SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended: December 31, 1998
-----------------
Commission file numbers: 33-5992, 33-84844, 33-99462, 333-22131
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Providian National Bank on behalf of the Providian Master Trust
(formerly the First Deposit Master Trust)
----------------------------------------------------------------
(Exact name of registrant as specified in charter)
United States of America 02-0118519
- -------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
295 Main Street
Tilton, New Hampshire 03276
- ---------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (603) 286-4348
--------------
Not Applicable
- -------------------------------------------------------------
(Former name or former address, if changed since last report)
Securities Registered pursuant to Section 12(b) of the Act: None
Securities Registered pursuant to Section 12(g) of the Act:
The following Providian Master Trust Asset-Backed Certificates
(collectively, the "Certificates"):
Floating Rate Asset-Backed Certificates, Series 1995-1
Floating Rate Asset-Backed Certificates, Series 1996-1
Floating Rate Class A Asset-Backed Certificates, Series 1997-1
Floating Rate Class B Asset-Backed Certificates, Series 1997-1
Floating Rate Class A Asset-Backed Certificates, Series 1997-2
Floating Rate Class B Asset-Backed Certificates, Series 1997-2
Floating Rate Class A Asset-Backed Certificates, Series 1997-3
Floating Rate Class B Asset-Backed Certificates, Series 1997-3
6.25% Asset-Backed Certificates, Series 1997-4
6.45% Asset-Backed Certificates, Series 1997-4
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Act during the preceding 12
months (or for such shorter period that the registration was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.
Yes X* No ____
- ----------------------------------------------------------------
* On December 23, 1993, the registrant was issued a no-action letter (the
"No-Action Letter") by the Securities and Exchange Commission with respect to
certain of the registrant's reporting requirements pursuant to Section 13 or
15(d) of the Act.
Indicate by check mark if disclosure of delinquent fillers 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. /__/
State the aggregate market value of the voting and non-voting common equity
held by non-affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which the common equity was sold, or the
average bid and asked prices of such common equity, as of a specified date
within 60 days prior to the date of filing. (See definition of affiliate in Rule
405.)
Not Applicable.
PART I
Item 1. Business
Omitted pursuant to the No-Action Letter.
Item 2. Properties
Attached hereto as Exhibits 99.1 through 99.8 are the annual
certificateholders' statements prepared by Providian National Bank ("PNB"), as
Servicer (the "Servicer"), of the Providian Master Trust (formerly known as the
First Deposit Master Trust) (the "Trust") and delivered to Bankers Trust
Company, as Trustee (the "Trustee"), pursuant to Section 5.02(d) of the Series
1995-1, 1996-1, 1997-1, 1997-2, 1997-3 and 1997-4 Supplements to the Providian
Master Trust Pooling and Servicing Agreement dated as of June 1, 1993, as
amended (the "Pooling Agreement"), between PNB, as Seller and Servicer, and the
Trustee. The annual certificateholders' statements contain the information
required to be contained in the monthly statements prepared by the Servicer and
delivered to the Trustee pursuant to Section 5.02(a) of such Supplements,
aggregated for the months of January 1998 through December 1998, relating to the
receivables (the "Receivables") transferred to the Trust and the accounts from
which the Receivables arise.
Item 3. Legal Proceedings
The registrant knows of no material pending legal proceedings with respect
to the Trust involving either the Trust, the Trustee or PNB.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
(a) To the best knowledge of the registrant, there is no established public
trading market for the Certificates.
(b) Each class of Certificates is represented by one or more certificates
registered in the name of Cede & Co., the nominee of The Depository Trust
Company ("DTC").
(c) Omitted pursuant to the No-Action Letter.
Item 6. Selected Financial Data
Omitted pursuant to the No-Action Letter.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation
Omitted pursuant to the No-Action Letter.
Item 8. Financial Statements and Supplementary Data
Omitted pursuant to the No-Action Letter.
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
Omitted pursuant to the No-Action Letter.
Item 11. Executive Compensation
Omitted pursuant to the No-Action Letter.
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) Each class of Certificates is 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 Trust is not entitled to receive a certificate
representing such interest except in limited circumstances. Accordingly, Cede &
Co. is the sole holder of record of Certificates, which it held on behalf of
brokers, dealers, banks and other direct participants in the DTC system at
December 31, 1997. Such direct participants may hold Certificates for their own
account or for the accounts of their customers. The address of Cede & Co. is:
Cede & Co., c/o The Depository Trust Company, 55 Water Street, 49th Floor, New
York, New York 10041.
(b) Omitted pursuant to the No-Action Letter.
(c) Omitted pursuant to the No-Action Letter.
Item 13. Certain Relationships and Related Transactions
There have not been, and there are not currently proposed, any transactions
or series of transactions, to which the Trust is a party, with any
Certificateholder known by the registrant to own of record or beneficially more
than five percent of any series or class of Certificates.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
99.1 Annual Certificateholders' Statement delivered pursuant to Section
5.02(d) of the Series 1995-1 Supplement.
99.2 Annual Certificateholders' Statement delivered pursuant to Section
5.02(d) of the Series 1996-1 Supplement.
99.3 Annual Certificateholders' Statement delivered pursuant to Section
5.02(d) of the Series 1997-1 Supplement.
99.4 Annual Certificateholders' Statement delivered pursuant to Section
5.02(d) of the Series 1997-2 Supplement.
99.5 Annual Certificateholders' Statement delivered pursuant to Section
5.02(d) of the Series 1997-3 Supplement.
99.6 Annual Certificateholders' Statement delivered pursuant to Section
5.02(d) of the Series 1997-4 Supplement.
99.7 Report on the activities of PNB, as Servicer, prepared by Ernst &
Young LLP pursuant to Section 3.06 of the Pooling Agreement.
(b) Omitted pursuant to the No-Action Letter.
(c) Omitted pursuant to the No-Action Letter.
(d) Omitted pursuant to the No-Action Letter.
SIGNATURES
Pursuant to the requirements of the Section 13 and 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.
PROVIDIAN MASTER TRUST
By: PROVIDIAN NATIONAL BANK,
Servicer
By:/s/ Miranda Mengis
------------------
Miranda Mengis
Vice President
Date: March 19, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following Directors and/or Officers of PNB,
as Servicer, on behalf of the registrant on March 19, 1999 in the capacities
indicated.
Signature Title
/s/ Shailesh J. Mehta Chairman of the Board of Directors,
- --------------------- Chief Executive Officer and Director
Shailesh J. Mehta (Principal Executive Officer)
/s/ Dianne Peterson President and Director
- ---------------------
Dianne Peterson
/s/ David J. Petrini Executive Vice President,
- --------------------- Chief Financial Officer and Treasurer
David J. Petrini (Principal Financial Officer)
/s/ Daniel Sanford Senior Vice President and Controller
- --------------------- (Principal Accounting Officer)
Daniel Sanford
/s/ Eric O'Brien Vice President and Director
- ---------------------
Eric O'Brien
/s/ Darrell Hotchkiss Director
- ---------------------
Darrell Hotchkiss
/s/ Janice B. Kitchen Director
- ---------------------
Janice B. Kitchen
EXHIBIT INDEX
Exhibit No.
99.1 Annual Certificateholders' Statement delivered pursuant to Section 5.02(d)
of the Series 1995-1 Supplement.
99.2 Annual Certificateholders' Statement delivered pursuant to Section 5.02(d)
of the Series 1996-1 Supplement.
99.3 Annual Certificateholders' Statement delivered pursuant to Section 5.02(d)
of the Series 1997-1 Supplement.
99.4 Annual Certificateholders' Statement delivered pursuant to Section 5.02(d)
of the Series 1997-2 Supplement.
99.5 Annual Certificateholders' Statement delivered pursuant to Section 5.02(d)
of the Series 1997-3 Supplement.
99.6 Annual Certificateholders' Statement delivered pursuant to Section 5.02(d)
of the Series 1997-4 Supplement.
99.7 Report on the activities of PNB, as Servicer, prepared by Ernst & Young LLP
pursuant to Section 3.06 of the Pooling Agreement.
ANNUAL CERTIFICATEHOLDERS' STATEMENT
_____________________________________________
PROVIDIAN MASTER TRUST
SERIES 1995-1
_____________________________________________
Pursuant to the Pooling and Servicing Agreement dated as of June 1, 1993
(as amended and supplemented, the "Agreement"), as supplemented by the Series
1995-1 Supplement dated as of June 1, 1995 (as amended and supplemented, the
"Series Supplement"), among Providian National Bank ("PNB"), formerly known as
First Deposit National Bank, Seller and Servicer, and Bankers Trust Company,
Trustee, PNB as Servicer is required to prepare certain information each year
regarding current distributions to Senior Certificateholders and the Collateral
Interest Holder and the performance of the Providian Master Trust (the "Trust")
during the previous year. The information which is required to be prepared for
the Series 1995-1 Certificates with respect to the year ended December 31, 1998,
and with respect to the performance of the Trust during 1998 is set forth below.
Certain of the information is presented on the basis of an original principal
amount of $1,000 per Investor Certificate. Certain other information is
presented based on the aggregate amounts for the Trust as a whole. Capitalized
terms used in this Certificate have their respective meanings set forth in the
Agreement or Series Supplement, as applicable.
A) Information Regarding the 1998 Distribution for the Series 1995-1 Senior
Certificates (stated on the basis of $1,000 original certificate principal
amount)
(1) The total amount distributed to Senior Certificateholders per $1,000
original certificate principal amount.......................$58.906060
(2) The amount set forth in A(1) above distributed to Senior
Certificateholders with respect to interest per $1,000 original
certificate principal amount................................$58.906060
(3) The amount set forth in A(1) above distributed to Senior
Certificateholders with respect to principal per $1,000 original
certificate principal amount.................................$0.000000
B) Information Regarding the Performance of the Trust
(1) Allocation of Receivables Collections to the Series 1995-1
Certificates
(a) The aggregate amount of Finance Charge Receivables collected
during 1998.....................................$1,415,446,763.72
(b) The aggregate amount of Interchange collected and allocated to
the Trust during 1998..............................$34,020,710.48
(c) The aggregate amount of Principal Receivables collected during
1998............................................$6,124,617,322.41
(d) The weighted average Floating Allocation Percentage with respect
to the Series 1995-1 Certificates for 1998.............14.976716%
(e) The weighted average Principal Allocation Percentage with respect
to the Series 1995-1 Certificates for 1998.............14.940341%
(f) The Finance Charge Receivables and Interchange collected and
allocated to the Series 1995-1 Certificates for
1998..............................................$217,082,630.01
(g) The Principal Receivables collected and allocated to the Series
1995-1 Certificates for 1998......................$915,038,706.59
(2) Available Finance Charge Collections and Reallocated Principal
Collections for Series 1995-1 for 1998
(a) The Finance Charge Receivables and Interchange collected and
allocated to the Series 1995-1 Certificates.......$217,082,630.01
(b) Collection Account and Special Funding Account investment
earnings allocated to the Series 1995-1 Certificates..$807,422.89
(c) Principal Funding Account Investment Proceeds...............$0.00
(d) Prefunding Account Investment Proceeds......................$0.00
(e) Reserve Account withdrawals, if applicable..................$0.00
(f) Additional Finance Charges from other Series allocated to the
Series 1995-1 Certificates..................................$0.00
(g) Payments, if any, on deposit as of the Determination Date
received from any Interest Rate Protection Agreements.......$0.00
(h) Reallocated Principal Collections...........................$0.00
(i) Total Available Finance Charge Collections and Reallocated
Principal Collections for Series 1995-1 (total of (a), (b), (c),
(d), (e), (f), (g) and (h) above).................$217,890,052.90
(3) Available Principal Collections for Series 1995-1 for 1998
(a) The Principal Receivables collected and allocated to the Series
1995-1 Certificates...............................$915,038,706.59
(b) Shared Principal Collections from other Series allocated to the
Series 1995-1 Certificates..................................$0.00
(c) Additional amounts to be treated as Available Principal
Collections pursuant to the Series Supplement......$75,188,538.31
(d) Reallocated Principal Collections...........................$0.00
(e) Available Principal Collections for Series 1995-1 (total of (a),
(b) and (c) minus (d) above)......................$990,227,244.90
(4) Delinquent Balances in the Trust
The aggregate outstanding balance of the Accounts which were
delinquent as of the close of business on the last day of 1998.
