-----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, GhJS5UUqGrIDImGXgOk/N7Toi4UKQgSboSIhDL50B5px+TBQ68SEAFsGeQr+eBOE 0Wpfegfyz/jV+pvMO10A7w== 0001036050-98-000053.txt : 19980122 0001036050-98-000053.hdr.sgml : 19980122 ACCESSION NUMBER: 0001036050-98-000053 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980121 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980121 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: SEC FILE NUMBER: 001-11285 FILM NUMBER: 98510389 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 EXCHANGE ACT OF 1934 EXHIBIT INDEX IS ON PAGE 3 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JANUARY 21, 1998 CoreStates Financial Corp - -------------------------------------------------------------------------------- (EXACT NAME OF REGISTRANT AS 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 7 ITEM 5. OTHER EVENTS. ------------- The information set forth in the earnings news release of CoreStates Financial Corp as Exhibit 99 is incorporated by reference and made a part hereof. ITEM 7. EXHIBITS. --------- 99 CoreStates Financial Corp Earnings News Release dated January 21, 1998. 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) Dated: January 21, 1998 By /s/ David T. Walker ------------------------- David T. Walker Senior Vice President 2 of 7 Exhibit Index ------------- Exhibit No. Page - ----------- ---- 99 CoreStates Financial Corp Earnings News Release dated January 21, 1998 4 3 of 7 EX-99 2 FINANCIAL EARNINGS NEWS RELEASE DATED 1/21/1998 Exhibit 99 Corestates Financial Corp Broad and Chestnut Streets PO Box 7558 Philadelphia, PA 19101-7558 [CORESTATES LOGO APPEARS HERE] Contact Gary Brooten or George Biechler (215) 973-3546 Immediately Upon Receipt For Release CORESTATES REPORTS RECORD 1997 EARNINGS Philadelphia, January 21, 1998--CoreStates Financial Corp today reported strong fourth quarter results and record earnings for the full year 1997. The company also reported special items in the fourth quarter that contributed a net favorable nine cents per share. Fourth quarter operating earnings, which exclude special items, were $198.6 million or $1.00 per average common share, equal to the company's record third quarter and up 8% from 93 cents per average common share in 1996. Net income, which includes special items, was a record $216.6 million or $1.09 per average common share, up 20% from 91 cents per average common share in 1996. A new accounting rule, FAS 128, requires reporting dual earnings per share. In addition to reporting per share amounts based on average shares, as in the past, companies are required to report results diluted for the impact of outstanding options. The impact on CoreStates' quarterly earnings is approximately one cent per share. Per share results diluted to account for stock options were 99 cents (operating) and $1.08 (net) for the 1997 fourth quarter, compared to 93 cents and 90 cents, respectively, in 1996. On an operating basis the company reported fourth quarter returns of 1.66% on assets and a very strong 24.84% on equity. Full year operating earnings were $795.3 million or $3.91 per average common share, up 10% from $3.57 per average common share a year earlier. Net income was $813.3 million or $4.00 per average common share, up 35% from $2.97 per average common share in 1996. The diluted 1997 per share results were $3.87 operating and $3.96 net, compared to $3.54 and $2.94, respectively, in 1996. On an operating basis the full year return on assets was 1.74% and the full year return on equity was 23.64%. 4 of 7 Terrence A. Larsen, chairman, said the results reflected "the hard work of dedicated CoreStates employees, whose efforts have returned us to record earnings after a year spent integrating our 1996 Meridian acquisition." CoreStates and First Union Corporation on November 18, 1997 announced an agreement to merge. The merger is expected to be consummated by April 30, 1998, pending CoreStates and First Union shareholder approval, regulatory approval and other customary conditions of closing. SPECIAL ITEMS The special items in fourth quarter 1997 included a tax benefit of $109 million resulting from a business transaction involving the liquidation of an affiliate. CoreStates also incurred significant and unusual charges totaling $142 million ($91 million after tax). These included a special loan loss provision of $70 million ($45 million after tax), primarily related to a decision to sell $450 million of credit card outstandings; restructuring and merger-related charges totaling $15 million ($9 million after tax), primarily related to the pending First Union merger and the strategic technology alliance with Andersen Consulting; a charitable contribution of $25 million ($16 million after tax); and other charges totaling $32 million ($21 million after tax). All special items added a net $18 million after-tax or 9 cents per share to earnings. There were no other significant and unusual items during 1997. During the fourth quarter of 1996 there was a merger-related