-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GhotAo8TcDQC/+WfsTirmEugHoEVO/sfvfkwkWa0DX+uDOsHAOqDzFuLvcbce0zr kP7lLskF2zdwinP7tuLxEQ== 0000096638-97-000001.txt : 19970123 0000096638-97-000001.hdr.sgml : 19970123 ACCESSION NUMBER: 0000096638-97-000001 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970122 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADVANTA CORP CENTRAL INDEX KEY: 0000096638 STANDARD INDUSTRIAL CLASSIFICATION: PERSONAL CREDIT INSTITUTIONS [6141] IRS NUMBER: 231462070 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-14120 FILM NUMBER: 97508687 BUSINESS ADDRESS: STREET 1: 650 NAAMANS RD STREET 2: BRANDYWINE CORP CTR CITY: CLAYMONT STATE: DE ZIP: 19703 BUSINESS PHONE: 2156574000 MAIL ADDRESS: STREET 1: BRANDYWINE CORPORATE CENTER STREET 2: 650 NAAMANS ROAD CITY: CLAYMONT STATE: DE ZIP: 19703 FORMER COMPANY: FORMER CONFORMED NAME: TSO FINANCIAL CORP DATE OF NAME CHANGE: 19880306 FORMER COMPANY: FORMER CONFORMED NAME: TEACHERS SERVICE ORGANIZATION INC DATE OF NAME CHANGE: 19850812 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 21, 1997 Advanta Corp. (Exact name of registrant as specified in its charter) Delaware 0-14120 23-1462070 (State or other jurisdiction of (Commission File (I.R.S. Employer incorporation or organization) Number) Identification No.) Welsh and McKean Roads, P.O. Box 844, Spring House, PA (Address of Principal Executive Offices) 19477 (Zip Code) (Registrant's telephone number, including area code) (215) 657-4000 5. Other Events. On January 21, 1997 Advanta Corporation announced earnings for both the fourth quarter and full year 1996. For the fourth quarter of 1996, Advanta reported earnings per share of $1.00 and net income of $45.2 million, increases of 18% and 20%, respectively, over fourth quarter 1995. For the full year, earnings per share rose to $3.89 and net income was $175.7 million, up 22% and 29%, respectively, over 1995 results. At December 31, 1996, the Company's portfolio of managed receivables increased 33%, or $4.1 billion to $16.3 billion, over the $12.2 billion recorded at year- end 1995. Highlights included the following items: Total managed credit cards grew 27% or $2.7 billion in 1996 to reach $12.7 billion at year-end. The Company added 340,000 new credit card accounts during the fourth quarter, raising the total to 5.7 million. This represented a 17% advance over the number of accounts reported at year-end 1995. Expansion of mortgage and personal finance businesses as demonstrated by a year-over-year 53% or $956 million growth in receivables to $2.8 billion. Additionally, Advanta Mortgage services $3.7 billion of mortgages for third parties, a year-over- year increase of nearly 500%. Growth of business services managed receivables by $446 million or 118%, led by the rapid expansion of the business card. Leveraging technology and investing for the future resulted in an operating expense ratio of 3.07% for the fourth quarter 1996. This ratio for the comparable quarter 1995 was 2.93%. Included in the operating expense ratio is spending on new technology, research and talent to support future growth and opportunities. Return on common equity for the fourth quarter 1996 was 23.7%, versus 25.5% for the comparable quarter of the prior year. For the full year 1996, return on common equity totalled 25.3%, compared with 26.2% for 1995. As previously disclosed, the Company adopted a new charge-off methodology relating to credit card bankruptcies in the third quarter 1996. As anticipated, that change had an impact in the fourth quarter 1996 similar to the amount in the third quarter. The consolidated managed charge-off rate increased to 3.9% in fourth quarter 1996, up from 2.3% for same quarter 1995 and the 3.2% posted in the third quarter. The charge-off rate on managed credit cards was 4.6% for the fourth quarter 1996, compared to 2.6% in 1995 and the 3.7% recorded in the third quarter. The consolidated 30+ day delinquency rate rose to 5.4% at December 31, above the 3.3% reported for the prior year's end and the 4.2% reported for the third quarter. The managed credit card 30+ day delinquency rate was 5.0%, above the 2.6% of the year ago period and the 3.9% reported in the third quarter. 