(a) 31-60 days $110,795,574
(b) 61-90 days 65,578,659
(c) 91 or more days 119,495,895
------------
(d) Total Delinquencies $295,870,128
(5) Defaulted Amount
(a) The aggregate amount of Defaulted Receivables with respect to the
Trust for 1998....................................$583,870,682.31
(b) The aggregate amount of Recoveries of Defaulted Receivables
processed during 1998..............................$82,284,725.02
(c) The Defaulted Amount for 1998 [Defaulted Receivables minus
Recoveries].......................................$501,585,957.29
(d) The Defaulted Amount for 1998 allocable to the Series 1995-1
Certificates (the "Series 1995-1 Defaulted
Amount")...........................................$75,188,538.31
(e) The Senior Defaulted Amount for 1998...............$59,398,945.26
(6) Senior Charge-Offs
(a) The excess, if any, of the Senior Defaulted Amount over the sum
of (i) Available Finance Charge Collections applied to such
Senior Defaulted Amount, (ii) Reallocated Principal Collections
and (iii) the amount by which the Collateral Invested Amount has
been reduced in respect of such Senior Defaulted Amount (a
"Senior Charge-Off")........................................$0.00
(b) The amount of the Senior Charge-Off set forth in item 6(a) above,
per $1,000 original certificate principal amount (which will have
the effect of reducing, pro rata, the amount of each Senior
Certificateholder's investment).........................$0.000000
(c) The total amount reimbursed on the Distribution Date in respect
of Senior Charge-Offs for 1997..............................$0.00
(d) The amount set forth in item 6(c) above per $1,000 original
certificate principal amount (which will have the effect of
increasing, pro rata, the amount of each Senior
Certificateholder's investment).........................$0.000000
(e) The amount, if any, by which the outstanding principal balance of
the Senior Certificates exceeds the Senior Invested Amount and
the Senior Initial Percentage of the Prefunding Account Balance,
if any, as of the last Distribution Date of 1998, after giving
effect to all deposits, withdrawals and distributions on such
Distribution Date...........................................$0.00
(7) Reductions in the Collateral Interest
(a) The excess, if any, of the Collateral Defaulted Amount over
Available Finance Charge Collections applied to such Collateral
Defaulted Amount............................................$0.00
(b) The amount by which the Collateral Invested Amount has been
reduced on the last Distribution Date of 1998 in respect of
Reallocated Principal Collections...........................$0.00
(c) The amount by which the Collateral Invested Amount has been
reduced on the last Distribution Date of 1998 in respect of the
unpaid Required Amount......................................$0.00
(d) The total amount by which the Collateral Invested Amount has been
reduced on the last Distribution Date of 1998 as set forth in
items 7(a), (b) and (c).....................................$0.00
(e) The total amount reimbursed on the last Distribution Date of 1998
in respect of reductions in the Collateral Invested Amount on
prior Distribution Dates....................................$0.00
(f) The amount, if any, by which the outstanding principal balance of
the Collateral Interest exceeds the Collateral Invested Amount
and the Collateral Percentage of the Prefunding Account Balance,
if any, as of the last Distribution Date of 1997, after giving
effect to all deposits, withdrawals and distributions on the last
Distribution Date of 1998...................................$0.00
(8) Investor Monthly Servicing Fee
The amount of the Series 1995-1 Monthly Servicing Fee payable to the
Servicer during 1998....................................$16,625,000.00
(9) Prefunding Account
(a) The Prefunding Account Balance on the last Distribution Date of
1998........................................................$0.00
(b) The Senior Percentage of the Prefunding Account Balance on the
last Distribution Date of 1998..............................$0.00
(c) The Collateral Percentage of the Prefunding Account Balance on
the last Distribution Date of 1998..........................$0.00
(10) Senior Monthly Interest
(a) Senior Monthly Interest payable during 1998........$43,921,410.60
(11) Principal Funding Account Amount
(a) The amount on deposit in the Principal Funding Account on the
Distribution Date, after giving effect to all deposits,
withdrawals and distributions on such Distribution Date.....$0.00
(b) Deposits to the Principal Funding Account are currently scheduled
to commence on the Distribution Date occurring in January, 2000
(The initial funding date for the Principal Funding Account may
be modified in certain circumstances in accordance with the terms
of the Series Supplement.)
(12) Deficit Controlled Accumulation Amount
The Deficit Controlled Accumulation Amount for the Distribution Date,
after giving effect to all deposits, withdrawals and distributions on
such Distribution Date...........................................$0.00
(13) Reserve Account (if applicable)
(a) The amount on deposit in the Reserve Account, if funded, on the
Distribution Date, after giving effect to all deposits,
withdrawals and distributions on such Distribution Date and the
related Transfer Date.........................................N/A
(b) The Required Reserve Account Amount, if any, selected by the
Servicer......................................................N/A
C) Senior Invested Amount
(1) The Senior Invested Amount and the Senior Percentage of the Prefunding
Account Balance on the date of issuance (the "Senior Initial
Amount")...............................................$750,500,000.00
(2) The Senior Invested Amount and the Senior Percentage of the Prefunding
Account Balance, if any, on the last Distribution Date of 1998, after
giving effect to all deposits, withdrawals and distributions on such
Distribution Date......................................$750,500,000.00
(3) The Pool Factor for the last Distribution Date of 1998 (which
represents the ratio of the Senior Invested Amount and the Senior
Percentage of the Prefunding Account Balance, if any, as of such
Distribution Date, after giving effect to any adjustment in the Senior
Invested Amount on such Distribution Date, to the Senior Initial
Amount). The amount of a Senior Certificateholder's pro rate share of
the Senior Invested Amount and the Prefunding Account Balance, if any,
can be determined by multiplying the original denomination of the
Senior Certificateholder's Certificate by the Pool Factor.....1.000000
D) Collateral Invested Amount
(1) The Collateral Invested Amount and the Collateral Percentage of the
Prefunding Account Balance on the date of issuance.....$199,500,000.00
(2) The Collateral Invested Amount and the Collateral Percentage of the
Prefunding Account Balance, if any, on the last Distribution Date of
1998, after giving effect to all deposits, withdrawals and
distributions on such Distribution Date................$199,500,000.00
(3) The Collateral Invested Amount as a percentage of the sum of the
Collateral Invested Amount and the Senior Invested Amount on such
Distribution Date...............................................21.00%
E) Receivables Balances
(1) The aggregate amount of Principal Receivables in the Trust at the
close of business on the last day of 1998...............$6,374,932,335
(2) The aggregate amount of Finance Charge Receivables in the Trust at the
close of business on the last day of 1998.................$158,475,082
F) Annualized Percentages
(1) The average Gross Yield for 1998 (sum of the monthly Gross Yield
divided by 12)..................................................22.94%
(2) The average Net Loss Rates for 1998 (sum of monthly Net Loss Rates
divided by 12)...................................................7.92%
(3) The average Portfolio Yield for 1998 (the average Gross Yield minus
the average Net Loss Rate for 1998).............................15.02%
(4) The average Base Rate for 1998 (sum of monthly Base Rates divided by
12)..............................................................7.93%
(5) The average Net Spread for 1998 (the average Portfolio Yield minus the
average Base Rate for 1998)......................................7.10%
(6) The average Monthly Payment Rate for 1998 (sum of the monthly Payment
Rates divided by 12).............................................9.75%
G) Series 1995-1 Information for the Last Three Distribution Dates in 1998
1) Gross Yield
a) 12/15/98 24.19%
b) 11/16/98 22.64%
c) 10/15/98 22.55%
2) Net Loss Rate
a) 12/15/98 8.58%
b) 11/16/98 9.36%
c) 10/15/98 7.82%
3) Net Spread (Portfolio Yield Minus Base Rate)
a) 12/15/98 8.20%
b) 11/16/98 5.21%
c) 10/15/98 6.88%
Three Month Average 6.76%
4) Monthly Payment Rate
a) 12/15/98 9.01%
b) 11/16/98 8.95%
c) 10/15/98 9.34%
PROVIDIAN NATIONAL BANK,
Servicer
By: /s/ Daniel Sanford
---------------------
Name: Daniel Sanford
Title: Senior Vice President and Controller
ANNUAL CERTIFICATEHOLDERS' STATEMENT
_____________________________________________
PROVIDIAN MASTER TRUST
SERIES 1996-1
_____________________________________________
Pursuant to the Pooling and Servicing Agreement dated as of June 1, 1993
(as amended and supplemented, the "Agreement"), as supplemented by the Series
1996-1 Supplement dated as of June 1, 1996 (as amended and supplemented, the
"Series Supplement"), among Providian National Bank ("PNB"), formerly known as
First Deposit National Bank, Seller and Servicer, and Bankers Trust Company,
Trustee, PNB as Servicer is required to prepare certain information each year
regarding current distributions to Senior Certificateholders and the Collateral
Interest Holder and the performance of the Providian Master Trust (the "Trust")
during the previous year. The information which is required to be prepared for
the Series 1996-1 Certificates with respect to the year ended December 31, 1998,
and with respect to the performance of the Trust during 1998 is set forth below.
Certain of the information is presented on the basis of an original principal
amount of $1,000 per Investor Certificate. Certain other information is
presented based on the aggregate amounts for the Trust as a whole. Capitalized
terms used in this Certificate have their respective meanings set forth in the
Agreement or Series Supplement, as applicable.
A) Information Regarding the 1998 Distribution for the Series 1996-1 Senior
Certificates (stated on the basis of $1,000 original certificate principal
amount)
(1) The total amount distributed to Senior Certificateholders per $1,000
original certificate principal amount.......................$58.703282
(2) The amount set forth in A(1) above distributed to Senior
Certificateholders with respect to interest per $1,000 original
certificate principal amount................................$58.703282
(3) The amount set forth in A(1) above distributed to Senior
Certificateholders with respect to principal per $1,000 original
certificate principal amount.................................$0.000000
B) Information Regarding the Performance of the Trust
(1) Allocation of Receivables Collections to the Series 1996-1
Certificates
(a) The aggregate amount of Finance Charge Receivables collected
during 1998.....................................$1,415,446,763.72
(b) The aggregate amount of Interchange collected and allocated to
the Trust during 1998..............................$34,020,710.48
(c) The aggregate amount of Principal Receivables collected during
1998............................................$6,124,617,322.41
(d) The weighted average Floating Allocation Percentage with respect
to the Series 1996-1 Certificates for 1998.............14.976716%
(e) The weighted average Principal Allocation Percentage with respect
to the Series 1996-1 Certificates for 1998.............14.940341%
(f) The Finance Charge Receivables and Interchange collected and
allocated to the Series 1996-1 Certificates for
1998..............................................$217,082,630.01
(g) The Principal Receivables collected and allocated to the Series
1996-1 Certificates for 1998......................$915,038,706.59
(2) Available Finance Charge Collections and Reallocated Principal
Collections for Series 1996-1 for 1998
(a) The Finance Charge Receivables and Interchange collected and
allocated to the Series 1996-1 Certificates.......$217,082,630.01
(b) Collection Account and Special Funding Account investment
earnings allocated to the Series 1996-1 Certificates..$808,295.24
(c) Principal Funding Account Investment Proceeds...............$0.00
(d) Prefunding Account Investment Proceeds......................$0.00
(e) Reserve Account withdrawals, if applicable..................$0.00
(f) Additional Finance Charges from other Series allocated to the
Series 1996-1 Certificates..................................$0.00
(g) Payments, if any, on deposit as of the Determination Date
received from any Interest Rate Protection Agreements.......$0.00
(h) Reallocated Principal Collections...........................$0.00
(i) Total Available Finance Charge Collections and Reallocated
Principal Collections for Series 1996-1 (total of (a), (b), (c),
(d), (e), (f), (g) and (h) above).................$217,890,925.25
(3) Available Principal Collections for Series 1996-1 for 1998
(a) The Principal Receivables collected and allocated to the Series
1996-1 Certificates...............................$915,038,706.59
(b) Shared Principal Collections from other Series allocated to the
Series 1996-1 Certificates..................................$0.00
(c) Additional amounts to be treated as Available Principal
Collections pursuant to the Series Supplement......$75,188,538.31
(d) Reallocated Principal Collections...........................$0.00
(e) Available Principal Collections for Series 1996-1 (total of (a),
(b) and (c) minus (d) above)......................$990,227,244.90
(4) Delinquent Balances in the Trust
The aggregate outstanding balance of the Accounts which were
delinquent as of the close of business on the last day of 1998.
