CONFORMED
UNITED STATES 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) April 22, 1996
Beneficial Corporation
(Exact name of registrant as specified in its charter)
Delaware 1-1177 51-0003820
(State or other jurisdic- (Commission (IRS Employer
tion of incorporation) File Number) Identification No.)
301 North Walnut Street, Wilmington, Delaware 19801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (302)425-2500
No Change
(Former name or former address, if changed since last report)
Item 5. Other Events.
The following is the text of a press release of
Beneficial Corporation, a Delaware corporation, issued on
April 22, 1996:
BENEFICIAL CORPORATION'S FIRST-QUARTER EARNINGS
INCREASE DRAMATICALLY
TO $107.4 MILLION FROM $20.7 MILLION A YEAR EARLIER
EARNINGS PER SHARE RISE TO $1.96 FROM $0.37
- Record Earnings for Any Quarter in Beneficial's History -
WILMINGTON, Del. -- Beneficial Corporation (NYSE: BNL) today
reported first-quarter earnings of $107.4 million, up sharply from
earnings of $20.7 million in the first quarter of 1995. Comparable
earnings per share increased to $1.96 from $0.37 in the 1995
period. These are the highest earnings for any quarter in
Beneficial's history.
Prior-year earnings were burdened by a $65 million pretax loss
from the tax refund anticipation loan (RAL) business. Conversely,
this year's quarter enjoyed $80.5 million of RAL pretax profits,
benefiting from $41.9 million in prior-year bad debt collections.
Also, 1995 results included a $23.5 million pretax gain on a
securitization. This year's quarter included an $8.4 million gain
after consideration of related taxes on the sale of the annuity
portfolio of Beneficial's Central National Life Insurance Company
of Omaha subsidiary. Removing these items from both years, the
aftertax earnings of the rest of Beneficial's business increased
11% during the quarter despite a $12 million addition to the
balance of the loan loss reserve.
"We are particularly pleased to report record quarterly earnings
for any period in Beneficial's history," said Finn M.W. Caspersen,
chairman and chief executive officer. "Although the dramatic
recovery of RAL profits was a powerful factor in the quarter's
success, operating earnings were up nicely even without RAL.
Lending spreads widened appreciably, and receivables growth was
strong, benefiting from successful acquisition activity and strong
growth at BNB USA, Beneficial's private-label credit card bank.
These factors offset a cyclical increase in net chargeoffs,
particularly on the unsecured loan portfolios, and some softness
in credit insurance earnings due to higher loss ratios."
Caspersen continued, "The second quarter will benefit from
additional RAL profits, and we anticipate a strong earnings gain
over last year. Although the second half of the year is likely to
reflect significant start-up costs for the recently announced
private-label credit card relationship with Kmart, particularly in
the fourth quarter, we look forward to an outstanding earnings
gain for the full year to a new record level."
Total owned receivables at March 31 were $13,867 million,
representing an increase of $451 million from the year-end 1995
level. Including loans both owned and serviced, total managed
receivables increased $360 million during the quarter before the
impact of foreign exchange translation, compared to a comparable
increase of $195 million during the first quarter of 1995. At
March 31, total managed receivables were $14,861 million. First
quarter receivables growth benefited from $230 million of real
estate-secured loan acquisitions and from continued strong growth
at BNB USA.
First-quarter net chargeoffs increased to $69.5 million from
$42.2 million in the first quarter of 1995. As an annualized
percentage of average owned receivables, net chargeoffs increased
noticeably to 1.98% from 1.33% of the portfolio in the 1995
quarter. The increase in the chargeoff percentage mainly reflects
the increased proportion of credit card and personal loans in
Beneficial's portfolio coupled with some increase in the chargeoff
rate on these portfolios. The net chargeoff percentage did
decline modestly from the 2.09% of the fourth quarter of 1995. At
March 31, the reserve for credit losses was 3.05% of owned
receivables, compared to 2.97% a year earlier, and 3.03% at year-
end 1995.
All owned receivables delinquent two months and greater on a
contractual basis increased just modestly to 3.16% from 2.95% at
March 31, 1995 and 2.98% at year-end 1995. The modest increase in
delinquency from the year-end level reflects the normal seasonal
pattern for delinquency to increase during the first quarter, and
delinquency remains very well controlled by any historical
measure. Examining delinquency for all managed receivables
exhibits a similar pattern. Managed receivables delinquency was
3.15% at March 31, up from 2.77% a year earlier and 2.97% at year-
end 1995.
Beneficial Corporation is a $15 billion, New York Stock Exchange-
listed financial services holding company. Subsidiaries of the
Company provide financial services through their various
consumer-finance, credit-card, banking and insurance operations
located throughout the United States, Canada, the United Kingdom,
Ireland, and Germany.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
BENEFICIAL CORPORATION
(Registrant)
By /s/ Samuel F. McMillan
Samuel F. McMillan
Senior Vice President and
Treasurer
Dated: April 22, 1996
