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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 1998
[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number: 333-24023
FIRST USA BANK, NATIONAL ASSOCIATION
(As Successor to First National Bank of Commerce)
(Exact name of Registrant as specified in its charter)
(As Servicer on behalf of the First NBC Credit Card Master Trust)
LAWS OF THE UNITED STATES 76-0039224
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
201 NORTH WALNUT STREET
WILMINGTON, DELAWARE 19801
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (302) 594-4000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Title of each class:
First NBC Credit Card Master Trust
Class A 6.15% Asset Backed Certificates, Series 1997-1
and
Class B 6.35% Asset Backed Certificates, Series 1997-1
Indicate by check mark whether the Registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
Not applicable.
State the aggregate market value of the voting stock held by non-affiliates of
the Registrant. The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked prices of
such stock, as of a specified date within 60 days prior to the date of filing.
Not applicable.
Indicate the number shares outstanding of each of the Registrant's class of
common stock, as of the latest practicable date.
Not applicable.
DOCUMENTS INCORPORATED BY REFERENCE: None
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INTRODUCTORY NOTE
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Effective November 16, 1998, First USA Bank, National Association, a national
banking association organized under the laws of the United States (the "Bank"),
which is a wholly owned subsidiary of First USA Financial, Inc. which is a
wholly owned subsidiary of BANK ONE CORPORATION ("BANK ONE"), replaced Bank One,
Louisiana, N.A. ("Bank One Louisiana"), as the Transferor and Servicer under the
Pooling and Servicing Agreement (the "Agreement"), dated as of August 1, 1997,
between Bank One Louisiana (as successor to First National Bank of Commerce), as
the Transferor and the Servicer, and The Bank of New York, as the Trustee
relating to the First NBC Credit Card Master Trust (the "Trust"), and the
Supplements for all Series of Investor Certificates issued thereunder.
The Bank is the Transferor and Servicer under the Series 1997-1 Supplement to
the Agreement dated as of August 1, 1997 and the Series 1998-1 Supplement to the
Agreement dated as of September 24, 1998. The Certificates issued pursuant to
the Series 1998-1 Supplement to the Agreement were privately placed.
PART I
ITEM 1. BUSINESS
Not applicable.
ITEM 2. PROPERTIES
Not applicable.
ITEM 3. LEGAL PROCEEDINGS
The Bank has been named as a defendant in four class action lawsuits
filed in late 1997 by cardmembers of the Bank. These actions were filed in the
Superior Court of the State of Delaware, New Castle County, the Circuit Court of
Multnomah County, Oregon, the United States District Court for the Western
District of Washington and in the 14th District Court of Dallas County, Texas.
The plaintiffs in all four cases contend that they and others similarly situated
are entitled to equitable relief for alleged violations of the Delaware Consumer
Fraud Act, breach of contract, breach of the covenant of good faith and fair
dealing and fraud. The court granted summary judgment in favor of the Bank in
the Delaware case in April 1998 and the court in Oregon entered partial summary
judgment in favor of the Bank in May 1998. These cases are in various stages of
motion and discovery practice. The Bank believes that these claims are without
merit and intends to vigorously defend against all claims. While it is
impossible to predict the outcome of these matters, the Bank believes that any
liability arising from these matters will not have a material adverse effect on
the Transferor's business or on the Receivables of the Trust.
The Bank has been named as a defendant in a class action lawsuit filed
in the United States District Court for the District of Delaware against the
Bank alleging that the Bank charged convenience check fees in a manner contrary
to representations made in the Bank's solicitations. Although this matter is at
a preliminary stage, the Bank believes that it is without merit and the Bank
intends to vigorously defend against all claims. While it is impossible to
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predict the outcome of this matter, the Bank believes that any liability arising
from this matter will not have a material effect on the Transferor's business or
on the Receivables of the Trust.
The Bank has been named as a defendant in a class action lawsuit filed
in December 1998 in the United States District Court for the Northern District
of Illinois alleging that the Bank, in one of its direct mail solicitations,
violated Federal and state prohibitions against the mailing of unsolicited
credit cards. Although this matter is at a preliminary stage, the Bank believes
that it is without merit and the Bank intends to vigorously defend against all
claims. While it is impossible to predict the outcome of this matter, the Bank
believes that any liability arising from this matter will not have a material
adverse effect on the Transferor's business or on the Receivables of the Trust.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OR SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Certificates representing investors' interests in the Trust are
held and delivered in book-entry form through the facilities of the Depository
Trust Company ("DTC"), a "clearing agency" registered pursuant to the provisions
of Section 17A of the Securities Exchange Act of 1934, as amended. All
outstanding Certificates are held by CEDE & Co., the nominee of DTC.