(a) 31-60 days $110,795,574
(b) 61-90 days 65,578,659
(c) 91 or more days 119,495,895
------------
(d) Total Delinquencies $295,870,128
(5) Defaulted Amount
(a) The aggregate amount of Defaulted Receivables with respect to the
Trust for 1998....................................$583,870,682.31
(b) The aggregate amount of Recoveries of Defaulted Receivables
processed during 1998..............................$82,284,725.02
(c) The Defaulted Amount for 1998 [Defaulted Receivables minus
Recoveries].......................................$501,585,957.29
(d) The Defaulted Amount for 1998 allocable to the Series 1996-1
Certificates (the "Series 1996-1 Defaulted
Amount")...........................................$75,188,538.31
(e) The Senior Defaulted Amount for 1998...............$59,398,945.26
(6) Senior Charge-Offs
(a) The excess, if any, of the Senior Defaulted Amount over the sum
of (i) Available Finance Charge Collections applied to such
Senior Defaulted Amount, (ii) Reallocated Principal Collections
and (iii) the amount by which the Collateral Invested Amount has
been reduced in respect of such Senior Defaulted Amount (a
"Senior Charge-Off") for 1998...............................$0.00
(b) The amount of the Senior Charge-Off set forth in item 6(a) above,
per $1,000 original certificate principal amount (which will have
the effect of reducing, pro rata, the amount of each Senior
Certificateholder's investment) for 1998................$0.000000
(c) The total amount reimbursed in respect of Senior Charge-Offs for
1998........................................................$0.00
(d) The amount set forth in item 6(c) above per $1,000 original
certificate principal amount (which will have the effect of
increasing, pro rata, the amount of each Senior
Certificateholder's investment) for 1998................$0.000000
(e) The amount, if any, by which the outstanding principal balance of
the Senior Certificates exceeds the Senior Invested Amount and
the Senior Initial Percentage of the Prefunding Account Balance,
if any, as of the last Distribution Date of 1998, after giving
effect to all deposits, withdrawals and distributions on such
Distribution Date...........................................$0.00
(7) Reductions in the Collateral Interest
(a) The excess, if any, of the Collateral Defaulted Amount over
Available Finance Charge Collections applied to such Collateral
Defaulted Amount on the last Distribution of 1998...........$0.00
(b) The amount by which the Collateral Invested Amount has been
reduced on the last Distribution Date of 1998 in respect of
Reallocated Principal Collections...........................$0.00
(c) The amount by which the Collateral Invested Amount has been
reduced on the last Distribution Date of 1998 in respect of the
unpaid Required Amount......................................$0.00
(d) The total amount by which the Collateral Invested Amount has been
reduced on the last Distribution Date of 1998 as set forth in
items 7(a), (b) and (c).....................................$0.00
(e) The total amount reimbursed on the last Distribution Date of 1998
in respect of reductions in the Collateral Invested Amount on
prior Distribution Dates....................................$0.00
(f) The amount, if any, by which the outstanding principal balance of
the Collateral Interest exceeds the Collateral Invested Amount
and the Collateral Percentage of the Prefunding Account Balance,
if any, as of the last Distribution Date of 1998, after giving
effect to all deposits, withdrawals and distributions on the last
Distribution Date of 1998...................................$0.00
(8) Investor Monthly Servicing Fee
The amount of the Series 1996-1 Monthly Servicing Fee payable to the
Servicer during 1998....................................$16,625,000.00
(9) Prefunding Account
(a) The Prefunding Account Balance on the last Distribution Date of
1998........................................................$0.00
(b) The Senior Percentage of the Prefunding Account Balance on the
last Distribution Date of 1998..............................$0.00
(c) The Collateral Percentage of the Prefunding Account Balance on
the last Distribution Date of 1998..........................$0.00
(10) Senior Monthly Interest
(a) Senior Monthly Interest payable during 1998........$43,769,225.88
(11) Principal Funding Account Amount
(a) The amount on deposit in the Principal Funding Account on the
last Distribution Date of 1998, after giving effect to all
deposits, withdrawals and distributions on such Distribution
Date........................................................$0.00
(b) Deposits to the Principal Funding Account are currently scheduled
to commence on the Distribution Date occurring in August, 2002
(The initial funding date for the Principal Funding Account may
be modified in certain circumstances in accordance with the terms
of the Series Supplement.)
(12) Deficit Controlled Accumulation Amount
The Deficit Controlled Accumulation Amount for the last Distribution
Date of 1998, after giving effect to all deposits, withdrawals and
distributions on such Distribution Date..........................$0.00
(13) Reserve Account (if applicable)
(a) The amount on deposit in the Reserve Account, if funded, on the
last Distribution Date of 1998, after giving effect to all
deposits, withdrawals and distributions on such Distribution Date
and the related Transfer Date.................................N/A
(b) The Required Reserve Account Amount, if any, selected by the
Servicer......................................................N/A
C) Senior Invested Amount
(1) The Senior Invested Amount and the Senior Percentage of the Prefunding
Account Balance on the date of issuance (the "Senior Initial
Amount")...............................................$750,500,000.00
(2) The Senior Invested Amount and the Senior Percentage of the Prefunding
Account Balance, if any, on the last Distribution Date of 1998, after
giving effect to all deposits, withdrawals and distributions on such
Distribution Date......................................$750,500,000.00
(3) The Pool Factor on the last Distribution Date of 1998 (which
represents the ratio of the Senior Invested Amount and the Senior
Percentage of the Prefunding Account Balance, if any, as of such
Distribution Date, after giving effect to any adjustment in the Senior
Invested Amount on such Distribution Date, to the Senior Initial
Amount). The amount of a Senior Certificateholder's pro rate share of
the Senior Invested Amount and the Prefunding Account Balance, if any,
can be determined by multiplying the original denomination of the
Senior Certificateholder's Certificate by the Pool Factor.....1.000000
D) Collateral Invested Amount
(1) The Collateral Invested Amount and the Collateral Percentage of the
Prefunding Account Balance on the date of issuance.....$199,500,000.00
(2) The Collateral Invested Amount and the Collateral Percentage of the
Prefunding Account Balance, if any, on the last Distribution Date of
1998, after giving effect to all deposits, withdrawals and
distributions on such Distribution Date................$199,500,000.00
(3) The Collateral Invested Amount as a percentage of the sum of the
Collateral Invested Amount and the Senior Invested Amount on such
Distribution Date...............................................21.00%
E) Receivables Balances
(1) The aggregate amount of Principal Receivables in the Trust at the
close of business on the last day of 1998...............$6,374,932,335
(2) The aggregate amount of Finance Charge Receivables in the Trust at the
close of business on the last day of 1998.................$158,475,082
F) Annualized Percentages
(1) The average Gross Yield for 1998 (sum of the monthly Gross Yield
divided by 12)..................................................22.94%
(2) The average Net Loss Rates for1998 (sum of monthly Net Loss Rates
divided by 12)...................................................7.92%
(3) The average Portfolio Yield for 1998 (the average Gross Yield minus
the average Net Loss Rate for 1998).............................15.02%
(4) The average Base Rate for 1998 (sum of monthly Base Rates divided by
12)..............................................................7.94%
(5) The average Net Spread for 1998 (the average Portfolio Yield minus the
average Base Rate for 1998)......................................7.08%
(6) The average Monthly Payment Rate for 1998 (sum of the monthly Payment
Rates divided by 12).............................................9.75%
G) Series 1995-1 Information for the Last Three Distribution Dates in 1998
1) Gross Yield
a) 12/15/98 24.19%
b) 11/16/98 22.64%
c) 10/15/98 22.55%
2) Net Loss Rate
a) 12/15/98 8.58%
b) 11/16/98 9.36%
c) 10/15/98 7.82%
3) Net Spread (Portfolio Yield Minus Base Rate)
a) 12/15/98 8.24%
b) 11/16/98 5.22%
c) 10/15/98 6.87%
Three Month Average 6.78%
4) Monthly Payment Rate
a) 12/15/98 9.01%
b) 11/16/98 8.95%
c) 10/15/98 9.34%
PROVIDIAN NATIONAL BANK,
Servicer
By: /s/ Daniel Sanford
--------------------------
Name: Daniel Sanford
Title: Senior Vice President and Controller
ANNUAL CERTIFICATEHOLDERS' STATEMENT
_____________________________________________
PROVIDIAN MASTER TRUST
SERIES 1997-1
_____________________________________________
Pursuant to the Pooling and Servicing Agreement dated as of June 1, 1993
(as amended and supplemented, the "Agreement"), as supplemented by the Series
1997-1 Supplement dated March 1, 1997 (as amended and supplemented, the "Series
Supplement"), among Providian National Bank ("PNB"), formerly known as First
Deposit National Bank, Seller and Servicer, and Bankers Trust Company, Trustee,
PNB as Servicer is required to prepare certain information each year regarding
current distributions to Class A Certificateholders, Class B Certificateholders
and the Collateral Interest Holder and the performance of the Providian Master
Trust (the "Trust") during the previous year. The information which is required
to be prepared for the Series 1997-1 Certificates with respect to the year ended
December 31, 1998, and with respect to the performance of the Trust during 1998
is set forth below. Certain of the information is presented on the basis of an
original principal amount of $1,000 per Investor Certificate. Certain other
information is presented based on the aggregate amounts for the Trust as a
whole. Capitalized terms used in this Certificate have their respective meanings
set forth in the Agreement or Series Supplement, as applicable.
A) Information Regarding the 1998 Distribution for the Series 1997-1 lass A
Certificates and Class B Certificates (stated on the basis of $1,000
original certificate principal amount)
(1) The total amount distributed to Class A Certificateholders per $1,000
original certificate principal amount.......................$57.892171
(2) The amount set forth in A(1) above distributed to Class A
Certificateholders with respect to interest per $1,000 original
certificate principal amount................................$57.892171
(3) The amount set forth in A(1) above distributed to Class A
Certificateholders with respect to principal per $1,000 original
certificate principal amount.................................$0.000000
(4) The total amount distributed to Class B Certificateholders per $1,000
original certificate principal amount.......................$59.818559
(5) The amount set forth in A(4) above distributed to Class B
Certificateholders with respect to interest per $1,000 original
certificate principal amount................................$59.818559
(6) The amount set forth in A(4) above distributed to Class B
Certificateholders with respect to principal per $1,000 original
certificate principal amount.................................$0.000000
B) Information Regarding the Performance of the Trust
(1) Allocation of Receivables Collections to the Series 1997-1
Certificates
(a) The aggregate amount of Finance Charge Receivables collected
during 1998.....................................$1,415,446,763.72
(b) The aggregate amount of Interchange collected and allocated to
the Trust during 1998..............................$34,020,710.48
(c) The aggregate amount of Principal Receivables collected during
1998............................................$6,124,617,322.41
(d) The Floating Allocation Percentage with respect to the Series
1997-1 Certificates for 1998............................9.458979%
(e) The Principal Allocation Percentage with respect to the Series
1997-1 Certificates for 1998............................9.436005%
(f) The Finance Charge Receivables and Interchange collected and
allocated to the Series 1997-1 Certificates for
1998..............................................$137,104,818.95
(g) The Principal Receivables collected and allocated to the Series
1997-1 Certificates for 1998......................$577,919,183.11
(2) Available Finance Charge Collections, Required Draw Amount and
Reallocated Principal Collections for Series 1997-1 for 1998
(a) The Finance Charge Receivables and Interchange collected and
allocated to the Series 1997-1 Certificates.......$137,104,818.95
(b) Collection Account and Special Funding Account investment
earnings allocated to the Series 1997-1 Certificates..$499,702.97
(c) Principal Funding Account Investment Proceeds...............$0.00
(d) Cash Collateral Account Investment Proceeds.........$1,000,618.38
(e) Reserve Draw Amount, if applicable..........................$0.00
(f) Additional Finance Charges from other Series allocated to the
Series 1997-1 Certificates..................................$0.00
(g) Payments, if any, on deposit as of the Determination Date
received from any Interest Rate Protection Agreements.......$0.00
(h) Required Draw Amount, if applicable.........................$0.00
(i) Reallocated Collateral Principal Collections................$0.00
(j) Reallocated Class B Principal Collections...................$0.00
(k) Total Available Finance Charge Collections and Reallocated
Principal Collections for Series 1997-1 (total of (a), (b), (c),
(d), (e), (f), (g), (h), (i) and (j) above).......$138,605,140.30
(3) Available Principal Collections for Series 1997-1 for 1998
(a) The Principal Receivables collected and allocated to the Series
1997-1 Certificates...............................$577,919,183.11
(b) Shared Principal Collections from other Series allocated to the
Series 1997-1 Certificates..................................$0.00
(c) Additional amounts to be treated as Available Principal
Collections pursuant to the Series Supplement......$47,487,497.88
(d) Reallocated Collateral Principal Collections................$0.00
(e) Reallocated Class B Principal Collections...................$0.00
(f) Available Principal Collections for Series 1997-1 (total of (a),
(b) and (c) minus (d) and (e) above)..............$625,406,680.99
(4) Delinquent Balances in the Trust
The aggregate outstanding balance of the Accounts which were
delinquent as of the close of business on the last day of 1998
(a) 31-60 days $ 110,795,574
(b) 61-90 days 65,578,659
(c) 91 or more days 119,495,895
-------------
(d) Total Delinquencies $ 295,870,128
(5) Defaulted Amount
(a) The aggregate amount of Defaulted Receivables with respect to the
Trust for 1998....................................$583,870,682.31
(b) The aggregate Amount of Recoveries of Defaulted Receivables
processed during 1998..............................$82,284,725.02
(c) The Defaulted Amount for 1998 Defaulted Receivables minus
Recoveries].......................................$501,585,957.29
(d) The Defaulted Amount for 1998 allocable to the Series 1997-1
Certificates (the "Series 1997-1 Defaulted
Amount")...........................................$47,487,497.88
(e) The Class A Defaulted Amount for 1998 [Series 1997-1 Defaulted
Amount multiplied by the Class A Percentage].......$38,702,310.77
(f) The Class B Defaulted Amount for 1998 [Series 1997-1 Defaulted
