<PAGE>
FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)________________________
November 14, 1996
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FCC National Bank
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(Exact name of registrant as specified in its charter)
United States of America 0-16337 51-0269396
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
One Gateway Center, 300 King Street, Wilmington, Delaware 19801
- -----------------------------------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: 302-656-5020
<PAGE>
Item 5. Other Events
- ------
1. On November 13, 1996, the registrant made available to prospective investors
a series term sheet setting forth a description of the collateral pool and
the proposed structure of $400,000,000 aggregate principal amount of Class A
Floating Rate Asset Backed Certificates, Series 1996-R of the First Chicago
Master Trust II. The series term sheet is attached hereto as Exhibit 99.01.
2. On November 13, 1996, the registrant made available to prospective investors
a series term sheet setting forth a description of the collateral pool and
the proposed structure of $600,000,000 aggregate principal amount of Class A
Floating Rate Asset Backed Certificates, Series 1996-S of the First Chicago
Master Trust II. The series term sheet is attached hereto as Exhibit 99.02.
Item 7. Financial Statements and Exhibits
- ------
(c) Exhibits
Exhibit Number Description of Exhibit
-------------- ----------------------
99.01 Series Term Sheet dated November 13, 1996,
with respect to the proposed issuance of the
Class A Floating Rate Asset Backed
Certificates, Series 1996-R of the First
Chicago Master Trust II.
99.02 Series Term Sheet dated November 13, 1996,
with respect to the proposed issuance of the
Class A Floating Rate Asset Backed
Certificates, Series 1996-S of the First
Chicago Master Trust II.
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 hereunto duly authorized.
FCC NATIONAL BANK
----------------------------------
(Registrant)
Date: November 14, 1996 By /s/ Sharon A. Renchof
----------------------------------
Title: Assistant Secretary
2
<PAGE>
SUBJECT TO REVISION
SERIES TERM SHEET DATED NOVEMBER 13, 1996
$400,000,000
FIRST CHICAGO MASTER TRUST II
FLOATING RATE ASSET BACKED CERTIFICATES SERIES 1996-R
FCC NATIONAL BANK, SELLER AND SERVICER
THE CLASS A CERTIFICATES WILL REPRESENT INTERESTS IN THE TRUST ONLY AND WILL
NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF FCC NATIONAL BANK OR ANY
AFFILIATE THEREOF EXCEPT TO THE LIMITED EXTENT DESCRIBED HEREIN. NEITHER THE
CLASS A CERTIFICATES, THE UNDERLYING ACCOUNTS, THE RECEIVABLES NOR ANY
COLLECTIONS THEREON ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
THIS SERIES TERM SHEET CONTAINS STRUCTURAL AND COLLATERAL INFORMATION ABOUT
THE CLASS A CERTIFICATES; HOWEVER, THIS SERIES TERM SHEET DOES NOT CONTAIN
COMPLETE INFORMATION ABOUT THE CLASS A CERTIFICATES. THE INFORMATION PROVIDED
HEREIN IS PRELIMINARY, LIMITED IN NATURE AND SUBJECT TO COMPLETION OR
AMENDMENT AND WILL BE SUPERSEDED BY THE INFORMATION CONTAINED IN THE
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. ADDITIONAL INFORMATION WILL BE
CONTAINED IN THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. THIS SERIES TERM
SHEET IS NOT INTENDED TO BE A PROSPECTUS AND AN INVESTOR'S DECISION SHOULD BE
BASED ON THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. PURCHASERS ARE URGED TO
READ BOTH THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
THIS SERIES TERM SHEET SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE. SALES OF THE CLASS A CERTIFICATES MAY NOT BE CONSUMMATED
UNLESS THE PURCHASER HAS RECEIVED BOTH THE PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION.
FIRST CHICAGO CAPITAL MARKETS, INC.
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
LEHMAN BROTHERS
NATIONSBANC CAPITAL MARKETS, INC.
<PAGE>
This Series Term Sheet will be superseded in its entirety by the information
appearing in the Prospectus Supplement, the Prospectus and the Series 1996-R
Supplement to the Pooling and Servicing Agreement, as amended (the "Agreement")
between FCC National Bank (the "Bank"), as seller (in such capacity, the
"Seller") and servicer (in such capacity, the "Servicer"), and Norwest Bank
Minnesota, National Association, as trustee (the "Trustee"). The information
contained herein addresses only certain limited aspects of the Class A
Certificates and their investment characteristics, and does not purport to
provide a complete description thereof or of the risks associated with the
purchase thereof which are more fully described under "Risk Factors" in the
Prospectus.
SUMMARY OF SERIES TERMS
Trust................. First Chicago Master Trust II.
Title of Security..... Floating Rate Asset Backed Certificates Series
1996-R (the "Class A Certificates").
Initial Invested $457,142,858.
Amount...............
Class A Initial
Invested Amount......
$400,000,000.
Collateral Initial
Invested Amount......
$57,142,858.
Class A Certificate LIBOR plus % per annum.
Rate.................
Distribution Dates.... The fifteenth day of each month (or, if such
day is not a business day, the next succeeding
business day), commencing January 15, 1997.
Expected Initial
Principal Payment
Date.................
The June 1999 Distribution Date.
Controlled
Amortization Amount..
$33,333,333.33.
Class A Expected
Final Distribution
Date................. The May 2000 Distribution Date.
Series Termination The July 2001 Distribution Date.
Date.................
SUMMARY OF SERIES PROVISIONS
Issuer................ The Class A Certificates and the Collateral
Interest (collectively, the "Certificates")
each represent an undivided interest in the
Trust. As used herein, the term "Series 1996-
R" refers to the Class A Certificates and the
Collateral Interest, and the term
"Certificateholders" refers to holders of the
Class A Certificates and the holder of the
Collateral Interest, while the term "Series"
refers to any Series issued by the Trust,
including Series 1996-R. Concurrently with the
issuance of the Certificates, the Trust is
expected to issue another Series ("Series
1996-S"). The issuance of Series 1996-R is not
conditioned on the issuance of Series 1996-S.
2
<PAGE>
Trust Assets.......... The Trust assets include all receivables
existing from time to time (the "Receivables")
in certain consumer revolving credit card
accounts owned by the Bank (the "Accounts"),
any Receivables in additional accounts added
to the Trust from time to time, funds
collected or to be collected from cardholders
in respect of the Receivables (other than
recoveries on charged-off Receivables), moneys
on deposit in certain accounts of the Trust,
the right to receive certain Interchange fees
attributable to the Accounts (which right may
not be afforded to a particular Series) and
any Enhancement issued with respect to a
particular Series (the drawing on or payment
of such Enhancement not being available to the
Certificateholders of any other Series). The
Trust will not include the Receivables from
any removed accounts which are removed from
the Trust from time to time. The term
"Enhancement" shall mean, with respect to any
Series, any letter of credit, guaranteed rate
agreement, maturity guaranty facility, tax
protection agreement, interest rate swap, cash
collateral account, collateral interest or
other contract, agreement or arrangement for
the benefit of Certificateholders of such
Series or any class thereof.
The Accounts and the
Receivables..........
The Accounts currently consist of substantially
all of the VISA(R) and MasterCard(R)* consumer
revolving credit card accounts existing in all
of the Seller's ten billing cycles, excluding
certain accounts not originated by either the
Seller or its affiliate, The First National
Bank of Chicago ("FNBC").
Additional accounts added to each of the
billing cycles in the normal operation of the
Seller's credit card business and satisfying
the criteria provided in the Agreement also
are being added and currently are expected to
continue to be added on a daily basis to the
Accounts as a category of additional Accounts.
The Seller, at its option, may terminate or
suspend the inclusion of such additional
Accounts at any time.
All monthly calculations with respect to each
Account are computed based on the activity
during the applicable billing cycle for such
Account (the monthly billing cycle periods for
the Accounts ending in the same month are
collectively referred to as a "Due Period").
The aggregate amount of Receivables in the
Accounts as of the end of the October 1996 Due
Period was $15,978,267,238, of which
$15,636,362,503 were principal Receivables and
$341,904,735 were finance charge Receivables
(including those for the related Due Period as
well as unpaid finance charge Receivables for
previous Due Periods). Certain Interchange
attributable to cardholder charges for
merchandise and services will be treated as
finance charge Receivables for purposes of the
Series 1996-R Supplement.
- --------
* VISA(R) and MasterCard(R) are registered trademarks of VISA USA, Inc. and
MasterCard International, Inc., respectively.
