<PAGE> 1
As Filed With the Securities and Exchange Commission via the EDGAR system on
June 2, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
ADVANTA CORP.
(Exact name of issuer as specified in its charter)
Delaware 23-1462070
(State of Incorporation) (I.R.S. Employer Identification No.)
Welsh & McKean Roads, Spring House, Pennsylvania 19477
(Address of Principal Executive Offices) (Zip Code)
Elizabeth H. Mai, Esquire
Advanta Corp.
Welsh & McKean Roads
P.O. Box 844
Spring House, PA 19477
(215) 657-4000
(Name, address and telephone number, including area code, of agent for service)
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the Registration Statement becomes effective. If any
of the securities being registered on this form are to be offered on a delayed
or a continuous basis pursuant to Rule 415 of the Securities Act of 1933, check
the following box: [x]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================
Proposed
Maximum
Title of Each Class of Amount to be Offering Price Proposed Maximum Amount of Registration
Securities being Registered Registered Per Unit Offering Price Fee(1)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
RediReserve Certificates,
Notes $200,000,000 100% $200,000,000 $60,607
=============================================================================================================
</TABLE>
(1) Pursuant to Rule 429 of the Securities Act of 1933, as amended, the
Prospectus constituting part of this Registration Statement also constitutes
part of the Registrant's Registration Statement, File No. 33-62601 (which
became effective October 23, 1995 and which covers $7,537,000 of unsold
Securities). $2,599 of filing fees were paid with respect to such unsold
Securities.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 2
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
Subject to Completion, Dated _________, 1997
$207,537,000 Principal Amount
Advanta Corp. Logo
RediReserve Variable Rate Certificates ($1,000 Min.)
91 Day Notes
Six, Eighteen and Thirty Month Notes
One, Two, Three, Four, Five, Seven and Ten Year Notes
The Securities offered hereby are debt securities of Advanta Corp. (the
"Company") consisting of RediReserve Variable Rate Certificates (the
"RediReserve Certificates") and Notes (the "Notes," and together with the
RediReserve Certificates, the "Securities"). The RediReserve Certificates are
redeemable at the demand of the holder. The Notes are subject to automatic
extension at maturity unless the Company requests redemption at least seven days
prior to maturity or the holder elects redemption, in writing, within seven days
after maturity. For information on the terms of such extensions, including the
interest rate to be paid during any extended term, see "Description of
Securities -- Provisions Relating to Notes." The Securities will be
uncertificated and evidenced by book-entry and a statement issued to each
purchaser.
A tabular summary of the terms of the Securities offered hereby appears
at page 7.
The Company is not subject to state or federal regulations applicable
to banks and savings and loan associations, including, among other things,
regulations regarding the maintenance of reserves and the quality or condition
of its assets. THE SECURITIES OFFERED HEREBY REPRESENT UNSECURED OBLIGATIONS OF
THE COMPANY AND ARE NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION ("FDIC") OR ANY OTHER GOVERNMENTAL OR PRIVATE ENTITY. SEE "RISK
FACTORS" BEGINNING ON PAGE 3.
The Securities are being offered by the Company directly without an
underwriter or selling agent. The Securities are being offered on a continuous
basis without an expected termination date. See "Plan of Distribution." The
terms of the offering or the Securities may be modified prospectively at any
time. Certain terms of outstanding RediReserve Certificates may be modified. See
"Description of Securities." There is no assurance that all or any portion of
the offered Securities will be sold. It is not expected that there will be a
trading market for any of the Securities. The Company reserves the right to
reject any subscription in whole or in part.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS, ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
=====================================================================================
Underwriting
Price to Commissions and Proceeds
Public(1) Discounts to the Company(2)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Security................ 100% None 100%
Total........................ $200,000,000 None $200,000,000
=====================================================================================
</TABLE>
(1) RediReserve Certificates will be issued in payment of interest due on
RediReserve Certificates.
(2) Before deducting expenses estimated at $102,000.
The date of this Prospectus is ____________________, 1997.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
Available Information.................................. 2 Description of Securities................................ 8
Incorporation of Certain Information by Reference...... 3 General................................................ 8
Risk Factors........................................... 3 Provision Relating to RediReserve Certificates......... 9
The Company............................................ 5 Provisions Relating to Notes........................... 10
Recent Developments.................................... 5 Provisions Relating to All Securities.................. 12
Summary of the Offering................................ 6 Certain United States Federal Income
Highlights of Terms of Tax Consequences....................................... 14
Securities Offered................................... 7 Plan of Distribution..................................... 16
Ratio of Earnings to Fixed Charges..................... 8 Legal Opinions........................................... 16
Use of Proceeds........................................ 8 Experts.................................................. 16
</TABLE>
No Company employee or other person has been authorized to give any
oral information or to make any oral representation other than those contained
in this Prospectus and, if given or made, such information or representation
must not be relied upon as having been authorized by the Company. This
Prospectus does not constitute an offer of any securities other than those to
which it relates or to any person in any jurisdiction where such offer would be
unlawful. The delivery of this Prospectus at any time does not imply that the
information herein is true as of any time subsequent to its date.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Such reports and other information can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following
regional offices of the Commission: Seven World Trade Center, 13th Floor, New
York, N.Y. 10048; and Northwestern Atrium Center, 500 West Madison Street 14th
Floor, Suite 1400, Chicago, Illinois 60661. Copies of such material may also be
obtained at prescribed rates from the Public Reference Section of the Commission
at the address of the Commission set forth above. Such information may also be
accessed electronically by means of the Commission's home page on the Internet
(http://www.sec.gov).
The Company has filed with the Commission registration statements
(herein, together with all amendments and exhibits thereto, collectively called
the "Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the Securities offered hereby. This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission, and reference is hereby made to the Registration Statement
and to the exhibits relating thereto for further information with respect to the
Company and the Securities. Statements contained herein concerning the
provisions of any document are not necessarily complete and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference. Copies of all or any
part of the Registration Statement, including exhibits thereto, may be obtained,
upon payment of the prescribed fees, at the offices of the Commission as set
forth above.
2
<PAGE> 4
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
As required by the Commission, the Company hereby incorporates by
reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
2. The Company's Current Reports on Form 8-K dated January 22, March
17, and April 16, 1997; and
3. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997.
All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
Post-Effective Amendment which indicates that all Securities offered have been
sold or which deregisters all Securities then remaining unsold, shall be deemed
to be incorporated by reference in the Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in
this Prospectus or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus or any supplement thereto to the extent that a statement
contained herein or in any subsequently filed document which is deemed to be
incorporated by reference herein or therein (or in any subsequently filed
document that also is or is deemed to be incorporated by reference herein or
therein) modifies or supersedes such document. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this
Prospectus, including the documents incorporated or deemed to be incorporated
herein by reference, as the same may be amended, supplemented or otherwise
modified from time to time. Statements contained in this Prospectus as to the
contents of any contract or other document referred to herein do not purport to
be complete, and where reference is made to the particular provisions of such
contract or other document, such provisions are qualified in all respects by
reference to all of the provisions of such contract or other document. The
Company will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon written or oral request, a copy of any document
incorporated herein by reference (other than exhibits to such document which are
not specifically incorporated by reference in such document). Requests for such
documents should be directed to: Investor Relations, Advanta Corp., Welsh &
McKean Roads, Spring House, Pennsylvania 19477, telephone (215) 444-5335.
RISK FACTORS
Investors in the Securities offered hereby should consider the
following factors:
Absence of Insurance and Guarantees. The Securities are not deposits or
other obligations of a bank and, accordingly, are not insured by any
governmental or other entity such as the FDIC, as are bank, savings and loan or
credit union accounts, and the Securities are not guaranteed by any public or
private entity. In these respects, the Company is similar to most other
commercial enterprises (including bank holding companies) which sell debt
securities to public investors, but is dissimilar to most banking or savings
institutions.
Recent Operating Loss. On March 17, 1997, the Company announced that it
expects to report 1997 results well below previous expectations. On April 16,
1997, the Company reported a loss of $19.8 million, or $0.43 cents per share,
for the first quarter. See "Recent Developments." There can be no assurance that
the Company will not incur operating losses in future periods.
Availability of Financing. Beginning March 1997, in connection with the
March 17, 1997 announcement described above under "-Recent Operating Loss," the
various rating agencies lowered their ratings of the Company's debt securities.
As of May 12, 1997, debt of the Company maintained investment grade ratings (at
or above the lowest investment grade level) from three of the rating agencies,
but was rated two levels below investment grade by Standard & Poor's and by
Moody's Investors Service. While the Company believes that the Company's current
cash position and anticipated cash flow from future business will provide the
Company with adequate funds for its current needs, there can be no assurance
that the Company will be able to obtain adequate financing for its business
needs in the future.
