01—Abstract
Summary
Summary of the 10-K/A filed June 29, 1999. Cited figures are marked; the original filing is the authoritative source.
This filing is an amendment to PNC's 1998 Form 10-K (Form 10-K/A) and contains no consolidated financial statements for PNC Financial Services Group.
Its substance is the audited financial statements of the PNC Bank Corp. Incentive Savings Plan, a 401(k) employee benefit plan with an employee stock ownership (ESOP) component, for the years ended December 31, 1998 and 1997. The filing is supplemental: it is filed under SEC Rule 15d-21, which permits employee plan financials to be submitted separately, and it incorporates by reference the parent company's annual report, auditor's report and exhibits from the original 1998 10-K. The plan's net assets available for benefits fell to $976.9 milliona at December 31, 1998, from $1,044.95 million a year earlier, a decline of about 6.5%.
Benefits paid to participants were $141.0 millionb in 1998, and net realized and unrealized depreciation was $3.4 million. Roughly $298.1 million, about 31% of plan assets, sat in the PNC Bank Corp. Stock Fund, and the ESOP held a further $303.3 million of PNC common stock across allocated and unallocated accounts. The plan's investments were reorganized on July 1, 1998, when the plan moved into a Master Trust and participant funds were renamed around BlackRock portfolios and PNC Profile funds.
For investors, the main points are the scale of employee ownership in PNC stock, the modest remaining ESOP debt of $31.8 millionc (due by 2002 at a 5.36% rate), and the employer match, which is paid in PNC stock for participants under age 55. The filing does not report PNC's revenue, earnings, capital ratios or balance sheet, which appear only in the original 10-K and its Exhibit 13 annual report excerpts.
02—Key points
Key Highlights
- Filing type: 10-K/A amendment containing audited financials of the PNC Bank Corp. Incentive Savings Plan (401(k)/ESOP), not PNC's consolidated statements
- Plan net assets available for benefits were $976.9 million at December 31, 1998, down from $1,044.95 million at December 31, 1997 (about a 6.5% decline)
- PNC Bank Corp. Stock Fund held $298.1 million, and the ESOP held $303.3 million in PNC common stock (1,419,539 unallocated shares valued at $76.7 million)
- Benefits paid to participants totaled $141.0 million in 1998, and the plan recorded $3.4 million of net realized and unrealized depreciation
- The ESOP note payable stood at $31.8 million at year-end 1998, at a 5.36% fixed rate, with principal due annually through 2002
- Effective July 1, 1998, the plan joined a Master Trust and reorganized its funds around BlackRock portfolios and PNC Profile funds
- Employer matching contributions for participants under age 55 are made in PNC Bank Corp. common stock, and the age threshold for cash matching was lowered to 50 effective April 1, 1999
03—Questions
Frequently Asked Questions
Does this filing contain PNC Financial Services Group's consolidated financial statements?
No. The filing is a 10-K/A amendment that adds the audited financial statements of the PNC Bank Corp. Incentive Savings Plan under SEC Rule 15d-21. PNC's consolidated income statement, balance sheet and cash flows are incorporated by reference from the original 1998 Form 10-K and its Exhibit 13 annual report excerpts.
How much PNC stock do plan participants and the ESOP hold?
At December 31, 1998, the PNC Bank Corp. Stock Fund held $298.1 million of PNC common and preferred stock (about 5.52 million common shares). The ESOP held $303.3 million in PNC stock, comprising 4.20 million allocated shares ($226.6 million) and 1.42 million unallocated shares ($76.7 million).
What is the status of the ESOP debt?
The ESOP borrowed $140 million from PNC Bank in January 1990 to buy about 7.35 million PNC shares. The remaining note balance was refinanced in December 1998 and extended to 2002. The outstanding balance at year-end 1998 was $31.8 million, with scheduled principal payments of $9.0 million in 1999, $8.0 million in 2000, $8.6 million in 2001 and $6.2 million in 2002, at a 5.36% fixed rate.
Why did the plan's net assets decline in 1998?
Net assets fell from $1,044.95 million to $976.87 million. Benefit payments of $141.0 million and $3.4 million of net depreciation outweighed $30.8 million of interest and dividend income, $10.4 million of employer contributions, $35.6 million of employee contributions and $5.2 million of net transfers. The filing does not break out how much of the depreciation came from PNC stock versus other holdings.
04—Continue