<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 10, 1997
-----------------
FIRST USA BANK
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
(AS SERVICER ON BEHALF OF FIRST USA CREDIT CARD MASTER TRUST)
Delaware 333-24227 76-0039224
-------- --------- ----------
(State or other jurisdiction (Commission File (IRS Employer
of incorporation or Number) Identification Number)
organization)
201 North Walnut Street, Wilmington, Delaware 19801
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
302/594-4117
- -----------------------------------------------------------
Registrant's telephone number, including area code
N/A
- --------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Items 1-4. Not Applicable
Item 5. Other Events
On December 10, 1997, the Registrant made available to prospective investors a
series term sheet setting forth a description of the collateral pool and the
proposed structure of $700,000,000 aggregate principal amount of Class A
Floating Rate Asset Backed Certificates, Series 1997-10 and $63,253,000
aggregate principal amount of Class B Floating Rate Asset Backed Certificates,
Series 1997-10, each of the First USA Credit Card Master Trust. The series term
sheet is attached hereto as Exhibit 99.01.
Item 6. Not Applicable
Item 7. Financial Statements and Exhibits
The following exhibit is filed as a part of this report:
Exhibit 99.01 Series Term Sheet dated December 10, 1997, with respect to the
proposed issuance of the Class A Floating Rate Asset Backed
Certificates and the Class B Floating Rate Asset Backed
Certificates of the First USA Credit Card Master Trust, Series
1997-10.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRST USA BANK
As Servicer
By: /s/ Tracie H. Klein
----------------------------
Tracie H. Klein
Vice President
Date: December 11, 1997
-----------------
<PAGE>
EXHIBIT INDEX
Exhibit Description Page No.
- ------- ----------- --------
99.01 Series 1997-10 Term Sheet
dated December 10, 1997 5
<PAGE>
EXHIBIT 99.01
SERIES 1997-10 TERM SHEET
[Exhibit Begins on Next Page]
<PAGE>
EXHIBIT 99.01
SUBJECT TO REVISION
SERIES TERM SHEET DATED DECEMBER 10, 1997
$763,253,000
FIRST USA CREDIT CARD MASTER TRUST
$700,000,000 CLASS A FLOATING RATE ASSET BACKED CERTIFICATES, SERIES 1997-10
$63,253,000 CLASS B FLOATING RATE ASSET BACKED CERTIFICATES, SERIES 1997-10
FIRST USA BANK
TRANSFEROR AND SERVICER
THE OFFERED CERTIFICATES WILL REPRESENT INTERESTS IN THE TRUST ONLY AND WILL
NOT REPRESENT INTERESTS IN OR RECOURSE OBLIGATIONS OF FIRST USA BANK OR ANY
AFFILIATE THEREOF. AN OFFERED CERTIFICATE IS NOT A DEPOSIT AND NEITHER THE
OFFERED CERTIFICATES NOR THE UNDERLYING ACCOUNTS OR RECEIVABLES ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
THIS SERIES TERM SHEET CONTAINS STRUCTURAL AND COLLATERAL INFORMATION ABOUT
THE OFFERED CERTIFICATES; HOWEVER, THIS SERIES TERM SHEET DOES NOT CONTAIN
COMPLETE INFORMATION ABOUT THE OFFERED CERTIFICATES. THE INFORMATION PROVIDED
HEREIN IS PRELIMINARY AND WILL BE SUPERSEDED BY THE INFORMATION CONTAINED IN
THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. ADDITIONAL INFORMATION WILL BE
CONTAINED IN THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. PURCHASERS ARE
URGED TO READ BOTH THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
THIS SERIES TERM SHEET SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITA-
TION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN
ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SALES OF THE OFFERED CERTIFICATES MAY NOT BE CONSUMMATED UNLESS THE PURCHASER
HAS RECEIVED BOTH THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
BANC ONE CAPITAL CORPORATION
CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
<PAGE>
SUMMARY OF TERMS
This Series Term Sheet will be superseded in its entirety by the information
appearing in the Prospectus Supplement, the Prospectus and the Series 1997-10
Supplement to the Pooling and Servicing Agreement (as amended, the "Pooling and
Servicing Agreement") between First USA Bank (the "Bank"), as transferor (in
such capacity, the "Transferor") and servicer (in such capacity, the
"Servicer"), and The Bank of New York (Delaware), as trustee (the "Trustee").