3
<PAGE> 5
Limited Availability of Bank and Insurance Company Assets; Impact on
Liquidity. Because the Company's subsidiaries include banks and insurance
companies that are subject to significant state and federal regulation, the
Company's ability to receive dividends and loans from its subsidiaries is
restricted. Banking regulations limit the amount of dividends that a bank may
pay. In addition, Arizona insurance regulations restrict the amount of
dividends which an insurance company may distribute without the prior consent
of the Director of Insurance. Further, Advanta National Bank USA, Advanta
National Bank and Advanta Financial Corp., which are subsidiaries of the
Company are subject to restrictions under Sections 23A and 23B of the
Federal Reserve Act. These restrictions limit the transfer of funds by the
depository institution to the Company and certain other affiliates, as defined
in that Act, in the form of loans, extensions of credit, investments or
purchases of assets, and they require generally that the depository
institution's transactions with its affiliates be on terms no less favorable to
the depository institution than comparable transactions with unrelated third
parties. These transfers by any one institution to the Company or any single
affiliate are limited in amount to 10% of the depository institution's capital
and surplus and transfers to all affiliates are limited in the aggregate to 20%
of the depository institution's capital and surplus. Furthermore, such loans
and extensions of credit are also subject to various collateral requirements.
In addition, neither Advanta National Bank USA nor Advanta National Bank intend
to make loans to the Company. The limited availability to the Company of
dividends and loans from its banking and insurance subsidiaries impacts the
Company's liquidity.
Risks Associated with Maintaining Portfolios of Credit Card Receivables
and Mortgage Loans. There are certain risks associated with maintaining
portfolios of credit card receivables and mortgage loans. The primary risks
involve potential increases in credit losses, and potential deterioration in
managed net interest margin. These risks are inherent to every lender. The
Company believes its credit loss experience is comparable to that of the
industry as a whole although its managed net interest margin is currently
significantly below that of other leading domestic credit card issuers. See
"Recent Developments."
Regulation. The banking and finance businesses in general, and the
Company's banking and insurance subsidiaries in particular, are the subject of
extensive regulation at both the state and federal levels. In addition, numerous
legislative and regulatory proposals are advanced each year which, if adopted,
could adversely affect the Company's profitability or the manner in which the
Company conducts its activities.
Competition. As a marketer of credit products, the Company faces
intense competition from numerous providers of financial services. Although
the Company believes it is generally competitive in most of the geographic
areas in which it offers its services, there can be no assurance that its
ability to market its services successfully or to obtain adequate yields on
its loans will not be impacted by the nature of the competition that now
exists or may develop.
Structural Subordination. The Company's operations are largely
conducted by its subsidiaries. Because the Company's subsidiaries include banks
and insurance companies that are subject to significant state and federal
regulation, the Company's ability to receive dividends and loans from its
subsidiaries is restricted. Further, the right of the Company to participate in
any distribution of assets of any subsidiary upon such subsidiary's liquidation
or reorganization or otherwise (and thus the ability of holders of the
Securities to benefit indirectly from such distribution) is subject to the
prior claims of creditors of that subsidiary, except to the extent that the
Company may itself be recognized as a creditor of that subsidiary. Accordingly,
the Securities will be effectively subordinated to all existing and future
liabilities of the Company's subsidiaries. At March 31, 1997, the subsidiaries
of the Company had total liabilities (excluding liabilities owed to the
Company) of approximately $3.9 billion. The Indenture does not place any
limitation on the amount of secured or unsecured debt that may be incurred by
the Company or any of its subsidiaries. See "Description of Securities --
Provisions Relating to All Securities -- Aggregate Indebtedness."
-----------------------------------------------
This Prospectus contains forward-looking statements, including but not
limited to projections of future earnings, that are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
projected. Significant risks and uncertainties include: the Company's managed
net interest margin, which in turn is affected by the Company's success in
originating new credit card accounts, the receivables volume and initial pricing
of new accounts, the impact of repricing existing accounts and account
attrition, the mix of account types and interest rate fluctuations; the level of
delinquencies, customer bankruptcies, and charge-offs; and the amount and rate
of growth in the Company's expenses. The Company's earnings also may be
significantly affected by factors that affect consumer debt, competitive
pressures from other providers of financial services, the effects of
governmental regulation, the amount and cost of financing available to the
Company and its subsidiaries, the difficulty or inability to securitize the
Company's receivables and the impact of the ratings on debt of the Company and
its subsidiaries. Additional risks that may affect the Company's future
performance are set forth elsewhere in this Prospectus and in the Company's
other filings with the Securities and Exchange Commission.
4
<PAGE> 6
THE COMPANY
The Company serves consumers and small businesses through innovative
products and services primarily via direct, cost-effective delivery systems. The
Company primarily originates and services credit cards and mortgage loans. Other
products include commercial small-ticket equipment leasing, business credit
cards, automobile loans, insurance and deposit products. The Company utilizes
consumer information attributes, including credit assessments, usage patterns
and other characteristics, enhanced by proprietary information, to match
prospect profiles with appropriate products. At March 31, 1997, assets under
management totaled $20 billion.
Approximately 61% of total revenues at March 31, 1997 were derived from
credit cards marketed through targeted direct mail campaigns. For the past
several years, the Company's strategy has been to market this product in the
form of a no annual fee, low variable-rate gold card. The Company has
successfully grown to one of the ten largest issuers of gold cards in the United
States and ranks among the top 15 bankcard issuers worldwide. Personal finance
loans, which include mortgage, home equity and automobile loans, contribute
approximately 20% of total revenues with a managed loan portfolio of $3.3
billion. Mortgage loans are originated directly with consumers, as well as
through conduit relationships and wholesale purchases from brokers and other
financial institutions.
The Company was incorporated in Delaware in 1974 as Teachers Service
Organization, Inc., the successor to a business originally founded in 1951. In
January 1988, the Company's name was changed from TSO Financial Corp. to Advanta
Corp. The Company's principal executive office is located at Welsh & McKean
Roads, Spring House, Pennsylvania, 19477. The Company's telephone number at its
principal executive office is (215) 657-4000.
RECENT DEVELOPMENTS
On March 17, 1997, the Company announced that it expects to report 1997
results well below previous expectations. On April 16, 1997 the Company reported
a loss of $19.8 million, or $0.43 cents per share, for the first quarter of
1997. The Company expects to report a net profit for full-year 1997 of
approximately $1.50 per share. This interruption in the Company's historical
pattern of strong financial results reflects a number of factors, including
continuing increases in consumer bankruptcies and charge-offs and lower
receivables balances than originally anticipated in its credit card business.
The Company's mortgage financing, leasing and insurance businesses continue to
perform well.
The Company also announced that it has retained BT Wolfensohn, a
division of Bankers Trust New York Corporation, to explore all strategic
alternatives that build upon the historic strength and success of the Company as
a whole and of its business units with the aim of maximizing the Company's
value. The strategic alternatives that might be considered by the Company
include, but are not limited to, a strategic alliance with another company, an
alliance or initial public offering involving one or more of the Company's
operating units, or a merger or sale involving the Company as a whole. There is
no assurance that any such event will occur. In addition to considering other
strategic alternatives with its financial and other advisors, the Company is
pursuing a number of steps to return the Company to its historical level of
financial performance by increasing revenues and stemming credit card losses.
5
<PAGE> 7
SUMMARY OF THE OFFERING
The following information is qualified in its entirety by the more
detailed information appearing elsewhere in this Prospectus.
SECURITIES OFFERED
This offering relates to $207,537,000 in principal amount of the
following Securities of the Company: RediReserve Money Market Certificates
("RediReserve Certificates") and Notes ("Notes"). The RediReserve Certificates
are payable on the demand of the holder. The Notes have maturities of 91 days,
six months, one year, 18 months, two years, 30 months, and three, four, five,
seven and ten years after the date of issue. The Securities are not insured,
guaranteed or secured by any lien on assets of the Company and there are no
sinking fund provisions.
In lieu of paying interest by check, additional RediReserve
Certificates will be issued in payment of interest due on RediReserve
Certificates. Interest on RediReserve Certificates will only be paid in such
manner, except that, upon redemption by a holder of all RediReserve Certificates
held by such holder, any accrued interest will be paid by check. Further,
subject to the limitations described under "Redemption at Holder's Election" and
"Redemption by Draft," holders may access by draft all funds held in the form of
RediReserve Certificates.