3
<PAGE>
Class A Certificates.. The Trust's assets will be allocated to either
the interest of the Class A
Certificateholders, the interest of the holder
of the Collateral Interest (the "Collateral
Interest Holder"), the interest of the holders
of other outstanding Series of the Trust or
the interest of the Seller (the last being
referred to as the "First Chicago Interest").
Each Class A Certificate offered hereby
evidences an undivided interest in the Trust
assets allocated to the Class A
Certificateholders, and represents the right
to receive from such Trust assets funds up to
(but not in excess of) the amounts required to
make payments of interest at the Class A
Certificate Rate and payments of principal
during the amortization period to the extent
of the Class A Invested Amount (which may be
less than the aggregate unpaid principal
balance of the Class A Certificates).
The Class A Invested Amount will, except if
there are unreimbursed Class A Investor
Charge-Offs or if a Liquidation Event occurs,
remain fixed at the Class A Initial Invested
Amount during the Revolving Period and decline
thereafter during any amortization period as
principal is paid on the Class A Certificates.
The Class A Invested Amount is subject to
reduction as a result of allocating defaulted
Receivables to the Class A Certificates when
amounts available from excess spread, the Cash
Collateral Account and collections of
principal Receivables allocable to the
Collateral Interest ("Reallocated Principal
Collections") have been exhausted and the
Collateral Invested Amount has been reduced to
zero.
The Collateral Interest will be issued to the
Collateral Interest Holder in the Collateral
Initial Invested Amount (the Collateral
Initial Invested Amount, together with the
Class A Initial Invested Amount, is referred
to herein as the "Initial Invested Amount").
The amount of the Collateral Interest from
time to time (the "Collateral Invested Amount"
and, together with the Class A Invested
Amount, the "Invested Amount") will form a
portion of the Enhancement available to the
Class A Certificateholders.
The Class A Certificates, to the extent of the
Class A Invested Amount, will include the
right to receive varying percentages of the
collections of finance charge Receivables and
principal Receivables with respect to each
Distribution Date.
The Class A Certificates will represent
undivided interests in the Trust only and will
not represent interests in or obligations of
the Seller or any affiliate thereof except to
the limited extent described herein. Neither
the Class A Certificates, the Accounts, the
Receivables nor any collections thereon are
insured or guaranteed by the Federal Deposit
Insurance Corporation or any other
governmental agency.
Monthly Interest...... Interest at the applicable Class A Certificate
Rate on the Class A Certificates for each
Interest Period will be distributed to Class A
Certificateholders on each Distribution Date
commencing January 15, 1997, in an amount
equal to the product of (i)(a) the actual
number of days in the related Interest Period
divided by 360, times (b) the Class A
Certificate Rate for the related Interest
Period
4
<PAGE>
and (ii) the Class A Invested Amount as of the
preceding record date (or, in the case of the
first Distribution Date, as of the Series R
Closing Date). An "Interest Period," with
respect to any Distribution Date, will be the
period from the previous Distribution Date (or
the Series R Closing Date) through the day
preceding such Distribution Date. "LIBOR"
means the London interbank offered quotations
for one-month United States deposits
prevailing on the date that LIBOR is
determined. LIBOR will be determined on the
second business day prior to the Series R
Closing Date for the period from the Series R
Closing Date through December 15, 1996, and on
the second business day prior to each
Distribution Date for the period from and
including such Distribution Date through the
day preceding the next succeeding Distribution
Date.
Principal Payments.... No principal will be payable to the Class A
Certificateholders until the Expected Initial
Principal Payment Date or, upon the occurrence
of certain events (each, a "Liquidation
Event"), the first Distribution Date with
respect to the Rapid Amortization Period.
Unless or until a Liquidation Event has
occurred, commencing on the first day of the
due period relating to the June 1999
Distribution Date and ending when the Invested
Amount has been paid in full, when Series
1996-R terminates or upon the occurrence of a
Liquidation Event (the "Controlled
Amortization Period"), collections of
principal Receivables allocable to the Class A
Certificates will be distributed monthly, in
payment of principal of the Class A
Certificates, on each Distribution Date
beginning with the June 1999 Distribution
Date. During such period, the amount of
collections of principal Receivables allocable
to the Class A Certificates will be paid to
the Class A Certificateholders as principal,
up to the Controlled Amortization Amount (and
any previously unpaid Controlled Amortization
Amount).
During the period beginning on the earlier of
the first day of the due period in which a
Liquidation Event occurs or is deemed to occur
and continuing to and including the earlier of
(a) the date on which the Invested Amount has
been paid in full and (b) the date on which
Series 1996-R terminates (the "Rapid
Amortization Period"), collections of
principal Receivables and certain other
amounts allocable to the Class A
Certificateholders will be distributed to the
Class A Certificateholders monthly, in payment
of principal on the Class A Certificates, on
each Distribution Date beginning with the
first Distribution Date related to such Rapid
Amortization Period.
Cash Collateral The Certificates will have the benefit of an
Account.............. account (the "Cash Collateral Account"), which
will be held in the name of the Trustee for
the benefit of the Certificateholders. The
Cash Collateral Account will be funded on the
Series R Closing Date in the amount of
$4,571,429 (the "Initial Cash Collateral
Amount"). Withdrawals will be made from the
Cash Collateral Account, to the extent of
available funds on deposit therein, to pay
certain amounts to the Class A Certificates.
5
<PAGE>
If the Cash Collateral Account is exhausted,
and defaulted Receivables allocable to the
Class A Certificates cannot be covered for any
Distribution Date, Reallocated Principal
Collections will be applied to reduce any such
deficiency. If such Reallocated Principal
Collections are insufficient to fund any such
deficiency, then the Collateral Invested
Amount (to the extent not already reduced)
will be reduced by the amount of such
remaining deficiency. In the event that such
reduction of the Collateral Invested Amount
would cause the Collateral Invested Amount to
be a negative number, the Collateral Invested
Amount will be reduced to zero and the Class A
Invested Amount will be reduced by the amount
of such remaining deficiency (a "Class A
Investor Charge-Off"). Accordingly, in the
event that the Cash Collateral Account is
exhausted and the Collateral Invested Amount
has been reduced to zero, and there is such a
deficiency which has not been reimbursed,
interest to be paid to Class A
Certificateholders in the future and the
amount of principal returned to Class A
Certificateholders will be reduced.
Amounts Available as
Enhancement..........
The Cash Collateral Account and the Collateral
Interest constitute the Enhancement for Series
1996-R. The amount of Enhancement available to
the Class A Certificateholders for any
Distribution Date will equal the lesser of (i)
the sum of the Collateral Invested Amount and
the amount, if any, on deposit in the Cash
Collateral Account (such sum, the "Available
Enhancement Amount") and (ii) the Required
Enhancement Amount. The "Required Enhancement
Amount" with respect to any Distribution Date
means, subject to certain limitations, the
greater of (i) the product of (a) the Invested
Amount related to such Distribution Date and
(b) 13.5% and (ii) the sum of (A) $4,571,429
and (B) the product of (I) two and (II) the
excess, if any, of $4,571,429 over the amount
of funds on deposit in the Cash Collateral
Account with respect to such Distribution
Date.
Final Payment of
Principal;
Termination of the The final distribution of principal and
Trust................ interest on the Class A Certificates will be
made no later than the Series Termination
Date. After such date, neither the Trust nor
the Seller will have any further obligation to
pay principal or interest on the Class A
Certificates.
Tax Status............ Counsel is of the opinion that the Class A
Certificates will be characterized as debt for
Federal income tax purposes. If the Class A
Certificates are not characterized as debt,
there may be adverse tax consequences for
Certificateholders.
ERISA Considerations.. The acquisition and holding of Class A
Certificates by employee benefit plans and
individual retirement accounts that are
subject to the "prohibited transaction" rules
of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), and the
Internal Revenue Code of 1986, as amended, may
result in "prohibited transactions." Under the
regulations issued by the Department of Labor,
the Trust's assets would not be deemed "plan
6
<PAGE>
assets" of any employee benefit plan holding
interests in the Class A Certificates if
certain conditions are met, including that
interests in the Class A Certificates be held
by at least 100 persons upon completion of the
public offering of the Class A Certificates.
Further information regarding the status of
the Class A Certificates as publicly offered
securities will be provided in the Prospectus
Supplement. Accordingly, employee benefit
plans contemplating purchasing interests in
Class A Certificates should consult their
counsel and review "ERISA Considerations" in
the Prospectus and "Summary of Series
Provisions--ERISA Considerations" in the
Prospectus Supplement prior to making a
purchase.