Type of Securities.......... Class A Floating Rate Asset Backed
Certificates, Series 1997-10 (the "Class A
Certificates") and Class B Floating Rate
Asset Backed Certificates, Series 1997-10
(the "Class B Certificates" and, together
with the Class A Certificates, the "Offered
Certificates").
Trust Assets................ The property of the First USA Credit Card
Master Trust (the "Trust") includes and will
include receivables (the "Receivables")
arising under certain VISA (R) and
MasterCard (R)* revolving credit card
accounts (the "Accounts") selected by the
Transferor from a portfolio of VISA and
MasterCard accounts owned by the Transferor,
all monies due or to become due in payment
of the Receivables, all proceeds of the
Receivables and all monies on deposit in
certain bank accounts of the Trust (other
than certain investment earnings on such
amounts), Recoveries and any enhancement
issued with respect to any series issued
from time to time by the Trust (each, a
"Series") which will consist of one or more
classes of certificates. The benefits of any
enhancement issued with respect to any other
Series will not be available for the benefit
of the holders of the Certificates and the
holders of the certificates of other Series
will not be entitled to the benefits of any
enhancement for this Series.
Trustee..................... The Bank of New York (Delaware).
Certificateholders'
Interest.................... Each of the Offered Certificates represents
an undivided interest in the Trust. The
Trust's assets will be allocated among the
Class A Certificateholders (the "Class A
Certificateholders' Interest"), the Class B
Certificateholders (the "Class B
Certificateholders' Interest," and together
with the Class A Certificateholders'
Interest, the "Investor Interest"), the CIA
Certificateholders (the "CIA
Certificateholders' Interest"), the holders
of other Series previously issued or issued
at some future time pursuant to the Pooling
and Servicing Agreement and the applicable
series supplements to the Pooling and
Servicing Agreement (each, a "Supplement")
and the Transferor (the "Transferor
Interest"), as described below.
The aggregate principal amount of the Class A
Certificateholders' Interest and the Class B
Certificateholders' Interest will, except as
otherwise provided herein, remain fixed at
$700,000,000 (the "Class A Invested Amount")
and $63,253,000 (the "Class B Invested
Amount"), respectively. The principal amount
of the Transferor Interest will fluctuate as
the amount of Receivables in the Trust
changes from time to time.
- --------
* VISA (R) and MasterCard (R) are registered trademarks of Visa USA
Incorporated and MasterCard International Incorporated, respectively.
2
<PAGE>
The "CIA Invested Amount" in the initial
amount of $80,121,000 (which amount
represents 9.5% of the sum of the initial
Class A Invested Amount, the initial Class B
Invested Amount and the initial CIA Invested
Amount) constitutes enhancement for the
Offered Certificates. Allocations will be
made to the CIA Invested Amount and the
holders of the CIA Certificates will have
voting and certain other rights of a
subordinated class of certificates. The CIA
Certificates together with the Offered
Certificates are referred to herein as the
"Certificates."
The Class A Certificates will represent the
right to receive from the assets of the
Trust allocated to the Class A
Certificateholders' Interest funds up to
(but not in excess of) the amounts required
to make payments of interest on the Class A
Certificates at the Class A Certificate
Rate, and the payment of principal during
the amortization period to the extent of the
Class A Invested Amount (which may be less
than the aggregate unpaid principal amount
of the Class A Certificates, in certain
circumstances).
The Class B Certificates will represent the
right to receive from the assets of the
Trust allocated to the Class B
Certificateholders' Interest funds up to
(but not in excess of) the amounts required
to make payments of interest on the Class B
Certificates at the Class B Certificate
Rate, and the payment of principal during
the amortization period, following the final
principal payment of the Class A Invested
Amount to the holders of the Class A
Certificates, to the extent of the Class B
Invested Amount (which may be less than the
aggregate unpaid principal amount of the
Class B Certificates, in certain
circumstances, if there has been a reduction
of the Class B Invested Amount).