No interest will be paid on RediReserve Certificates for any day during
which the principal balance in an account is below $1,000.
A tabular summary of the terms of the Securities appears on the
following page.
MODIFICATION, TERMINATION OR EXTENSION OF OFFERING
The Company reserves the right to modify at any time the terms of the
offering or the Securities as set forth on the cover page of this Prospectus.
Any such modification will apply only to Securities offered after the date of
such modification, except as described under "Description of Securities --
General." From time to time, the aggregate amount of Securities offered for sale
by the Company may be increased.
6
<PAGE> 8
HIGHLIGHTS OF TERMS OF SECURITIES OFFERED
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
REDIRESERVE 91 DAY, SIX, EIGHTEEN AND THIRTY
VARIABLE RATE MONTH, AND ONE, TWO, THREE, FOUR, FIVE, SEVEN
CERTIFICATES AND TEN YEAR NOTES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Denomination of Minimum initial purchase: $1,000 or any amount in Minimum purchase: $5,000 or other amount as
Initial Purchase and excess thereof; additional purchases in any amount. specified by the Company.
Additional Purchases
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Annual Interest Interest rate on all outstanding Certificates may vary Fixed by the Company based on market conditions
from week to week. The rate will be set each week by and the Company's financial requirements. Once
the Company, to be at least the average rate on Thirteen determined, the rate on each Note remains fixed
Week U.S. Treasury Bills over the preceding eight weeks, until its maturity, but may change if the Note
less one percent. No interest will be paid for any day is extended, and will be set forth in a
on which the principal balance in an account is below supplement hereto.
the minimum balance (currently $1,000).
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Payment of Interest Quarterly, on each March 31, June 30, September 30 and On Notes with maturities of 91 days or six
December 31, accrued interest is added to the principal months interest is compounded daily and paid at
in each account in the form of additional RediReserve maturity. On all other Notes, at the election
Certificates. Except as otherwise provided herein, no of the holder, interest is compounded daily and
checks will be issued in payment of interest. paid at maturity or may be paid monthly,
quarterly, semi-annually or annually.
- ------------------------------------------------------------------------------------------------------------------------------------
Redemption by Holder Redeemable by holder upon oral or written demand, or by May be redeemed by the original holder after
draft. Redemption must be least $250 except for total permanent disability or by his estate
redemption to close an account. after death, at the principal amount plus
accrued interest. Otherwise, there is no right
of the holder to cause redemption prior to
maturity.
- ------------------------------------------------------------------------------------------------------------------------------------
Redemption by Company Redeemable on 30 days' notice. Not redeemable until maturity.
- ------------------------------------------------------------------------------------------------------------------------------------
Form Book-entry and non-negotiable. Book-entry and non-negotiable.
(A statement will be issued, not a promissory note). (A statement will be issued, not a promissory
note).
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Automatic Extension Not applicable (no fixed maturity). If the Company does not request redemption at
least seven days prior to maturity or if not
redeemed by holder within seven Business Days
after its maturity date, then a Note with a
principal amount of $2,500 or more will be
extended automatically for a period equal to
the original term. A Note with a principal
amount that is less than $2,500 at maturity
will automatically be redeemed. Notes are
extended at the rate being offered on
newly-issued Notes of like tenor, term and
denomination at their respective maturity
dates. If similar Notes are not then being
offered, absent instructions from the
Noteholder selecting a Note with a term
currently being offered, the maturing Note will
be redeemed.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The Securities are unsecured obligations of the Company. The Company is not
subject to state or federal regulation applicable to banks and savings and loan
associations with regard to insurance, the maintenance of reserves, or the
quality or condition of its assets or other matters. It is not expected that
there will be a trading market for the Notes, see "Description of Securities --
Provisions Relating to the Notes -- Liquidity." THE SECURITIES ARE NOT INSURED
OR GUARANTEED BY ANY BANK SUBSIDIARY OF THE COMPANY OR ANY OTHER PUBLIC OR
PRIVATE ENTITY.
7
<PAGE> 9
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges
of the Company for the periods indicated:
<TABLE>
<CAPTION>
Three
Months
Ended
March 31, Year Ended December 31,
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges(A)....... (B) 2.10x 1.97x 2.26x 2.71x 2.52x 1.81x
</TABLE>
- ----------
(A) For purposes of computing these ratios, "earnings" represent income before
income taxes plus fixed charges, and "fixed charges" consist of interest
expense and one-third (the proportion deemed representative of the interest
factor) of rental expenses on operating leases.
(B) For the three months ended March 31, 1997, earnings were inadequate to cover
fixed charges. The deficiency was approximately $26.7 million.
USE OF PROCEEDS
The net proceeds to the Company from the sale of Securities will be
used for general corporate purposes, including the purchase of assets from,
investments in and extensions of credit to, subsidiaries and affiliates of the
Company which will use the proceeds for general corporate purposes; and,
possibly, for financing future acquisitions by the Company, including without
limitation, acquisitions of credit card, mortgage and equipment lease
portfolios. At the date hereof, no specific proposed acquisitions have been
identified as probable. Proceeds may also be used to invest in income-producing
securities and other assets. The amount of Securities offered from time to time
and the precise amounts and timing of the applications of such proceeds will
depend upon funding requirements of the Company and its subsidiaries and
affiliates.
In view of its anticipated requirements, the Company expects to engage
on a recurring basis in additional private or public financing of a character
and amount to be determined as the need arises.
DESCRIPTION OF SECURITIES
GENERAL
This offering relates to the RediReserve Certificates and the Notes.
The Notes have maturities of 91 days, six months, one year, eighteen months, two
years, thirty months, or three, four, five, seven or ten years after their
respective dates of issue. The Securities are to be issued under an Indenture
dated October 23, 1995 (the "Indenture") between the Company and Mellon Bank
N.A., a national banking association, as trustee (the "Trustee"). A copy of the
Indenture is filed as an exhibit to the Registration Statement of which this
Prospectus is a part. The following statements are brief summaries of certain
provisions of the Indenture, and are subject to the detailed provisions of the
Indenture, to which reference is hereby made for a complete statement of such
provisions. Whenever particular provisions of the Indenture or terms defined
therein are referred to herein, such provisions or definitions are incorporated
by reference as part of the statements made herein and the statements are
qualified in their entirety by such reference. Parenthetical Section and Article
references appearing below are to the Indenture.
The Indenture may be modified as set forth below. Additionally, the
Company has reserved the right to terminate this offering, or modify the terms
of the offering or the Securities, at any time, by an appropriate amendment to
this Prospectus, but no such modification will affect the rights of the holders
of then outstanding Securities, except that, at the Company's election: (i) the
principal amount required to be maintained in an existing RediReserve
Certificate account may be increased (after 30 days' notice) or
8
<PAGE> 10
decreased; (ii) the minimum amount of any withdrawal from a RediReserve
Certificate account may be increased (after 30 days' notice) or decreased; and
(iii) certain service charges may be imposed or modified as described under
"Description of Securities -- Provisions Relating to all Securities."
The Securities are not secured by any collateral or lien. There are no
provisions for a sinking fund.
PROVISIONS RELATING TO REDIRESERVE CERTIFICATES
Form; Non-negotiability and Statements: RediReserve Certificates are
not negotiable and are not evidenced by any promissory note issued to the
holder. A statement evidencing ownership of a RediReserve Certificate will be
issued to each purchaser of a RediReserve Certificate, but such statement is not
a negotiable instrument, and no rights of ownership in a RediReserve Certificate
can be transferred by mere endorsement and delivery of such a statement to a
purchaser. Each holder of a RediReserve Certificate will receive, at the end of
the month after each investment, withdrawal and interest payment, a statement
indicating any transactions in such holder's RediReserve Certificate account.
The Company maintains a register to record the owner of each
outstanding RediReserve Certificate, and may treat the person whose name is so
recorded as the owner of such RediReserve Certificate for all purposes.
Ownership of a RediReserve Certificate may be transferred on the register only
by written notice to the Company signed by the holder or his duly authorized
representative on a form to be supplied by the Company.
Denomination and Minimum Purchase: As of the date of this Prospectus,
the minimum initial purchase of a RediReserve Certificate is $1,000 and
additional purchases may be in any amount. From time to time, the Company may
set other minimum purchase amounts and minimum balance requirements (as
described below) for RediReserve Certificates.