Amount multiplied by the Class B Percentage]........$4,511,312.30
(6) Class A Charge-Offs
(a) The excess, if any, of the Class A Defaulted Amount over the sum
of (i) Available Finance Charge Collections applied to such
Class A Defaulted Amount, (ii) the Available Cash Collateral
Amount applied to such Class A Defaulted Amount, (iii)
Reallocated Principal Collections applied to such Class A
Defaulted Amount, (iv) the amount by which the Collateral
Invested Amount has been reduced in respect of such Class A
Defaulted Amount and (v) the amount by which the Class B Invested
Amount has been reduced in respect of such Class A Defaulted
Amount (a "Class A Charge-Off") for 1998....................$0.00
(b) The amount of the Class A Charge-Off set forth in item 6(a)
above, per $1,000 original certificate principal amount (which
will have the effect of reducing, pro rata, the amount of each
Class A Certificateholder's investment) for 1997 for 1998...$0.00
(c) The total amount reimbursed on the last Distribution Date of 1998
in respect of Class A Charge-Offs for prior Distribution
Dates.......................................................$0.00
(d) The amount set forth in item 6(c) above per $1,000 original
certificate principal amount (which will have the effect of
increasing, pro rata, the amount of each Class A
Certificateholder's investment) for 1998....................$0.00
(e) The amount, if any, by which the outstanding principal balance of
the Class A Certificates exceeds the Class A Invested Amount if
any, as of the last Distribution Date of 1998 after giving effect
to all deposits, withdrawals and distributions on such
Distribution Date...........................................$0.00
(7) Class B Charge-Offs
(a) The excess, if any, of the Class B Defaulted Amount over the sum
of (i) Available Finance Charge Collections applied to such Class
B Defaulted Amount, (ii) the Available Cash Collateral Amount
applied to such Class B Defaulted Amount, (iii) Reallocated
Collateral Principal Collections applied to such Class B
Defaulted Amount and (iv) the amount by which the Collateral
Invested Amount has been reduced in respect of such Class B
Defaulted Amount for 1998...................................$0.00
(b) The amount by which the Class B Invested Amount has been reduced
on the last Distribution Date of 1998 in respect of Reallocated
Class B Principal Collections...............................$0.00
(c) The amount by which the Class B Invested Amount has been reduced
on the last Distribution Date of 1998 in respect of item 6(a)
(together with item 7(a), "Class B Charge-Offs")............$0.00
(d) The total amount by which the Class B Invested Amount has been
reduced on the last Distribution Date of 1998 as set forth in
items 7(a), (b) and (c).....................................$0.00
(e) The amount set forth in item 7(d) above per $1,000 original
certificate principal amount (which will have the effect of
reducing, pro rata, the amount of each Class B
Certificateholder's investment) for 1998....................$0.00
(f) The total amount reimbursed on the last Distribution Date of 1998
in respect of reductions in the Class B Invested Amount on prior
Distribution Dates..........................................$0.00
(g) The amount set forth in item 7(f) above per $1,000 original
certificate principal amount (which will have the effect of
increasing, pro rata, the amount of each Class B
Certificateholder's investment) for 1998....................$0.00
(h) The amount, if any, by which the outstanding principal balance of
the Class B Certificates exceeds the Class B Invested Amount if
any, as of the last Distribution Date of 1998, after giving
effect to all deposits, withdrawals and distributions on such
Distribution Date...........................................$0.00
(8) Reductions in the Collateral Interest
(a) The excess, if any, of the Collateral Defaulted Amount over
Available Finance Charge Collections applied to such Collateral
Defaulted Amount for 1998...................................$0.00
(b) The amount by which the Collateral Invested Amount has been
reduced on the last Distribution Date of 1998 in respect of
Reallocated Principal Collections...........................$0.00
(c) The amount by which the Collateral Invested Amount has been
reduced on the last Distribution Date of 1998 in respect of items
6(a) and 7(a) above.........................................$0.00
(d) The total amount by which the Collateral Invested Amount has been
reduced on the last Distribution Date of 1998 as set forth in
items 8(a), (b) and (c).....................................$0.00
(e) The total amount reimbursed on the last Distribution Date of 1998
in respect of reductions in the Collateral Invested Amount on
prior Distribution Dates....................................$0.00
(f) The amount, if any, by which the outstanding principal balance of
the Collateral Interest exceeds the Collateral Invested Amount,
if any, as of the last Distribution Date of 1998, after giving
effect to all deposits, withdrawals and distributions on the
Distribution Date...........................................$0.00
(9) Investor Monthly Servicing Fee
(a) The amount of the Series 1997-1 Monthly Servicing Fee payable to
the Servicer During 1998...........................$10,500,000.00
(10) Cash Collateral Account
(a) The Available Cash Collateral Amount on the last Distribution
Date of 1998, after giving effect to all deposits, withdrawals
and distributions on such Distribution Date........$18,000,000.00
(11) Class A Monthly Interest
(a) Class A Monthly Interest payable during 1998.......$28,121,889.59
(12) Class B Monthly Interest
(a) Class B Monthly Interest payable during 1998........$3,387,815.84
(13) Principal Funding Account Amount
(a) The amount on deposit in the Principal Funding Account on the
last Distribution Date of 1998, after giving effect to all
deposits, withdrawals and distributions on such Distribution
Date........................................................$0.00
(b) Deposits to the Principal Funding Account are currently scheduled
to commence on the Distribution Date occurring in October, 2001.
(The initial funding date for the Principal Funding Account may
be modified in certain circumstances in accordance with the terms
of the Series Supplement.)
(14) Deficit Controlled Accumulation Amount
The Deficit Controlled Accumulation Amount for the last Distribution
Date of 1998, after giving effect to all deposits, withdrawals and
distributions on such Distribution Date..........................$0.00
(15) Reserve Account (if applicable)
(a) The amount on deposit in the Reserve Account, if funded, on the
last Distribution Date of 1998, after giving effect to all
deposits, withdrawals and distributions on such Distribution Date
and the related Transfer Date...............................$0.00
(b) The Required Reserve Account Amount, if any, selected by the
Servicer....................................................$0.00
C) Class A Invested Amount
(1) The Class A Initial Invested Amount....................$489,000,000.00
(2) The Class A Invested Amount on the last Distribution Date of 1998,
after giving effect to all deposits, withdrawals and distributions on
such Distribution Date.................................$489,000,000.00
(3) The Pool Factor for the last Distribution Date of 1998 (which
represents the ratio of the Class A Invested Amount, as of such
Distribution Date, after giving effect to any adjustment in the
Class A Invested Amount on such Distribution Date, to the Class A
Initial Invested Amount). The amount of a Class A Certificateholder's
pro rata share of the Class A Invested Amount can be determined by
multiplying the original denomination of the Class A
Certificateholder's Certificate by the Pool Factor............1.000000
D) Class B Invested Amount
(1) The Class B Initial Invested Amount.....................$57,000,000.00
(2) The Class B Invested Amount on the last Distribution Date of 1998,
after giving effect to all deposits, withdrawals and distributions on
such Distribution Date..................................$57,000,000.00
(3) The Pool Factor for the last Distribution Date of 1998 (which
represents the ratio of the Class B Invested Amount, as of such
Distribution Date, after giving effect to any adjustment in the Class
B Invested Amount on such Distribution Date, to the Class B Initial
Invested Amount). The amount of a Class B Certificateholder's pro rata
share of the Class B Invested Amount can be determined by multiplying
the original denomination of the Class B Certificateholder's
Certificate by the Pool Factor................................1.000000
E) Collateral Invested Amount
(1) The Collateral Initial Invested Amount..................$54,000,000.00
(2) The Collateral Invested Amount on the last Distribution Date of 1998,
after giving effect to all deposits, withdrawals and distributions on
such Distribution Date..................................$54,000,000.00
(3) The Collateral Invested Amount as a percentage of the Invested Amount
on such Distribution Date........................................9.00%
F) Receivables Balances
(1) The aggregate amount of Principal Receivables in the Trust at the
close of business on the last day of 1998...............$6,374,932,335
(2) The aggregate amount of Finance Charge Receivables in the Trust at the
close of business on the last day of 1998.................$158,475,082
G) Annualized Percentages
(1) The average Gross Yield for 1998 (sum of the monthly Gross Yield
divided by 12)..................................................23.10%
(2) The average Net Loss Rate for 1998 (sum of monthly Net Loss Rates
divided by 12)...................................................7.92%
(3) The average Portfolio Yield for 1998 (the average Gross Yield minus
the average Net Loss Rate for 1998).............................15.18%
(4) The average Base Rate for 1998 (sum of monthly Base Rates divided
by 12)...........................................................7.83%
(5) The average Net Spread for 1998 (the average Portfolio Yield minus the
average Base Rate for 1998)......................................7.35%
(6) The average Monthly Payment Rate for 1998 (sum of the monthly Payment
Rates divided by 12).............................................9.75%
H) Series 1997-1 Information for the Last Three Distribution Dates in 1998.
1) Gross Yield
a) 12/15/98 24.35%
b) 11/16/98 22.80%
c) 10/15/98 22.71%
2) Net Loss Rate
a) 12/15/98 8.58%
b) 11/16/98 9.36%
c) 10/15/98 7.82%
3) Net Spread (Portfolio Yield Minus Base Rate)
a) 12/15/98 8.51%
b) 11/16/98 5.49%
c) 10/15/98 7.13%
Three Month Average 7.04%
4) Monthly Payment Rate
a) 12/15/98 9.01%
b) 11/16/98 8.95%
c) 10/15/98 9.34%
PROVIDIAN NATIONAL BANK
Servicer
By: /s/ Daniel Sanford
------------------------------
Name: Daniel Sanford
Title: Senior Vice President and Controller
ANNUAL CERTIFICATEHOLDERS' STATEMENT
_____________________________________________
PROVIDIAN MASTER TRUST
SERIES 1997-2
_____________________________________________
Pursuant to the Pooling and Servicing Agreement dated as of June 1, 1993
(as amended and supplemented, the "Agreement"), as supplemented by the Series
1997-2 Supplement dated March 1, 1997 (as amended and supplemented, the "Series
Supplement"), among Providian National Bank ("PNB"), formerly known as First
Deposit National Bank, Seller and Servicer, and Bankers Trust Company, Trustee,
PNB as Servicer is required to prepare certain information each year regarding
current distributions to Class A Certificateholders, Class B Certificateholders
and the Collateral Interest Holder and the performance of the Providian Master
Trust (the "Trust") during the previous year. The information which is required
to be prepared for the Series 1997-2 Certificates with respect to the year ended
December 31, 1998, and with respect to the performance of the Trust during 1998
is set forth below. Certain of the information is presented on the basis of an
original principal amount of $1,000 per Investor Certificate. Certain other
information is presented based on the aggregate amounts for the Trust as a
whole. Capitalized terms used in this Certificate have their respective meanings
set forth in the Agreement or Series Supplement, as applicable.
A) Information Regarding the 1998 Distribution for the Series 1997-2 Class A
Certificates and Class B Certificates (stated on the basis of $1,000
original certificate principal amount)
(1) The total amount distributed to Class A Certificateholders per $1,000
original certificate principal amount.......................$58.094949
(2) The amount set forth in A(1) above distributed to Class A
Certificateholders with respect to interest per $1,000 original
certificate principal amount................................$58.094949
(3) The amount set forth in A(1) above distributed to Class A
Certificateholders with respect to principal per $1,000 original
certificate principal amount.................................$0.000000
(4) The total amount distributed to Class B Certificateholders per $1,000
original certificate principal amount.......................$60.122727
(5) The amount set forth in A(4) above distributed to Class B
Certificateholders with respect to interest per $1,000 original
certificate principal amount................................$60.122727
(6) The amount set forth in A(4) above distributed to Class B
Certificateholders with respect to principal per $1,000 original
certificate principal amount.................................$0.000000
B) Information Regarding the Performance of the Trust
(1) Allocation of Receivables Collections to the Series 1997-2
Certificates
(a) The aggregate amount of Finance Charge Receivables collected
during 1998.....................................$1,415,446,763.72
(b) The aggregate amount of Interchange collected and allocated to
the Trust for 1998.................................$34,020,710.48
(c) The aggregate amount of Principal Receivables collected during
1998............................................$6,124,617,322.41
(d) The Floating Allocation Percentage with respect to the Series
1997-2 Certificates for 1998...........................11.035475%
(e) The Principal Allocation Percentage with respect to the Series
1997-2 Certificates for 1998...........................11.008672%
(f) The Finance Charge Receivables and Interchange collected and
allocated to the Series 1997-2 Certificates for
1998..............................................$159,955,622.11
(g) The Principal Receivables collected and allocated to the Series
1997-2 Certificates for 1998......................$674,239,046.96
(2) Available Finance Charge Collections, Required Draw Amount and
Reallocated Principal Collections for Series 1997-2 for 1998.
(a) The Finance Charge Receivables and Interchange collected and
allocated to the Series 1997-2 Certificates.......$159,955,622.11
(b) Collection Account and Special Funding Account investment
earnings allocated to the Series 1997-2 Certificates..$583,780.87
(c) Principal Funding Account Investment Proceeds...............$0.00
(d) Cash Collateral Account Investment Proceeds........$1,167,386.98
(e) Reserve Draw Amount, if applicable..........................$0.00
(f) Additional Finance Charges from other Series allocated to the
Series 1997-2 Certificates..................................$0.00
(g) Payments, if any, on deposit as of the Determination Date
received from any Interest Rate Protection Agreements.......$0.00
(h) Required Draw Amount, if applicable.........................$0.00
(i) Reallocated Collateral Principal Collections................$0.00
(j) Reallocated Class B Principal Collections...................$0.00
(k) Total Available Finance Charge Collections and Reallocated
Principal Collections for Series 1997-2 (total of (a), (b), (c),
(d), (e), (f), (g), (h), (i) and (j) above).......$161,706,789.96
(3) Available Principal Collections for Series 1997-2 for 1998.