Receivables................. The aggregate amount of Receivables in the
Accounts (including the amount of
Receivables in the additional Accounts added
to the Trust on November 3, 1997 and
November 25, 1997), as of the close of
business on October 31, 1997, was
$26,372,026,253, comprised of
$25,623,561,524 of principal Receivables and
$748,464,729 of finance charge Receivables.
Interest.................... Class A Certificate Rate: One-month LIBOR
plus %.
Class B Certificate Rate: One-month LIBOR
plus %.
Interest Payment Dates...... Interest on the Certificates will be
distributed on the 17th day of each calendar
month or, if such day is not a business day,
on the next succeeding business day (each, a
"Distribution Date"), commencing January 20,
1998, in an amount equal to the product of
(a) the actual number of days in the period
from the preceding Distribution Date (or in
the case of the January 1998 Distribution
Date, the Closing Date) through the day
preceding such Distribution Date divided by
360, (b) the Class A Certificate Rate or the
Class B Certificate Rate, as applicable, and
(c) the outstanding principal amount of the
Class A Certificates or the outstanding
principal amount of the Class B
Certificates, as
3
<PAGE>
applicable, as of the last day of the
preceding calendar month (or, in the case of
the January 1998 Distribution Date, as of
the Closing Date). "LIBOR" means the London
interbank offered quotations for one-month
United States dollar deposits prevailing on
the date that LIBOR is determined. The
Trustee will determine LIBOR on December 19,
1997 for the period from the Closing Date
through January 19, 1998 and on the second
business day prior to each Distribution Date
thereafter for the period from and including
such Distribution Date through the day
preceding the next succeeding Distribution
Date.
Principal................... The principal of the Class A Certificates and
the Class B Certificates is scheduled to be
paid on the Class A Expected Final Payment
Date and the Class B Expected Final Payment
Date, respectively, but may be paid earlier
or later under certain circumstances.
Class A Expected Final
Payment Date............... The January 2001 Distribution Date.
Class B Expected Final
Payment Date............... The January 2001 Distribution Date.
Stated Series Termination
Date........................ The final distribution of principal and
interest on the Certificates will be made no
later than the September 2003 Distribution
Date (the "Stated Series Termination Date").
After the Stated Series Termination Date,
the Trust will have no further obligation to
pay principal or interest on the
Certificates.
Subordination of the Class
B Certificates and the CIA
Certificates............... The Class B Certificateholders' Interest will
be subordinated to the extent necessary to
fund certain payments with respect to the
Class A Certificates. In addition, the CIA
Certificateholders' Interest will be
subordinated to the extent necessary to fund
certain payments with respect to the Class A
Certificates and the Class B Certificates.
If the CIA Invested Amount is reduced to
zero, the Class B Certificateholders will
bear directly the credit and other risks
associated with their undivided interest in
the Trust. To the extent the Class B
Invested Amount is reduced, the percentage
of collections of finance charge Receivables
allocated to the Class B Certificateholders
in subsequent Monthly Periods will be
reduced. Moreover, to the extent the amount
of such reduction in the Class B Invested
Amount is not reimbursed, the amount of
principal distributable to the Class B
Certificateholders will be reduced.
ERISA Considerations........ If certain conditions are satisfied,
including that upon completion of the public
offering thereof interests in the Class A
Certificates are held by 100 or more persons
independent of the Transferor and each
other, the Class A Certificates should
qualify as "publicly offered securities" for
purposes of the "plan assets regulation"
issued by the Department of Labor. In such
event, the purchase and holding of Class A
Certificates by an employee benefit plan
4
<PAGE>
(or other entity deemed to hold assets of
such a plan) would not cause the assets of
the Trust to be deemed "plan assets" of any
such plan subject to the prohibited
transaction rules of the Employee Retirement
Income Security Act of 1974, as amended and
the Internal Revenue Code of 1986, as
amended. Further information regarding the
status of the Class A Certificates as
publicly offered securities will be provided
in the Prospectus Supplement. Accordingly,
plan investors contemplating the purchase of
Class A Certificates should consult their
counsel and review "ERISA Considerations" in
the Prospectus and "Summary of Terms--ERISA
Considerations" in the Prospectus Supplement
prior to making any purchase of Class A
Certificates.
The Underwriters currently do not expect the
Class B Certificates to qualify as publicly
offered securities and, accordingly, the
Class B Certificates may not be purchased by
employee benefit plans (or entities deemed
to hold assets of such plans, including
without limitation any insurance company
general account deemed to hold plan assets
by reason of a plan's investment in the
general account).
