-----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, PX1Vdl1QvEpEIlN+ogWZclHYhS/sa9dmp5sbOPLdVO5qtC2YGUfFFZifKj8ZBmwn 7GUezN7QVOheOYeGvMIv6A== 0000950128-95-000127.txt : 199507180000950128-95-000127.hdr.sgml : 19950718 ACCESSION NUMBER: 0000950128-95-000127 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950710 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19950717 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PNC BANK CORP CENTRAL INDEX KEY: 0000713676 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 251435979 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09718 FILM NUMBER: 95554453 BUSINESS ADDRESS: STREET 1: ONE PNC PLAZA STREET 2: FIFTH AVE & WOOD ST CITY: PITTSBURGH STATE: PA ZIP: 15265 BUSINESS PHONE: 4127622666 MAIL ADDRESS: STREET 1: ONE PNC PLAZA STREET 2: FIFTH AVENUE & WOOD STREET CITY: PITTSBURGH STATE: PA ZIP: 15265 FORMER COMPANY: FORMER CONFORMED NAME: PNC BANK CORP /PA/ DATE OF NAME CHANGE: 19930428 FORMER COMPANY: FORMER CONFORMED NAME: PNC FINANCIAL CORP DATE OF NAME CHANGE: 19920703 8-K/A 1 PNC BANK 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A (AMENDMENT NO. 1) CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 JULY 10, 1995 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) 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 FIFTH AVENUE AND WOOD STREET PITTSBURGH, PENNSYLVANIA 15265 (Address of principal executive offices) (Zip Code) (412) 762-3900 (Registrant's telephone number, including area code) (Former name or former address, if changed since last report) 2 This Form 8-K/A amends PNC Bank Corp.'s ("Corporation") Form 8-K dated as of July 10, 1995 and filed on July 13, 1995 ("Form 8-K") pursuant to which the Corporation announced the execution of the Agreement and Plan of Reorganization and related matters with Midlantic Corporation ("Midlantic"). ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements Audited consolidated financial statements of Midlantic as of December 31, 1994 and 1993, and for each of the three years in the period ended December 31, 1994, and the independent auditors' report thereon, included on pages 42 - 70 of Midlantic's 1994 Annual Report to Shareholders and incorporated by reference in Midlantic's Annual Report on Form 10-K for the year ended December 31, 1994 (File No. 0-15870) ("Midlantic Form 10-K") are incorporated herein by reference to such Midlantic Form 10-K. Unaudited consolidated financial statements of Midlantic as of March 31, 1995 and for the three months ended March 31, 1995 and 1994 included on pages 3 to 11 of Midlantic's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1995 (File No. 0-15870) ("Midlantic Form 10-Q") are incorporated herein by reference to such Midlantic Form 10-Q. (b) Pro Forma Financial Information Pro forma consolidated financial information giving effect to the proposed merger of Midlantic with and into a wholly-owned subsidiary of the Corporation is attached hereto as Exhibit 99.4 and incorporated herein by reference. (c) Exhibits The exhibits listed below are filed herewith or incorporated herein by reference: 2 Agreement and Plan of Reorganization dated as of July 10, 1995, by and among Midlantic, the Corporation and PNC Bancorp, Inc., including Agreement and Plan of Merger (Annex A) incorporated herein by reference to Exhibit 2 of the Form 8-K.* 23 Consent of Coopers & Lybrand L.L.P., independent auditors for Midlantic, filed herewith. 99.1 Press Release dated July 10, 1995 incorporated herein by reference to Exhibit 99.1 of the Form 8-K. 99.2 Midlantic Stock Option Agreement dated as of July 10, 1995, by and between Midlantic and the Corporation incorporated herein by reference to Exhibit 99.2 of the Form 8-K. 99.3 PNC Stock Option Agreement dated as of July 10, 1995, by and between Midlantic and the Corporation incorporated herein by reference to Exhibit 99.3 of the Form 8-K. 99.4 Pro forma financial information filed herewith. [FN] * The exhibits of the agreements have been omitted. They are (a) Exhibit 4.9(a) - form of Midlantic affiliate letter, (b) Exhibit 4.9(b) - form of Corporation affiliate letter, (c) Exhibit 5.2(f) - form of opinion of Corporation counsel, and (d) Exhibit 5.3(g) - form of opinion of Midlantic counsel. The Corporation agrees to furnish supplementally a copy of any omitted exhibit to the Commission upon request. 