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): October 17, 1996
________________________ADVANTA Corp.____________________________
(Exact name of registrant as specified in its charter)
_______Delaware__________ _____0-14120________ ______23-1462070__
(State or other jurisdic- (Commission File (IRS Employer Identi-
tion of incorporation) Number) fication No.)
Welsh and McKean Roads, P.O. Box 844, Spring House, PA
(Address of principal executive offices)
19477
(Zip Code)
Registrant's telephone number, including area code: (215) 657-4000
Five Horsham Business Center, 300 Welsh Road, Horsham, PA 19044
(Former name or former address, if changed since last report)
<PAGE>
5. Other Events.
On October 17, 1996 Advanta Corporation announced earnings for the
third quarter 1996 with net income of $44.4 million and earnings
per share of $.98, increases of 27% and 21%, respectively, over the
$34.9 million and $.81 per share results reported for the third
quarter 1995. Earnings for the second quarter 1996 totalled $45.1
million or $1.00 per share. From September 30, 1995, the
Company's portfolio of managed receivables increased by $5.5
billion or 53% to $15.8 billion at September 30, 1996.
Highlights for the third quarter include the following items:
Managed credit card receivables at September 30 of $12.7
billion posted a 53% increase over the $8.3 billion level last
September. Total managed assets expanded to $18.4 billion at
September 30, a 54% increase over the year ago amount.
In the third quarter, the Company adopted a new charge-off
methodology relating to credit card bankruptcies which provides
for an investigative period following notification of the bankruptcy
petition of up to 90-days (rather than up to 30-days) prior to
charge-off. The longer investigative period, which is consistent
with others in the industry, had an approximate $24 million net
positive impact for the quarter.
The charge-off rate on managed credit cards was 3.7% for the
quarter, compared to 3.3% in the prior quarter and above the 2.7%
of a year ago. The managed credit card 30+ day delinquency rate
was 3.9%, above the 2.9% registered at June 30, and above the 2.3%
of the year ago period. The third quarter 1996 figures reflect the
adoption of the new bankruptcy charge-off methodology described
above. The Company's credit card asset quality statistics continue
to be better than industry averages.
The Company originated approximately 157,000 new credit card
accounts during the quarter compared to 263,000 accounts during the
comparable quarter 1995 and 505,000 opened in the second quarter of
1996.
Managed net interest margin increased to 6.19%, above the
5.84% recorded in the second quarter, and the 5.64% posted in the
comparable period of 1995. During the third quarter, 37% of the
managed credit card portfolio consisted of receivables in their
introductory rate period; these accounts will contractually reprice
upward over the course of the next three quarters.
The operating expense ratio increased to 3.00% from 2.75%
recorded in the prior quarter, and was above the year ago measure
of 2.72%. Included in the operating expense ratio is spending on
new technology, research and talent to support future growth and
opportunities.
During the third quarter, a company in the portfolio of
Advanta's venture capital affiliate, Advanta Partners, completed
its IPO. This company, RMH Teleservices, Inc., is a leading
provider of outbound teleservices to major corporations in the
insurance and financial services industries. Income from this
transaction was offset by reserves and expense accruals.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
The following exhibit is filed as part of this Report on
Form 8-K.
27 Financial Data Schedules.
99 Selected summary financial data.
<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.
Advanta Corp.
Date: October 17, 1996 By ________________________
Gene S. Schneyer, Vice
President and Secretary
<PAGE>
ADVANTA AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
($ in millions, except per share data)
Three Months Ended % Change
September 30, 1996 versus
1996 1995 1995
OPERATING RESULTS
Net Revenues $232.8 $151.2 54%
Provision for Losses $ 24.2 $ 10.6 129%
Operating Expenses $141.3 $ 86.3 64%
Net Income $ 44.4 $ 34.9 27%
Earnings Per Common Share $ .98 $ .81 21%
Average Shares 45.2 43.1 5%
Return on Common Equity 25.0% 25.7% (3%)
Managed Net Interest Margin 6.19% 5.64% 10%
Nine Months Ended % Change
September 30, 1996 versus
1996 1995 1995
OPERATING RESULTS
Net Revenues (A) $610.1 $430.5 42%
Provision for Losses $ 67.0 $ 28.1 138%
Operating Expenses $379.2 $248.3 53%
Net Income $130.5 $ 99.1 32%
Earnings Per Common Share $ 2.89 $ 2.35 23%
Average Shares 45.1 42.1 7%
Return on Common Equity 26.0% 26.1% (1%)
Managed Net Interest Margin 6.08% 5.85% 4%
(A) Excludes $33.8 million gain on sale of credit card
relationships in the second quarter of 1996.
<PAGE>
ADVANTA AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
($ in millions, except per share data)
% Change
Sept. 1996
Sept. 30, June 30, Sept.30, versus
1996 1996 1995 Sept. 1995
FINANCIAL CONDITION
Managed Receivables*
Credit Cards $12,711 $12,679 $ 8,287 53%
Mortgage Loans $ 2,334 $ 2,092 $ 1,673 40%
Business Loans (A) $ 725 $ 610 $ 344 111%
Other Loans $ 27 $ 12 $ 7 279%
Total Managed Receivables $15,797 $15,393 $ 10,311 53%
Total Managed Assets $18,357 $18,184 $ 11,938 54%
Stockholders' Equity $ 798 $ 755 $ 635 26%
Book Value Per
Common Share $ 17.14 $ 16.13 $ 13.49 27%
Equity/Managed Assets 4.35% 4.15% 5.32% (18%)
Reserve for Credit Losses $ 77.6 $ 70.9 $ 40.3 93%
Customer Accounts 5,854,627 5,829,247 4,512,216 30%
CREDIT QUALITY
Managed Net Charge-off Rate
Credit Cards (B) 3.7% 3.3% 2.7%
Mortgages 0.7% 0.7% 0.9%
Business Loans (A) 1.9% 2.1% 1.7%
Total Receivables (C) 3.2% 2.9% 2.3%
Managed 30+ Day Delinquency Rate
Credit Cards (B) 3.9% 2.9% 2.3%
Mortgages 5.4% 5.3% 4.9%
Business Loans (A) 6.7% 6.8% 8.1%
Total Receivables (C) 4.2% 3.4% 3.0%
(A) Includes Leases and Business Cards beginning in 1996.
(B) Third quarter 1996 figures reflect the adoption of a new
charge-off methodology. Without this change, managed credit card
charge-off and delinquency rates for the third quarter 1996 would have
been 4.6% and 3.7%, respectively.
(C) Third quarter 1996 figures reflect the adoption of a new
charge-off methodology. Without this charge, total managed charge-
off and delinquency rates for the third quarter 1996 would have been
4.0% and 4.0%, respectively.
* Managed figures combine both owned and securitized receivables.
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