Rating of the Class A
Certificates.........
It is a condition to the issuance of the Class
A Certificates that they be rated in one of
the two highest rating categories by at least
one nationally recognized statistical rating
organization. The rating of the Class A
Certificates is based primarily on the value
of the Receivables, the Collateral Invested
Amount and the amount to be deposited in the
Cash Collateral Account.
7
<PAGE>
THE BANK'S CREDIT CARD PORTFOLIO
LOSS AND DELINQUENCY EXPERIENCE
The following tables set forth the loss and delinquency experience with
respect to payments by cardholders for each of the periods shown for
substantially all VISA and MasterCard consumer revolving credit card accounts
owned at the dates indicated by the Bank (excluding certain accounts not
originated by the Bank or its affiliate, FNBC (the "Bank's Portfolio")) during
the periods shown. As of the end of the September 1996 Due Period, the
Receivables in the Accounts represented substantially all Receivables in the
Bank's Portfolio. There can be no assurance, however, that the loss and
delinquency experience for the Receivables in the future will be similar to
the historical experience set forth below for the Bank's Portfolio.
LOSS EXPERIENCE FOR THE BANK'S PORTFOLIO
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
--------------------------- -----------------------------------
1996 1995 1995 1994 1993
----------- ----------- ----------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Average Receivables
Outstanding(1)......... $15,728,710 $12,019,934 $12,625,398 $9,763,242 $7,862,277
Gross Charge-offs(2).... 806,329 448,311 645,417 451,094 365,376
Gross Charge-offs as a
Percentage of Average
Receivables
Outstanding............ 6.84%(3) 4.97%(3) 5.11% 4.62% 4.65%
</TABLE>
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(1) Average Receivables Outstanding is the arithmetic average of receivables
outstanding during the period indicated.
(2) Gross Charge-offs are charge-offs before recoveries and do not include the
amount of any reductions in Average Receivables Outstanding due to fraud,
returned goods or customer disputes.
(3) On an annualized basis.
Charge-offs for the Bank's Portfolio measured as a percentage of average
receivables outstanding increased during 1995 and 1996 due, in part, to
certain strategies employed by the Bank to increase the cardholder base which
the Bank believes, in turn, will result in the increase of overall revenues
for the Bank's Portfolio in the future. In addition, during 1995 and 1996,
consumer debt service burden and defaults increased as a result of the growing
consumer debt levels coupled with stagnant real wage growth. The Bank believes
that the current level of unemployment and personal bankruptcy filings make
reductions in the loss rates unlikely in the immediate future and expects the
trend in charge-offs to continue in the near term. The timing of the peak
level of charge-offs is uncertain at this time. Losses are also affected by
other factors including competitive behavior and social conditions. The loss
rates for the Bank's Portfolio could increase in the future if economic
conditions were to worsen and could continue to increase for several months
even after such conditions begin to improve. The loss rates set forth above do
not reflect the reversal of unpaid fees and finance charges at the time a
charge-off occurs.
AVERAGE DELINQUENCIES FOR THE BANK'S PORTFOLIO
<TABLE>
<CAPTION>
AVERAGE OF
NINE MONTHS ENDED AVERAGE OF TWELVE MONTHS ENDED DECEMBER 31,
------------------------ --------------------------------------------------------------------------
SEPTEMBER 30, 1996 1995 1994 1993
------------------------ ------------------------ ------------------------ ------------------------
DELINQUENT DELINQUENT DELINQUENT DELINQUENT
PAYMENT STATUS AMOUNT PERCENTAGE(1) AMOUNT PERCENTAGE(1) AMOUNT PERCENTAGE(1) AMOUNT PERCENTAGE(1)
- -------------- ---------- ------------- ---------- ------------- ---------- ------------- ---------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30-59 days delin-
quent............... $260,793 1.66% $189,476 1.50% $138,280 1.41% $112,934 1.44%
60-89 days delin-
quent............... 125,603 .80 83,191 .66 57,419 .59 46,686 .59
90 days delinquent or
more................ 235,305 1.49 148,808 1.18 102,171 1.05 80,700 1.03
-------- ---- -------- ---- -------- ---- -------- ----
Total.............. $621,701 3.95% $421,475 3.34% $297,870 3.05% $240,320 3.06%
======== ==== ======== ==== ======== ==== ======== ====
</TABLE>
- --------
(1)The percentages are the result of dividing Delinquent Amount by Average
Receivables Outstanding for the applicable period.
8
<PAGE>
Delinquencies as a percentage of average receivables outstanding reflect a
pattern similar to loss rates as a result of the same factors discussed with
respect to the table set forth above for Loss Experience for the Bank's
Portfolio. The delinquency information in the above table reflects the
application of the Bank's current policy of allowing certain delinquent
accounts whose cardholders are making good faith efforts to repay overdue
amounts to be deemed current provided certain conditions are met.
SUMMARY OF MONTHLY PAYMENT RATES
The following table sets forth the highest and lowest cardholder monthly
payment rates for the Bank's Portfolio during any month in the period shown
and the average cardholder monthly payment rates for all months during the
periods shown, in each case calculated as a percentage of total opening
monthly account balances during the periods shown. The amount of collections
on Receivables may vary from month to month due to seasonal variations,
general economic conditions and payment habits of individual cardholders.
Payments shown in the table include amounts which would be deemed payments of
principal Receivables and finance charge Receivables with respect to the
Accounts but do not include Interchange.
CARDHOLDER MONTHLY PAYMENT RATES FOR THE BANK'S PORTFOLIO
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------- -------------------------
<S> <C> <C> <C> <C>
1996 1995 1994 1993
----- ------- ------- -------
Lowest................................. 20.30% 21.08% 19.81% 19.51%
Highest................................ 21.86 25.01 25.02 24.21
Monthly Average........................ 21.09 22.58 23.27 22.45
</TABLE>
REVENUE EXPERIENCE
The gross revenues from monthly periodic charges and fees billed to
cardholders on the Bank's Portfolio for each of the three years in the period
ended December 31, 1995, and the nine months ended September 30, 1996 and
1995, respectively, are set forth in the following table.
The historic gross revenue figures in the table are calculated on an as-
billed basis and represent amounts billed to cardholders in each billing cycle
before deduction of charge-offs, reductions due to fraud, returned goods and
customer disputes or other expenses. Cash collections on receivables may not
reflect the historical experience in the table. During periods of increasing
delinquencies, billings of periodic charges and fees may exceed cash as
amounts collected on credit card receivables lag behind amounts billed to
cardholders. Conversely, as delinquencies decrease, cash may exceed billings
of periodic charges and fees as amounts collected in a current period may
include amounts billed during prior periods. However, the Bank believes that,
during the periods shown, revenues on a billed basis closely approximated
revenues on a cash basis. Revenues from periodic charges and fees on both a
billed and a cash basis will be affected by numerous factors, including the
periodic charges on principal receivables, the amount of the annual membership
fees, the amount of other fees paid by cardholders, the percentage of
cardholders who pay off their balances in full each month and do not incur
periodic charges on purchases, fees and finance charges and changes in the
delinquency rate on the Receivables.
9
<PAGE>
REVENUE EXPERIENCE FOR THE BANK'S PORTFOLIO
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
--------------------------- -----------------------------------
1996 1995 1995 1994 1993
----------- ----------- ----------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Average Receivables
Outstanding(1)......... $15,728,710 $12,019,934 $12,625,398 $9,763,242 $7,862,277
Finance Charges and Fees
Billed................. 1,920,851 1,499,291 2,066,872 1,601,164 1,316,326
Average Finance Charges
and Fees Billed(2)..... 16.28%(3) 16.63%(3) 16.37% 16.40% 16.74%
</TABLE>
- --------
(1)Average Receivables Outstanding is the arithmetic average of receivables
outstanding during the period indicated.
(2) Average Finance Charges and Fees Billed is the result of dividing Finance
Charges and Fees Billed by Average Receivables Outstanding and does not
include revenue attributable to Interchange.
(3) On an annualized basis.
The revenues for the Bank's Portfolio shown in the Revenue Experience table
are related to periodic charges and other fees billed to cardholders but do
not include revenue attributable to Interchange. The revenues related to
periodic charges and fees depend in part upon the collective preference of
cardholders to use their credit cards as revolving debt instruments for
purchases and cash advances and paying off account balances over several
months as opposed to convenience use, where the cardholders prefer instead to
pay off their entire balance each month, thereby avoiding periodic charges on
purchases, fees and finance charges. Revenues related to periodic charges and
fees also depend on the types of charges and fees assessed by the Bank on the
accounts. From 1989 through 1994, the Bank emphasized the origination of
variable rate accounts and substantially all new accounts originated during
that time were variable rate accounts. Depending upon fluctuations in interest
rates, the variable rate periodic charge (which is based on the prime rate)
assessed on variable rate accounts may change from month to month and could be
less than the fixed charge applicable to most standard fixed rate accounts.