2 3 SIGNATURES 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 thereunto duly authorized. PNC BANK CORP. (Registrant) Date: July 17, 1995 By /s/Robert L. Haunschild -------------------------- Robert L. Haunschild Senior Vice President and Chief Financial Officer 3 4 EXHIBIT INDEX 23 Consent of Coopers & Lybrand L.L.P., independent auditors for Midlantic, filed herewith. 99.4 Pro forma consolidated financial information, filed herewith. 4 EX-23 2 PNC BANK 8-K/A 1 EXHIBIT 23 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference, in the Registration Statements listed below, of our report dated January 18, 1995 (January 20, 1995 as to Note 28), with respect to the consolidated financial statements of Midlantic Corporation and Subsidiaries ("Midlantic") incorporated by reference in this Form 8-K from Midlantic's 1994 Form 10-K as filed with the Securities and Exchange Commission. Form S-3 relating to the shelf registration of $1 billion of debt securities of PNC Funding Corp, unconditionally guaranteed by PNC Bank Corp., and/or preferred stock of PNC Bank Corp. (File No. 33-55114) Form S-3 relating to the Dividend Reinvestment and Stock Purchase Plan of PNC Bank Corp. (File No. 33-52844) Form S-3 relating to the shelf registration of six million shares of PNC Bank Corp. preferred stock (File No. 33-40602) Post-Effective Amendment No. 1 on Form S-3 relating to the shelf registration of $500 million of debt securities of PNC Funding Corp, unconditionally guaranteed by PNC Bank Corp. (File No. 33-42803) Form S-8 relating to the PNC Bank Corp. 1992 Long-Term Incentive Award Plan (File No. 33-54960) Form S-8 relating to the 1987 Senior Executive Long-Term Award Plan of PNC Bank Corp.(now known as the PNC Bank Corp. 1992 Long-Term Incentive Award Plan) (File No. 33-28828) Post-Effective Amendment No. 2 on Form S-8 relating to the Employee Stock Purchase Plan of PNC Bank Corp. (File No. 2-83150) Post Effective Amendment No. 1 on Form S-8 relating to the Stock Option Plan of PNC Bank Corp. (File No. 2-92181) Form S-8 relating to the PNC Bank Corp. Incentive Savings Plan (File No. 33-25140) Post-Effective Amendment No. 1 (on Form S-3) to Form S-4 relating to the conversion of outstanding debentures assumed in connection with the merger of PNC Bank Corp., Kentucky, Inc., with and into a wholly-owned subsidiary of PNC Bank Corp. (File No. 33-10016) 5 2 Post-Effective Amendment No. 2 (on Form S-8) to Form S-4 relating to the exercise of stock options assumed by PNC Bank Corp. in connection with the merger of PNC Bank Corp., Kentucky, Inc., with and into a wholly-owned subsidiary of PNC Bank Corp. (File No. 33-10016) Post-Effective Amendment No. 1 (on Form S-8) to Form S-4 relating to the exercise of stock options assumed by PNC Bank Corp. in connection with the merger of a wholly-owned subsidiary of PNC Bank Corp. with and into Bank of Delaware Corporation (File No. 33-25642) /s/ COOPERS & LYBRAND L.L.P. ---------------------------- New York, New York July 17, 1995 6 EX-99.4 3 PNC BANK 8-K/A 1 Exhibit 99.4 PRO FORMA CONSOLIDATED FINANCIAL INFORMATION PNC Bank Corp. ("Corporation") has entered into a definitive agreement to merge Midlantic Corporation ("Midlantic") with and into a wholly-owned subsidiary of the Corporation. The transaction is expected to close by the year-end 1995, pending shareholder and regulatory approvals. The pro forma financial information on the following pages is unaudited and presents (i) the historical consolidated balance sheets of the Corporation and Midlantic at March 31, 1995, and (ii) the historical consolidated statements of income of the Corporation and Midlantic for the three months ended March 31, 1995 and 1994, and for each of the three years in the period ended December 31, 1994, assuming the companies had been combined for each period presented on a pooling of interests accounting basis. Certain financial statement reclassifications have been made for purposes of presenting the pro forma consolidated