(a) The Principal Receivables collected and allocated to the Series
1997-2 Certificates...............................$674,239,046.96
(b) Shared Principal Collections from other Series allocated to the
Series 1997-2 Certificates..................................$0.00
(c) Additional amounts to be treated as Available Principal
Collections pursuant to the Series Supplement......$55,402,080.86
(d) Reallocated Collateral Principal Collections................$0.00
(e) Reallocated Class B Principal Collections...................$0.00
(f) Available Principal Collections for Series 1997-2 (total of (a),
(b) and (c) minus (d) and (e) above)..............$729,641,127.82
(4) Delinquent Balances in the Trust
The aggregate outstanding balance of the Accounts which were
delinquent as of the close of business on the last day of 1998.
(a) 31-60 days $ 110,795,574
(b) 61-90 days 65,578,659
(c) 91 or more days 119,495,895
-------------
(d) Total Delinquencies $ 295,870,128
(5) Defaulted Amount
(a) The aggregate amount of Defaulted Receivables with respect to the
Trust for 1998....................................$583,870,682.31
(b) The aggregate Amount of Recoveries of Defaulted Receivables
processed during 1998..............................$82,284,725.02
(c) The Defaulted Amount for 1998 [Defaulted Receivables minus
Recoveries].......................................$501,585,957.29
(d) The Defaulted Amount for 1998 allocable to the Series 1997-2
Certificates (the "Series 1997-2 Defaulted
Amount")...........................................$55,402,080.86
(e) The Class A Defaulted Amount for 1998 [Series 1997-2 Defaulted
Amount multiplied by the Class A Percentage].......$45,152,695.90
(f) The Class B Defaulted Amount for 1998 [Series 1997-2 Defaulted
Amount multiplied by the Class B Percentage]........$5,263,197.68
(6) Class A Charge-Offs
(a) The excess, if any, of the Class A Defaulted Amount over the sum
of (i) Available Finance Charge Collections applied to such
Class A Defaulted Amount, (ii) the Available Cash Collateral
Amount applied to such Class A Defaulted Amount, (iii)
Reallocated Principal Collections applied to such Class A
Defaulted Amount, (iv) the amount by which the Collateral
Invested Amount has been reduced in respect of such Class A
Defaulted Amount and (v) the amount by which the Class B Invested
Amount has been reduced in respect of such Class A Defaulted
Amount (a "Class A Charge-Off") for 1998....................$0.00
(b) The amount of the Class A Charge-Off set forth in item 6(a)
above, per $1,000 original certificate principal amount (which
will have the effect of reducing, pro rata, the amount of each
Class A Certificateholder's investment) for 1998............$0.00
(c) The total amount reimbursed on the last Distribution Date of 1998
in respect of Class A Charge-Offs for prior Distribution
Dates.......................................................$0.00
(d) The amount set forth in item 6(c) above per $1,000 original
certificate principal amount (which will have the effect of
increasing, pro rata, the amount of each Class A
Certificateholder's investment) for 1998.................$0.00000
(e) The amount, if any, by which the outstanding principal balance of
the Class A Certificates exceeds the Class A Invested Amount if
any, as of the last Distribution Date of 1998, after giving
effect to all deposits, withdrawals and distributions on such
Distribution Date...........................................$0.00
(7) Class B Charge-Offs
(a) The excess, if any, of the Class B Defaulted Amount over the sum
of (i) Available Finance Charge Collections applied to such Class
B Defaulted Amount applied to such Class B Defaulted Amount, (ii)
the Available Cash Collateral Amount, (iii) Reallocated
Collateral Principal Collections applied to such Class B
Defaulted Amount and (iv) the amount by which the Collateral
Invested Amount has been reduced in respect of such Class B
Defaulted Amount for 1998...................................$0.00
(b) The amount by which the Class B Invested Amount has been reduced
on the last Distribution Date of 1998 in respect of Reallocated
Class B Principal Collections............................$0.00000
(c) The amount by which the Class B Invested Amount has been reduced
on the last Distribution Date of 1998 in respect of item 6(a)
(together with item 7(a), "Class B Charge-Offs")............$0.00
(d) The total amount by which the Class B Invested Amount has been
reduced on the of Distribution Date of 1998 as set forth in items
7(a), (b) and (c)........................................$0.00000
(e) The amount set forth in item 7(d) above per $1,000 original
certificate principal amount (which will have the effect of
reducing, pro rata, the amount of each Class B
Certificateholder's investment) for 1998....................$0.00
(f) The total amount reimbursed on the last Distribution Date of 1998
in respect of reductions in the Class B Invested Amount on prior
Distribution Date...........................................$0.00
(g) The amount set forth in item 7(f) above per $1,000 original
certificate principal amount (which will have the effect of
increasing, pro rata, the amount of each Class B
Certificateholder's investment) for 1998....................$0.00
(h) The amount, if any, by which the outstanding principal balance of
the Class B Certificates exceeds the Class B Invested Amount if
any, as of the last Distribution Date of 1998, after giving
effect to all deposits, withdrawals and distributions on such
Distribution Date...........................................$0.00
(8) Reductions in the Collateral Interest
(a) The excess, if any, of the Collateral Defaulted Amount over
Available Finance Charge Collections applied to such Collateral
Defaulted Amount for 1998...................................$0.00
(b) The amount by which the Collateral Invested Amount has been
reduced on the last Distribution Date of 1998 in respect of
Reallocated Principal Collections...........................$0.00
(c) The amount by which the Collateral Invested Amount has been
reduced on the last Distribution Date of 1998 in respect of items
6(a) and 7(a) above.........................................$0.00
(d) The total amount by which the Collateral Invested Amount has been
reduced on the last Distribution Date of 1998 as set forth in
items 8(a), (b) and (c).....................................$0.00
(e) The total amount reimbursed on the last Distribution Date of 1998
in respect of reductions in the Collateral Invested Amount on
prior Distribution Dates....................................$0.00
(f) The amount, if any, by which the outstanding principal balance of
the Collateral Interest exceeds the Collateral Invested Amount,
if any, as of the last Distribution Date of 1998, after giving
effect to all deposits, withdrawals and distributions on the
Distribution Date...........................................$0.00
(9) Investor Monthly Servicing Fee
(a) The amount of the Series 1997-2 Monthly Servicing Fee payable to
the Servicer for 1998..............................$12,250,000.00
(10) Cash Collateral Account
(a) The Available Cash Collateral Amount on the last Distribution
Date of 1998, after giving effect to all deposits, withdrawals
and distributions on such Distribution Date........$21,000,000.00
(11) Class A Monthly Interest
(a) Class A Monthly Interest payable during 1998.......$32,924,555.91
(12) Class B Monthly Interest
(a) Class B Monthly Interest payable during 1998........$3,972,678.89
(13) Principal Funding Account Amount
(a) The amount on deposit in the Principal Funding Account on the
last Distribution Date of 1998, after giving effect to all
deposits, withdrawals and distributions on such Distribution
Date........................................................$0.00
(b) Deposits to the Principal Funding Account are currently scheduled
to commence on the Distribution Date occurring in April, 2003.
(The initial funding date for the Principal Funding Account may
be modified in certain circumstances in accordance with the terms
of the Series Supplement.)
(14) Deficit Controlled Accumulation Amount
The Deficit Controlled Accumulation Amount for the last Distribution
Date of 1998, after giving effect to all deposits, withdrawals and
distributions on such Distribution Date..........................$0.00
(15) Reserve Account (if applicable)
(a) The amount on deposit in the Reserve Account, if funded, on the
last Distribution Date of 1998, after giving effect to all
deposits, withdrawals and distributions on such Distribution Date
and the related Transfer Date...............................$0.00
(b) The Required Reserve Account Amount, if any, selected by the
Servicer....................................................$0.00
(C) Class A Invested Amount
(1) The Class A Initial Invested Amount....................$570,500,000.00
(2) The Class A Invested Amount on the last Distribution Date of 1998,
after giving effect to all deposits, withdrawals and distributions on
such Distribution Date.................................$570,500,000.00
(3) The Pool Factor for the last Distribution Date of 1998 (which
represents the ratio of the Class A Invested Amount, as of such
Distribution Date, after giving effect to any adjustment in the
Class A Invested Amount on such Distribution Date, to the Class A
Initial Invested Amount). The amount of a Class A Certificateholder's
pro rata share of the Class A Invested Amount can be determined by
multiplying the original denomination of the Class A
Certificateholder's Certificate by the Pool Factor............1.000000
D) Class B Invested Amount
(1) The Class B Initial Invested Amount.....................$66,500,000.00
(2) The Class B Invested Amount on the last Distribution Date of 1998,
after giving effect to all deposits, withdrawals and distributions on
such Distribution Date..................................$66,500,000.00
(3) The Pool Factor for the last Distribution Date of 1998 (which
represents the ratio of the Class B Invested Amount, as of such
Distribution Date, after giving effect to any adjustment in the Class
B Invested Amount on such Distribution Date, to the Class Initial
Invested Amount). The amount of a Class B Certificateholder' pro rata
share of the Class B Invested Amount can be determined by multiplying
the original denomination of the Class B Certificateholder's
Certificate by the Pool Factor................................1.000000
E) Collateral Invested Amount
(1) The Collateral Initial Invested Amount..................$63,000,000.00
(2) The Collateral Invested Amount on the last Distribution Date of 1998,
after giving effect to all deposits, withdrawals and distributions on
such Distribution Date..................................$63,000,000.00
(3) The Collateral Invested Amount as a percentage of the sum of the
Invested Amount on such Distribution Date........................9.00%
F) Receivables Balances
(1) The aggregate amount of Principal Receivables in the Trust at the
close of business on the last day of 1998...............$6,374,932,335
(2) The aggregate amount of Finance Charge Receivables in the Trust at the
close of business on the last day of 1998.................$158,475,082
G) Annualized Percentages
(1) The average Gross Yield for 1998 (sum of the monthly Gross Yield
divided by 12)..................................................23.10%
(2) The average Net Loss Rate for 1998 (sum of monthly Net Loss Rates
divided by 12)...................................................7.92%
(3) The average Portfolio Yield for 1998 (the Gross Yield minus the Net
Loss Rate for 1998).............................................15.18%
(4) The average Base Rate for 1998 (sum of monthly Base Rates divided
by 12)...........................................................7.84%
(5) The average Net Spread for 1998 (the average Portfolio Yield minus the
average Base Rate for 1998)......................................7.34%
(6) The average Monthly Payment Rate for 1998 (sum of the monthly Payment
Rates divided by 12).............................................9.75%
H) Series 1997-2 Information for the Last Three Distribution Dates in 1998
1) Gross Yield
a) 12/15/98 24.35%
b) 11/16/98 22.80%
c) 10/15/98 22.71%
2) Net Loss Rate
a) 12/15/98 8.58%
b) 11/16/98 9.36%
c) 10/15/98 7.82%
3) Net Spread (Portfolio Yield Minus Base Rate)
a) 12/15/98 8.49%
b) 11/16/98 5.48%
c) 10/15/98 7.12%
Three Month Average 7.03%
4) Monthly Payment Rate
a) 12/15/98 9.01%
b) 11/16/98 8.95%
c) 10/15/98 9.34%
PROVIDIAN NATIONAL BANK
Servicer
By: /s/ Daniel Sanford
----------------------------
Name: Daniel Sanford
Title: Senior Vice President and Controller
ANNUAL CERTIFICATEHOLDERS' STATEMENT
_____________________________________________
PROVIDIAN MASTER TRUST
SERIES 1997-3
_____________________________________________
Pursuant to the Pooling and Servicing Agreement dated as of June 1, 1993
(as amended and supplemented, the "Agreement"), as supplemented by the Series
1997-3 Supplement dated June 1, 1997 (as amended and supplemented, the "Series
Supplement"), among Providian National Bank ("PNB"), formerly known as First
Deposit National Bank, Seller and Servicer, and Bankers Trust Company, Trustee,
PNB as Servicer is required to prepare certain information each year regarding
current distributions to Class A Certificateholders, Class B Certificateholders
and the Collateral Interest Holder and the performance of the Providian Master
Trust (the "Trust") during the previous year. The information which is required
to be prepared for the Series 1997-3 Certificates with respect to the year ended
December 31, 1998, and with respect to the performance of the Trust during 1998
is set forth below. Certain of the information is presented on the basis of an
original principal amount of $1,000 per Investor Certificate. Certain other
information is presented based on the aggregate amounts for the Trust as a
whole. Capitalized terms used in this Certificate have their respective meanings
set forth in the Agreement or Series Supplement, as applicable.
