CONSOLIDATED BALANCE SHEET (in thousands)
December 31, ---------------------------- 1996 1995 ------------ ------------ ASSETS Cash and due from banks..................................... $ 3,462,287 $ 3,662,143 Time deposits, principally Eurodollars...................... 2,443,154 1,909,260 Federal funds sold and securities purchased under agreements to resell..................................... 509,694 719,937 Trading account assets...................................... 122,317 147,218 Investment securities available-for-sale.................... 2,394,166 2,572,315 Investment securities held-to-maturity (market value: 1996-$1,692,243; 1995-$3,075,964)........................ 1,689,058 3,059,917 Total loans, net of unearned discounts of $204,521 in 1996 and $232,077 in 1995.................... 32,777,032 31,714,152 Less: Allowance for loan losses.......................... (710,327) (670,265) ------------ ------------ Net loans.............................................. 32,066,705 31,043,887 Due from customers on acceptances........................... 738,077 560,707 Premises and equipment...................................... 625,876 664,279 Other assets................................................ 1,442,860 1,657,579 ------------ ------------ Total assets........................................... $45,494,194 $45,997,242 ============ ============ LIABILITIES Deposits: Domestic: Non-interest bearing................................... $ 9,330,445 $ 8,937,147 Interest bearing....................................... 22,986,955 23,883,726 Overseas branches and subsidiaries....................... 1,409,756 1,142,947 ------------ ------------ Total deposits......................................... 33,727,156 33,963,820 Short-term funds borrowed................................... 2,633,157 3,677,013 Bank acceptances outstanding................................ 727,728 549,048 Other liabilities........................................... 1,661,162 1,719,697 Long-term debt.............................................. 3,049,297 2,212,099 ------------ ------------ Total liabilities...................................... 41,798,500 42,121,677 ------------ ------------ COMMITMENTS AND CONTINGENT LIABILITIES SHAREHOLDERS' EQUITY Preferred stock: authorized 10.0 million shares; no shares issued................................. - - Common stock: $1 par value; authorized 350.0 million shares; issued 223.6 million shares in 1996 and 230.2 million shares in 1995 (including treasury shares of 8.9 million in 1996 and 7.8 million in 1995, and unallocated shares held by Employee Stock Ownership Plan (ESOP) of 2.3 million in 1996 and 2.3 million in 1995).......... 223,599 230,231 Other common shareholders' equity, net...................... 3,472,095 3,645,334 ------------ ------------ Total shareholders' equity............................. 3,695,694 3,875,565 ------------ ------------ Total liabilities and shareholders' equity............. $45,494,194 $45,997,242 ============ ============
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