financial information. Intercompany transactions between the Corporation and Midlantic were not material. The pro forma financial information includes only those actions to be completed on or prior to the closing date and excludes (i) balance sheet changes, if any, that may occur after the closing date; (ii) expenses and nonrecurring charges related to the merger; and (iii) the estimated effect of revenue enhancements and expense savings to be initiated as part of the consolidation of the operations of the Corporation and Midlantic. The pro forma consolidated financial information is intended for informational purposes and may not be indicative of the financial position or results of operations that actually would have occurred, or will be attained in the future, had the merger been completed on the dates indicated. The pro forma consolidated financial information should be read in conjunction with the 1994 Annual Reports on Form 10-K and the Quarterly Reports on Form 10-Q for the quarterly period ended March 31, 1995 of the Corporation and Midlantic. 7 2 PNC BANK CORP. Pro Forma Consolidated Balance Sheet (Unaudited) March 31, 1995
PNC MIDLANTIC PRO FORMA In millions BANK CORP. CORPORATION ADJUSTMENTS PRO FORMA ___________________________________________________________________________________________________________ ASSETS Cash and due from banks $ 2,699 $ 791 $ 17 $ 3,507 Short-term investments 533 965 1,498 Loans held for sale 437 437 Securities available for sale 3,137 778 3,915 Investment securities 17,070 2,502 19,572 Loans, net of unearned income 35,724 8,223 43,947 Allowance for credit losses (981) (337) (1,318) ----------------------------------------------------------- Net loans 34,743 7,886 42,629 Other 3,475 712 29 4,216 -------------------------------------------------------------- Total assets $ 62,094 $ 13,634 $46 $ 75,774 ============================================================== LIABILITIES Deposits Noninterest-bearing $ 6,578 $ 2,599 $ 9,177 Interest-bearing 26,363 8,058 34,421 -------------------------------------------------------------- Total deposits 32,941 10,657 43,598 Borrowed funds Federal funds purchased 2,928 60 2,988 Repurchase agreements 7,059 922 7,981 Commercial paper 825 825 Other 2,968 27 2,995 -------------------------------------------------------------- Total borrowed funds 13,780 1,009 14,789 Notes and debentures 9,599 373 9,972 Accrued expenses and other liabilities 1,384 186 1,570 -------------------------------------------------------------- Total liabilities 57,704 12,225 69,929 -------------------------------------------------------------- SHAREHOLDERS' EQUITY Preferred stock 1 50 51 Common stock 1,181 158 $ (158) 1,741 560 Capital surplus 463 613 (613) 712 249 Retained earnings 3,062 599 3,661 Deferred ESOP benefit expense (83) (83) Net unrealized securities losses (65) (3) (68) Common stock held in treasury at cost (169) (8) 8 (169) -------------------------------------------------------------- Total shareholders' equity 4,390 1,409 46 5,845 -------------------------------------------------------------- Total liabilities and shareholders' equity $ 62,094 $ 13,634 $46 $ 75,774 ________________________________________________________________________________________________________________
See accompanying Notes to Pro Forma Consolidated Financial Information. 8 3 PNC BANK CORP. Pro Forma Consolidated Statement of Income (Unaudited) Three months ended March 31, 1995
PNC MIDLANTIC PRO FORMA In thousands, except per share data BANK CORP. CORPORATION ADJUSTMENTS PRO FORMA _____________________________________________________________________________________________________________ INTEREST INCOME Loans and fees on loans $ 707,039 $ 174,500 $881,539 Securities 295,423 50,082 345,505 Other 21,621 12,612 34,233 -------------------------------------------------------------- Total interest income 1,024,083 237,194 1,261,277 INTEREST EXPENSE Deposits 292,334 65,387 357,721 Borrowed funds 204,121 7,914 212,035 Notes and debentures 143,654 8,587 152,241 -------------------------------------------------------------- Total interest expense 640,109 81,888 721,997 -------------------------------------------------------------- Net interest income 383,974 155,306 539,280 Provision for credit losses 1,500 1,500 -------------------------------------------------------------- Net interest income less provision for credit losses 383,974 153,806 537,780 NONINTEREST INCOME Investment management and trust 79,140 11,228 90,368 Service charges, fees and commissions 91,424 18,845 110,269 Mortgage banking 44,650 44,650 Net securities gains 1,254 1,254 Other 20,645 18,371 39,016 -------------------------------------------------------------- Total noninterest income 237,113 48,444 285,557 NONINTEREST EXPENSE Staff expense 201,858 62,423 264,281 Net occupancy and equipment 68,850 17,884 86,734 Amortization of intangibles 21,146 2,189 23,335 Federal deposit insurance 18,376 5,944 24,320 Other 127,149 28,412 155,561 -------------------------------------------------------------- Total noninterest expense 437,379 116,852 554,231 -------------------------------------------------------------- Income before income taxes 183,708 85,398 269,106 Applicable income taxes 58,057 32,074 90,131 -------------------------------------------------------------- Net income $ 125,651 $ 53,324 $178,975 _____________________________________________________________________________________________________________ EARNINGS PER COMMON SHARE Primary $ .54 $ .98 $ .52 Fully diluted .54 .97 .52 AVERAGE COMMON SHARES OUTSTANDING Primary 232,589 53,244 341,739 Fully diluted 234,463 54,900 347,008 _____________________________________________________________________________________________________________
See accompanying Notes to Pro Forma Consolidated Financial Information. 9 4 PNC BANK CORP. Pro Forma Consolidated Statement of Income (Unaudited) Three months ended March 31, 1994
PNC MIDLANTIC PRO FORMA In thousands, except per share data BANK CORP. CORPORATION ADJUSTMENTS PRO FORMA ________________________________________________________________________________________________________ INTEREST INCOME Loans and fees on loans $ 572,836 $ 162,482 $ 735,318 Securities 295,808 27,705 323,513 Other 26,460 14,761 41,221 --------------------------------------------------------- Total interest income 895,104 204,948 1,100,052 INTEREST EXPENSE Deposits 200,004 53,748 253,752 Borrowed funds 96,737 5,243 101,980 Notes and debentures 101,022 8,660 109,682 --------------------------------------------------------- Total interest expense 397,763 67,651 465,414 --------------------------------------------------------- Net interest income 497,341 137,297 634,638 Provision for credit losses 25,015 8,156 33,171 --------------------------------------------------------- Net interest income less provision for credit losses 472,326 129,141 601,467 NONINTEREST INCOME Investment management and trust 72,967 9,782 82,749 Service charges, fees and commissions 87,902 18,946 106,848 Mortgage banking 37,892 37,892 Net securities gains 30,392 1,263 31,655 Other 29,398 17,338 46,736 --------------------------------------------------------- Total noninterest income 258,551 47,329 305,880 NONINTEREST EXPENSE Staff expense 206,899 56,214 263,113 Net occupancy and equipment 65,282 19,160 84,442 Amortization of intangibles 19,560 1,605 21,165 Federal deposit insurance 18,176 7,194 25,370 Other 116,929 36,676 153,605 --------------------------------------------------------- Total noninterest expense 426,846 120,849 547,695 --------------------------------------------------------- Income before income taxes and cumulative effect of change in accounting principle 304,031 55,621 359,652 Applicable income taxes 98,342 2,268 100,610 --------------------------------------------------------- Income before cumulative effect of change in accounting principle 205,689 53,353 259,042 Cumulative effect of change in accounting principle (7,528) (7,528) --------------------------------------------------------- Net income $ 205,689 $ 45,825 $ 251,514 ________________________________________________________________________________________________________ EARNINGS PER COMMON SHARE Primary before cumulative effect of change in accounting principle $ .87 $ .99 $ .75 Cumulative effect of change in accounting