Interest on RediReserve Certificate Accounts: The interest rate on all
outstanding RediReserve Certificates will be set by the Company each Tuesday (or
such other day as the Company may determine from time to time by Company Order)
and the interest rate paid on each outstanding RediReserve Certificate may vary
from week to week. As long as a holder maintains the applicable minimum balance
in his RediReserve Certificate account, the weekly rate, at a minimum, will be
1% below the average rate on Thirteen Week U.S. Treasury Bills for the preceding
eight weekly auctions. While the foregoing is the minimum at which the weekly
rate will be fixed, the actual rate may be above the minimum. Investors may
inquire concerning the rate then being paid on outstanding RediReserve
Certificates by writing or telephoning the Company.
Interest on each RediReserve Certificate account with a balance above
the minimum required (currently $1,000) accrues daily and is compounded
quarterly on March 31, June 30, September 30 and December 31 of each year.
Interest accrued during each quarterly period will not be paid by check, but
rather will be added to the principal balance of each holder's RediReserve
Certificate account in the form of additional RediReserve Certificates. Interest
accrues on the principal balance of each RediReserve Certificate through the
date of redemption. If a holder redeems in full all RediReserve Certificates
held by him, the Company will pay all accrued interest by check as soon as
practicable after redemption.
Minimum Balance Requirement for RediReserve Certificate Accounts: No
interest shall be paid on any day the principal amount in a holder's RediReserve
Certificate account is less than the amount which may be designated from time to
time by the Company ($1,000 at the date of this Prospectus). The Company has the
right to increase or decrease the minimum principal amount which must be
maintained in a RediReserve Certificate account and such an increase or decrease
may be applied, at the Company's election, to RediReserve Certificates
outstanding as of the date of the increase or decrease as well as RediReserve
Certificates issued after such increase or decrease. The Company must give
holders of RediReserve Certificates at least 30 days advance written notice if
the Company elects to increase the minimum principal amount which must be
maintained in their RediReserve Certificate accounts.
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Redemption at the Holder's Election: RediReserve Certificates may be
redeemed at any time in minimum amounts of $250 (or any amount if closing an
account) with respect to RediReserve Certificates, and will be paid in full upon
demand by the holder, which demand is received by the Company at its principal
place of business or such other places as may be designated by it for such
purpose. The Company may delay redemption of a newly purchased RediReserve
Certificate for such time as may be necessary to assure that it has received the
full purchase price of such RediReserve Certificate -- for example, until a
check given to it in payment for the RediReserve Certificate is collected.
The minimum amount for redemptions may be increased (after 30 days'
notice) or decreased by the Company from time to time.
Redemption by Draft: A holder may elect to make redemptions by draft
payable to the order of any payee in any amount of $250 or more. At the request
of a holder, the Company will provide drafts drawn on it that will be payable
through one of its subsidiary banks, or a successor bank. All authorized signers
on a RediReserve Certificate account must submit specimen signatures on a
signature card provided by the Company and must agree to abide by the Company's
rules and regulations pertaining to such accounts. As with regular bank checks,
certain banks may not provide cash at the time of deposit, but will wait until
they have received payment from the subsidiary bank. When a draft is presented
to the subsidiary bank for payment, the subsidiary bank, as agent of the holder,
will cause the Company to redeem a sufficient amount from the holder's
RediReserve Certificate account to cover the amount of the draft. Interest
continues to accrue on a RediReserve Certificate account until a draft is
presented to the subsidiary bank for payment. The subsidiary bank will return a
draft if the amount of collected funds in the holder's RediReserve Certificate
account is insufficient to cover the draft or if the signature(s) on the draft
is (are) not, in the judgment of the Company, the same as the specimen
signature(s) previously submitted to the Company. The Company reserves the right
to charge a fee for the dishonor of a draft or for a stop payment order.
Neither the Company nor the subsidiary bank will return canceled drafts
to the holders of RediReserve Certificate accounts, although the Company will,
upon request, provide a holder with copies of drafts designated by the holder
upon payment of a service charge. Holders of RediReserve Certificate accounts
will receive statements as described under "Form; Non-negotiability and
Statements" above, which will reflect draft transactions.
Redemption at the Company's Election: The Company may, at its election,
redeem RediReserve Certificates either as a whole or from time to time in part,
upon not less than 30 days' written notice to the holder, at the principal
amount thereof without premium, plus interest accrued to the date of redemption.
Accrued interest on RediReserve Certificates so redeemed will be paid as soon as
practicable.
PROVISIONS RELATING TO NOTES
Form and Denominations: The Notes shall be uncertificated and evidenced
by book entry and a statement issued to each purchaser.
Statements issued by the Company are not negotiable instruments, and no
rights of ownership can be transferred by mere endorsement and delivery of a
statement. Ownership of a Note may be transferred on the Company register only
by written notice to the Company signed by the owner(s) or such owner's duly
authorized representative on a form to be supplied by the Company. The Notes may
not be pledged, assigned or hypothecated (as collateral for a loan or
otherwise). The Notes may be purchased in minimum denominations ($5,000 at the
date of this Prospectus) to be determined, from time to time, by the Company.
Separate purchases may not be accumulated to satisfy the minimum denomination
requirements.
Interest: The interest rates payable on the Notes will be fixed by the
Company from time to time based on market conditions and the Company's financial
requirements. Once determined, the rate of interest payable on a Note will
remain fixed on such Note until it matures or is redeemed by the Noteholder.
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Interest on 91 Day and Six Month Notes compounds daily and is paid only
at maturity. While interest on Eighteen Month, Two Year, 30 Month, and Three,
Four, Five, Seven and Ten Year Notes compounds daily, holders may elect to have
interest paid monthly, quarterly, semiannually, annually, or paid at maturity.
This election may be changed one time by the holder during the term of the Note.
Interest on One Year Notes compounds daily and holders may elect to have
interest paid monthly, quarterly, semiannually or at maturity. This election may
not be changed during the term of a One Year Note.
Automatic Extension: If the Company does not request redemption of a
Note at least seven Business Days prior to maturity, or if a Note is not
redeemed or converted to another term by the Noteholder within seven Business
Days after maturity, a Note with a principal amount of $2,500 or more will be
extended automatically for a period equal to the original term. As used herein,
"Business Day" means any day that is not a Saturday, a Sunday or a day on which
banking institutions or trust companies in the State of Delaware or the
Commonwealth of Pennsylvania are not authorized or obligated to be open. If a
Note is renewed as described above, such Note will continue in all its
provisions, including provisions relating to payment, except that the interest
rate payable during any renewed term shall be the interest rate which is being
offered by the Company on similar Notes as of the renewal date. If similar Notes
are not then being offered, the Note will not renew, and, absent instructions
from the Noteholder selecting a Note with a term that is currently being
offered, the maturing Note will be redeemed. The Company will give each
Noteholder notice at least seven days prior to maturity reminding him of the
maturity. If the Company gives notice to a Noteholder of the Company's desire to
redeem a Note at maturity, no interest will accrue after the date of maturity.
Likewise, if a Noteholder submits a written request for redemption within seven
days after its maturity date, no interest will accrue after the date of
maturity. A Note with a principal amount that is less than $2,500 at maturity
will be redeemed automatically.
No Redemption by the Company: The Company has no right to redeem a Note
and the holder has no right to require the Company to redeem any such Note prior
to its maturity date as originally stated or as it may be extended, except as
indicated below.
Redemption by the Holder on Death or Disability: A Note may be redeemed
at the election of the original owner (if he is still the holder) following his
total permanent disability, or at the election of his estate following his
death, as established to the satisfaction of the Company. The redemption price,
in the event of such a death or disability, is the principal amount of the Note,
plus interest accrued and not previously paid, to the date of redemption. If two
or more persons are joint record owners of a Note, the election to redeem will
not apply until both record owners are either deceased or disabled, except that,
if the joint owners are husband and wife, the election may be made after the
death or total permanent disability of either spouse.
The Company may modify the foregoing policy on redemption after death
or disability. However, no such modification will affect the right of redemption
applicable to any Note which was purchased at a time when the then current
prospectus of the Company stated the Company's policy to redeem as indicated in
the preceding paragraph.
Liquidity: It is not expected that there will be a trading market for
the Notes. Although Noteholders have no contractual right to redeem a Note prior
to maturity, the Company, in its sole discretion, may honor a written request
for early redemption. Should the Company elect to do so, the Company will impose
a penalty that is the higher of (a) 91 days' compound interest at the actual
rate of interest borne by the Note, plus an amount equal to the difference, if
any, between the interest earned on the Note, at the rate and on the terms
stated therein, and the interest that would have been earned on the Note at a
rate of 5%, if 5% is lower than the rate borne by the Note; or (b) the rate
currently being offered by the Company (as of the redemption date) on a Note of
the same term as the Note being redeemed, less the actual interest rate borne by
the Note being redeemed, multiplied by the remaining term of the Note being
redeemed on a 365 day basis. Under either calculation method, early redemption
may result in a loss of principal.