Commencing in 1994, the Bank began offering certain new non-affinity accounts,
for purchase transactions, a fixed rate periodic charge for an initial period
(ranging from 6 to 15 months) which then converts into a variable rate. The
initial fixed rate offered on such accounts is generally either 6.9% or 9.9%
per annum, a rate which is substantially lower than that currently assessed on
the variable rate accounts or the standard fixed rate accounts. The total
yield on such accounts during the initial fixed rate period is therefore lower
than that of a variable rate account or standard fixed rate account. As of the
end of the September 1996 Due Period, Receivables assessed a variable periodic
charge constituted approximately 93.89% of the total Receivables balance of
Accounts in the Trust. Fluctuations in the prime interest rate and/or the
continued use of the initial fixed/variable rate pricing for certain new
accounts, may affect future revenue experience. Throughout the periods shown
above, the Bank made certain changes in the charges and fees assessed on the
accounts. The Bank has no basis to predict how these changes and any future
changes in the terms of accounts may affect the revenue for the Bank's
Portfolio.
THE ACCOUNTS
The Receivables arising from the Accounts as of the end of the September
1996 Due Period totaled $16,166,078,620 and included $15,828,123,824 of
principal Receivables. The Accounts had an average principal Receivables
balance of $1,142 and an average credit limit of $7,292. The aggregate total
Receivables balance as a percentage of the aggregate total credit limit was
15.99%.
The Receivables arising from the Accounts as of the end of the October 1996
Due Period totaled $15,978,267,238 and included $15,636,362,503 of principal
Receivables.
10
<PAGE>
The following tables summarize the Accounts by various criteria as of the
end of the September 1996 Due Period. Approximately 201,973 cardholder
accounts included in the Accounts as of the end of the September 1996 Due
Period are Classic VISA accounts with respect to which the cardholder has been
upgraded to a VISA Gold account. For some period of time (not exceeding three
years), both accounts are active for a particular cardholder although the
Classic VISA account is eventually closed. Upon any cardholder upgrade, the
receivables balance in the Classic VISA account is transferred to the VISA
Gold account (which account is considered to have the same account opening
date as the Classic VISA account) and any new receivables created on the
Classic VISA account are immediately transferred to the VISA Gold account. In
addition, pursuant to the ordinary operating procedures of the Bank, accounts
which expire and have no outstanding balance are not removed immediately from
the Bank's Portfolio, but rather are removed periodically from the Bank's
Portfolio and therefore may still be included as an Account for some period of
time after expiration. As of the end of the September 1996 Due Period,
approximately 989,458 expired accounts with a credit balance or no balance
were included in the Accounts. Because the composition of the Accounts may
change in the future, these tables are not necessarily indicative of the
characteristics of the Trust at any time after the end of the September 1996
Due Period.
COMPOSITION OF THE ACCOUNTS BY ACCOUNT BALANCES
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL
NUMBER OF NUMBER OF RECEIVABLES RECEIVABLES
ACCOUNT BALANCE ACCOUNTS ACCOUNTS OUTSTANDING OUTSTANDING
--------------- ---------- ---------- --------------- -----------
<S> <C> <C> <C> <C>
Credit Balance(1)............ 153,010 1.10% $ (24,714,030) (.15)%
No Balance(2)................ 6,235,010 44.98 0 .00
$0.01 to $1,499.99........... 4,020,627 29.00 1,783,034,350 11.03
$1,500.00 to $2,999.99....... 1,253,893 9.05 2,785,420,603 17.23
$3,000.00 to $4,499.99....... 878,552 6.34 3,283,081,518 20.31
$4,500.00 to $9,999.99....... 1,271,190 9.17 7,751,732,286 47.95
$10,000 or more.............. 49,304 .36 587,523,893 3.63
---------- ------ --------------- ------
Total...................... 13,861,586 100.00% $16,166,078,620 100.00 %
========== ====== =============== ======
</TABLE>
- --------
(1) Credit Balances are a result of cardholder payments and credit adjustments
applied in excess of an Account's unpaid balance. Accounts currently with
a credit balance are included, as Receivables may be generated with
respect thereto in the future.
(2) Accounts currently with no balance are included, as Receivables may be
generated with respect thereto in the future.
COMPOSITION OF ACCOUNTS BY CREDIT LIMIT
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL
NUMBER OF NUMBER OF RECEIVABLES RECEIVABLES
CREDIT LIMIT ACCOUNTS ACCOUNTS OUTSTANDING OUTSTANDING
------------ ---------- ---------- --------------- -----------
<S> <C> <C> <C> <C>
$0.01 to $1,499.99............ 355,095 2.56% $ 90,597,535 .56%
$1,500.00 to $2,999.99........ 432,709 3.12 488,538,960 3.02
$3,000.00 to $4,499.99........ 784,513 5.66 967,600,879 5.99
$4,500.00 to $9,999.99........ 8,897,960 64.19 10,094,311,489 62.44
$10,000 or more(1)............ 3,391,309 24.47 4,525,029,757 27.99
---------- ------ --------------- ------
Total....................... 13,861,586 100.00% $16,166,078,620 100.00%
========== ====== =============== ======
</TABLE>
- --------
(1)Maximum current credit limit on an Account is $65,000.
11
<PAGE>
COMPOSITION OF ACCOUNTS BY PAYMENT STATUS
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL
NUMBER OF NUMBER OF RECEIVABLES RECEIVABLES
PAYMENT STATUS ACCOUNTS ACCOUNTS OUTSTANDING OUTSTANDING
-------------- ---------- ---------- --------------- -----------
<S> <C> <C> <C> <C>
Current(1).................... 13,612,187 98.20% $15,260,501,939 94.40%
30-59 days delinquent......... 134,468 .97 451,462,277 2.79
60-89 days delinquent......... 46,066 .33 172,840,725 1.07
90 days delinquent or more.... 68,865 .50 281,273,679 1.74
---------- ------ --------------- ------
Total....................... 13,861,586 100.00% $16,166,078,620 100.00%
========== ====== =============== ======
</TABLE>
- --------
(1) Includes Accounts on which the minimum payment has not yet been received
prior to the second billing date following the issuance of the related
bill.
COMPOSITION OF ACCOUNTS BY AGE
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL
NUMBER OF NUMBER OF RECEIVABLES RECEIVABLES
AGE ACCOUNTS ACCOUNTS OUTSTANDING OUTSTANDING
--- ---------- ---------- --------------- -----------
<S> <C> <C> <C> <C>
Not more than 6 months........ 596,999 4.31% $ 551,274,920 3.41%
Over 6 months to 12 months.... 1,282,661 9.25 1,587,262,530 9.82
Over 12 months to 24 months... 3,053,809 22.03 4,137,865,821 25.59
Over 24 months to 48 months... 4,002,534 28.88 4,233,546,202 26.19
Over 48 months................ 4,925,583 35.53 5,656,129,147 34.99
---------- ------ --------------- ------
Total....................... 13,861,586 100.00% $16,166,078,620 100.00%
========== ====== =============== ======
</TABLE>
12
<PAGE>
GEOGRAPHIC COMPOSITION OF THE ACCOUNTS
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL
NUMBER OF RECEIVABLES
STATE ACCOUNTS OUTSTANDING
- ----- ---------- -----------
<S> <C> <C>
California............................................... 13.70% 16.66%
Illinois................................................. 7.20 7.91
New York................................................. 7.65 7.21
Texas.................................................... 5.78 6.00
Florida.................................................. 6.17 5.60
New Jersey............................................... 3.91 3.52
Pennsylvania............................................. 4.28 3.29
Colorado................................................. 2.49 3.17
Ohio..................................................... 3.55 3.14
Michigan................................................. 3.29 2.95
Washington............................................... 1.98 2.22
Virginia................................................. 2.09 2.16
Massachusetts............................................ 2.45 2.11
Indiana.................................................. 2.20 2.02
Maryland................................................. 1.92 1.86
Georgia.................................................. 1.80 1.84
Minnesota................................................ 2.45 1.83
Missouri ................................................ 2.04 1.81
Tennessee................................................ 1.81 1.78
North Carolina........................................... 1.82 1.74
Arizona.................................................. 1.57 1.70
Oregon................................................... 1.45 1.64
Connecticut.............................................. 1.28 1.19
Louisiana................................................ 1.15 1.12
Hawaii................................................... 0.72 1.10
Alabama.................................................. 1.07 1.09
Iowa..................................................... 1.32 1.06
Oklahoma................................................. 1.10 1.01
All Other(1)............................................. 11.76 11.27
------ ------
Total................................................. 100.00% 100.00%
====== ======
</TABLE>
- --------
(1)States and foreign countries with less than 1.00% of Total Receivables
Outstanding.