principle (.14) (.02) -------------------------------------------------------- Primary $ .87 $ .85 $ .73 -------------------------------------------------------- Fully diluted before cumulative effect of change in accounting principle $ .86 $ .98 $ .74 Cumulative effect of change in accounting principle (.14) (.02) -------------------------------------------------------- Fully diluted $ .86 $ .84 $ .72 --------------------------------------------------------- AVERAGE COMMON SHARES OUTSTANDING Primary 236,698 52,821 344,981 Fully diluted 238,592 54,403 350,118 ________________________________________________________________________________________________________
See accompanying Notes to Pro Forma Consolidated Financial Information. 10 5 PNC BANK CORP. Pro Forma Consolidated Statement of Income (Unaudited) Year ended December 31, 1994
PNC MIDLANTIC PRO FORMA In thousands, except per share data BANK CORP. CORPORATION ADJUSTMENTS PRO FORMA ____________________________________________________________________________________________________________ INTEREST INCOME Loans and fees on loans $2,479,093 $ 676,741 $3,155,834 Securities 1,290,998 116,887 1,407,885 Other 91,721 69,856 161,577 ---------------------------------------------------------------- Total interest income 3,861,812 863,484 4,725,296 INTEREST EXPENSE Deposits 935,876 223,366 1,159,242 Borrowed funds 499,252 21,128 520,380 Notes and debentures 517,078 34,453 551,531 ---------------------------------------------------------------- Total interest expense 1,952,206 278,947 2,231,153 ---------------------------------------------------------------- Net interest income 1,909,606 584,537 2,494,143 Provision for credit losses 60,123 23,335 83,458 ---------------------------------------------------------------- Net interest income less provision for credit losses 1,849,483 561,202 2,410,685 NONINTEREST INCOME Investment management and trust 292,052 43,263 335,315 Service charges, fees and commissions 370,146 77,337 447,483 Mortgage banking 198,548 198,548 Net securities losses (134,919) (6,663) (141,582) Other 96,814 100,273 197,087 ---------------------------------------------------------------- Total noninterest income 822,641 214,210 1,036,851 NONINTEREST EXPENSE Staff expense 835,672 226,676 1,062,348 Net occupancy and equipment 280,437 67,896 348,333 Amortization of intangibles 82,237 6,460 88,697 Federal deposit insurance 73,902 28,407 102,309 Other 497,487 141,968 639,455 ---------------------------------------------------------------- Total noninterest expense 1,769,735 471,407 2,241,142 ---------------------------------------------------------------- Income before income taxes and cumulative effect of change in accounting principle 902,389 304,005 1,206,394 Applicable income taxes 292,327 24,900 317,227 ---------------------------------------------------------------- Income before cumulative effect of change in accounting principle 610,062 279,105 889,167 Cumulative effect of change in accounting principle (7,528) (7,528) ---------------------------------------------------------------- Net income $ 610,062 $ 271,577 $ 881,639 ___________________________________________________________________________________________________________ EARNINGS PER COMMON SHARE Primary before cumulative effect of change in accounting principle $ 2.57 $ 5.18 $ 2.56 Cumulative effect of change in accounting principle (.14) (.02) ---------------------------------------------------------------- Primary $ 2.57 $ 5.04 $ 2.54 ---------------------------------------------------------------- Fully diluted before cumulative effect of change in accounting principle $ 2.56 $ 5.11 $ 2.54 Cumulative effect of change in accounting principle (.14) (.02) ---------------------------------------------------------------- Fully diluted $ 2.56 $ 4.97 $ 2.52 ---------------------------------------------------------------- AVERAGE COMMON SHARES OUTSTANDING Primary 236,610 52,978 345,215 Fully diluted 238,448 54,522 350,218 __________________________________________________________________________________________________________ See accompanying Notes to Pro Forma Consolidated Financial Information.