A) Information Regarding the 1998 Distribution for the Series 1997-3 Class A
Certificates and Class B Certificates (stated on the basis of $1,000
original certificate principal amount)
(1) The total amount distributed to Class A Certificateholders per $1,000
original certificate principal amount.......................$58.094949
(2) The amount set forth in A(1) above distributed to Class A
Certificateholders with respect to interest per $1,000 original
certificate principal amount................................$58.094949
(3) The amount set forth in A(1) above distributed to Class A
Certificateholders with respect to principal per $1,000 original
certificate principal amount.................................$0.000000
(4) The total amount distributed to Class B Certificateholders per $1,000
original certificate principal amount.......................$60.122727
(5) The amount set forth in A(4) above distributed to Class B
Certificateholders with respect to interest per $1,000 original
certificate principal amount................................$60.122727
(6) The amount set forth in A(4) above distributed to Class B
Certificateholders with respect to principal per $1,000 original
certificate principal amount.................................$0.000000
B) Information Regarding the Performance of the Trust
(1) Allocation of Receivables Collections to the Series 1997-3
Certificates
(a) The aggregate amount of Finance Charge Receivables collected
during 1998.....................................$1,415,446,763.72
(b) The aggregate amount of Interchange collected and allocated to
the Trust for 1998.................................$34,020,710.48
(c) The aggregate amount of Principal Receivables collected during
1998............................................$6,124,617,322.41
(d) The Floating Allocation Percentage with respect to the Series
1997-3 Certificates for 1998...........................11.035475%
(e) The Principal Allocation Percentage with respect to the Series
1997-3 Certificates for 1998...........................11.008672%
(f) The Finance Charge Receivables and Interchange collected and
allocated to the Series 1997-3 Certificates for
1998..............................................$159,955,622.11
(g) The Principal Receivables collected and allocated to the Series
1997-3 Certificates for 1998......................$674,239,046.96
(2) Available Finance Charge Collections, Required Draw Amount and
Reallocated Principal Collections for Series 1997-3 for 1998 8
(a) The inance Charge Receivables and Interchange collected and
allocated to the Series 1997-3 Certificates.......$159,955,622.11
(b) Collection Account and Special Funding Account investment
earnings allocated to the Series 1997-3 Certificates..$583,366.17
(c) Principal Funding Account Investment Proceeds...............$0.00
(d) Cash Collateral Account Investment Proceeds........$1,167,849.44
(e) Reserve Draw Amount, if applicabl...........................$0.00
(f) Additional Finance Charges from other Series allocated to the
Series 1997-3 Certificates..................................$0.00
(g) Payments, if any, on deposit as of the Determination Date
received from any Interest Rate Protection Agreements.......$0.00
(h) Required Draw Amount, if applicable.........................$0.00
(i) Reallocated Collateral Principal Collections................$0.00
(j) Reallocated Class B Principal Collections...................$0.00
(k) Total Available Finance Charge Collections and Reallocated
Principal Collections for Series 1997-3 (total of (a), (b), (c),
(d), (e), (f), (g), (h), (i) and (j) above).......$161,706,837.72
(3) Available Principal Collections for Series 1997-3 for 1998
(a) The Principal Receivables collected and allocated to the Series
1997-3 Certificates...............................$674,239,046.96
(b) Shared Principal Collections from other Series allocated to the
Series 1997-3 Certificates..................................$0.00
(c) Additional amounts to be treated as Available Principal
Collections pursuant to the Series Supplement......$55,402,080.86
(d) Reallocated Collateral Principal Collections................$0.00
(e) Reallocated Class B Principal Collections...................$0.00
(f) Available Principal Collections for Series 1997-3 (total of (a),
(b) and (c) minus (d) and (e) above)..............$729,641,127.82
(4) Delinquent Balances in the Trust
The aggregate outstanding balance of the Accounts which were
delinquent as of the close of business on the last day of 1998.
(a) 31-60 days $ 110,795,574
(b) 61-90 days 65,578,659
(c) 91 or more days 119,495,895
-------------
(d) Total Delinquencies $ 295,870,128
(5) Defaulted Amount
(a) The aggregate amount of Defaulted Receivables with respect to the
Trust for 1998....................................$583,870,682.31
(b) The aggregate Amount of Recoveries of Defaulted Receivables
processed during 1998..............................$82,284,725.02
(c) The Defaulted Amount for 1998 [Defaulted Receivables minus
Recoveries].......................................$501,585,957.29
(d) The Defaulted Amount for 1998 allocable to the Series 1997-3 (the
"Series 1997-3 Defaulted Amount")..................$55,402,080.86
(e) The Class A Defaulted Amount for 1998 [Series 1997-3 Defaulted
Amount multiplied by the Class A Percentage].......$45,152,695.90
(f) The Class B Defaulted Amount for 1998 [Series 1997-3 Defaulted
Amount multiplied by the Class B Percentage]........$5,263,197.68
(6) Class A Charge-Offs
(a) The excess, if any, of the Class A Defaulted Amount over the sum
of (i) Available Finance Charge Collections applied to such
Class A Defaulted Amount, (ii) the Available Cash Collateral
Amount applied to such Class A Defaulted Amount, (iii)
Reallocated Principal Collections applied to such Class A
Defaulted Amount, (iv) the amount by which the Collateral
Invested Amount has been reduced in respect of such Class A
Defaulted Amount and (v) the amount by which the Class B Invested
Amount has been reduced in respect of such Class A Defaulted
Amount (a "Class A Charge-Off").............................$0.00
(b) The amount of the Class A Charge-Off set forth in item 6(a)
above, per $1,000 original certificate principal amount (which
will have the effect of reducing, pro rata, the amount of each
Class A Certificateholder's investment).....................$0.00
(c) The total amount reimbursed on the last Distribution Date of 1998
in respect of Class A Charge-Offs for prior Distribution
Dates.......................................................$0.00
(d) The amount set forth in item 6(c) above per $1,000 original
certificate principal amount (which will have the effect of
increasing, pro rata, the amount of each Class A
Certificateholder's investment).............................$0.00
(e) The amount, if any, by which the outstanding principal balance of
the Class A Certificates exceeds the Class A Invested Amount if
any, as of the last Distribution Date of 1998, after giving
effect to all deposits, withdrawals and distributions on such
Distribution Date...........................................$0.00
(7) Class B Charge-Offs
(a) The excess, if any, of the Class B Defaulted Amount over the sum
of (i) Available Finance Charge Collections applied to such Class
B Defaulted Amount applied to such Class B Defaulted Amount, (ii)
the Available Cash Collateral Amount, (iii) Reallocated
Collateral Principal Collections applied to such Class B
Defaulted Amount and (iv) the amount by which the Collateral
Invested Amount has been reduced in respect of such Class B
Defaulted Amount............................................$0.00
(b) The amount by which the Class B Invested Amount has been reduced
on the last Distribution Date of 1998 in respect of Reallocated
Class B Principal Collections...............................$0.00
(c) The amount by which the Class B Invested Amount has been reduced
on the last Distribution Date of 1998 in respect of item 6(a)
(together with item 7(a), "Class B Charge-Offs")............$0.00
(d) The total amount by which the Class B Invested Amount has been
reduced on the last Distribution Date of 1998 as set forth in
items 7(a), (b) and (c).....................................$0.00
(e) The amount set forth in item 7(d) above per $1,000 original
certificate principal amount (which will have the effect of
reducing, pro rata, the amount of each Class B
Certificateholder's investment).............................$0.00
(f) The total amount reimbursed on the last Distribution Date of 1998
in respect of reductions in the Class B Invested Amount on prior
Distribution Date...........................................$0.00
(g) The amount set forth in item 7(f) above per $1,000 original
certificate principal amount (which will have the effect of
increasing, pro rata, the amount of each Class B
Certificateholder's investment).............................$0.00
(h) The amount, if any, by which the outstanding principal balance of
the Class B Certificates exceeds the Class B Invested Amount if
any, as of the Distribution Date, after giving effect to all
deposits, withdrawals and distributions on such last Distribution
Date of 1998................................................$0.00
(8) Reductions in the Collateral Interest
(a) The excess, if any, of the Collateral Defaulted Amount over
Available Finance Charge Collections applied to such Collateral
Defaulted Amount............................................$0.00
(b) The amount by which the Collateral Invested Amount has been
reduced on the last Distribution Date of 1998 in respect of
Reallocated Principal Collections...........................$0.00
(c) The amount by which the Collateral Invested Amount has been
reduced on the last Distribution Date of 1998 in respect of items
6(a) and 7(a) above.........................................$0.00
(d) The total amount by which the Collateral Invested Amount has been
reduced on the last Distribution Date of 1998 as set forth in
items 8 (a), (b) and (c)....................................$0.00
(e) The total amount reimbursed on the last Distribution Date of 1998
in respect of reductions in the Collateral Invested Amount on
prior Distribution Dates....................................$0.00
(f) The amount, if any, by which the outstanding principal balance of
the Collateral Interest exceeds the Collateral Invested Amount,
if any, as of the last Distribution Date of 1998, after giving
effect to all deposits, withdrawals and distributions on the
Distribution Date...........................................$0.00
(9) Investor Monthly Servicing Fee
(a) The amount of the Series 1997-3 Monthly Servicing Fee payable to
the Servicer during 1998...........................$12,250,000.00
(10) Cash Collateral Account
(a) The Available Cash Collateral Amount on the last Distribution
Date of 1998, after giving effect to all deposits, withdrawals
and distributions on such Distribution Date........$21,000,000.00
(11) Class A Monthly Interest
(a) Class A Monthly Interest payable for 1998..........$32,924,555.91
(12) Class B Monthly Interest
(a) Class B Monthly Interest payable for 1998..........$3,972,678.89
(13) Principal Funding Account Amount
(a) The amount on deposit in the Principal Funding Account on the
last Distribution Date of 1998, after giving effect to all
deposits, withdrawals and distributions on such Distribution
Date........................................................$0.00
(b) Deposits to the Principal Funding Account are currently scheduled
to commence on the Distribution Date occurring in March 2001.
(The initial funding date for the Principal Funding Account may
be modified in certain circumstances in accordance with the terms
of the Series Supplement.)
(14) Deficit Controlled Accumulation Amount
The Deficit Controlled Accumulation Amount for the last Distribution
Date of 1998, after giving effect to all deposits, withdrawals and
distributions on such Distribution Date..........................$0.00
(15) Reserve Account (if applicable)
(a) The amount on deposit in the Reserve Account, if funded, on the
last Distribution Date of 1998, after giving effect to all
deposits, withdrawals and distributions on such Distribution Date
and the related Transfer Date...............................$0.00
(b) The current Required Reserve Account Amount, if any, selected by
the Servicer................................................$0.00
C) Class A Invested Amount
(1) The Class A Initial Invested Amount....................$570,500,000.00
(2) The Class A Invested Amount on the last Distribution Date of 1998,
after giving effect to all deposits, withdrawals and distributions on
such Distribution Date.................................$570,500,000.00
(3) The Pool Factor for the last Distribution Date of 1998 (which
represents the ratio of the Class A Invested Amount, as of such
Distribution Date, after giving effect to any adjustment in the
Class A Invested Amount on such Distribution Date, to the Class A
Initial Invested Amount). The amount of a Class A Certificateholder's
pro rata share of the Class A Invested Amount can be determined by
multiplying the original denomination of the Class A
Certificateholder's Certificate by the Pool Factor............1.000000
D) Class B Invested Amount
(1) The Class B Initial Invested Amount.....................$66,500,000.00
(2) The Class B Invested Amount on the last Distribution Date of 1998,
after giving effect to all deposits, withdrawals and distributions on
such Distribution Date..................................$66,500,000.00
(3) The Pool Factor for the last Distribution Date of 1998 (which
represents the ratio of the Class B Invested Amount, as of such
Distribution Date, after giving effect to any adjustment in the Class
B Invested Amount on such Distribution Date, to the Class B Initial
Invested Amount). The amount of a Class B Certificateholder's pro rata
share of the Class B Invested Amount can be determined by multiplying
the original denomination of the Class B Certificateholder's
Certificate by the Pool Factor................................1.000000
E) Collateral Invested Amount
(1) The Collateral Initial Invested Amount..................$63,000,000.00
(2) The Collateral Invested Amount on the last Distribution Date of 1998,
after giving effect to all deposits, withdrawals and distributions on
such Distribution Date..................................$63,000,000.00
(3) The Collateral Invested Amount as a percentage of the sum of the
Invested Amount on such Distribution Date........................9.00%
F) Receivables Balances
(1) The aggregate amount of Principal Receivables in the Trust at the
close of business on the last day of 1998...............$6,374,932,335
(2) The aggregate amount of Finance Charge Receivables in the Trust at the
close of business on the last day of 1998.................$158,475,082
G) Annualized Percentages
(1) The average Gross Yield for 1998 (sum of the monthly Gross Yield
divided by 12)..................................................23.10%
(2) The average Net Loss Rate for 1998 (sum of monthly Net Loss Rates
divided by 12)...................................................7.92%
(3) The average Portfolio Yield for 1998 (the average Gross Yield minus
the average Net Loss Rate for 1998).............................15.18%
(4) The average Base Rate for 1998 (sum of monthly Base Rates divided by
12)..............................................................7.83%
(5) The average Net Spread for 1998 (the average Portfolio Yield minus the
average Base Rate for 1998)......................................7.35%
(6) The average Monthly Payment Rate for 1998 (sum of the monthly Payment
Rates divided by 12).............................................9.75%
H) Series 1997-3 Information for the Last Three Distribution Dates in 1998
1) Gross Yield
a) 12/15/98 24.35%
b) 11/16/98 22.80%
c) 10/15/98 22.71%
2) Net Loss Rate
a) 12/15/98 8.58%
b) 11/16/98 9.36%
c) 10/15/98 7.82%
3) Net Spread (Portfolio Yield Minus Base Rate)
a) 12/15/98 8.50%
b) 11/16/98 5.49%
c) 10/15/98 7.13%
Three Month Average 7.04%
4) Monthly Payment Rate
a) 12/15/98 9.01%
b) 11/16/98 8.95%
c) 10/15/98 9.34%
PROVIDIAN NATIONAL BANK
Servicer
By: /s/ Daniel Sanford
-----------------------------
Name: Daniel Sanford
Title: Senior Vice President and Controller
ANNUAL CERTIFICATEHOLDERS' STATEMENT
_____________________________________________
PROVIDIAN MASTER TRUST
SERIES 1997-4
_____________________________________________
Pursuant to the Pooling and Servicing Agreement dated as of June 1, 1993
(as amended and supplemented, the "Agreement"), as supplemented by the Series
1997-4 Supplement dated as of November 1, 1997 (as amended and supplemented, the
"Series Supplement"), among Providian National Bank ("PNB"), formerly known as
First Deposit National Bank, Seller and Servicer, and Bankers Trust Company,
Trustee, PNB as Servicer is required to prepare certain information each year
regarding current distributions to Class A Certificateholders, Class B
Certificateholders and the Collateral Interest Holder and the performance of the
Providian Master Trust (the "Trust") during the previous year. The information
which is required to be prepared for the Series 1997-4 Certificates with respect
to the year ended December 31, 1998, and with respect to the performance of the
Trust during 1998 , is set forth below. Certain of the information is presented
on the basis of an original principal amount of $1,000 per Investor Certificate.