Certificate Ratings......... It is a condition to the issuance of the
Class A Certificates that they be rated in
the highest rating category by at least one
nationally recognized statistical rating
organization (each such rating organization,
a "Rating Agency").
It is a condition to the issuance of the
Class B Certificates that they receive a
rating of at least "A" or its equivalent by
at least one Rating Agency.
Listing..................... Application will be made to list the Offered
Certificates on the Luxembourg Stock
Exchange.
5
<PAGE>
RECENT DEVELOPMENTS
Pursuant to an Agreement and Plan of Merger dated as of January 19, 1997,
and amended as of April 23, 1997, between First USA, Inc. ("FUSA") and BANC
ONE CORPORATION ("BANC ONE"), FUSA was merged with and into BANC ONE on June
27, 1997 (the "Merger") at which time the separate corporate existence of FUSA
ceased. As a result of the Merger, the Bank is now an indirect wholly-owned
subsidiary of BANC ONE.
BANC ONE intends to consolidate the management of its credit card operations
with those of FUSA. BANC ONE may also consolidate the operations of certain
other subsidiaries or divisions of BANC ONE and FUSA which provide similar
services, although no final determination with respect to such matters has
been made. No decision has been made as to whether receivables in accounts
originated by Bank One, N.A. or Bank One, Arizona, N.A., or any affiliate
thereof (other than the Bank) will be added at any time to the Trust. Any such
addition would be subject to the restrictions on additions of Accounts in the
Pooling and Servicing Agreement.
THE BANK'S CREDIT CARD PORTFOLIO
The following tables set forth the delinquency and loss experience for each
of the periods shown for the portfolio of VISA and MasterCard credit card
accounts serviced by the Bank (the "Bank Portfolio"). The Bank has changed its
charge-off policy to align it with that of BANC ONE. For the Trust, this
change in charge-off policy will be implemented over the course of a six month
period which began in July 1997 and will end in December 1997. The Bank will
now generally charge off an account immediately prior to the end of the sixth
billing cycle after having become contractually past due. Its prior policy was
to charge off accounts immediately prior to the end of the seventh billing
cycle after having become contractually past due. Receivables Delinquent 95 or
more days and Net Losses in the following tables have been restated to reflect
this change in charge-off policy for each of the periods shown.
As of the close of business on October 31, 1997, the Receivables in the
Trust Portfolio (including the Receivables in the additional Accounts added to
the Trust on November 3, 1997 and November 25, 1997) represented approximately
96.9% of the Bank Portfolio. The accounts in the Bank Portfolio that are not
included in the Trust Portfolio are primarily newly originated accounts with
lower delinquency and loss rates than the average accounts in the Trust
Portfolio which are generally more seasoned. Therefore, the actual delinquency
and loss experience with respect to the Receivables in the Trust Portfolio may
be different from that set forth below. There can be no assurance that the
delinquency and loss experience for the Trust Portfolio will be similar to the
historical experience set forth below because, among other things, economic
and financial conditions affecting the ability of cardholders to make payments
may be different from those that have prevailed during the periods reflected
below.
6
<PAGE>
DELINQUENCY EXPERIENCE
BANK PORTFOLIO
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AS OF DECEMBER 31, (1)
NINE MONTHS ENDED -----------------------------------------------------------------------
SEPTEMBER 30, 1997 1996 1995 1994
----------------------- ----------------------- ----------------------- -----------------------
PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL OF TOTAL OF TOTAL
RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receivables
Outstanding(2)........ $27,428,970 100.00% $22,119,202 100.00% $17,411,514 100.00% $10,989,357 100.00%
=========== ====== =========== ====== =========== ====== =========== ======
Receivables Delinquent:
35-64 days............ $ 403,450 1.50% $ 359,275 1.62% $ 219,240 1.26% $ 106,275 0.97%
65-94 days............ 250,539 0.90 250,468 1.13 130,088 0.75 53,691 0.49
95 or more days(3).... 478,308 1.70 475,115 2.15 231,315 1.32 100,532 0.91
----------- ------ ----------- ------ ----------- ------ ----------- ------
Total................. $ 1,132,297 4.10% $ 1,084,858 4.90% $ 580,643 3.33% $ 260,498 2.37%
=========== ====== =========== ====== =========== ====== =========== ======
</TABLE>
- --------
(1)The information set forth in the table above is stated on a basis
consistent with the Bank's current fiscal year. The Bank changed its fiscal
year end from June 30 to December 31 in connection with the Merger.