charge of two cents per share. For the full year 1996 the significant and unusual items were net merger-related charges of 68 cents per share; a special assessment for the SAIF Fund of four cents per share; and net investment gains of 12 cents per share. EARNINGS AND CREDIT QUALITY Compared to 1996, both the fourth quarter and full year 1997 earnings reflected solid growth in revenues from fee-based services. Net interest income was down slightly for both the quarter and the year, with double-digit loan growth offset by narrowing of the net interest margin. A significant factor in both the decreased net interest margin and the increased earnings per share was the repurchase of 17 million shares of stock during the first ten months of the year. Larsen said that fee-based services have been leading the company's efforts to enhance revenue growth. Collectively, the five principal categories of fee- based services generated 11% revenue growth for both the quarter and the full year 5 of 7 compared to 1996, reaching $715 million for the full year. Total non-interest income was up 8%. Total non-financial expenses were up slightly for the quarter but flat for the year compared to 1996, Larsen said. Non-performing assets at December 31, 1997 were $268 million, 0.55% of total assets and 0.77% of loans plus real estate foreclosed. Net charge-offs were $63.0 million for the quarter and $236.9 million for the year, compared to $37.9 million and $188.7 million, respectively, in 1996. The provision for losses on loans was $120 million, including the $70 million special provision, in the fourth quarter, and $263 million for the year. The reserve for possible loan losses at December 31 was $634 million, representing 1.82% of total loans and 250% of non-performing loans. BALANCE SHEET AND CAPITAL Consolidated total assets at December 31 were $48.5 billion, including consolidated net loans of $34.8 billion. Consolidated total deposits were $34.2 billion. The comparable figures for December 31, 1996 were $45.5 billion, $32.3 billion and $33.7 billion, respectively. Shareholders' equity at December 31 was $3.2 billion, or 6.7% of total assets. The Tier 1 leverage ratio (Tier 1 or "core" capital as a percentage of quarterly average assets) was 8.0% for the fourth quarter. Tier 1 capital at December 31 was 8.5% of risk-adjusted assets and total capital was 12.0% of risk-adjusted assets, well above regulatory minimums of 4% and 8% respectively. Shareholders' equity and total shares outstanding at year-end were reduced by the repurchase of shares authorized by the directors in fall 1996 and extended in summer 1997. A total of 17 million shares were repurchased during 1997. 6 of 7 CORESTATES FINANCIAL CORP (In thousands, except per share)
Three Months Ended Twelve Months Ended December 31, December 31, ------------------------- ------------------------ 1997 1996 1997 1996 ------------ ----------- ----------- ----------- Net interest income plus non-interest income.................. $773,835 $761,465 $3,041,638 $3,040,559 ======== ======== ========== ========== Net income.............................. $216,626(a) $195,546(a) $813,279(a) $649,144(a) ======== ======== ========== ========== Net income per common share: Basic................................ $1.09(a) $0.91(a) $4.00(a) $2.97(a) ======== ======== ========= ========== Diluted.............................. $1.08(a) $0.90(a) $3.96(a) $2.94(a) ======== ======= ========= ========== Common shares outstanding: Average basic........................ 197,920 215,866 203,452 218,812 ======== ======== ========= ========== Average diluted...................... 200,416 218,020 205,568 220,698 ======== ======== ========= ==========
(a) Selected financial results for the three and twelve months ended December 31, 1997 and 1996 excluding the significant items listed below, were as follows:
Three Months Ended Twelve Months Ended December 31, December 31, ------------------------- ----------------------- 1997 1996 1997 1996 ------------ ----------- ----------- ----------- Net income.............................. $ 216,626 $195,546 $ 813,279 $649,144 Exclude the following after-tax items: Special tax benefit.................... (109,000) - (109,000) - Special provision for loan losses...... 44,862 - 44,862 - Restructuring and merger- related charges....................... 9,612 6 ,049 9,612 150,840 Certain net investment gains........... - - - (28,115) Other.................................. 36,526 - 36,526 8,920 --------- -------- --------- -------- Operating earnings...................... $ 198,626 $201,595 $ 795,279 $780,789 ========= ======== ========= ======== Operating earnings per common share: Basic.................................. $ 1.00 $ 0.93 $ 3.91 $ 3.57 Diluted................................ $ 0.99 $ 0.93 $ 3.87 $ 3.54 Return on average total assets.......... 1.66% 1.81% 1.74% 1.78% Return on average shareholders' equity................... 24.84% 21.03% 23.64% 20.07% 7 of 7
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