The records of DTC indicate that, at December 31, 1998, there were: (i)
twenty-three (23) DTC participants holding a position in the Class A 6.15% Asset
Backed Certificates, Series 1997-1; and (ii) three (3) DTC participants holding
a position in the Class B 6.35% Asset Backed Certificates, Series 1997-1.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
BANK ONE continues to execute project plans established by its
predecessor companies to assure Year 2000 readiness. Project costs are estimated
to reach $350 million over the life of the project. Year 2000 costs incurred
through year-end 1998 were approximately $235 million.
The inventory and assessment phase has been completed for all
information and non-information technology. At December 31, 1998, 87% of BANK
ONE's affected information technology applications were tested and returned to
production. BANK ONE expects that all information technology applications,
systems and equipment will be Year 2000 compliant by mid-1999. Ongoing
facilities and equipment improvements are expected to result in Year 2000
readiness for non-information systems technology by mid-1999.
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Year 2000 readiness is highly dependent on external entities and is not
limited to operating risk. BANK ONE is working extensively with external
entities to ensure that their systems will be Year 2000 compliant; however, BANK
ONE bears risk and could be adversely affected if outside parties, such as
customers, vendors, utilities and government agencies, do not appropriately
address Year 2000 readiness issues. In addition, BANK ONE may have increased
credit risk related to customers whose ability to repay debt is impaired due to
Year 2000 readiness costs or risk or whose collateral becomes impaired due to
lack of Year 2000 readiness.
Detailed contingency plans exist for critical business system
applications to mitigate potential problems or delays associated with systems
replacements or vendor delivery dates. Critical business processes have been
identified, and the most reasonable recovery strategies have been selected.
Contingency plans have been documented and validated for effectiveness. BANK ONE
will continue to review and validate the scope and content of its contingency
plans throughout 1999.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Not applicable.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Not applicable.
ITEM 11. EXECUTIVE COMPENSATION
Not applicable.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) The certificates of each Class of Series 1997-1 representing
investors' interest in the First NBC Credit Card Master Trust are represented by
one or more Certificates registered in the name of Cede & Co., the nominee of
DTC, and an investor holding an interest in the First NBC Credit Card Master
Trust is not entitled to receive a certificate representing such interest except
in certain limited circumstances. Accordingly, Cede & Co. is the sole holder of
record of the Certificates, which it held on behalf of brokers, dealers, banks
and other direct participants in the DTC system at December 31, 1998. At
December 31, 1998, the following direct participants held positions in the
Certificates representing interests in the First NBC Credit Card
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Master Trust, Series 1997-1 equal to or exceeding 5% of the total principal
amount of the Certificates of each Class of each Series outstanding on that
date.
<TABLE>
<CAPTION>
PRINCIPAL % OF
CLASS A AMOUNT OWNERSHIP
- ------- --------- ---------
<S> <C> <C>
Bank of New York (The) $37,390,000 14.41%
925 Patterson Plank Road
Secaucus, NJ 07094
Bankers Trust Company $18,590,000 7.16%
c/o BT Services Tennessee Inc.
648 Grassmere Park Drive
Nashville, TN 37211
Boston Safe Deposit and Trust Company $34,515,000 13.30%
c/o Mellon Bank N.A.
Three Mellon Bank Center
Room 153-3015
Pittsburgh, PA 15259
Chase Manhattan Bank $44,930,000 17.31%
4 New York Plaza, 13th Floor
New York, NY 10004
SSB--Trust Custody $24,500,000 9.44%
225 Franklin Street, M4
Boston, MA 02110
State Street Bank and Trust Company $47,300,000 18.23%
Global Corp. Action Dept. JAB5W
P.P. Box 1631
Boston, MA 02105-1631
CLASS B
- -------
Chase Manhattan Bank $14,000,000 66.67%
4 New York Plaza, 13th Floor
New York, NY 10004
State Street Bank and Trust Company $5,000,000 23.81%
Global Corp. Action Dept. JAB5W
P.P. Box 1631
Boston, MA 02105-1631
Suntrust Bank, Atlanta $2,000,000 9.52%
303 Peachtree Street
14th Floor MC #3141
Atlanta, GA 30308
</TABLE>
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(b) Not applicable.
(c) Not applicable.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. Not applicable.
2. Not applicable.
3. Exhibits
99.1 Annual Servicer's Certificate
99.2 Annual Independent Accountants' Servicing Report
of Arthur Andersen LLP on Management's Assertions
(b) During the quarter ended December 31, 1998, the following
reports on Form 8-K were filed with respect to the Trust:
Reports dated Items Reported
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June 11, 1998 5,7
July 10, 1998 7
August 11, 1998 7
September 9, 1998 7
October 8, 1998 5,7
November 10, 1998 7
November 16, 1998 5,7
November 16, 1998 5,7
December 10, 1998 7
(c) See Item 14(a)(3) above.
(d) Not applicable.
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SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) 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.