(2)The Receivables Outstanding on the accounts consist of all amounts due from
cardholders as posted to the accounts.
(3)The amount of Receivables Delinquent 95 or more days for each of the
periods shown is stated on a basis consistent with the Bank's current
policy of charging off an account immediately prior to the end of the sixth
billing cycle after having become contractually past due. Its prior policy,
which applied during the periods shown above, was to charge off accounts
immediately prior to the end of the seventh billing cycle after having
become contractually past due.
LOSS EXPERIENCE
BANK PORTFOLIO
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31, (1)
SEPTEMBER 30, ------------------------------------
1997 1996 1995 1994
------------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Average Receivables
Outstanding(2)............ $23,994,835 $18,986,458 $13,497,080 $7,680,291
Gross Charge-Offs(3)....... 1,022,800 895,267 416,406 180,715
Gross Charge-Offs as a
percentage of Average
Receivables
Outstanding(4)............ 5.70% 4.72% 3.09% 2.35%
Recoveries(5).............. 83,201 61,787 23,597 14,688
Net Losses(5).............. 939,599 833,480 392,809 166,027
Net Losses as a percentage
of Average Receivables
Outstanding(4)............ 5.24% 4.39% 2.91% 2.16%
</TABLE>
- --------
(1) The information set forth in the table above is stated on a basis
consistent with the Bank's current fiscal year. The Bank changed its
fiscal year end from June 30 to December 31 in connection with the Merger.
(2) Average Receivables Outstanding is the average daily receivables during
the periods indicated.
(3) Gross Charge-Offs are principal charge-offs before recoveries and do not
include the amount of any reductions in Average Receivables Outstanding
due to fraud, returned goods or customer disputes.
(4) Annualized.
(5) Recoveries are included in the Trust as of July 1, 1996. Net Losses for
each of the periods shown are stated on a basis consistent with the Bank's
current policy of charging off an account immediately prior to the end of
the sixth billing cycle after having become contractually past due. Its
prior policy, which applied during the periods shown above, was to charge
off accounts immediately prior to the end of the seventh billing cycle
after having become contractually past due.
7
<PAGE>
SUMMARY OF MONTHLY PAYMENT RATES
The following table sets forth the highest and lowest cardholder monthly
payment rates for the Bank Portfolio during any month in the period shown and
the average cardholder monthly payment rates for all months during the periods
shown, in each case calculated as a percentage of total opening monthly
account balances during the periods shown. Payment rates shown in the table
are based on amounts which would be deemed payments of principal Receivables
and finance charge Receivables with respect to the Accounts.
CARDHOLDER MONTHLY PAYMENT RATES
BANK PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
NINE MONTHS ENDED -------------------
SEPTEMBER 30, 1997 1996 1995 1994
------------------ ----- ----- -----
<S> <C> <C> <C> <C>
Lowest Month............................ 11.73% 10.16% 9.86% 10.46%
Highest Month........................... 13.58 11.86 11.73 12.14
Monthly Average......................... 12.70 11.18 10.90 11.17
</TABLE>
RECEIVABLE YIELD CONSIDERATIONS
The portfolio yield on the Bank Portfolio for each of the three years
contained in the period ended December 31, 1996 and for the nine months ended
September 30, 1997 is set forth in the table below. The portfolio yields in
the table are calculated on an accrual basis. The portfolio yield on
Receivables included in the Trust is calculated on a cash basis. Portfolio
yields calculated on an accrual basis may differ from portfolio yields
calculated on a cash basis due to (a) a lag between when finance charges and
fees are charged to cardholder accounts and when such finance charges and fees
are collected and (b) finance charges and fees that are not ultimately
collected from the cardholder. However, during the three years contained in
the period ended December 31, 1996 and for the nine months ended September 30,
1997, portfolio yield on an accrual basis approximated portfolio yield on a
cash basis. Portfolio yield on both an accrual and a cash basis will also be
affected by numerous factors, including changes in the Monthly Periodic Rates,
variations in the rate of payments and new borrowings on the Accounts, the
amount of the Annual Membership Fees and Other Charges, changes in the
delinquency and loss rates on the Receivables and the percentage of
cardholders who pay their balances in full each month and do not incur
Periodic Finance Charges, which may in turn be caused by a variety of factors,
including seasonal variations, the availability of other sources of credit and
general economic conditions. Interchange allocated to the Trust with respect
to the Receivables may vary from the amounts included in the table below
because Interchange will be included in the Trust on an estimated basis by
initially treating 1.3% of collections on the Receivables, other than
collections with respect to Periodic Finance Charges, Annual Membership Fees
and Other Charges, as Discount Receivables.
