8-K 1 jan02press_supp.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) January 18, 2002 ------------------------- MBNA Corporation -------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Maryland 1-10683 52-1713008 -------------------------------------------------------------------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) Wilmington, Delaware 19884-0141 -------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (800) 362-6255 ----------------------- -------------------------------------------------------------------------- (Former name or former address, if changed since last report.) Item 5. Other Events In December 2001, MBNA Corporation ("the Corporation") elected to amend its securitization agreements to transfer the legal right to recoveries from charged-off securitized loans from the Corporation to the securitization transaction cashflows. Previously, the Corporation recognized these recoveries in the reserve for possible credit losses. The Corporation now includes these recoveries in other operating income and accounts receivable from securitization. As a result, the Corporation increased the provision for possible credit losses and reserve for possible credit losses, with a related increase in other operating income and accounts receivable from securitization. For purposes of comparability, certain prior period amounts have been reclassified. This reclassification did not affect the Corporation's net income, earnings per common share, or managed asset quality ratios. The Corporation is providing the reclassified financial highlights for the three months ended March 31, June 30, September 30, and December 31, 2001 and 2000, respectively, as filed in exhibit 99 under Item 7. Item 7. Financial Statements and Exhibits Exhibits Exhibit 99: Additional Exhibits Exhibit 99 MBNA CORPORATION AND SUBSIDIARIES FINANCIAL HIGHLIGHTS (dollars in thousands, except per share amounts) For the Three Months Ended -------------------------------------------------- March 31, June 30, September 30, December 31, 2001 2001 2001 2001 ------------------------------------------------------------------------------ (unaudited) INCOME STATEMENT DATA FOR THE PERIOD: Net interest income........ $ 290,748 $ 339,657 $ 347,885 $ 412,747 Provision for possible credit losses............. 218,840 322,216 314,322 285,237 Other operating income..... 1,517,729 1,640,181 1,873,432 1,908,277 Other operating expense.... 1,091,151 1,048,443 1,140,421 1,194,816 Net income............... 311,055 380,128 478,342 524,766 ------------------------------------------------------------------------------ PER COMMON SHARE DATA FOR THE PERIOD: Earnings(a)................ $ .36 $ .44 $ .56 $ .61 Earnings-assuming dilution(a)............... .35 .43 .54 .60 Dividends.................. .09 .09 .09 .09 Book value................. 7.69 7.95 8.44 8.90 ------------------------------------------------------------------------------ RATIOS: Return on average total assets.................... 3.26% 3.88% 4.58% 4.77% Return on average stockholders' equity...... 19.12 22.33 26.49 27.55 Average receivables to average deposits.......... 76.93 81.36 80.60 84.30 Stockholders' equity to total assets.............. 17.22 17.29 17.19 17.16 Loan Receivables: Delinquency(b)........... 3.58 3.89 3.61 4.64 Net credit losses........ 4.06 4.24 4.11 4.39 Managed Loans: Delinquency(c)........... 4.60 4.57 4.23 5.09 Net credit losses........ 4.35 4.82 4.90 4.86 Net interest margin(e)... 7.71 8.33 8.57 9.00 ------------------------------------------------------------------------------ MBNA CORPORATION AND SUBSIDIARIES FINANCIAL HIGHLIGHTS (dollars in thousands, except per share amounts) For the Three Months Ended -------------------------------------------------- March 31, June 30, September 30, December 31, 2000 2000 2000 2000 ------------------------------------------------------------------------------ (unaudited) INCOME STATEMENT DATA FOR THE PERIOD: Net interest income........ $ 305,057 $ 290,688 $ 299,918 $ 282,969 Provision for possible credit losses............. 139,336 165,572 110,107 132,294 Other operating income..... 1,128,540 1,247,267 1,298,090 1,462,889 Other operating expense.... 915,310 911,339 892,183 928,870 Net income............... 