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PROVISIONS RELATING TO ALL SECURITIES
Interest Accrual Date: Interest on the Securities accrues from the date
of purchase which is deemed to be the date the Company receives funds which are
received prior to 3:00 p.m. on a business day or the next business day if the
Company receives such funds on a non-business day or after 3:00 p.m. on a
business day. For this purpose, the Company's business days will be deemed to be
Monday through Friday, except for Pennsylvania legal holidays.
Interest Withholding: With respect to those investors who do not
provide the Company with a fully executed Form W-9 or satisfactory equivalent,
the Company will withhold 31% of any interest paid.
Additional Interest: In addition to the interest rates payable as set
forth above, the Company may make such additional payments of interest, premiums
or other benefits ("Additional Interest") on such of the Securities, in such
amounts, in such form, on such terms and at such times as shall be determined
from time to time by the Company. Such Additional Interest payments may be
modified or discontinued at any time. For example, such Additional Interest
payments may be limited to new investors, or to current investors increasing or
renewing their investments in the Securities. Also, such Additional Interest
payments may be limited to current or new investors residing in one or more
states or localities where the Company is authorized to sell the Securities.
Aggregate Indebtedness: The amount of indebtedness which may be
outstanding under the Indenture at any one time is unlimited. There also is no
limitation on the respective amounts of each class of Securities which may be
outstanding at any one time.
Modification of Indenture: The Indenture may be modified by the Company
and the Trustee at any time or times with the consent of the holders of not less
than a majority in principal amount of the Securities then outstanding, but no
modification of the Indenture may be made which will affect the terms of payment
or the principal of any Security, without consent of the holder thereof, or
reduce the percentage of holders of Securities whose consent to modification is
required. The Company and the Trustee may enter into supplemental indentures
adding covenants or agreements of the Company for the protection of the holders
of Securities, or clarifying any ambiguity or correcting any defect in the
Indenture, consistent with its terms, or modifying provisions of the Indenture
provided that such modifications do not have a material adverse effect on the
interest of the holders of outstanding Securities, without action by the holders
of Securities. (Article Nine)
Place and Method of Payment: Principal and interest upon the Securities
will be payable at the office of the Company, as it may be established from time
to time, or at such other place as the Company may designate for that purpose;
provided, however, that payments may be made at the option of the Company by
check or draft mailed to the person entitled thereto at his address appearing in
the register which the Company maintains for that purpose. (Sections 307 and
1002)
Events of Default: An Event of Default is defined in the Indenture as
being any of the following: (i) default in payment of principal on any of the
Securities under the Indenture which has not been cured; (ii) a default for 30
days in payment of any installment of interest on a Security; or (iii) certain
events of bankruptcy, insolvency or reorganization or default in the performance
or breach of any covenant or warranty of the Company in the Indenture and
continuance of such default in performance or breach for a period of 60 days
after notice of such default has been received by the Company from the Trustee
or from the holders of 25% in principal amount of the outstanding Securities.
The Company is required to file annually with the Trustee an officer's
certificate as to the absence of certain defaults under the terms of the
Indenture. The Indenture provides that the holders of a majority in aggregate
principal amount of the applicable Securities at the time outstanding may, on
behalf of all holders, waive any past default or Event of Default except in
payment of principal or interest on the Securities and certain other specified
covenants or provisions. (Article Five)
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<PAGE> 14
Subject to the provisions of the Indenture relating to the duties of
the Trustee, in case an Event of Default shall occur and be continuing, the
Trustee is under no obligation to exercise any of its rights or powers under the
Indenture at the request, order or direction of any of the holders of
Securities, unless such holders of Securities shall have offered to the Trustee
reasonable indemnity. (Section 601) Subject to such provisions for the
indemnification of the Trustee, the holders of a majority in principal amount of
the Securities at the time outstanding have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any power conferred on the Trustee. The Indenture contains certain
limitations on the right of individual holders of Securities to institute legal
proceedings in the event of the Company's default. (Sections 507 and 512)
Certain Covenants: The Company has entered into certain covenants
including that it will not consolidate or merge with or into any other
corporation, unless the other corporation expressly assumes the obligations of
the Company under the Indenture. (Article Eight) The Indenture contains no
covenants or other provisions to afford protection to holders of Securities in
the event of a highly leveraged transaction for a change in the control of the
Company.
Exchanges: The Company, in its discretion, may offer and/or accept
outstanding Securities in exchange for other Securities issued under the
Indenture. (Section 305)
Concerning the Trustee: The Trustee may resign at any time, may be
removed by the holders of a majority of the principal amount of outstanding
Securities, or upon the occurrence of certain contingencies (relating generally
to the insolvency of the Trustee or the Trustee's ineligibility to serve as such
under the Trust Indenture Act of 1939, as amended), may be removed by the
Company or by a court of competent jurisdiction upon petition of a holder of
Securities, but no such resignation or removal of the Trustee may become
effective until a successor Trustee has accepted the appointment as provided in
the Indenture. (Sections 607 and 608) The Company and its subsidiaries reserve
the right to enter into banking relationships with the Trustee and its
subsidiaries.
Satisfaction and Discharge of Indenture: The Indenture may be
discharged upon the payment of all RediReserve Certificates and Notes
outstanding thereunder or upon deposit in trust of funds sufficient therefor,
plus compliance with certain formal procedures. (Article Four)
Reports: The Company publishes annual reports containing audited
financial statements and quarterly reports containing unaudited financial
information for the first three quarters of each fiscal year. Copies of such
reports will be sent to any holder of Securities upon oral or written request.
Service Charges: The Company reserves the right to assess service
charges for services such as changing the registration of any Security when such
change is occasioned by a change in name of the holder, or a transfer (whether
by operation of law or otherwise) of the Security by the holder to another
person.
The Company also reserves the right, upon 30 days' written notice to
the holder, to increase service charges currently imposed in connection with
redemptions by draft from RediReserve Certificate accounts and assess service
charges for: (i) a holder making more than a specified number of redemptions in
a specified period from a RediReserve Certificate account; and (ii) for certain
other services provided with respect to RediReserve Certificate accounts.
Additional Securities: The Company may offer from time to time,
pursuant to the Indenture, additional classes of securities with terms and
conditions different from the Securities offered hereby, except that no such
security issued under the Indenture may be senior to the Securities offered
hereby. The Company will supplement this Prospectus if and when it decides to
offer to the public any additional class of Security pursuant to the Indenture.
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Variations in Terms and Conditions: The Company reserves the right from
time to time to offer different Securities and to vary the terms and conditions
of the offer (including, but not limited to, minimum balance requirements for
RediReserve Certificates and minimum denominations, additional interest payments
and service charges for all Securities) depending upon the state or locality
where the purchaser resides, the purchaser's tenure as an investor with the
Company or whether an investor is increasing or renewing his/her investment in
the Company's securities. In addition, the Company may vary certain terms and
conditions of the RediReserve Certificate account and/or Notes for its employees
and the employees of its subsidiaries.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary of certain United States Federal income tax
consequences of the purchase, ownership and disposition of the Notes is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change or possible differing interpretations, which could apply
retroactively, so as to result in United States Federal income tax consequences
different from those discussed below. This summary deals only with Notes held as
capital assets and does not purport to deal with persons in special tax
situations, such as financial institutions, insurance companies, regulated
investment companies, dealers in securities or currencies, persons holding Notes
as a hedge against currency risks or as a position in a "straddle" for tax
purposes, or persons whose functional currency is not the United States dollar.
It also does not deal with holders other than original purchasers (except where
otherwise specifically noted). Persons considering the purchase of the Notes
should consult their own tax advisors concerning the application of United
States Federal income tax laws to their particular situations as well as any
consequences of the purchase, ownership and disposition of the Notes arising
under the laws of any other taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a
Note that is for United States Federal income tax purposes (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any
political subdivision thereof, (iii) an estate the income of which is subject to
United States Federal income taxation regardless of its source, (iv) a trust if
a court within the United States is able to exercise primary supervision over
the administration of the trust and one or more United States fiduciaries having
authority to control all decisions of the trust; or (v) any other person whose
income or gain in respect of a Note is effectively connected with the conduct of
a United States trade or business.