1996 credit quality figures reflect the adoption of the new bankruptcy charge- off methodology. The managed net interest margin for the fourth quarter 1996 was 6.89%, up from the 5.88% in the previous year's fourth quarter and the 6.19% reported for the third quarter. At year- end, 34% of the managed credit card portfolio consisted of receivables in their introductory rate period; these accounts will contractually reprice upward over the course of the next three quarters. Item 7. Financial Statements and Exhibits. (c) Exhibits. The following exhibit is filed as part of this Report on Form 8-K. 27 Financial Data Schedules. 99 Selected summary financial data. ADVANTA AND SUBSIDIARIES FINANCIAL HIGHLIGHTS ($ in millions, except per share data) Three Months Ended % Change December 31, 1996 versus 1996 1995 1995 OPERATING RESULTS Net Revenues $240.9 $185.4 30% Provision for Losses $ 29.9 $ 25.2 19% Operating Expenses $143.7 $102.4 40% Net Income(1) $ 45.2 $ 37.6 20% Earnings per Common Share(1) $ 1.00 $ .85 18% Average Shares 45.2 44.3 2% Return on Common Equity 23.7% 25.5% (7%) Managed Net Interest Margin 6.89 5.88 17% Year Ended % Change December 31, 1996 versus 1996 1995 1995 OPERATING RESULTS Net Revenues(2) $851.0 $615.9 38% Provision for Losses $ 96.9 $ 53.3 82% Operating Expenses $523.0 $350.7 49% Net Income(1) $175.7 $136.7 29% Earnings per Common Share(1) $ 3.89 $ 3.20 22% Average Shares 45.1 42.7 6% Return on Common Equity 25.3% 26.2% (3%) Managed Net Interest Margin 6.32 5.87 8% (1) 1996 earnings per share and net income are reported net of the impact of the capital securities transaction. (2) Full year 1996 amount excludes a $33.8 million gain on the sale of credit card relationships. ADVANTA AND SUBSIDIARIES FINANCIAL HIGHLIGHTS ($ in millions, except per share data) % Change Dec.1996 Dec. 31, Sept. 30, Dec. 31, versus 1996 1996 1995 Dec. 1995 FINANCIAL CONDITION Managed Receivables* Credit Cards $12,691 $12,711 $ 10,031 27% Personal Finance Loans(A) $ 2,754 $ 2,346 $ 1,797 53% Business Loans(B) $ 823 $ 725 $ 378 118% Other Loans $ 21 $ 15 $ 9 125% Total Managed Receivables $16,289 $15,797 $ 12,215 33% Total Managed Assets $19,217 $18,357 $ 13,977 38% Stockholders' Equity $ 852 $ 798 $ 673 27% Book Value Per Common Share $ 18.06 $ 17.14 $ 14.35 26% Equity/Managed Assets(C) 4.95% 4.35% 4.81% 3% Reserve for Credit Losses $ 89.2 $ 77.6 $ 53.5 67% Customer Accounts 5,984,488 5,854,627 5,031,484 19% CREDIT QUALITY Managed Net Charge-off Rate For the Quarter ended - Credit Cards(D) 4.6% 3.7% 2.6% Personal Finance Loans(A) 0.7% 0.7% 0.8% Business Loans(B) 2.6% 2.1% 2.0% Total Receivables(E) 3.9% 3.2% 2.3% Managed 30+ Day Delinquency Rate Credit Cards(D) 5.0% 3.9% 2.6% Personal Finance Loans(A) 7.1% 5.4% 5.9% Business Loans(B) 7.3% 6.7% 9.3% Total Receivables(E) 5.4% 4.2% 3.3% (A) Effective December 31, 1996 includes Mortgages and Auto Loans. Prior periods of 1996 have been restated. (B) Includes Leases and Business Cards beginning in 1996. (C) Equity includes capital securities and stockholders' equity. (D) Fourth quarter 1996 figures reflect the adoption of a new charge-off methodology. Without this change, managed credit card charge-off and delinquency rates for the fourth quarter 1996 would have been 5.1% and 4.6%, respectively. (E) Fourth quarter 1996 figures reflect the adoption of a new charge-off methodology. Without this change, total managed charge-off and delinquency rates for the fourth quarter 1996 would have been 4.3% and 5.3%, respectively. * Managed figures combine both owned and securitized receivables. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Advanta Corp. Date: January 22, 1997 By: /s/ Gene S. Schneyer Gene S. Schneyer, Vice President, Secretary and General Counsel EX-27 2
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