234,571 285,386 368,749 423,826 ------------------------------------------------------------------------------ PER COMMON SHARE DATA FOR THE PERIOD: Earnings(a)................ $ .29 $ .35 $ .44 $ .49 Earnings-assuming dilution(a)............... .28 .34 .43 .48 Dividends.................. .08 .08 .08 .08 Book value................. 5.08 5.29 7.13 7.53 ------------------------------------------------------------------------------ RATIOS: Return on average total assets.................... 3.02% 3.63% 4.38% 4.57% Return on average stockholders' equity...... 22.46 26.36 27.56 26.10 Average receivables to average deposits.......... 90.62 87.29 84.61 81.53 Stockholders' equity to total assets.............. 13.66 13.88 17.30 17.13 Loan Receivables: Delinquency(b)........... 3.35 3.77 3.94 3.89 Net credit losses........ 3.25 3.03 3.07 4.14 Managed Loans: Delinquency(d)........... 4.35 4.44 4.65 4.49 Net credit losses(d)..... 4.06 3.95 3.88 5.51 Net interest margin(e)... 7.10 7.12 7.10 7.00 ------------------------------------------------------------------------------ MBNA CORPORATION AND SUBSIDIARIES FINANCIAL HIGHLIGHTS (dollars in thousands, except per share amounts) For the Three Months Ended -------------------------------------------------- March 31, June 30, September 30, December 31, 2001 2001 2001 2001 ------------------------------------------------------------------------------ (unaudited) MANAGED LOAN DATA: At Period End: Loans held for securitization........... $ 6,666,017 $ 7,108,967 $ 5,742,127 $ 9,929,948 Loan portfolio............ 12,404,928 13,434,128 13,308,652 14,703,616 Securitized loans......... 68,844,064 69,873,921 73,534,371 72,862,487 ----------- ----------- ------------ ------------ Total managed loans..... $87,915,009 $90,417,016 $ 92,585,150 $ 97,496,051 =========== =========== ============ ============ Average for the Period: Loans held for securitization........... $ 6,837,225 $ 6,365,115 $ 6,841,400 $ 7,588,123 Loan portfolio............ 11,911,022 13,629,563 13,615,360 14,531,409 Securitized loans......... 69,237,079 69,271,510 71,395,990 72,295,037 ----------- ----------- ------------ ------------ Total managed loans..... $87,985,326 $89,266,188 $ 91,852,750 $ 94,414,569 =========== =========== ============ ============ For the Period: Sales and cash advance volume................... $31,798,235 $35,326,093 $ 35,935,826 $ 39,201,482 ------------------------------------------------------------------------------ MANAGED INCOME STATEMENT DATA FOR THE PERIOD(f): Net interest income........ $ 1,787,777 $ 1,981,634 $ 2,120,066 $ 2,314,665 Provision for possible credit losses............. 986,563 1,186,305 1,229,167 1,190,594 Other operating income..... 788,423 862,293 1,016,096 911,716 Other operating expense.... 1,091,151 1,048,443 1,140,421 1,194,816 Net income............... 311,055 380,128 478,342 524,766 ------------------------------------------------------------------------------ MBNA CORPORATION AND SUBSIDIARIES FINANCIAL HIGHLIGHTS (dollars in thousands, except per share amounts) For the Three Months Ended -------------------------------------------------- March 31, June 30, September 30, December 31, 2000 2000 2000 2000 ------------------------------------------------------------------------------ (unaudited) MANAGED LOAN DATA: At Period End: Loans held for securitization........... $ 8,172,508 $ 7,426,197 $ 6,991,585 $ 8,271,933 Loan portfolio............ 9,339,039 9,695,285 11,053,165 11,682,904 Securitized loans......... 55,488,220 59,211,174 66,626,693 68,835,884 ----------- ----------- ------------ ------------ Total managed loans..... $72,999,767 $76,332,656 $ 84,671,443 $ 88,790,721 =========== =========== ============ ============ Average for the Period: Loans held for securitization........... $ 9,475,492 $ 7,631,360 $ 7,900,917 $ 7,518,783 Loan portfolio............ 7,943,671 9,597,259 9,767,282 11,029,257 Securitized loans......... 54,584,913 56,832,969 60,120,484 67,281,639 ----------- ----------- ------------ ------------ Total managed loans..... $72,004,076 $74,061,588 $ 77,788,683 $ 85,829,679 =========== =========== ============ ============ For the Period: Sales and cash advance volume................... $28,260,846 $31,098,301 $ 31,449,996 $ 34,874,588 ------------------------------------------------------------------------------ MANAGED INCOME STATEMENT DATA FOR THE PERIOD(f): Net interest income........ $ 1,356,335 $ 1,390,508 $ 1,484,732 $ 1,605,534 Provision for possible credit losses............. 729,356 766,727 729,077 1,123,129 Other operating income..... 667,282 748,602 732,246 1,131,159 Other operating expense.... 915,310 911,339 892,183 928,870 Net income............... 234,571 285,386 368,749 423,826 ------------------------------------------------------------------------------ MBNA CORPORATION AND SUBSIDIARIES FINANCIAL HIGHLIGHTS (dollars in thousands, except per share amounts) For the Three Months Ended -------------------------------------------------- March 31, June 30, September 30, December 31, 2001 2001 2001 2001 ------------------------------------------------------------------------------ (unaudited) BALANCE SHEET DATA AT PERIOD END: Investment securities and money market instruments.. $ 5,668,487 $ 6,260,409 $ 7,544,665 $ 6,577,734 Loans held for securitization............ 6,666,017 7,108,967 5,742,127 9,929,948 Credit card loans.......... 8,063,346 7,391,078 7,567,748 8,261,575 Other consumer loans....... 4,341,582 6,043,050 5,740,904 6,442,041 ----------- ----------- ------------ ------------ Total loans.............. 12,404,928 13,434,128 13,308,652 14,703,616 Reserve for possible credit losses............. (565,700) (678,190) (789,095) (833,423) ----------- ----------- ------------ ------------ Net loans................ 11,839,228 12,755,938 12,519,557 13,870,193 Total assets............... 39,263,281 40,415,549 43,089,574 45,447,945 Total deposits............. 24,185,871 24,768,957 25,634,526 27,094,745 Stockholders' equity....... 6,760,981 6,989,715 7,405,991 7,798,718 ------------------------------------------------------------------------------ AVERAGE BALANCE SHEET DATA: Investment securities and money market instruments.. $ 6,120,959 $ 6,174,213 $ 6,301,080 $ 7,630,010 Loans held for securitization............ 6,837,225 6,365,115 6,841,400 7,588,123 Credit card loans.......... 7,744,128 8,224,458 7,155,281 8,425,152 Other consumer loans....... 4,166,894 5,405,105 6,460,079 6,106,257 ----------- ----------- ------------ ------------ Total loans.............. 11,911,022 13,629,563 13,615,360 14,531,409 Reserve for possible credit losses............. (530,798) (606,302) (697,713) (788,517) ----------- ----------- ------------ ------------ Net loans................ 11,380,224 13,023,261 12,917,647 13,742,892 Total assets............... 38,647,395 39,246,635 41,412,393 43,688,324 Total deposits............. 24,369,752 24,576,519 25,381,715 26,240,020 Stockholders' equity....... 6,597,332 6,829,061 7,165,278 7,556,356 ------------------------------------------------------------------------------ MBNA CORPORATION AND SUBSIDIARIES FINANCIAL HIGHLIGHTS (dollars in thousands, except per share amounts) For the Three Months Ended -------------------------------------------------- March 31, June 30, September 30, December 31, 2000 2000 2000 2000 ------------------------------------------------------------------------------ (unaudited) BALANCE SHEET DATA AT PERIOD END: Investment securities and money market instruments.. $ 4,905,722 $ 4,853,478 $ 5,599,474 $ 5,255,615 Loans held for securitization............ 8,172,508 7,426,197 6,991,585 8,271,933 Credit card loans.......... 6,579,232 6,791,080 7,994,814 7,798,772 Other consumer loans....... 2,759,807 2,904,205 3,058,351 3,884,132 ----------- ----------- ------------ ------------ Total loans.............. 9,339,039 9,695,285 11,053,165 11,682,904 Reserve for possible credit losses............. (525,963) (568,374) (580,140) (527,573) ----------- ----------- ------------ ------------ Net loans................ 8,813,076 9,126,911 10,473,025 11,155,331 Total assets............... 31,419,464 32,137,558 36,344,519 38,678,096 Total deposits............. 19,246,790 20,439,846 21,594,846 24,343,595 Stockholders' equity....... 4,291,166 4,459,772 6,289,240 6,627,278 ------------------------------------------------------------------------------ AVERAGE BALANCE SHEET DATA: Investment securities and money market instruments.. $ 4,874,972 $ 4,564,462 $ 5,484,148 $ 5,398,921 Loans held for securitization............ 