U.S. HOLDERS
Payments of Interest
Payments of interest on the Securities generally will be taxable to a
U.S. Holder as ordinary interest income at the time such payments are accrued or
are received, actually or constructively (in accordance with the U.S. Holder's
regular method of tax accounting). If a holder of an eighteen month, two year,
30 month, three, four, five, seven or ten year Note elects to have interest paid
only at maturity, such Note will be treated as issued with original issue
discount and the holder should consult with a tax advisor with respect to the
specific tax consequences of such election. Generally, the holder will be
required to include such original issue discount in income as ordinary interest
as it accrues under a constant yield method in advance of the receipt of the
cash payments attributable to such income, regardless of the holder's regular
method of tax accounting.
Short-Term Notes
Notes that have a fixed maturity of one year or less ("Short-Term
Notes") will be treated as having been issued with original issue discount. In
general, a cash method U.S. Holder is not required to accrue such original issue
discount unless the U.S. Holder elects to do so. If such an election is not
made, any gain recognized by the U.S. Holder on the sale, exchange or redemption
of the Short-Term Note will be ordinary income to the extent of the original
issue discount accrued on a straight-line basis, or upon election under the
constant yield method (based on daily compounding), through the date of sale or
maturity, and a portion
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of the deductions otherwise allowable to the U.S. Holder for interest on
borrowings allocable to the Short-Term Note will be deferred until a
corresponding amount of income is realized. Accrual method U.S. Holders and
certain other holders including banks and dealers in securities, are required to
accrue original issue discount on a Short-Term Note on a straight-line basis
unless an election is made to accrue the original issue discount under a
constant yield method (based on daily compounding).
Disposition of Securities
Upon the sale, exchange or retirement of a Security, a U.S. Holder
generally will recognize taxable gain or loss equal to the difference between
the amount realized on the sale, exchange or retirement (other than amounts
representing accrued and unpaid interest) and such U.S. Holder's adjusted tax
basis in the Security. A U.S. Holder's adjusted tax basis in a Security
generally will equal such U.S. Holder's initial investment in the Security
increased by any original issue discount included in income (and accrued market
discount, if any, if the U.S. Holder has included such market discount in
income) and decreased by the amount of any principal payments, and in the case
of a Security issued with original issue discount, any payments, other than
qualified stated interest payments, received and amortizable bond premium taken
with respect to such Security. Such gain or loss generally will be long-term
capital gain or loss if the Security were held for more than one year. Under
current law, the excess of net long-term net capital gains over net short-term
capital losses is taxed at a lower rate than ordinary income for certain
non-corporate taxpayers. The distinction between capital gain or loss is also
relevant for purposes of, among other things, limitations on the deductibility
of capital losses.
If a U.S. Holder disposes of only a portion of a Security pursuant to a
redemption or repayment , such disposition will be treated as a pro rata
prepayment in retirement of a portion of a debt instrument. Generally, the
resulting gain or loss would be calculated by assuming that the original
Security being tendered consists of two instruments, one that is retired (or
repaid), and one that remains outstanding. The adjusted issue price, U.S.
Holder's adjusted basis and the accrued but unpaid original issue discount of
the Security, determined immediately before the disposition, would be allocated
between these two instruments based on the portion of the instrument that is
treated as retired by the pro rata prepayment.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Backup withholding and information reporting requirements may apply to
certain payments of principal, premium and interest (including original issue
discount) on the Securities, and to payments of proceeds of the sale or
redemption of the Securities, to certain non-corporate U.S. Holders. The
Company, its agent, a broker, the relevant Trustee or any paying agent, as the
case may be, will be required to withhold from any payment a tax equal to 31
percent of such payment if the U.S. Holder fails to furnish or certify his
correct taxpayer identification number (social security number or employer
identification number) to the payor in the manner required, fails to certify
that such U.S. Holder is not subject to backup withholding, or otherwise fails
to comply with the applicable requirements of the backup withholding rules. Any
amounts withheld under the backup withholding rules from a payment to a Holder
may be credited against such Holder's United States Federal income tax and may
entitle such Holder to a refund, provided that the required information is
furnished to the United States Internal Revenue Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS
INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A
HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS
WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF
THE SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
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PLAN OF DISTRIBUTION
The Securities will be sold by the Company directly without an
underwriter or selling agent. The Securities will be sold by employees of the
Company who, pursuant to Rule 3a4-1(a) promulgated under the Exchange Act, are
deemed not to be brokers. In accordance with certain provisions of Rule
3a4-1(a), such employees are not compensated by commission, are not associated
with any broker or dealer and limit their activities so that, among other
things, they do not engage in oral solicitations of, and comply with certain
specified limitations when responding to inquiries from, potential purchasers.
The Company may vary the terms and conditions of the offer by state,
locality or as otherwise described under "Description of Securities --
Provisions Relating to All Securities -- Additional Interest" and "-- Variations
in Terms and Conditions" in this Prospectus. Further, the Company may offer
different Securities at different times depending on such factors as the
Company's liquidity requirements, the interest rate environment and other
economic conditions.
LEGAL OPINIONS
Certain legal matters relating to the Securities offered hereby will be
passed upon for the Company by Elizabeth H. Mai, Esquire, Senior Vice President,
Secretary and General Counsel of the Company. Ms. Mai has a right to
acquire a number of shares of Class B Common Stock of the Company which is well
below 1% of the outstanding common stock of the Company. Wolf, Block, Schorr
and Solis-Cohen will pass upon certain matters relating to United States
federal income tax considerations.
EXPERTS
The consolidated financial statements and schedules incorporated by
reference in this Prospectus and elsewhere in the registration statement to the
extent and for the periods indicated in their reports have been audited by
Arthur Andersen LLP, independent public accounts, and are incorporated herein in
reliance upon the authority of said firm as experts in giving said reports.
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ADVANTA
CORP.
----------
PROSPECTUS
The date of this Prospectus is ______________________, 1997
<PAGE> 19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
Registration Fees...................................................$ 60,607
Printing and Engraving..............................................$ 7,000
Counsel fees........................................................$ 10,000
Accountants' fees and expenses......................................$ 2,500
Blue Sky qualification fees and expenses............................$ 1,500
Indenture Trustee's fees and expenses...............................$ 20,000
Miscellaneous.......................................................$ 393
--------
$102,000
========
- -----------
* Estimated, other than registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides, inter
alia, that under specified circumstances a corporation shall have the power to
indemnify any person who is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding by reason of the
fact that such person is or was a director, officer, employee or agent of the
corporation, against expenses, attorneys' fees, judgments, fines and
settlements. The By-Laws of the Company provide that the Company shall indemnify
any director, officer, employee or agent of the Company to the fullest extent
now or hereafter permitted by law in connection with any such action, suit or
proceeding. The By-Laws further provide that the Board of Directors of the
Company may, by resolution, indemnify any person other than a director, officer,
employee or agent of the Company for liabilities incurred in connection with
services rendered for or at the request of the Company or its subsidiaries. In
addition, consistent with Section 102 of the Delaware General Corporation Law,
the Company's Certificate of Incorporation limits the personal liability of the
Company's directors to the Company or its stockholders for monetary damages for
certain breaches of fiduciary duty. The Company maintains director and officer
liability insurance which would provide coverage against certain securities law
liabilities.
ITEM 16. EXHIBITS
4.1 Trust Indenture dated October 23, 1995 between Registrant and Mellon
Bank, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to the
Registrant's Registration Statement on Form S-3 (File No. 33-62601),
filed September 13, 1995).
5. Opinion and Consent of Elizabeth H. Mai, Senior Vice President,
Secretary and General Counsel (filed herewith).
8. Opinion and Consent of Wolf, Block, Schorr and Solis-Cohen (filed
herewith).
12. Computation of Ratio of Earnings to Fixed Charges (filed herewith).
23. Consent of independent public accountants (filed herewith).
24. Powers of Attorney (included on Signature Pages).
25. Form T-1, Statement of Eligibility and Qualification Under the Trust
Indenture Act of 1933 of a Corporation Designated to Act as Trustee
(filed herewith).
27. Financial Data Schedule.
II-1
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ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any Prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent Post-Effective Amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement; provided, however, that the undertakings set forth in clauses (i) and
(ii) of this paragraph shall not apply if the information required to be
included in such post-effective amendments is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such Post-Effective Amendment shall be deemed
to be a new Registration Statement relating to the Securities offered therein,
and the offering of such Securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a Post-Effective
Amendment any of the Securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such Securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
processing) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-2
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Act of l933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Lower Gwynned Township, Montgomery County, Commonwealth of
Pennsylvania, on May 30, 1997.
Advanta Corp.