PORTFOLIO YIELD
BANK PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
NINE MONTHS ENDED -------------------------
SEPTEMBER 30, 1997 1996 1995 1994
------------------ ------- ------- -------
<S> <C> <C> <C> <C>
Average account monthly accrued
fees and
charges (1)(2).................. $39.99 $36.82 $ 32.35 $27.17
Average account balance(3)....... 2,976 2,799 2,580 2,219
Portfolio yield from fees and
charges (1)(4).................. 16.13% 15.79% 15.04% 14.69%
</TABLE>
- --------
(1) Fees and charges are comprised of Periodic Finance Charges, Interchange,
Annual Membership Fees and Other Charges.
(2) Average account monthly accrued fees and charges are presented net of
adjustments made pursuant to the Bank's normal servicing procedures,
including removal of incorrect or disputed Periodic Finance Charges, and
include Interchange.
(3) Average account balance includes Purchases, Cash Advances and accrued and
unpaid Periodic Finance Charges, Annual Membership Fees and Other Charges
and is calculated based on the average of the month end balances for
accounts with balances.
(4) Annualized.
8
<PAGE>
The increase in portfolio yield for the years ended December 31, 1995 and
December 31, 1996 and for the nine months ended September 30, 1997 reflects
changes in the overall pricing distribution of the Bank Portfolio. The
accounts in the Bank Portfolio that are not included in the Trust Portfolio
are primarily newly originated accounts with a greater proportion of
Receivables arising pursuant to direct solicitations of low-rate, no annual
fee credit cards, with on average a lower introductory rate, than the average
accounts in the Trust Portfolio, which are more seasoned. Therefore, the
actual portfolio yield with respect to the Receivables in the Trust Portfolio
may be different from that set forth above.
THE RECEIVABLES
The Receivables in the Accounts selected from the Bank Portfolio included in
the Trust on the basis of criteria set forth in the Pooling and Servicing
Agreement (the "Trust Portfolio") (including the additional Accounts added to
the Trust on November 3, 1997 and November 25, 1997), as of the close of
business on October 31, 1997, consisted of $25,623,561,524 of principal
Receivables and $748,464,729 of finance charge Receivables. On the Closing
Date, the Transferor will deposit $2,080,000 into the Finance Charge Account,
which will be applied as collections of finance charge Receivables received
during the initial Monthly Period and allocated to Series 1997-10 (the
"Offered Series"). The Accounts, including such additional Accounts, had an
average principal Receivable balance of $1,911 (including accounts with a zero
balance) and an average credit limit of $8,254. The percentage of the
aggregate total Receivable balance to the aggregate total credit limit was
23.8%.
As of October 31, 1997, cardholders whose Accounts are included in the Trust
Portfolio, including such additional Accounts, had billing addresses in 50
states, the District of Columbia and other United States territories and
possessions. As of October 31, 1997, 73% of the Accounts, including such
additional Accounts, were premium accounts and 27% were standard accounts, and
the aggregate principal Receivable balances of premium accounts and standard
accounts, as a percentage of the aggregate total principal Receivables, were
84% and 16%, respectively.
The following tables summarize the Trust Portfolio (including the additional
Accounts added to the Trust on November 3, 1997 and November 25, 1997), by
various criteria as of the close of business on October 31, 1997. Because the
future composition of the Trust Portfolio may change over time, these tables
are not necessarily indicative of the composition of the Trust Portfolio at
any subsequent time.