Since the largest number of cardholders (based on billing address) whose
accounts historically have been included in the Trust are in California,
Illinois, New York and Texas, adverse changes in economic conditions in these
areas could have a direct impact on the timing and amount of payments on the
Certificates.
13
<PAGE>
SUBJECT TO REVISION
SERIES TERM SHEET DATED NOVEMBER 13, 1996
$600,000,000
FIRST CHICAGO MASTER TRUST II
FLOATING RATE ASSET BACKED CERTIFICATES SERIES 1996-S
FCC NATIONAL BANK, SELLER AND SERVICER
THE CLASS A CERTIFICATES WILL REPRESENT INTERESTS IN THE TRUST ONLY AND WILL
NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF FCC NATIONAL BANK OR ANY
AFFILIATE THEREOF EXCEPT TO THE LIMITED EXTENT DESCRIBED HEREIN. NEITHER THE
CLASS A CERTIFICATES, THE UNDERLYING ACCOUNTS, THE RECEIVABLES NOR ANY
COLLECTIONS THEREON ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
THIS SERIES TERM SHEET CONTAINS STRUCTURAL AND COLLATERAL INFORMATION ABOUT
THE CLASS A CERTIFICATES; HOWEVER, THIS SERIES TERM SHEET DOES NOT CONTAIN
COMPLETE INFORMATION ABOUT THE CLASS A CERTIFICATES. THE INFORMATION PROVIDED
HEREIN IS PRELIMINARY, LIMITED IN NATURE AND SUBJECT TO COMPLETION OR
AMENDMENT AND WILL BE SUPERSEDED BY THE INFORMATION CONTAINED IN THE
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. ADDITIONAL INFORMATION WILL BE
CONTAINED IN THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. THIS SERIES TERM
SHEET IS NOT INTENDED TO BE A PROSPECTUS AND AN INVESTOR'S DECISION SHOULD BE
BASED ON THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. PURCHASERS ARE URGED TO
READ BOTH THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
THIS SERIES TERM SHEET SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE. SALES OF THE CLASS A CERTIFICATES MAY NOT BE CONSUMMATED
UNLESS THE PURCHASER HAS RECEIVED BOTH THE PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION.
FIRST CHICAGO CAPITAL MARKETS, INC.
CHASE SECURITIES INC.
CS FIRST BOSTON
LEHMAN BROTHERS
UBS SECURITIES INC.
<PAGE>
This Series Term Sheet will be superseded in its entirety by the information
appearing in the Prospectus Supplement, the Prospectus and the Series 1996-S
Supplement to the Pooling and Servicing Agreement, as amended (the "Agreement")
between FCC National Bank (the "Bank"), as seller (in such capacity, the
"Seller") and servicer (in such capacity, the "Servicer"), and Norwest Bank
Minnesota, National Association, as trustee (the "Trustee"). The information
contained herein addresses only certain limited aspects of the Class A
Certificates and their investment characteristics, and does not purport to
provide a complete description thereof or of the risks associated with the
purchase thereof which are more fully described under "Risk Factors" in the
Prospectus.
SUMMARY OF SERIES TERMS
Trust................. First Chicago Master Trust II.
Title of Security..... Floating Rate Asset Backed Certificates Series
1996-S (the "Class A Certificates").
Initial Invested $685,714,286.
Amount...............
Class A Initial
Invested Amount......
$600,000,000.
Collateral Initial
Invested Amount......
$85,714,286.
Class A Certificate LIBOR plus % per annum.
Rate.................
Distribution Dates.... The fifteenth day of each month (or, if such
day is not a business day, the next succeeding
business day), commencing January 15, 1997.
Expected Initial
Principal Payment
Date.................
The July 2002 Distribution Date.
Controlled
Amortization Amount..
$100,000,000.00
Class A Expected
Final Distribution
Date................. The December 2002 Distribution Date.
Series Termination The August 2004 Distribution Date.
Date.................
SUMMARY OF SERIES PROVISIONS
Issuer................ The Class A Certificates and the Collateral
Interest (collectively, the "Certificates")
each represent an undivided interest in the
Trust. As used herein, the term "Series 1996-
S" refers to the Class A Certificates and the
Collateral Interest, and the term
"Certificateholders" refers to holders of the
Class A Certificates and the holder of the
Collateral Interest, while the term "Series"
refers to any Series issued by the Trust,
including Series 1996-S. Concurrently with the
issuance of the Certificates, the Trust is
expected to issue another Series ("Series
1996-R"). The issuance of Series 1996-S is not
conditioned on the issuance of Series 1996-R.
2
<PAGE>
Trust Assets.......... The Trust assets include all receivables
existing from time to time (the "Receivables")
in certain consumer revolving credit card
accounts owned by the Bank (the "Accounts"),
any Receivables in additional accounts added
to the Trust from time to time, funds
collected or to be collected from cardholders
in respect of the Receivables (other than
recoveries on charged-off Receivables), moneys
on deposit in certain accounts of the Trust,
the right to receive certain Interchange fees
attributable to the Accounts (which right may
not be afforded to a particular Series) and
any Enhancement issued with respect to a
particular Series (the drawing on or payment
of such Enhancement not being available to the
Certificateholders of any other Series). The
Trust will not include the Receivables from
any removed accounts which are removed from
the Trust from time to time. The term
"Enhancement" shall mean, with respect to any
Series, any letter of credit, guaranteed rate
agreement, maturity guaranty facility, tax
protection agreement, interest rate swap, cash
collateral account, collateral interest or
other contract, agreement or arrangement for
the benefit of Certificateholders of such
Series or any class thereof.
The Accounts and the
Receivables..........
The Accounts currently consist of substantially
all of the VISA(R) and MasterCard(R)* consumer
revolving credit card accounts existing in all
of the Seller's ten billing cycles, excluding
certain accounts not originated by either the
Seller or its affiliate, The First National
Bank of Chicago ("FNBC").
Additional accounts added to each of the
billing cycles in the normal operation of the
Seller's credit card business and satisfying
the criteria provided in the Agreement also
are being added and currently are expected to
continue to be added on a daily basis to the
Accounts as a category of additional Accounts.
The Seller, at its option, may terminate or
suspend the inclusion of such additional
Accounts at any time.
All monthly calculations with respect to each
Account are computed based on the activity
during the applicable billing cycle for such
Account (the monthly billing cycle periods for
the Accounts ending in the same month are
collectively referred to as a "Due Period").
The aggregate amount of Receivables in the
Accounts as of the end of the October 1996 Due
Period was $15,978,267,238 of which
$15,636,362,503 were principal Receivables and
$341,904,735 were finance charge Receivables
(including those for the related Due Period as
well as unpaid finance charge Receivables for
previous Due Periods). Certain Interchange
attributable to cardholder charges for
merchandise and services will be treated as
finance charge Receivables for purposes of the
Series 1996-S Supplement.
- --------
* VISA(R) and MasterCard(R) are registered trademarks of VISA USA, Inc. and
MasterCard International, Inc., respectively.
3
<PAGE>
Class A Certificates.. The Trust's assets will be allocated to either
the interest of the Class A
Certificateholders, the interest of the holder
of the Collateral Interest (the "Collateral
Interest Holder"), the interest of the holders
of other outstanding Series of the Trust or
the interest of the Seller (the last being
referred to as the "First Chicago Interest").
Each Class A Certificate offered hereby
evidences an undivided interest in the Trust
assets allocated to the Class A
Certificateholders, and represents the right
to receive from such Trust assets funds up to
(but not in excess of) the amounts required to
make payments of interest at the Class A
Certificate Rate and payments of principal
during the amortization period to the extent
of the Class A Invested Amount (which may be
less than the aggregate unpaid principal
balance of the Class A Certificates).
The Class A Invested Amount will, except if
there are unreimbursed Class A Investor
Charge-Offs or if a Liquidation Event occurs,
remain fixed at the Class A Initial Invested
Amount during the Revolving Period and decline
thereafter during any amortization period as
principal is paid on the Class A Certificates.