Certain other information is presented based on the aggregate amounts for the
Trust as a whole. Capitalized terms used in this Certificate have their
respective meanings set forth in the Agreement or Series Supplement, as
applicable.
A) Information Regarding the 1998 Distribution for the Series 1997-4 Class A
Certificates and Class B Certificates (stated on the basis of $1,000
original certificate principal amount)
(1) The total amount distributed to Class A Certificateholders per $1,000
original certificate principal amount.......................$62.500000
(2) The amount set forth in A(1) above distributed to Class A
Certificateholders with respect to interest per $1,000 original
certificate principal amount................................$62.500000
(3) The amount set forth in A(1) above distributed to Class A
Certificateholders with respect to principal per $1,000 original
certificate principal amount.................................$0.000000
(4) The total amount distributed to Class B Certificateholders per $1,000
original certificate principal amount.......................$64.500000
(5) The amount set forth in A(4) above distributed to Class B
Certificateholders with respect to interest per $1,000 original
certificate principal amount................................$64.500000
(6) The amount set forth in A(4) above distributed to Class B
Certificateholders with respect to principal per $1,000 original
certificate principal amount.................................$0.000000
B) Information Regarding the Performance of the Trust
(1) Allocation of Receivables Collections to the Series 1997-4
Certificates
(a) The aggregate amount of Finance Charge Receivables collected
during 1998.....................................$1,415,446,763.72
(b) The aggregate amount of Interchange collected and allocated to
the Trust for 1998.................................$34,020,710.48
(c) The aggregate amount of Principal Receivables collected during
1998............................................$6,124,617,322.41
(d) The Floating Allocation Percentage with respect to the Series
1997-4 Certificates for 1998............................9.458979%
(e) The Principal Allocation Percentage with respect to the Series
1997-4 Certificates for 1998............................9.436005%
(f) The Finance Charge Receivables and Interchange collected and
allocated to the Series 1997-4 Certificates for
1998..............................................$137,104,818.95
(g) The Principal Receivables collected and allocated to the Series
1997-4 Certificates for 1998......................$577,919,183.11
(2) Available Finance Charge Collections, Required Draw Amount and
Reallocated Principal Collections for Series 1997-4 for 1998.
(a) The Finance Charge Receivables and Interchange collected and
allocated to the Series 1997-4 Certificates.......$137,104,818.95
(b) Collection Account and Special Funding Account investment
earnings allocated to the Series 1997-4 Certificates..$505,224.93
(c) Principal Funding Account Investment Proceeds...............$0.00
(d) Cash Collateral Account Investment Proceeds...........$834,341.00
(e) Reserve Draw Amount, if applicable..........................$0.00
(f) Additional Finance Charges from other Series allocated to the
Series 1997-4 Certificates..................................$0.00
(g) Payments, if any, on deposit as of the Determination Date
received from any Interest Rate Protection Agreements.......$0.00
(h) Required Draw Amount, if applicable.........................$0.00
(i) Reallocated Collateral Principal Collections................$0.00
(j) Reallocated Class B Principal Collections...................$0.00
(k) Total Available Finance Charge Collections and Reallocated
Principal Collections for Series 1997-4 (total of (a), (b), (c),
(d), (e), (f), (g), (h), (i) and (j) above).......$138,444,384.88
(3) Available Principal Collections for Series 1997-4 for 1998.
(a) The Principal Receivables collected and allocated to the Series
1997-4 Certificates...............................$577,919,183.11
(b) Shared Principal Collections from other Series allocated to the
Series 1997-4 Certificates..................................$0.00
(c) Additional amounts to be treated as Available Principal
Collections pursuant to the Series Supplement......$47,487,497.88
(d) Reallocated Collateral Principal Collections................$0.00
(e) Reallocated Class B Principal Collections...................$0.00
(f) Available Principal Collections for Series 1997-4 (total of (a),
(b) and (c) minus (d) and (e) above...............$625,406,680.99
(4) Delinquent Balances in the Trust
The aggregate outstanding balance of the Accounts which were
delinquent as of the close of business on the last day of 1998.
(a) 31-60 days $ 110,795,574
(b) 61-90 days 65,578,659
(c) 91 or more days 119,495,895
-------------
(d) Total Delinquencies $ 295,870,128
(5) Defaulted Amount
(a) The aggregate amount of Defaulted Receivables with respect to the
Trust for 1998....................................$583,870,682.31
(b) The aggregate Amount of Recoveries of Defaulted Receivables
processed during 1998..............................$82,284,725.02
(c) The Defaulted Amount for 1998 [Defaulted Receivables minus
Recoveries].......................................$501,585,957.29
(d) The Defaulted Amount for 1998 allocable to the Series 1997-4
Certificates (the "Series 1997-4 Defaulted
Amount")...........................................$47,487,497.88
(e) The Class A Defaulted Amount (Series 1997-4 Defaulted Amount
multiplied by the Class A Percentage)..............$39,652,060.73
(f) The Class B Defaulted Amount (Series 1997-4 Defaulted Amount
multiplied by the Class B Percentage)...............$3,798,999.83
(6) Class A Charge-Offs
(a) The excess, if any, of the Class A Defaulted Amount over the sum
of (i) Available Finance Charge Collections applied to such
Class A Defaulted Amount, (ii) the Available Cash Collateral
Amount applied to such Class A Defaulted Amount, (iii)
Reallocated Principal Collections applied to such Class A
Defaulted Amount, (iv) the amount by which the Collateral
Invested Amount has been reduced in respect of such Class A
Defaulted Amount and (v) the amount by which the Class B Invested
Amount has been reduced in respect of such Class A Defaulted
Amount (a "Class A Charge-Off") for 1998....................$0.00
(b) The amount of the Class A Charge-Off set forth in item 6(a)
above, per $1,000 original certificate principal amount (which
will have the effect of reducing, pro rata, the amount of each
Class A Certificateholder's investment) for 1998............$0.00
(c) The total amount reimbursed on the last Distribution Date of 1998
in respect of Class A Charge-Offs for prior Distribution
Dates.......................................................$0.00
(d) The amount set forth in item 6(c) above per $1,000 original
certificate principal amount (which will have the effect of
increasing, pro rata, the amount of each Class A
Certificateholder's investment) for 1998....................$0.00
(e) The amount, if any, by which the outstanding principal balance of
the Class A Certificates exceeds the Class A Invested Amount if
any, as of the last Distribution Date of 1998, after giving
effect to all deposits, withdrawals and distributions on such
Distribution Date...........................................$0.00
(7) Class B Charge-Offs
(a) The excess, if any, of the Class B Defaulted Amount over the sum
of (i) Available Finance Charge Collections applied to such Class
B Defaulted Amount applied to such Class B Defaulted Amount, (ii)
the Available Cash Collateral Amount, (iii) Reallocated
Collateral Principal Collections applied to such Class B
Defaulted Amount and (iv) the amount by which the Collateral
Invested Amount has been reduced in respect of such Class B
Defaulted Amount for 1998...................................$0.00
(b) The amount by which the Class B Invested Amount has been reduced
on the last Distribution Date of 1998 in respect of Reallocated
Class B Principal Collections...............................$0.00
(c) The amount by which the Class B Invested Amount has been reduced
on the last Distribution Date of 1998 in respect of item 6(a)
(together with item 7(a), "Class B Charge-Offs")............$0.00
(d) The total amount by which the Class B Invested Amount has been
reduced on the last Distribution Date of 1998 as set forth in
items 7(a), (b) and (c).....................................$0.00
(e) The amount set forth in item 7(d) above per $1,000 original
certificate principal amount (which will have the effect of
reducing, pro rata, the amount of each Class B
Certificateholder's investment) for 1998....................$0.00
(f) The total amount reimbursed on the last Distribution Date of 1998
in respect of reductions in the Class B Invested Amount on prior
Distribution Dates..........................................$0.00
(g) The amount set forth in item 7(f) above per $1,000 original
certificate principal amount (which will have the effect of
increasing, pro rata, the amount of each Class B
Certificateholder's investment) for 1998....................$0.00
(h) The amount, if any, by which the outstanding principal balance of
the Class B Certificates exceeds the Class B Invested Amount if
any, as of the last Distribution Date of 1998, after giving
effect to all deposits, withdrawals and distributions on such
Distribution Date...........................................$0.00
(8) Reductions in the Collateral Interest
(a) The excess, if any, of the Collateral Defaulted Amount over
Available Finance Charge Collections applied to such Collateral
Defaulted Amount for 1998...................................$0.00
(b) The amount by which the Collateral Invested Amount has been
reduced on the last Distribution Date of 1998 in respect of
Reallocated Principal Collections...........................$0.00
(c) The amount by which the Collateral Invested Amount has been
reduced on the last Distribution Date of 1998 in respect of items
6(a) and 7(a) above.........................................$0.00
(d) The total amount by which the Collateral Invested Amount has been
reduced on the last Distribution Date of 1998 as set forth in
items 8(a), (b) and (c).....................................$0.00
(e) The total amount reimbursed on the last Distribution Date of 1998
in respect of reductions in the Collateral Invested Amount on
prior Distribution Dates....................................$0.00
(f) The amount, if any, by which the outstanding principal balance of
the Collateral Interest exceeds the Collateral Invested Amount,
if any, as of the last Distribution Date of 1998, after giving
effect to all deposits, withdrawals and distributions on the
Distribution Date...........................................$0.00
(9) Investor Monthly Servicing Fee
(a) The amount of the Series 1997-4 Monthly Servicing Fee payable to
the Servicer for 1998..............................$10,500,000.00
(10) Cash Collateral Account
(a) The Available Cash Collateral Amount on the last Distribution
Date of 1998, after giving effect to all deposits, withdrawals
and distributions on such Distribution Date........$15,000,000.00
(11) Class A Monthly Interest
(a) Class A Monthly Interest payable for 1998..........$31,312,500.00
(12) Class B Monthly Interest
(a) Class B Monthly Interest payable for 1998...........$3,096,000.00
(13) Principal Funding Account Amount
(a) The amount on deposit in the Principal Funding Account on the
last Distribution Date of 1998, after giving effect to all
deposits, withdrawals and distributions on such Distribution
Date........................................................$0.00
(b) Deposits to the Principal Funding Account are currently scheduled
to commence on the Distribution Date occurring in May 2002. (The
initial funding date for the Principal Funding Account may be
modified in certain circumstances in accordance with the terms of
the Series Supplement.)