FIRST USA BANK, NATIONAL ASSOCIATION as
Servicer, on behalf of First NBC Credit Card
Master Trust
By: /s/ TRACIE H. KLEIN
--------------------------
Name: Tracie H. Klein
Title: Vice President
Dated: March 25, 1999
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EXHIBIT 99.1
ANNUAL SERVICER'S CERTIFICATE
FIRST USA BANK, N.A.
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FIRST NBC CREDIT CARD MASTER TRUST
SERIES 1997-1
1998 ANNUAL SERVICER'S CERTIFICATE
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The undersigned, a duly authorized representative of First USA Bank, N.A.
("First USA"), as Successor Transferor and Servicer to Bank One, Louisiana, N.A.
(as successor to First National Bank of Commerce ("FNBC")), pursuant to the
Pooling and Servicing Agreement dated as of August 1, 1997 (as may be amended
and supplemented from time to time, the "Agreement"), among First USA, as
Transferor and Servicer, and The Bank of New York, as Trustee, does hereby
certify that:
1. First USA is, as of the date hereof, Servicer under the Agreement.
Capitalized terms used in this Certificate have their respective meanings
as set forth in the Agreement.
2. The undersigned is a Servicing Officer who is duly authorized pursuant to
the Agreement to execute and deliver this Certificate to Trustee.
3. A review of the activities of Servicer during the fiscal year ended
December 31, 1998, and of its performance under the Agreement was conducted
under my supervision.
4. Based on such review, the Servicer has, to the best of my knowledge,
performed in all material respects its obligations under the Agreement
throughout such year and no default in the performance of such obligations
has occurred or is continuing except as set forth in paragraph 5.
5. The following is a description of each default in the performance of the
Servicer's obligations under the provisions of the Agreement known to me to
have been made during the fiscal year ended December 31, 1998, which sets
forth in detail (i) the nature of each such default, (ii) the action taken
by the Servicer, if any, to remedy each such default and (iii) the current
status of each such default: NONE
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate this 25th
----
day of March, 1999.
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FIRST USA BANK, N.A.,
as Servicer
By: /s/ TRACIE H. KLEIN
--------------------
Name: Tracie H. Klein
Title: Vice President
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[LETTERHEAD OF ARTHUR ANDERSEN LLP APPEARS HERE]
EXHIBIT 99.2
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
We have examined management's assertion about First USA Bank, N.A.'s (the
"Servicer") compliance with the Pooling and Servicing Agreement dated as of
August 1, 1997 between the Servicer and The Bank of New York, as Trustee for the
various Certficateholders and Enhancement Providers of First National Bank of
Commerce Credit Card Master Trust (the "Agreement") and the Series 1997-1 and
1998-1 Supplements thereto (the "Supplements"), as amended (together, the
"Agreements"), during the twelve months ended December 31, 1998. Management is
responsible for the Servicer's compliance with the Agreements. Our
responsibility is to express an opinion on management's assertion about the
Servicer's compliance based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
examining, on a test basis, evidence about the Servicer's compliance with those
requirements and performing such other procedures as we considered necessary in
the circumstances. We believe that our examination provides a reasonable basis
for our opinion.
As discussed in management's assertion, management, in providing its assertion
on compliance, assumed the accuracy of the reports prepared by the Servicer's
third party credit card processor and did not extend its assessment to the
relevant aspects of the Servicer's compliance that are the responsibility of the
third party credit card processor. Accordingly, our examination did not extend
to these aspects of the Servicer's compliance that are the responsibility of the
third party credit card processor, and we do not express an opinion or any other
form of assurance on these compliance aspects.
In our opinion, management's assertion that the Servicer complied with the
covenants and conditions of the Agreements during the twelve months ended
December 31, 1998, is fairly stated, in all material respects.
/s/ ARTHUR ANDERSEN LLP
Chicago, Illinois
March 17, 1999
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ASSERTION BY FIRST USA BANK, N.A.
The management of First USA Bank, N.A. (the "Servicer") is responsible for
complying with the Pooling and Servicing Agreement dated as of August 1, 1997
between the Servicer and The Bank of New York (the "Agreement") and the Series
1997-1 and Series 1998-1 Supplements thereto (the "Supplements"), as amended
(together, the "Agreements").
Management has performed an evaluation of the Servicer's compliance with the
Agreement and based on this evaluation management believes that the Servicer
has complied with the covenants and conditions of the Agreements during the
twelve months ended December 31, 1998.
In providing this assertion on compliance, we have assumed the accuracy of the
reports prepared by the Servicer's third party credit card processor and did not
extend our assessment to the relevant aspects of the Servicer's compliance that
are the responsibility of the third party credit card processor. Accordingly,
our assessment does not extend to these aspects of the Servicer's compliance
that are the responsibility of the third party credit card processor, and we do
not express any form of assurance on these compliance aspects.
/s/ GEORGE P. HUBLEY /s/ TRACIE H. KLEIN
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George P. Hubley Tracie H. Klein
Executive Vice President Vice President
Chief Financial Officer