COMPOSITION BY ACCOUNT BALANCE
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF TOTAL PERCENTAGE OF
ACCOUNT NUMBER OF NUMBER OF AMOUNT OF TOTAL AMOUNT OF
BALANCE RANGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
------------- ---------- ---------- --------------- ---------------
<S> <C> <C> <C> <C>
Credit Balance.......... 198,788 1.6% $ (46,556,488) (0.2%)
No Balance.............. 4,498,797 33.5 0 0.0
$0.01 to $2,000.00...... 4,427,275 33.0 2,918,267,198 11.1
$2,000.01 to $5,000.00.. 2,405,825 17.9 8,489,157,053 32.1
$5,000.01 to $10,000.00. 1,553,560 11.6 10,776,522,116 40.9
$10,000.01 or More...... 325,582 2.4 4,234,636,374 16.1
---------- ----- --------------- -----
TOTAL............... 13,409,826 100.0% $26,372,026,253 100.0%
========== ===== =============== =====
</TABLE>
9
<PAGE>
COMPOSITION BY CREDIT LIMIT
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF TOTAL PERCENTAGE OF
CREDIT NUMBER OF NUMBER OF AMOUNT OF TOTAL AMOUNT OF
LIMIT RANGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
----------- ---------- ---------- --------------- ---------------
<S> <C> <C> <C> <C>
$0.00 to $2,000.00....... 1,029,058 7.7% $ 543,706,247 2.1%
$2,000.01 to $5,000.00... 3,597,288 26.8 5,719,175,345 21.7
$5,000.01 to $10,000.00.. 5,018,174 37.4 10,906,891,662 41.4
$10,000.01 or More....... 3,765,306 28.1 9,202,252,999 34.8
---------- ----- --------------- -----
TOTAL................ 13,409,826 100.0% $26,372,026,253 100.0%
========== ===== =============== =====
</TABLE>
COMPOSITION BY PERIOD OF DELINQUENCY
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
PERIOD OF DELINQUENCY OF TOTAL PERCENTAGE OF
(DAYS CONTRACTUALLY NUMBER OF NUMBER OF AMOUNT OF TOTAL AMOUNT OF
DELINQUENT) ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
--------------------- ---------- ---------- --------------- ---------------
<S> <C> <C> <C> <C>
Not Delinquent........... 12,827,517 95.6% $23,770,223,518 90.1%
Up to 34 Days............ 350,012 2.6 1,431,719,641 5.4
35 to 64 Days............ 87,903 0.7 398,215,462 1.5
65 to 94 Days............ 51,914 0.4 250,915,426 1.0
95 or More Days (1)...... 92,480 0.7 520,952,206 2.0
---------- ----- --------------- -----
TOTAL................ 13,409,826 100.0% $26,372,026,253 100.0%
========== ===== =============== =====
</TABLE>
- --------
(1) A change in the Bank's charge-off policy, which is being implemented over
a six month period beginning in July 1997, will result in a decrease in
the number of accounts and amount of receivables delinquent 95 or more
days but will also result in an increase in Default Amounts during such
period. See "The Bank's Credit Card Portfolio--Delinquency and Loss
Experience" herein.