(14) Deficit Controlled Accumulation Amount
The Deficit Controlled Accumulation Amount for the last Distribution
Date of 1998, after giving effect to all deposits, withdrawals and
distributions on such Distribution Date..........................$0.00
(15) Reserve Account (if applicable)
(a) The amount on deposit in the Reserve Account, if funded, on the
last Distribution Date of 1998, after giving effect to all
deposits, withdrawals and distributions on such Distribution Date
and the related Transfer Date...............................$0.00
(b) The Required Reserve Account Amount, if any, selected by the
Servicer....................................................$0.00
C) Class A Invested Amount
(1) The Class A Initial Invested Amount....................$501,000,000.00
(2) The Class A Invested Amount on the last Distribution Date of 1998,
after giving effect to all deposits, withdrawals and distributions on
such Distribution Date.................................$501,000,000.00
(3) The Pool Factor for the last Distribution Date of 1998 (which
represents the ratio of the Class A Invested Amount, as of such
Distribution Date, after giving effect to any adjustment in the
Class A Invested Amount on such Distribution Date, to the Class A
Initial Invested Amount). The amount of a Class A Certificateholder's
pro rata share of the Class A Invested Amount can be determined by
multiplying the original denomination of the Class A
Certificateholder's Certificate by the Pool Factor............1.000000
D) Class B Invested Amount
(1) The Class B Initial Invested Amount.....................$48,000,000.00
(2) The Class B Invested Amount on the last Distribution Date of 1998,
after giving effect to all deposits, withdrawals and distributions on
such Distribution Date..................................$48,000,000.00
(3) The Pool Factor for the last Distribution Date of 1998 (which
represents the ratio of the Class B Invested Amount, as of such
Distribution Date, after giving effect to any adjustment in the Class
B Invested Amount on such Distribution Date, to the Class B Initial
Invested Amount). The amount of a Class B Certificateholder's pro rata
share of the Class B Invested Amount can be determined by multiplying
the original denomination of the Class B Certificateholder's
Certificate by the Pool Factor................................1.000000
E) Collateral Invested Amount
(1) The Collateral Initial Invested Amount..................$51,000,000.00
(2) The Collateral Invested Amount on the last Distribution Date of 1998,
after giving effect to all deposits, withdrawals and distributions on
such Distribution Date..................................$51,000,000.00
(3) The Collateral Invested Amount as a percentage of the sum of the
Invested Amount on such Distribution Date........................8.50%
F) Receivables Balances
(1) The aggregate amount of Principal Receivables in the Trust at the
close of business on the last day of 1998...............$6.374,932,335
(2) The aggregate amount of Finance Charge Receivables in the Trust at the
close of business on the last day of 1998.................$158,475,082
G) Annualized Percentages
(1) The average Gross Yield for 1998 (sum of monthly Gross Yield divided
by 12)..........................................................23.08%
(2) The average Net Loss Rate for 1998 (sum of monthly Net Loss Rates
divided by 12)...................................................7.92%
(3) The average Portfolio Yield for 1998 (the average Gross Yield minus
the average Net Loss Rate for 1998).............................15.16%
(4) The average Base Rate for 1998 (sum of monthly Base Rates divided by
12)..............................................................8.27%
(5) The average Net Spread (the average Portfolio Yield minus the average
Base Rate for 1998)..............................................6.89%
(6) The average Monthly Payment Rate for 1998 (sum of monthly Payment
Rates divided by 12).............................................9.75%
H) Series 1997-4 Information for the Last Three Distribution Dates in 1998
1) Gross Yield
a) 12/15/98 24.33%
b) 11/16/98 22.77%
c) 10/15/98 22.69%
2) Net Loss Rate
a) 12/15/98 8.58%
b) 11/16/98 9.36%
c) 10/15/98 7.82%
3) Net Spread (Portfolio Yield Minus Base Rate)
a) 12/15/98 7.53%
b) 11/16/98 5.13%
c) 10/15/98 6.60%
Three Month Average 6.42%
4) Monthly Payment Rate
a) 12/15/98 9.01%
b) 11/16/98 8.95%
c) 10/15/98 9.34%
PROVIDIAN NATIONAL BANK
Servicer
By: /s/ Daniel Sanford
-----------------------------
Name: Daniel Sanford
Title: Senior Vice President and Treasurer
Independent Accountant's Report on
Applying Agreed-Upon Procedures
Providian National Bank, as Seller and Servicer
and
Bankers Trust Company, as Trustee
Providian Master Trust
We have performed the procedures enumerated below, which were agreed to by
Providian National Bank and Bankers Trust Company, solely to assist you with
respect to Article III, Sections 3.06(a) and 3.06(b), of the Pooling and
Servicing Agreement dated as of June 1, 1993, as amended and supplemented (the
"Agreement") between Providian National Bank, as Seller and Servicer, and
Bankers Trust Company, as Trustee. This engagement to apply agreed-upon
procedures was performed in accordance with standards established by the
American Institute of Certified Public Accountants. The sufficiency of the
procedures is solely the responsibility of Providian National Bank and Bankers
Trust Company. Consequently, we make no representation regarding the sufficiency
of the procedures described below either for the purpose for which this report
has been requested or for any other purpose.
Our procedures were as follows:
1. We inquired of Servicer management as to whether separate Collection
Accounts were maintained by the Trustee during 1998 in accordance with the
terms of the Agreement. We were informed that separate collection accounts
were maintained by the Trustee during 1998 (Article IV Section 4.02 of the
Agreement).
2. We selected a sample of six business days ("Selected Days") from the period
October 1, 1997 to September 30, 1998 (March 3, March 5, March 10, July 2,
July 8, and July 10) and performed the following (Article III Sections 3.01
and 3.04 and Article IV Sections 4.02 and 4.03 of the Agreement):
a. We obtained the corresponding day's Transfer of Funds Notice ("TFN")
as prepared by Providian National Bank.
b. We compared the wire amount as set forth in the TFN to the
corresponding amount in the caption "Investor Finance Charge and Fee
Collections" contained in the Collection Data Report, as prepared by
the Servicer. No exceptions were noted.
c. We compared the total finance charge collections, gross fee, and
principal collections for the Selected Days to the Agent Bank Summary
Report ("ABS"), which is prepared by Providian National Bank's third
party bank card processor, Total System Services, Inc. ("TSYS"). No
exceptions were noted.
d. We compared the collection date for the days selected per the
Collection Data Report to the corresponding TFN to determine that the
wire transfers occurred no later than three business days after the
collection date. No exceptions were noted.
e. For the Selected Days, we recalculated all mathematical calculations
contained in the Collection Data Report. No exceptions were noted.
3. We obtained Monthly Servicer's Certificates and the Monthly Statements for
all Series issued for all months from October 1997 through September 1998.
We noted that the Certificates were signed by an authorized officer, and
that management asserted that no Pay Out Event had occurred.
4. For the months of October 1997 through September 1998 for Series 1993-3,
1995-1, 1996-1, 1997-1, 1997-2, 1997-3, 1997-4, and for the months of June
1998 through December 1998 for Series 1998-1 we obtained Providian National
Bank-prepared Monthly Statements and performed the following (Article III
Section 3.04 and Article IV Sections 4.03 and 4.04 of the Agreement):
a. For the month of May for Series 1993-3, 1995-1, 1996-1, 1997-1,
1997-2, 1997-3, and 1997-4, for the month of August for Series 1993-3,
and the month of July for Series 1998-1 we recalculated all
mathematical calculations in the Monthly Statements and compared the
related Trust activity amounts reported in the Monthly Statements to
the amounts reported in TSYS reports, third party statements, and
reports prepared by officers and employees of Providian National Bank.
No exceptions were noted.
b. We recomputed the mathematical calculation that determines the
investor and seller portions (Article III Section 3.04 and Article IV
Sections 4.03 and 4.04 of the Agreement). No exceptions were noted.
5. We obtained direct confirmation of the Servicer's fidelity bond coverage
insuring against losses through wrongdoing of its officers and associates
who are involved in the servicing of receivables. The insurer stated that
the coverage is currently maintained and was in force throughout 1998.
6. We inquired of Servicer personnel responsible for investments in the
Collection Account. The Servicer personnel informed us that deposits in the
Collection Account were invested in Eligible Investments only, as defined
in Article 1 of the Agreement (Article IV Section 4.02 of the Agreement).
7. The Servicer provided us with written representation that no Pay Out Event,
as the term is defined in the Agreement, occurred during the twelve months
ended September 30, 1998 for any series during its revolving period
(Article IX Section 9.01).
8. We obtained written representation from management of Providian National
Bank that, to the best of their knowledge, Providian National Bank has
recorded all material transactions properly relating to the Agreement, and
Providian National Bank has complied with all material aspects of the
Agreement (Articles III and IV and Section 8.08 of the Agreement).
9. We obtained copies of the Annual Servicer's Certificate and compared the
form of the Annual Servicer's Certificate to Exhibit D of the Agreement
(Article III Section 3.05 of the Agreement). No exceptions were noted.
We were not engaged to and did not perform an examination, the objective of
which would be the expression of an opinion on the Servicer's compliance with
the terms and conditions set forth in Articles III and IV and Sections 8.08 and
9.01 of the Agreement and the applicable provisions of each supplement, the
monthly certificates for each series included in the Trust delivered pursuant to
Section 3.04(b) of the Agreement, or on the reports prepared by the Servicer.
Accordingly, we do not express such an opinion. Had we performed additional
procedures with respect to Servicer's compliance with the terms and conditions
set forth in Articles III and IV and Sections 8.08 and 9.01 of the Agreement and
the applicable provisions of each supplement, the monthly certificates for each
series included in the Trust delivered pursuant to Section 3.04(b) of the
Agreement, or on the reports prepared by the Servicer which were the source of
such amounts, other matters might have come to our attention that would have
been reported to you.
This report is intended solely for the use and information of Providian National
Bank and Bankers Trust Company and should not be used by those who have not
agreed to the procedures and taken responsibility for the sufficiency of the
procedures for their purposes.
/s/ Ernst & Young LLP
March 8, 1999
Independent Accountant's Report
Board of Directors
Providian National Bank
We have examined management's assertion, included in the accompanying Report of
Management on Master Trust Internal Controls and Pooling and Servicing Agreement
Complaince (the "Report"), that its controls over the functions performed as
servicer of the Providian Master Trust ("Trust") are effective, during the year
ended December 31, 1998, in providing reasonable assurance that Trust assets are
safeguarded against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's authorization in
conformity with the Pooling and Servicing Agreement dated as of June 1, 1993, as
amended and supplemented (the "Agreement"), between Providian National Bank, as
Seller and Servicer, and Bankers Trust Company, as Trustee, and are recorded
properly to permit the preparation of the required financial reports. Management
is responsible for Providian National Bank's controls over compliance with those
requirements. Our responsibility is to express an opinion on management's
assertion based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
obtaining an understanding of the controls over the functions performed by
Providian National Bank as Servicer of the Trust, testing and evaluating the
design and operating effectiveness of those controls, and such other procedures
as we considered necessary in the circumstances. We believe that our examination
provides a reasonable basis for our opinion.
Because of inherent limitations in any controls, errors or fraud may occur and
not be detected. Also, projections of any evaluation of the controls over the
functions performed by Providian National Bank as Servicer of the Trust to
future periods are subject to the risk that the controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
controls may deteriorate.
In our opinion, management's assertion that it believes that, during the year
ended December 31, 1998, Providian National Bank maintained controls over the
functions performed as Servicer of the Trust that are effective in providing
reasonable assurance that Trust assets are safeguarded against loss from
unauthorized use or disposition, and that transactions are executed in
accordance with management's authorization in conformity with the Agreement and
the Supplements to the Agreement referred to above, and are recorded properly to
permit the preparation of the required financial reports, is fairly stated, in
all materials respects, based upon the following criteria specified in
management's report:
- -- Controls provide reasonable assurance that funds collected are
appropriately remitted to the Trustee in accordance with the Agreement.
- -- Controls provide reasonable assurance that Trust assets are segregated from
those assets retained by Providian National Bank in accordance with the
Agreement.
- -- Controls provide reasonable assurance that expenses incurred by the Trust
are properly calculated and remitted in accordance with the Agreement.
- -- Controls provide reasonable assurance that the addition of accounts to the
Trust are authorized in accordance with the Agreement.
- -- Controls provide reasonable assurance that the removals of accounts from
the Trust are authorized in accordance with the Agreement.
- -- Controls provide reasonable assurance that Trust principal collections used
to amortize investor's certificates are calculated in accordance with the
Agreement.
- -- Controls provide reasonable assurance that Monthly Statements and Payment
Instructions provided to the Trustee are reviewed by management prior to
delivery.
- -- Controls provide reasonable assurance that Monthly Statements and Payment
Instructions contain information required by the Agreement.
This report is intended solely for your information. However, this report is a
matter of public record as a result of being included as an exhibit to the
report on Form 10-K prepared by Providian National Bank and filed with the
Securities and Exchange Commission on behalf of the Providian Master Trust and
its distribution is not limited.
/s/ Ernst & Young LLP
March 8, 1999
Independent Accountant's Report
Providian National Bank
and
Bankers Trust Company
We have examined management's assertion, included in the accompanying Report of
Management on Master Trust Internal Controls and Pooling and Servicing Agreement
Compliance (the "Report"), that Providian National Bank complied with the
relevant terms and conditions of Articles III and IV, and Sections 8.08 and 9.01
of the Pooling and Servicing Agreement, as amended, dated as of June 1, 1993
between Providian National Bank and Bankers Trust Company (the "Agreement") and
Articles IV and V of the supplements to the Agreement relating to Series 1993-3,
Series 1995-1, Series 1996-1, Series 1997-1, Series 1997-2, Series 1997-3,
Series 1997-4, and Series 1998-1 during the year ended December 31, 1998.
Management is responsible for Providian National Bank's compliance with those
requirements. Our responsibility is to express an opinion on management's
assertion about Providian National Bank'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 Providian National Bank'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. Our examination does not provide a legal
determination of Providian National Bank's compliance with specified
requirements.
In our opinion, management's assertion that Providian National Bank complied
with the terms and conditions of the sections of the Agreement and the
provisions of each supplement to the Agreement referred to above, during the
year ended December 31, 1998, is fairly stated, in all material respects.
This report is intended solely for your information. However, this report is a
matter of public record as a result of being included as an exhibit to the
annual report on Form 10-K prepared by Providian National Bank and filed with
the Securities and Exchange Commission on behalf of the Providian Master Trust
and its distribution is not limited.
March 8, 1999 /s/ Ernst & Young