The Class A Invested Amount is subject to
reduction as a result of allocating defaulted
Receivables to the Class A Certificates when
amounts available from excess spread, the Cash
Collateral Account and collections of
principal Receivables allocable to the
Collateral Interest ("Reallocated Principal
Collections") have been exhausted and the
Collateral Invested Amount has been reduced to
zero.
The Collateral Interest will be issued to the
Collateral Interest Holder in the Collateral
Initial Invested Amount (the Collateral
Initial Invested Amount, together with the
Class A Initial Invested Amount, is referred
to herein as the "Initial Invested Amount").
The amount of the Collateral Interest from
time to time (the "Collateral Invested Amount"
and, together with the Class A Invested
Amount, the "Invested Amount") will form a
portion of the Enhancement available to the
Class A Certificateholders.
The Class A Certificates, to the extent of the
Class A Invested Amount, will include the
right to receive varying percentages of the
collections of finance charge Receivables and
principal Receivables with respect to each
Distribution Date.
The Class A Certificates will represent
undivided interests in the Trust only and will
not represent interests in or obligations of
the Seller or any affiliate thereof except to
the limited extent described herein. Neither
the Class A Certificates, the Accounts, the
Receivables nor any collections thereon are
insured or guaranteed by the Federal Deposit
Insurance Corporation or any other
governmental agency.
Monthly Interest...... Interest at the applicable Class A Certificate
Rate on the Class A Certificates for each
Interest Period will be distributed to Class A
Certificateholders on each Distribution Date
commencing January 15, 1997, in an amount
equal to the product of (i)(a) the actual
number of days in the related Interest Period
divided by 360, times (b) the Class A
Certificate Rate for the related Interest
Period
4
<PAGE>
and (ii) the Class A Invested Amount as of the
preceding record date (or, in the case of the
first Distribution Date, as of the Series S
Closing Date). An "Interest Period," with
respect to any Distribution Date, will be the
period from the previous Distribution Date (or
the Series S Closing Date) through the day
preceding such Distribution Date. "LIBOR"
means the London interbank offered quotations
for one-month United States deposits
prevailing on the date that LIBOR is
determined. LIBOR will be determined on the
second business day prior to the Series S
Closing Date for the period from the Series S
Closing Date through December 15, 1996, and on
the second business day prior to each
Distribution Date for the period from and
including such Distribution Date through the
day preceding the next succeeding Distribution
Date.
Principal Payments.... No principal will be payable to the Class A
Certificateholders until the Expected Initial
Principal Payment Date or, upon the occurrence
of certain events (each, a "Liquidation
Event"), the first Distribution Date with
respect to the Rapid Amortization Period.
Unless or until a Liquidation Event has
occurred, commencing on the first day of the
due period relating to the July 2002
Distribution Date and ending when the Invested
Amount has been paid in full, when Series
1996-S terminates or upon the occurrence of a
Liquidation Event (the "Controlled
Amortization Period"), collections of
principal Receivables allocable to the Class A
Certificates will be distributed monthly, in
payment of principal of the Class A
Certificates, on each Distribution Date
beginning with the July 2002 Distribution
Date. During such period, the amount of
collections of principal Receivables allocable
to the Class A Certificates will be paid to
the Class A Certificateholders as principal,
up to the Controlled Amortization Amount (and
any previously unpaid Controlled Amortization
Amount).
During the period beginning on the earlier of
the first day of the due period in which a
Liquidation Event occurs or is deemed to occur
and continuing to and including the earlier of
(a) the date on which the Invested Amount has
been paid in full and (b) the date on which
Series 1996-S terminates (the "Rapid
Amortization Period"), collections of
principal Receivables and certain other
amounts allocable to the Class A
Certificateholders will be distributed to the
Class A Certificateholders monthly, in payment
of principal on the Class A Certificates, on
each Distribution Date beginning with the
first Distribution Date related to such Rapid
Amortization Period.
Cash Collateral The Certificates will have the benefit of an
Account.............. account (the "Cash Collateral Account"), which
will be held in the name of the Trustee for
the benefit of the Certificateholders. The
Cash Collateral Account will be funded on the
Series S Closing Date in the amount of
$6,857,143 (the "Initial Cash Collateral
Amount"). Withdrawals will be made from the
Cash Collateral Account, to the extent of
available funds on deposit therein, to pay
certain amounts to the Class A Certificates.
5
<PAGE>
If the Cash Collateral Account is exhausted,
and defaulted Receivables allocable to the
Class A Certificates cannot be covered for any
Distribution Date, Reallocated Principal
Collections will be applied to reduce any such
deficiency. If such Reallocated Principal
Collections are insufficient to fund any such
deficiency, then the Collateral Invested
Amount (to the extent not already reduced)
will be reduced by the amount of such
remaining deficiency. In the event that such
reduction of the Collateral Invested Amount
would cause the Collateral Invested Amount to
be a negative number, the Collateral Invested
Amount will be reduced to zero and the Class A
Invested Amount will be reduced by the amount
of such remaining deficiency (a "Class A
Investor Charge-Off"). Accordingly, in the
event that the Cash Collateral Account is
exhausted and the Collateral Invested Amount
has been reduced to zero, and there is such a
deficiency which has not been reimbursed,
interest to be paid to Class A
Certificateholders in the future and the
amount of principal returned to Class A
Certificateholders will be reduced.
Amounts Available as
Enhancement..........
The Cash Collateral Account and the Collateral
Interest constitute the Enhancement for Series
1996-S. The amount of Enhancement available to
the Class A Certificateholders for any
Distribution Date will equal the lesser of (i)
the sum of the Collateral Invested Amount and
the amount, if any, on deposit in the Cash
Collateral Account (such sum, the "Available
Enhancement Amount") and (ii) the Required
Enhancement Amount. The "Required Enhancement
Amount" with respect to any Distribution Date
means, subject to certain limitations, the
greater of (i) the product of (a) the Invested
Amount related to such Distribution Date and
(b) 13.5% and (ii) the sum of (A) $6,857,143
and (B) the product of (I) two and (II) the
excess, if any, of $6,857,143 over the amount
of funds on deposit in the Cash Collateral
Account with respect to such Distribution
Date.
Final Payment of
Principal;
Termination of the The final distribution of principal and
Trust................ interest on the Class A Certificates will be
made no later than the Series Termination
Date. After such date, neither the Trust nor
the Seller will have any further obligation to
pay principal or interest on the Class A
Certificates.
Tax Status............ Counsel is of the opinion that the Class A
Certificates will be characterized as debt for
Federal income tax purposes. If the Class A
Certificates are not characterized as debt,
there may be adverse tax consequences for
Certificateholders.
ERISA Considerations.. The acquisition and holding of Class A
Certificates by employee benefit plans and
individual retirement accounts that are
subject to the "prohibited transaction" rules
of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), and the
Internal Revenue Code of 1986, as amended, may
result in "prohibited transactions." Under the
regulations issued by the Department of Labor,
the Trust's assets would not be deemed "plan
6
<PAGE>
assets" of any employee benefit plan holding
interests in the Class A Certificates if
certain conditions are met, including that
interests in the Class A Certificates be held
by at least 100 persons upon completion of the
public offering of the Class A Certificates.
Further information regarding the status of
the Class A Certificates as publicly offered
securities will be provided in the Prospectus
Supplement. Accordingly, employee benefit
plans contemplating purchasing interests in
Class A Certificates should consult their
counsel and review "ERISA Considerations" in
the Prospectus and "Summary of Series
Provisions--ERISA Considerations" in the
Prospectus Supplement prior to making a
purchase.
Rating of the Class A
Certificates.........
It is a condition to the issuance of the Class
A Certificates that they be rated in one of
the two highest rating categories by at least
one nationally recognized statistical rating
organization. The rating of the Class A
Certificates is based primarily on the value
of the Receivables, the Collateral Invested
Amount and the amount to be deposited in the
Cash Collateral Account.
7
<PAGE>
THE BANK'S CREDIT CARD PORTFOLIO
LOSS AND DELINQUENCY EXPERIENCE
The following tables set forth the loss and delinquency experience with
respect to payments by cardholders for each of the periods shown for
substantially all VISA and MasterCard consumer revolving credit card accounts
owned at the dates indicated by the Bank (excluding certain accounts not
originated by the Bank or its affiliate, FNBC (the "Bank's Portfolio")) during
the periods shown. As of the end of the September 1996 Due Period, the
Receivables in the Accounts represented substantially all Receivables in the
Bank's Portfolio. There can be no assurance, however, that the loss and
delinquency experience for the Receivables in the future will be similar to
the historical experience set forth below for the Bank's Portfolio.
