DUFF & PHELPS: PNC FUNDING CORP. $200 MILLION SUBORDINATED NOTES RATED 'A'
CHICAGO, Feb. 17 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of A' (Single-A) to PNC Funding Corporation's $200 million offering of 6-7/8 percent subordinated notes. The noncallable notes were priced to yield 6.998 percent to maturity and are due March 1, 2003. The securities are unconditionally guaranteed by PNC Bank Corp. The rating reflects the solid underlying fundamentals of PNC Bank Corp. including its large equity base, strong earnings capability, and solid loan loss reserves. Asset quality measures show continued improvement as management works to reduce problem asset levels. Fourth quarter earnings were strong with net income equaling $143.5 million, 1.18 percent return on assets, compared with $100.6 million, 0.95 percent, in 1991. Importantly, PNC's core profitability, normalized earnings before asset quality charges, is likewise above average, equaling 2.23 percent of average assets in the fourth quarter. This level of core earnings demonstrates the ability to incur credit costs before capital is impaired as well as the inherent profit potential of the company. PNC's high profitability reflects, in part, management's long history of expense control. PNC's balance sheet is strong as measured by capitalization, liquidity, reserves, and asset quality. Asset quality has shown consistent improvement over the last several quarters. Non-performing assets equaled 3.14 percent of loans and other real estate owned, compared with 3.59 percent and 4.21 percent, three months and twelve months earlier, respectively. The loan loss reserve continues to strengthen relative to problem loans with reserves equaling 162 percent of non-performing loans at Dec. 31, 1992, versus 145 percent at the close of the third quarter and 105 percent at year end 1991. Capital ratios are strong with stockholders' equity equaling 7.29 percent of total assets at Dec. 31, 1992. PNC Bank Corp. ranks among the 15 largest U.S. bank holding companies with total assets of $51.4 billion at Dec. 31, 1992. -0- 2/17/93 /CONTACT: Charles J. Orabutt Jr., CPA of Duff & Phelps, 312-368-3153/
CO: PNC Funding Corporation ST: IN: FIN SU: RTG
WB -- NY084 -- 7374 02/17/93 13:18 EST
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|Date:||Feb 17, 1993|
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