By: /s/ Alex W. Hart
---------------------------------
Alex W. Hart, Chief Executive Officer
and Director
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned does
hereby constitute and appoint Dennis Alter, Alex W. Hart, William A. Rosoff,
John J. Calamari, David D. Wesselink and Elizabeth Mai, or any of them (with
full power to each of them to act alone), his or her true and lawful
attorney-in-fact and agent, with full power of substitution, for him or her and
on his or her behalf to sign, execute and file this Registration Statement and
any or all amendments (including, without limitation, post-effective amendments
and any amendment or amendments increasing the amount of securities for which
registration is being sought) to this Registration Statement, with all exhibits
and any and all documents required to be filed with respect thereto, with the
Securities and Exchange Commission or any regulatory authority, granting unto
such attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises in order to effectuate the same as fully to all
intents and purposes as he or she might or could do if personally present,
hereby ratifying and confirming all that such attorneys-in-fact and agents, or
any of them, or their substitute or substitutes, may lawfully do or cause to be
done.
Pursuant to the requirements of the Securities Act of l933, this
Registration Statement has been signed by the following persons on behalf of the
Registrant and in the capacities indicated on the 30th day of May, 1997.
Name Title
- ---- -----
/s/ Dennis Alter Chairman and Director
- -------------------------------
Dennis Alter
/s/ Alex W. Hart Chief Executive Officer
- ------------------------------- and Director
Alex W. Hart
/s/ William A. Rosoff Vice Chairman and Director
- -------------------------------
William A. Rosoff
/s/ David D. Wesselink Senior Vice President and
- ------------------------------- Chief Financial Officer
David D. Wesselink
II-3
<PAGE> 22
Name Title
- ---- -----
/s/ John J. Calamari Vice President, Finance and
- ------------------------------- Chief Accounting Officer
John J. Calamari
/s/ Arthur P. Bellis Director
- -------------------------------
Arthur P. Bellis
/s/ Max Botel Director
- -------------------------------
Max Botel
/s/ Richard J. Braemer Director
- -------------------------------
Richard J. Braemer
/s/ William C. Dunkelberg Director
- -------------------------------
William C. Dunkelberg
/s/ Dana Becker Dunn Director
- -------------------------------
Dana Becker Dunn
/s/ Robert C. Hall Director
- -------------------------------
Robert C. Hall
/s/ James E. Ksansnak Director
- -------------------------------
James E. Ksansnak
/s/ Ronald J. Naples Director
- -------------------------------
Ronald J. Naples
/s/ Phillip A. Turberg Director
- -------------------------------
Phillip A. Turberg
/s/ Ronald Lubner Director
- -------------------------------
Ronald Lubner
II-4
<PAGE> 23
EXHIBIT INDEX
Item
4.1 Trust Indenture dated October 23, 1995 between Registrant and Mellon
Bank, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to the
Registrant's Registration Statement on Form S-3 (File No. 33-62601),
filed September 13, 1995).
5. Opinion and Consent of Elizabeth H. Mai, Senior Vice President,
Secretary and General Counsel (filed herewith).
8. Opinion and Consent of Wolf, Block, Schorr and Solis-Cohen (filed
herewith).
12. Computation of Ratio of Earnings to Fixed Charges (filed herewith).
23. Consent of independent public accountants (filed herewith).
24. Powers of Attorney (included on Signature Pages).
25. Form T-1, Statement of Eligibility and Qualification Under the Trust
Indenture Act of 1933 of a Corporation Designated to Act as Trustee
(filed herewith).
27. Financial Data Schedule.
<PAGE> 1
EXHIBIT 5
May 30, 1997
Advanta Corp.
Welsh & McKean Roads
P.O. Box 844
Spring House, PA 19477
RE: SECURITIES AND EXCHANGE COMMISSION -
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
I am Senior Vice President, Secretary and General Counsel of Advanta Corp. (the
"Company"), and have acted as counsel for the Company in connection with the
filing of a Registration Statement on Form S-3 (the "Registration Statement")
under the Securities Act of 1933, as amended (the "Act"), relating to the sale
of the securities described below. I am familiar with the requirements of the
Act and the rules and regulations promulgated pursuant thereto. I have examined
the Company's Restated Certificate of Incorporation, the Company's By-Laws, as
amended and such other corporate records and documents of the Company as I have
deemed necessary or advisable in connection with rendering this opinion.
Based on the foregoing, it is my opinion that (a) appropriate corporate action
has been taken to authorize the sale and issuance of the securities described in
the Prospectus included in the Registration Statement, namely a total of
$207,537,000 (including $7,537,000 of unsold securities from Registration
Statement No. 33-62601 which became effective on October 23, 1995) of principal
amount of RediReserve Variable Rate Certificates, 91 Day, Six, Eighteen and
Thirty Month and One, Two, Three, Four, Five, Seven and Ten Year Notes, all of
which are uncertificated (hereinafter referred to collectively as the
"Securities"), and (b) when issued pursuant to the Trust Indenture dated October
23, 1995 between the Company and Mellon Bank, N.A., as Trustee, such Securities
will be valid and binding obligations of the Company enforceable in accordance
with their terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium, or similar laws affecting creditors' rights generally or
by equitable principles.
I hereby consent to the inclusion of this opinion as an exhibit to the
Registration Statement, and to the filing of this opinion with any other
appropriate governmental agency.
Sincerely,
/s/ Elizabeth H. Mai
- --------------------------------
Elizabeth H. Mai
Senior Vice President, Secretary
and General Counsel
EHM/LRC/ji
<PAGE> 1
EXHIBIT 8
OPINION AND CONSENT OF WOLF BLOCK
[WOLF, BLOCK, SCHORR AND SOLIS-COHEN LETTERHEAD]
May 30, 1997
Advanta Corp.
Welsh & McKean Roads
P.O. Box 844
Spring House, Pennsylvania 19477
RE: Advanta Corp.-Registration Statement on Form S-3, File No. 333-___
(the "Registration Statement")
Dear Ladies and Gentlemen:
We have acted as special tax counsel for Advanta Corp. in connection
with the offer of Securities (as defined in the Registration Statement).
Although the discussion set forth in the prospectus (the "Prospectus")
that is part of the Registration Statement, under the caption "Certain United
States Federal Income Tax Consequences," does not purport to discuss all
possible federal income tax consequences of the purchase, ownership and
disposition of the Securities, such discussion represents, to the extent that
it concerns matters of federal law or legal conclusions with respect thereto,
in all material respects, a fair and accurate summary of the United States
federal income tax consequences of the purchase, ownership and disposition of
the Securities under current law.
We hereby consent to the use of our name under the caption "Legal
Opinions" in the Prospectus. The issuance of such a consent does not concede
that we are an "Expert" for the purposes of the Securities Act of 1933.
Very truly yours,
Wolf, Block, Schorr And
Solis-Cohen
<PAGE> 1
Exhibit 12
Advanta Corp. and Subsidiaries
Statements setting forth details of computation of ratio
of earnings to fixed charges
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in thousands)
<TABLE>
<CAPTION>
For The Three
Months Ended
March 31,
1997 1996
-------- --------
<S> <C> <C>
Net earnings (loss) $(19,818) $ 41,030
Federal and state income taxes (benefit) (6,891) 21,133
-------- --------
Earnings (loss) before income taxes (benefit) (26,709) 62,163
-------- --------
Fixed charges:
Interest 71,462 55,935
One-Third of all rentals 819 461
-------- --------
Total fixed charges 72,281 56,396
-------- --------
Earnings before income taxes and
fixed charges $ 45,572 $118,559
-------- --------
Ratio of earnings to fixed charges (A) (B) 2.10x
</TABLE>
(A) For purposes of computing these ratios, "earnings" represent income before
income taxes plus fixed charges, and "fixed charges" consist of interest
expense and one-third (the proportion deemed representative of the interest
factor) of rental expense on operating leases.
(B) For the three months ended March 31, 1997, earnings were inadequate to
cover fixed charges. The deficiency was approximately $26.7 million.
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-3 Registration Statement of our reports dated January
21, 1997 on the Advanta Corp. consolidated financial statements included in the
Advanta Corp. Form 10-K for the year ended December 31, 1996 and to all
references to our Firm included in this Form S-3 Registration Statement.
Arthur Andersen LLP
Philadelphia, PA
May 29, 1997
<PAGE> 1
Exhibit 25
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM T-1
------------------------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS
TRUSTEE
------------------------
Check if an application to determine eligibility of
a Trustee pursuant to Section 305(b)(2) [ ]
MELLON BANK, N.A.
(Name of Trustee)
25-0659306 U.S.