LOSS EXPERIENCE FOR THE BANK'S PORTFOLIO
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
--------------------------- -----------------------------------
1996 1995 1995 1994 1993
----------- ----------- ----------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Average Receivables
Outstanding(1)......... $15,728,710 $12,019,934 $12,625,398 $9,763,242 $7,862,277
Gross Charge-offs(2).... 806,329 448,311 645,417 451,094 365,376
Gross Charge-offs as a
Percentage of Average
Receivables
Outstanding............ 6.84%(3) 4.97%(3) 5.11% 4.62% 4.65%
</TABLE>
- --------
(1) Average Receivables Outstanding is the arithmetic average of receivables
outstanding during the period indicated.
(2) Gross Charge-offs are charge-offs before recoveries and do not include the
amount of any reductions in Average Receivables Outstanding due to fraud,
returned goods or customer disputes.
(3) On an annualized basis.
Charge-offs for the Bank's Portfolio measured as a percentage of average
receivables outstanding increased during 1995 and 1996 due, in part, to
certain strategies employed by the Bank to increase the cardholder base which
the Bank believes, in turn, will result in the increase of overall revenues
for the Bank's Portfolio in the future. In addition, during 1995 and 1996,
consumer debt service burden and defaults increased as a result of the growing
consumer debt levels coupled with stagnant real wage growth. The Bank believes
that the current level of unemployment and personal bankruptcy filings make
reductions in the loss rates unlikely in the immediate future and expects the
trend in charge-offs to continue in the near term. The timing of the peak
level of charge-offs is uncertain at this time. Losses are also affected by
other factors including competitive behavior and social conditions. The loss
rates for the Bank's Portfolio could increase in the future if economic
conditions were to worsen and could continue to increase for several months
even after such conditions begin to improve. The loss rates set forth above do
not reflect the reversal of unpaid fees and finance charges at the time a
charge-off occurs.
AVERAGE DELINQUENCIES FOR THE BANK'S PORTFOLIO
<TABLE>
<CAPTION>
AVERAGE OF
NINE MONTHS ENDED AVERAGE OF TWELVE MONTHS ENDED DECEMBER 31,
------------------------ --------------------------------------------------------------------------
SEPTEMBER 30, 1996 1995 1994 1993
------------------------ ------------------------ ------------------------ ------------------------
DELINQUENT DELINQUENT DELINQUENT DELINQUENT
PAYMENT STATUS AMOUNT PERCENTAGE(1) AMOUNT PERCENTAGE(1) AMOUNT PERCENTAGE(1) AMOUNT PERCENTAGE(1)
- -------------- ---------- ------------- ---------- ------------- ---------- ------------- ---------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30-59 days delin-
quent............... $260,793 1.66% $189,476 1.50% $138,280 1.41% $112,934 1.44%
60-89 days delin-
quent............... 125,603 .80 83,191 .66 57,419 .59 46,686 .59
90 days delinquent or
more................ 235,305 1.49 148,808 1.18 102,171 1.05 80,700 1.03
-------- ---- -------- ---- -------- ---- -------- ----
Total.............. $621,701 3.95% $421,475 3.34% $297,870 3.05% $240,320 3.06%
======== ==== ======== ==== ======== ==== ======== ====
</TABLE>
- --------
(1)The percentages are the result of dividing Delinquent Amount by Average
Receivables Outstanding for the applicable period.
8
<PAGE>
Delinquencies as a percentage of average receivables outstanding reflect a
pattern similar to loss rates as a result of the same factors discussed with
respect to the table set forth above for Loss Experience for the Bank's
Portfolio. The delinquency information in the above table reflects the
application of the Bank's current policy of allowing certain delinquent
accounts whose cardholders are making good faith efforts to repay overdue
amounts to be deemed current provided certain conditions are met.
SUMMARY OF MONTHLY PAYMENT RATES
The following table sets forth the highest and lowest cardholder monthly
payment rates for the Bank's Portfolio during any month in the period shown
and the average cardholder monthly payment rates for all months during the
periods shown, in each case calculated as a percentage of total opening
monthly account balances during the periods shown. The amount of collections
on Receivables may vary from month to month due to seasonal variations,
general economic conditions and payment habits of individual cardholders.
Payments shown in the table include amounts which would be deemed payments of
principal Receivables and finance charge Receivables with respect to the
Accounts but do not include Interchange.
CARDHOLDER MONTHLY PAYMENT RATES FOR THE BANK'S PORTFOLIO
<TABLE>
<CAPTION>
NINE
MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------- -------------------------
<S> <C> <C> <C> <C>
1996 1995 1994 1993
----- ------- ------- -------
Lowest................................. 20.30% 21.08% 19.81% 19.51%
Highest................................ 21.86 25.01 25.02 24.21
Monthly Average........................ 21.09 22.58 23.27 22.45
</TABLE>
REVENUE EXPERIENCE
The gross revenues from monthly periodic charges and fees billed to
cardholders on the Bank's Portfolio for each of the three years in the period
ended December 31, 1995, and the nine months ended September 30, 1996 and
1995, respectively, are set forth in the following table.
The historic gross revenue figures in the table are calculated on an as-
billed basis and represent amounts billed to cardholders in each billing cycle
before deduction of charge-offs, reductions due to fraud, returned goods and
customer disputes or other expenses. Cash collections on receivables may not
reflect the historical experience in the table. During periods of increasing
delinquencies, billings of periodic charges and fees may exceed cash as
amounts collected on credit card receivables lag behind amounts billed to
cardholders. Conversely, as delinquencies decrease, cash may exceed billings
of periodic charges and fees as amounts collected in a current period may
include amounts billed during prior periods. However, the Bank believes that,
during the periods shown, revenues on a billed basis closely approximated
revenues on a cash basis. Revenues from periodic charges and fees on both a
billed and a cash basis will be affected by numerous factors, including the
periodic charges on principal receivables, the amount of the annual membership
fees, the amount of other fees paid by cardholders, the percentage of
cardholders who pay off their balances in full each month and do not incur
periodic charges on purchases, fees and finance charges and changes in the
delinquency rate on the Receivables.
9
<PAGE>
REVENUE EXPERIENCE FOR THE BANK'S PORTFOLIO
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
--------------------------- -----------------------------------
1996 1995 1995 1994 1993
----------- ----------- ----------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Average Receivables
Outstanding(1)......... $15,728,710 $12,019,934 $12,625,398 $9,763,242 $7,862,277
Finance Charges and Fees
Billed................. 1,920,851 1,499,291 2,066,872 1,601,164 1,316,326
Average Finance Charges
and Fees Billed(2)..... 16.28%(3) 16.63%(3) 16.37% 16.40% 16.74%
</TABLE>
- --------
(1)Average Receivables Outstanding is the arithmetic average of receivables
outstanding during the period indicated.
(2) Average Finance Charges and Fees Billed is the result of dividing Finance
Charges and Fees Billed by Average Receivables Outstanding and does not
include revenue attributable to Interchange.
(3) On an annualized basis.
The revenues for the Bank's Portfolio shown in the Revenue Experience table
are related to periodic charges and other fees billed to cardholders but do
not include revenue attributable to Interchange. The revenues related to
periodic charges and fees depend in part upon the collective preference of
cardholders to use their credit cards as revolving debt instruments for
purchases and cash advances and paying off account balances over several
months as opposed to convenience use, where the cardholders prefer instead to
pay off their entire balance each month, thereby avoiding periodic charges on
purchases, fees and finance charges. Revenues related to periodic charges and
fees also depend on the types of charges and fees assessed by the Bank on the
accounts. From 1989 through 1994, the Bank emphasized the origination of
variable rate accounts and substantially all new accounts originated during
that time were variable rate accounts. Depending upon fluctuations in interest
rates, the variable rate periodic charge (which is based on the prime rate)
assessed on variable rate accounts may change from month to month and could be
less than the fixed charge applicable to most standard fixed rate accounts.