9,475,492 7,631,360 7,900,917 7,518,783 Credit card loans.......... 5,707,560 6,849,599 7,051,176 7,519,626 Other consumer loans....... 2,236,111 2,747,660 2,716,106 3,509,631 ----------- ----------- ------------ ------------ Total loans.............. 7,943,671 9,597,259 9,767,282 11,029,257 Reserve for possible credit losses............. (516,246) (527,120) (568,940) (583,234) ----------- ----------- ------------ ------------ Net loans................ 7,427,425 9,070,139 9,198,342 10,446,023 Total assets............... 31,196,236 31,634,728 33,457,198 36,867,592 Total deposits............. 19,223,202 19,736,843 20,880,994 22,749,785 Stockholders' equity....... 4,201,148 4,354,457 5,322,244 6,460,047 ------------------------------------------------------------------------------ MBNA CORPORATION AND SUBSIDIARIES FINANCIAL HIGHLIGHTS (dollars in thousands, except per share amounts) For the Three Months Ended -------------------------------------------------- March 31, June 30, September 30, December 31, 2001 2001 2001 2001 ------------------------------------------------------------------------------ (unaudited) Weighted average common shares outstanding (000).. 851,840 851,853 851,812 851,815 Weighted average common shares oustanding and common stock equivalents (000)......... 878,402 877,749 875,139 873,390 ------------------------------------------------------------------------------ MBNA CORPORATION AND SUBSIDIARIES FINANCIAL HIGHLIGHTS (dollars in thousands, except per share amounts) For the Three Months Ended -------------------------------------------------- March 31, June 30, September 30, December 31, 2000 2000 2000 2000 ------------------------------------------------------------------------------ (unaudited) Weighted average common shares outstanding (000).. 801,849 801,821 826,310 851,819 Weighted average common shares oustanding and common stock equivalents (000)......... 824,445 826,308 854,672 880,256 ------------------------------------------------------------------------------ NOTES: (a) Earnings per common share is computed using net income applicable to common stock and weighted average common shares outstanding, whereas earnings per common share-assuming dilution includes the potential dilutive effect of common stock equivalents. The Corporation's common stock equivalents are solely related to employee stock options. The Corporation has no other common stock equivalents. (b) Loan delinquency does not include loans held for securitization or securitized loans. (c) During September 2001, MBNA Corporation initiated measures to assist its Customers who were affected by the tragic events of September 11, 2001. This included assistance for Customers who may not have received their statement in a timely manner or may have had delivery of their payment delayed. The Corporation's actions postponed some Customer's accounts from becoming delinquent. As a result, the Corporation's managed and reported delinquency ratios were lower than their anticipated levels. Without these measures, the Corporation estimates that managed delinquency ratios would have been between 4.85% and 4.95% at September 30, 2001. Charged-off accounts were unaffected. (d) In December 2000, the Corporation implemented the Federal Financial Examination Council's ("FFIEC") revised policy on the classification of consumer loans. Without the one-time FFIEC adjustment, managed loan delinquency would have been 4.94% at December 31, 2000 and managed net credit losses would have been 3.87% for the three months ended December 31, 2000. (e) Managed net interest margin is presented on a fully taxable equivalent basis. (f) MBNA Corporation's managed income statement data reflects the Corporation's results on a managed basis. The managed income statement data reclassifies securitization income into interest income, interchange income, credit card and other fees, insurance income, interest paid to investors, credit losses, and other trust expenses. SIGNATURE 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. MBNA CORPORATION Date: January 18, 2002 By: /s/ M. Scot Kaufman ------------------------------- M. Scot Kaufman Senior Executive Vice President and Chief Financial Officer