(I.R.S. Employer Identification No.) (Jurisdiction of Incorporation)
One Mellon Bank Center
Pittsburgh, PA 15258-0001
(Address of Principal Executive Office)
ELAINE D. RENN
VICE PRESIDENT
MELLON BANK, N.A.
ONE MELLON BANK CENTER
PITTSBURGH, PENNSYLVANIA 15258-0001
(412) 234-4694
(Name, Address and Telephone Number of Agent for Service)
------------------------
ADVANTA CORP.
(Name of Obligor)
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
23-1462070
(I.R.S. Employer Identification No.)
Brandywine Corporate Center, 650 Naamans Road, Claymont, Delaware 19073
(Address of Principal Executive Offices)
SECURITIES
(Title of Indenture Securities)
<PAGE> 2
1. General information. Furnish the following information as to the trustee --
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
Comptroller of the Currency Washington, D.C.
Federal Reserve Bank of Cleveland Cleveland, Ohio
Federal Deposit Insurance Corporation Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
2. Affiliations with the obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
The obligor is not an affiliate of the trustee.
ITEMS 3-15 ARE NOT APPLICABLE SINCE THE OBLIGOR IS NOT IN DEFAULT ON SECURITIES
ISSUED UNDER INDENTURES UNDER WHICH THE APPLICANT IS TRUSTEE.
16. List of exhibits. List below all exhibits filed as a part of this
statement of eligibility.
Exhibit 1 - Copy of articles of association of the trustee as now
in effect, filed as Exhibit 1 to trustee's statement
of eligibility and qualification, Registration No.
33-46990, and incorporated herein by reference.
Exhibit 2 - Copy of certificate of the authority of the trustee
to commence business, copy of certificate of
consolidation with the Union Trust Company of
Pittsburgh and copy of certificate approving merger
of Mellon National Bank and Trust Company into Mellon
Bank, N.A. filed as Exhibit T1A(b) to trustee's
statement of eligibility and qualification,
Registration No. 33-13020, and incorporated herein by
reference.
Exhibit 3 - Copy of certificate as to authority of the trustee to
exercise corporate trust powers, filed as Exhibit
T1A(c) to trustee's statement of eligibility and
qualification, Registration No. 33-13020, and
incorporated herein by reference.
Exhibit 4 - Copy of existing by-laws of the trustee, filed as
Exhibit 4 to trustee's statement of eligibility and
qualification, Registration No. 33-46990, and
incorporated herein by reference.
Exhibit 5 - Copy of each indenture referred to in Item 4, if the
obligor is in default. Not Applicable.
Exhibit 6 - Consent of the trustee required by Section 321(b) of
the Act, filed as Exhibit TID to trustee's statement
of eligibility and qualification, Registration No.
33-13020, and incorporated herein by reference.
Exhibit 7 - Copy of the latest report of condition of the trustee
transmitted electronically pursuant to law or the
requirements of its supervising or examining
authority.
1
<PAGE> 3
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939, THE
TRUSTEE, MELLON BANK, N.A., A NATIONAL BANKING ASSOCIATION ORGANIZED AND
EXISTING UNDER THE LAWS OF THE UNITED STATES OF AMERICA, HAS DULY CAUSED THIS
STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF PITTSBURGH, AND COMMONWEALTH OF
PENNSYLVANIA, ON THE 15TH DAY OF MAY, 1997.
MELLON BANK, N.A.
TRUSTEE
By: /s/ Elaine D. Renn
-----------------------------
Elaine D. Renn
Vice President
2
<PAGE> 4
EXHIBIT 7
REPORT OF CONDITION
CONSOLIDATING DOMESTIC AND FOREIGN SUBSIDIARIES OF
MELLON BANK, N.A.
FOR DECEMBER 31, 1996
IN THE COMMONWEALTH OF PENNSYLVANIA, AT THE CLOSE OF BUSINESS ON
DECEMBER 31, 1996; TRANSMITTED ELECTRONICALLY IN RESPONSE TO CALL MADE BY
COMPTROLLER OF THE CURRENCY, UNDER TITLE 12, UNITED STATES CODE, SECTION 161.
CHARTER NO. 6301 NORTHEASTERN DISTRICT
STATEMENT OF RESOURCES AND LIABILITIES
(in thousands)
<TABLE>
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.......................... $ 2,672,284
Interest-bearing balances................................................... 789,575
Securities:
Held-to-maturity securities................................................. 2,210,496
Available-for-sale securities............................................... 3,869,905
Federal funds sold and securities purchased under agreements
to resell in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs:
Federal funds sold.......................................................... 533,454
Securities purchased under agreements to resell............................. 7,681
Loans and lease financing receivables:
Loans and leases, net of unearned income....................... $23,267,207
LESS: Allowance for loan and lease losses...................... 315,660
Loans and leases, net of unearned income, allowance, and reserve............ 22,951,547
Assets held in trading accounts............................................... 345,978
Premises and fixed assets (including capitalized leases)...................... 496,468
Other real estate owned....................................................... 53,313
Customers' liability to this bank on acceptances outstanding.................. 247,120
Intangible assets............................................................. 1,559,411
Other assets.................................................................. 1,602,061
TOTAL ASSETS........................................................... 37,339,293
LIABILITIES
Deposits:
In domestic offices......................................................... 24,662,107
Noninterest-bearing......................................... 7,405,910
Interest-bearing............................................ 17,256,197
In foreign offices, Edge and Agreement subsidiaries, and IBFs............... 3,655,311
Noninterest-bearing......................................... 18,417
Interest-bearing............................................ 3,636,894
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs:
Federal funds purchased..................................................... 1,383,786
Securities sold under agreements to repurchase.............................. 297,830
Demand notes issued to the U.S. Treasury...................................... 471,321
Trading liabilities........................................................... 306,209
Other borrowed money:
With remaining maturity of one year or less................................. 779,101
With remaining maturity of more than one year............................... 467,673
Mortgage indebtedness and obligations under capitalized leases................ 1,997
Bank's liability on acceptances executed and outstanding...................... 247,120
Subordinated notes and debentures............................................. 977,681
Other liabilities............................................................. 856,713
TOTAL LIABILITIES...................................................... 34,106,849
EQUITY CAPITAL
Common stock.................................................................. 167,285
Surplus (exclude all surplus related to preferred stock)...................... 895,960
Undivided profits and capital reserves........................................ 2,182,376
Net unrealized holding gains (losses) on available-for-sale securities........ (6,348)
Cumulative foreign currency translation adjustments........................... (6,829)
TOTAL EQUITY CAPITAL................................................... 3,232,444
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK, AND EQUITY CAPITAL.... 37,339,293
</TABLE>
3
<PAGE> 5
I, Michael K. Hughey, Senior Vice President and Corporate Controller of
the above-named bank, do hereby declare that this Report of Condition is true
and correct to the best of my knowledge and belief.
Michael K. Hughey
February 4, 1997
We, the undersigned directors, attest to the correctness of this
Statement of Resources and Liabilities. We declare that it has been examined by
us, and to the best of our knowledge and belief has been prepared in
conformance with the instructions and is true and correct.
FRANK V. CAHOUET
W. KEITH SMITH
CHARLES A. CORRY
4
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 147,175
<INT-BEARING-DEPOSITS> 834,444
<FED-FUNDS-SOLD> 780,584
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 857,889
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 2,582,224
<ALLOWANCE> 105,377
<TOTAL-ASSETS> 6,244,266
<DEPOSITS> 1,958,791
<SHORT-TERM> 1,580,984
<LIABILITIES-OTHER> 300,482
<LONG-TERM> 1,467,198
<COMMON> 442
0
1,010
<OTHER-SE> 835,359
<TOTAL-LIABILITIES-AND-EQUITY> 6,244,266
<INTEREST-LOAN> 66,022
<INTEREST-INVEST> 31,052
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 97,074
<INTEREST-DEPOSIT> 27,096
<INTEREST-EXPENSE> 44,366
<INTEREST-INCOME-NET> 25,612
<LOAN-LOSSES> 60,364
<SECURITIES-GAINS> 3,442
<EXPENSE-OTHER> 148,811
<INCOME-PRETAX> (26,709)
<INCOME-PRE-EXTRAORDINARY> (26,709)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (19,818)
<EPS-PRIMARY> (.43)
<EPS-DILUTED> (.43)
<YIELD-ACTUAL> 2.22
<LOANS-NON> 35,263
<LOANS-PAST> 42,821
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 89,184
<CHARGE-OFFS> 41,018
<RECOVERIES> 3,253
<ALLOWANCE-CLOSE> 105,377
<ALLOWANCE-DOMESTIC> 105,216
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 161
</TABLE>