11 6 PNC BANK CORP. Pro Forma Consolidated Statement of Income (Unaudited) Year ended December 31, 1993
PNC MIDLANTIC PRO FORMA In thousands, except per share data BANK CORP. CORPORATION ADJUSTMENTS PRO FORMA _____________________________________________________________________________________________________________ INTEREST INCOME Loans and fees on loans $1,950,937 $ 663,410 $2,614,347 Securities 1,203,151 92,048 1,295,199 Other 47,032 70,089 117,121 -------------------------------------------------------------- Total interest income 3,201,120 825,547 4,026,667 INTEREST EXPENSE Deposits 742,772 262,886 1,005,658 Borrowed funds 362,995 11,586 374,581 Notes and debentures 266,320 36,385 302,705 -------------------------------------------------------------- Total interest expense 1,372,087 310,857 1,682,944 -------------------------------------------------------------- Net interest income 1,829,033 514,690 2,343,723 Provision for credit losses 203,944 146,305 350,249 -------------------------------------------------------------- Net interest income less provision for credit losses 1,625,089 368,385 1,993,474 NONINTEREST INCOME Investment management and trust 273,849 41,459 315,308 Service charges, fees and commissions 354,297 78,815 433,112 Mortgage banking 50,590 50,590 Net securities gains 187,694 7,005 194,699 Other 78,819 59,174 137,993 -------------------------------------------------------------- Total noninterest income 945,249 186,453 1,131,702 NONINTEREST EXPENSE Staff expense 685,388 219,332 904,720 Net occupancy and equipment 229,308 71,503 300,811 Amortization of intangibles 31,589 6,334 37,923 Federal deposit insurance 65,488 33,841 99,329 Other 441,953 203,475 645,428 -------------------------------------------------------------- Total noninterest expense 1,453,726 534,485 1,988,211 -------------------------------------------------------------- Income before income taxes and cumulative effect of changes in accounting principles 1,116,612 20,353 1,136,965 Applicable income taxes 371,349 (111,043) 260,306 -------------------------------------------------------------- Income before cumulative effect of changes in accounting principles 745,263 131,396 876,659 Cumulative effect of changes in accounting principles (19,393) 38,962 19,569 -------------------------------------------------------------- Net income $ 725,870 $ 170,358 $ 896,228 _____________________________________________________________________________________________________________ EARNINGS PER COMMON SHARE Primary before cumulative effect of changes in accounting principles $ 3.14 $ 2.51 $ 2.55 Cumulative effect of changes in accounting principles (.08) .76 .06 -------------------------------------------------------------- Primary $ 3.06 $ 3.27 $ 2.61 -------------------------------------------------------------- Fully diluted before cumulative effect of changes in accounting principles $ 3.13 $ 2.51 $ 2.53 Cumulative effect of changes in accounting principles (.09) .74 .06 -------------------------------------------------------------- Fully diluted $ 3.04 $ 3.25 $ 2.59 -------------------------------------------------------------- AVERAGE COMMON SHARES OUTSTANDING Primary 236,386 50,943 340,820 Fully diluted 238,421 52,569 346,187 _____________________________________________________________________________________________________________ See accompanying Notes to Pro Forma Consolidated Financial Information.