Commencing in 1994, the Bank began offering certain new non-affinity accounts,
for purchase transactions, a fixed rate periodic charge for an initial period
(ranging from 6 to 15 months) which then converts into a variable rate. The
initial fixed rate offered on such accounts is generally either 6.9% or 9.9%
per annum, a rate which is substantially lower than that currently assessed on
the variable rate accounts or the standard fixed rate accounts. The total
yield on such accounts during the initial fixed rate period is therefore lower
than that of a variable rate account or standard fixed rate account. As of the
end of the September 1996 Due Period, Receivables assessed a variable periodic
charge constituted approximately 93.89% of the total Receivables balance of
Accounts in the Trust. Fluctuations in the prime interest rate and/or the
continued use of the initial fixed/variable rate pricing for certain new
accounts, may affect future revenue experience. Throughout the periods shown
above, the Bank made certain changes in the charges and fees assessed on the
accounts. The Bank has no basis to predict how these changes and any future
changes in the terms of accounts may affect the revenue for the Bank's
Portfolio.
THE ACCOUNTS
The Receivables arising from the Accounts as of the end of the September
1996 Due Period totaled $16,166,078,620 and included $15,828,123,824 of
principal Receivables. The Accounts had an average principal Receivables
balance of $1,142 and an average credit limit of $7,292. The aggregate total
Receivables balance as a percentage of the aggregate total credit limit was
15.99%.
The Receivables arising from the Accounts as of the end of the October 1996
Due Period totaled $15,978,267,238 and included $15,636,362,503 of principal
Receivables.
10
<PAGE>
The following tables summarize the Accounts by various criteria as of the
end of the September 1996 Due Period. Approximately 201,973 cardholder
accounts included in the Accounts as of the end of the September 1996 Due
Period are Classic VISA accounts with respect to which the cardholder has been
upgraded to a VISA Gold account. For some period of time (not exceeding three
years), both accounts are active for a particular cardholder although the
Classic VISA account is eventually closed. Upon any cardholder upgrade, the
receivables balance in the Classic VISA account is transferred to the VISA
Gold account (which account is considered to have the same account opening
date as the Classic VISA account) and any new receivables created on the
Classic VISA account are immediately transferred to the VISA Gold account. In
addition, pursuant to the ordinary operating procedures of the Bank, accounts
which expire and have no outstanding balance are not removed immediately from
the Bank's Portfolio, but rather are removed periodically from the Bank's
Portfolio and therefore may still be included as an Account for some period of
time after expiration. As of the end of the September 1996 Due Period,
approximately 989,458 expired accounts with a credit balance or no balance
were included in the Accounts. Because the composition of the Accounts may
change in the future, these tables are not necessarily indicative of the
characteristics of the Trust at any time after the end of the September 1996
Due Period.
COMPOSITION OF THE ACCOUNTS BY ACCOUNT BALANCES
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL
NUMBER OF NUMBER OF RECEIVABLES RECEIVABLES
ACCOUNT BALANCE ACCOUNTS ACCOUNTS OUTSTANDING OUTSTANDING
--------------- ---------- ---------- --------------- -----------
<S> <C> <C> <C> <C>
Credit Balance(1)............ 153,010 1.10% $ (24,714,030) (.15)%
No Balance(2)................ 6,235,010 44.98 0 .00
$0.01 to $1,499.99........... 4,020,627 29.00 1,783,034,350 11.03
$1,500.00 to $2,999.99....... 1,253,893 9.05 2,785,420,603 17.23
$3,000.00 to $4,499.99....... 878,552 6.34 3,283,081,518 20.31
$4,500.00 to $9,999.99....... 1,271,190 9.17 7,751,732,286 47.95
$10,000 or more.............. 49,304 .36 587,523,893 3.63
---------- ------ --------------- ------
Total...................... 13,861,586 100.00% $16,166,078,620 100.00 %
========== ====== =============== ======
</TABLE>
- --------
(1) Credit Balances are a result of cardholder payments and credit adjustments
applied in excess of an Account's unpaid balance. Accounts currently with
a credit balance are included, as Receivables may be generated with
respect thereto in the future.
(2) Accounts currently with no balance are included, as Receivables may be
generated with respect thereto in the future.
COMPOSITION OF ACCOUNTS BY CREDIT LIMIT
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL
NUMBER OF NUMBER OF RECEIVABLES RECEIVABLES
CREDIT LIMIT ACCOUNTS ACCOUNTS OUTSTANDING OUTSTANDING
------------ ---------- ---------- --------------- -----------
<S> <C> <C> <C> <C>
$0.01 to $1,499.99............ 355,095 2.56% $ 90,597,535 .56%
$1,500.00 to $2,999.99........ 432,709 3.12 488,538,960 3.02
$3,000.00 to $4,499.99........ 784,513 5.66 967,600,879 5.99
$4,500.00 to $9,999.99........ 8,897,960 64.19 10,094,311,489 62.44
$10,000 or more(1)............ 3,391,309 24.47 4,525,029,757 27.99
---------- ------ --------------- ------
Total....................... 13,861,586 100.00% $16,166,078,620 100.00%
========== ====== =============== ======
</TABLE>
- --------
(1)Maximum current credit limit on an Account is $65,000.
11
<PAGE>
COMPOSITION OF ACCOUNTS BY PAYMENT STATUS
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL
NUMBER OF NUMBER OF RECEIVABLES RECEIVABLES
PAYMENT STATUS ACCOUNTS ACCOUNTS OUTSTANDING OUTSTANDING
-------------- ---------- ---------- --------------- -----------
<S> <C> <C> <C> <C>
Current(1).................... 13,612,187 98.20% $15,260,501,939 94.40%
30-59 days delinquent......... 134,468 .97 451,462,277 2.79
60-89 days delinquent......... 46,066 .33 172,840,725 1.07
90 days delinquent or more.... 68,865 .50 281,273,679 1.74
---------- ------ --------------- ------
Total....................... 13,861,586 100.00% $16,166,078,620 100.00%
========== ====== =============== ======
</TABLE>
- --------
(1) Includes Accounts on which the minimum payment has not yet been received
prior to the second billing date following the issuance of the related
bill.
COMPOSITION OF ACCOUNTS BY AGE
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL
NUMBER OF NUMBER OF RECEIVABLES RECEIVABLES
AGE ACCOUNTS ACCOUNTS OUTSTANDING OUTSTANDING
--- ---------- ---------- --------------- -----------
<S> <C> <C> <C> <C>
Not more than 6 months........ 596,999 4.31% $ 551,274,920 3.41%
Over 6 months to 12 months.... 1,282,661 9.25 1,587,262,530 9.82
Over 12 months to 24 months... 3,053,809 22.03 4,137,865,821 25.59
Over 24 months to 48 months... 4,002,534 28.88 4,233,546,202 26.19
Over 48 months................ 4,925,583 35.53 5,656,129,147 34.99
---------- ------ --------------- ------
Total....................... 13,861,586 100.00% $16,166,078,620 100.00%
========== ====== =============== ======
</TABLE>
12
<PAGE>
GEOGRAPHIC COMPOSITION OF THE ACCOUNTS
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL
NUMBER OF RECEIVABLES
STATE ACCOUNTS OUTSTANDING
- ----- ---------- -----------
<S> <C> <C>
California............................................... 13.70% 16.66%
Illinois................................................. 7.20 7.91
New York................................................. 7.65 7.21
Texas.................................................... 5.78 6.00
Florida.................................................. 6.17 5.60
New Jersey............................................... 3.91 3.52
Pennsylvania............................................. 4.28 3.29
Colorado................................................. 2.49 3.17
Ohio..................................................... 3.55 3.14
Michigan................................................. 3.29 2.95
Washington............................................... 1.98 2.22
Virginia................................................. 2.09 2.16
Massachusetts............................................ 2.45 2.11
Indiana.................................................. 2.20 2.02
Maryland................................................. 1.92 1.86
Georgia.................................................. 1.80 1.84
Minnesota................................................ 2.45 1.83
Missouri ................................................ 2.04 1.81
Tennessee................................................ 1.81 1.78
North Carolina........................................... 1.82 1.74
Arizona.................................................. 1.57 1.70
Oregon................................................... 1.45 1.64
Connecticut.............................................. 1.28 1.19
Louisiana................................................ 1.15 1.12
Hawaii................................................... 0.72 1.10
Alabama.................................................. 1.07 1.09
Iowa..................................................... 1.32 1.06
Oklahoma................................................. 1.10 1.01
All Other(1)............................................. 11.76 11.27
------ ------
Total................................................. 100.00% 100.00%
====== ======
</TABLE>
- --------
(1)States and foreign countries with less than 1.00% of Total Receivables
Outstanding.
Since the largest number of cardholders (based on billing address) whose
accounts historically have been included in the Trust are in California,
Illinois, New York and Texas, adverse changes in economic conditions in these
areas could have a direct impact on the timing and amount of payments on the
Certificates.
13