COMPOSITION OF ACCOUNTS BY AGE
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF TOTAL PERCENTAGE OF
NUMBER OF NUMBER OF AMOUNT OF TOTAL AMOUNT OF
AGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
--- ---------- ---------- --------------- ---------------
<S> <C> <C> <C> <C>
Less than or equal to 6
Months.................. 2,932,962 21.9% $ 5,666,554,958 21.5%
Over 6 Months to 12
Months.................. 1,489,412 11.1 2,997,721,938 11.4
Over 12 Months to 24
Months.................. 2,787,025 20.7 5,622,255,389 21.3
Over 24 Months to 36
Months.................. 2,593,283 19.3 5,562,626,196 21.1
Over 36 Months to 48
Months.................. 1,739,633 13.0 3,263,772,255 12.4
Over 48 Months to 60
Months.................. 759,372 5.7 1,329,582,563 5.0
Over 60 Months........... 1,108,137 8.3 1,929,512,954 7.3
---------- ----- --------------- -----
TOTAL................ 13,409,824 100.0% $26,372,026,253 100.0%
========== ===== =============== =====
</TABLE>
10
<PAGE>
COMPOSITION BY GEOGRAPHIC DISTRIBUTION
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF TOTAL PERCENTAGE OF
NUMBER OF NUMBER OF AMOUNT OF TOTAL AMOUNT OF
STATE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
----- ---------- ---------- --------------- ---------------
<S> <C> <C> <C> <C>
Alabama.................. 145,648 1.1% $ 299,902,763 1.1%
Alaska................... 32,555 0.2 80,086,621 0.3
Arizona.................. 233,492 1.7 480,859,871 1.8
Arkansas................. 112,789 0.8 208,358,038 0.8
California............... 1,642,061 12.3 3,624,886,171 13.8
Colorado................. 226,817 1.7 454,696,479 1.7
Connecticut.............. 197,829 1.5 397,260,909 1.5
Delaware................. 41,576 0.3 66,874,567 0.2
District of Columbia..... 26,257 0.2 58,586,811 0.2
Florida.................. 889,678 6.6 1,754,789,799 6.7
Georgia.................. 307,144 2.3 666,786,190 2.5
Hawaii................... 61,382 0.5 137,642,914 0.5
Idaho.................... 59,758 0.5 116,626,972 0.4
Illinois................. 631,835 4.7 1,154,757,837 4.4
Indiana.................. 191,026 1.4 347,124,591 1.3
Iowa..................... 15,123 0.1 26,001,056 0.1
Kansas................... 129,517 1.0 244,366,795 0.9
Kentucky................. 143,839 1.1 252,765,932 1.0
Louisiana................ 272,705 2.0 481,344,362 1.8
Maine.................... 54,456 0.4 98,123,954 0.4
Maryland................. 312,475 2.3 656,181,427 2.5
Massachusetts............ 426,189 3.2 755,218,058 2.9
Michigan................. 445,639 3.3 880,036,145 3.3
Minnesota................ 168,208 1.3 284,986,811 1.1
Mississippi.............. 90,310 0.7 174,490,095 0.7
Missouri................. 250,007 1.9 454,399,486 1.7
Montana.................. 51,355 0.4 98,019,297 0.4
Nebraska................. 85,414 0.6 135,774,552 0.5
Nevada................... 106,844 0.8 240,753,143 0.9
New Hampshire............ 62,245 0.5 116,337,517 0.4
New Jersey............... 533,917 4.0 982,940,688 3.7
New Mexico............... 87,528 0.7 169,353,829 0.6
New York................. 984,607 7.3 1,943,688,168 7.4
North Carolina........... 272,746 2.0 541,484,497 2.1
North Dakota............. 29,496 0.2 47,073,329 0.2
Ohio..................... 530,875 4.0 985,911,479 3.7
Oklahoma................. 197,612 1.5 367,314,491 1.4
Oregon................... 187,423 1.4 383,084,903 1.5
Pennsylvania............. 585,238 4.4 946,725,600 3.6
Rhode Island............. 58,756 0.4 105,416,255 0.4
South Carolina........... 133,043 1.0 254,474,401 1.0
South Dakota............. 31,497 0.2 56,597,592 0.2
Tennessee................ 148,462 1.1 285,252,300 1.1
Texas.................... 1,251,731 9.3 2,579,131,376 9.8
Utah..................... 88,659 0.7 162,065,218 0.6
Vermont.................. 27,644 0.2 48,684,316 0.2
Virginia................. 353,075 2.6 737,948,377 2.8
Washington............... 321,375 2.3 713,698,617 2.7
West Virginia............ 75,610 0.6 138,588,276 0.5
Wisconsin................ 34,841 0.3 58,289,687 0.2
Wyoming.................. 26,088 0.2 47,101,774 0.2
Other U.S. territories
and possessions......... 35,430 0.2 69,161,917 0.3
---------- ----- --------------- -----
TOTAL.................... 13,409,826 100.0% $26,372,026,253 100.0%
========== ===== =============== =====
</TABLE>
Since the largest number of cardholders (based on billing addresses) whose
accounts were included in the Trust as of October 31, 1997 were in California,
Texas, New York, Florida and Illinois, adverse changes in the economic
conditions in these areas could have a direct impact on the timing and amount
of payments on the Certificates.
11