12 7 PNC BANK CORP. Pro Forma Consolidated Statement of Income (Unaudited) Year ended December 31, 1992
PNC MIDLANTIC PRO FORMA In thousands, except per share data BANK CORP. CORPORATION ADJUSTMENTS PRO FORMA ______________________________________________________________________________________________________________ INTEREST INCOME Loans and fees on loans $1,964,248 $ 844,240 $2,808,488 Securities 1,203,643 181,421 1,385,064 Other 51,080 36,546 87,626 -------------------------------------------------------------- Total interest income 3,218,971 1,062,207 4,281,178 INTEREST EXPENSE Deposits 1,063,422 483,154 1,546,576 Borrowed funds 352,162 17,341 369,503 Notes and debentures 146,095 41,517 187,612 -------------------------------------------------------------- Total interest expense 1,561,679 542,012 2,103,691 -------------------------------------------------------------- Net interest income 1,657,292 520,195 2,177,487 Provision for credit losses 323,531 170,299 493,830 -------------------------------------------------------------- Net interest income less provision for credit losses 1,333,761 349,896 1,683,657 NONINTEREST INCOME Investment management and trust 260,113 46,776 306,889 Service charges, fees and commissions 330,317 79,478 409,795 Mortgage banking 30,476 30,476 Net securities gains 193,503 52,753 246,256 Other 72,367 111,358 183,725 -------------------------------------------------------------- Total noninterest income 886,776 290,365 1,177,141 NONINTEREST EXPENSE Staff expense 668,403 257,221 925,624 Net occupancy and equipment 206,560 87,186 293,746 Amortization of intangibles 18,294 7,696 25,990 Federal deposit insurance 65,629 34,090 99,719 Other 483,529 244,196 727,725 -------------------------------------------------------------- Total noninterest expense 1,442,415 630,389 2,072,804 -------------------------------------------------------------- Income before income taxes and cumulative effect of change in accounting principle 778,122 9,872 787,994 Applicable income taxes 248,682 2,844 251,526 -------------------------------------------------------------- Income before cumulative effect of change in accounting principle 529,440 7,028 536,468 Cumulative effect of change in accounting principle (102,501) (102,501) -------------------------------------------------------------- Net income $ 426,939 $ 7,028 $ 433,967 _____________________________________________________________________________________________________________ EARNINGS PER COMMON SHARE Primary before cumulative effect of change in accounting principle $ 2.36 $ .08 $ 1.72 Cumulative effect of change in accounting principle (.46) (.33) -------------------------------------------------------------- Primary $ 1.90 $ .08 $ 1.39 -------------------------------------------------------------- Fully diluted before cumulative effect of change in accounting principle $ 2.34 $ .08 $ 1.70 Cumulative effect of change in accounting principle (.45) (.32) ------------------------------------------------------------- Fully diluted $ 1.89 $ .08 $ 1.38 ------------------------------------------------------------- AVERAGE COMMON SHARES OUTSTANDING Primary 224,023 41,569 309,240 Fully diluted 227,125 41,954 316,333 ______________________________________________________________________________________________________________ See accompanying Notes to Pro Forma Consolidated Financial Information.
13 8 NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) 1. The pro forma consolidated financial information presented herein is unaudited and has been prepared assuming the merger will be accounted for as a pooling of interests. Accordingly, the related pro forma adjustments included herein reflect an assumed exchange ratio of 2.05 shares of the Corporation's common stock for each share of Midlantic common stock ("Exchange Ratio"). 2. During 1995 and 1994, the Corporation completed, or has pending, various other acquisitions which individually and in the aggregate are not "significant subsidiaries" in relation to the Corporation. Accordingly, pro forma financial information with respect to those acquisitions is not included herein. 3. Pro forma earnings per share data has been computed based on the combined historical net income applicable to common shareholders of the Corporation and Midlantic, using the historical weighted average shares outstanding of the Corporation's common stock and the weighted average shares of Midlantic adjusted by the Exchange Ratio. The 1992 pro forma earnings per share data reflects an adjustment to the Midlantic historical net income applicable to common shareholders and fully diluted weighted average common shares ourstanding for the dilutive effect of assuming the conversion of Midlantic debentures and the realted interest expense. 4. The pro forma consolidated financial information does not include any expenses or nonrecurring charges related to the transaction nor the estimated effect of revenue enhancements and expense savings to be initiated as part of the operations of the Corporation and Midlantic. 5. Shareholders' equity has been adjusted to record the assumed exchange of 2.05 shares of the Corporation's common stock for each share of outstanding Midlantic common stock (52,433,679 at March 31, 1995). In addition, the computation assumes that all stock options have been exercised for $17 million in cash and the recognition of a related tax benefit of $29 million. As a result, outstanding Midlantic common stock was eliminated and Midlantic treasury stock was assumed to be retired. Common shares of the Corporation assumed to be issued in exchange for outstanding shares and options of Midlantic totaled 111,554,875. Midlantic's 8.25% convertible debentures, which approximate $75 million for all periods presented, are convertible into Midlantic common stock at a conversion price of $48 per share. For purposes of this pro forma consolidated financial information, conversion of these debentures has not been assumed. -----END PRIVACY-ENHANCED MESSAGE-----