28
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A-2
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
-------------------------------------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
--------------------- ------------------------
Commission file number 1-10683
---------------------------------------------------------
MBNA Corporation
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 52-1713008
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Wilmington, DE 19884-0141
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(800) 362-6255
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------------------------------------ ---------------------------
Common Stock, $.01 par value New York Stock Exchange
6 7/8% Senior Notes due October 1, 1999 New York Stock Exchange
7 1/2% Cumulative Preferred Stock, Series A New York Stock Exchange
Adjustable Rate Cumulative Preferred Stock,
Series B New York Stock Exchange
MBNA Capital A 8.278% Capital Securities,
Series A, guaranteed by MBNA Corporation
to the extent described therein New York Stock Exchange
MBNA Capital B Floating Rate Capital
Securities, Series B, guaranteed by MBNA
Corporation to the extent described therein New York Stock Exchange
MBNA Capital C 8.25% Trust Originated Preferred
Securities, Series C, guaranteed by MBNA
Corporation to the extent described therein New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Pursuant to Rule 15d-21 of the Securities and Exchange Commission under the
Securities Act of 1934 (as amended), the Registrant amends its Annual Report on
Form 10-K for the fiscal year ended December 31, 1997, to file the financial
statements required by Form 11-K with respect to the MBNA Corporation 401(k)
Plus Savings Plan.
MBNA CORPORATION 401(k) PLUS SAVINGS PLAN
Index to Financial Statements and Schedules
(A) FINANCIAL STATEMENTS AND SCHEDULES:
Page Number
-----------
FINANCIAL STATEMENTS:
Report of Independent Auditors............................... 1
Statement of Net Assets Available for Plan Benefits.......... 2
Statement of Changes in Net Assets Available for Plan
Benefits.................................................... 3
Notes to Financial Statements................................ 4
SCHEDULES:
Schedule I-Item 27a-Schedule of Assets Held for
Investment Purposes......................................... 20
Schedule II-Item 27d-Schedule of Reportable Transactions..... 21
(B) EXHIBITS
Exhibit 23: Consent of Independent Auditors................. 27
(C) SIGNATURE.................................................... 28
REPORT OF INDEPENDENT AUDITORS
To the Pension and 401(k) Plus Savings Plan Committee of MBNA Corporation
We have audited the accompanying statements of net assets available for plan
benefits of MBNA Corporation 401(k) Plus Savings Plan ("the Plan") as of
December 31, 1997 and 1996, and the related statements of changes in net assets
available for plan benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
at December 31, 1997 and 1996, and the changes in its net assets available for
plan benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1997 and reportable
transactions for the year then ended are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the basic financial statements. The supplemental
schedules have been subjected to the auditing procedures applied in our audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Ernst & Young LLP
Baltimore, Maryland
June 26, 1998
MBNA CORPORATION 401(k) PLUS SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31,
----------------------------
1997 1996
------------- -------------
ASSETS
Investments at fair value:
Common trust funds............................ $ 54,429,538 $ 54,252,639
Interest in registered investment companies... 74,028,280 52,264,487
Short-term investment fund.................... 5,062,981 2,384,829
Common Stock of MBNA Corporation.............. 125,080,216 70,648,936
Guaranteed investment contracts............... 19,192,472 5,381,335
Loans receivable.............................. 16,448,866 11,970,085
------------- -------------
Total investments........................... 294,242,353 196,902,311
Income receivable............................... 435,509 380,410
------------- -------------
Total assets................................ 294,677,862 197,282,721
LIABILITIES
Accrued expenses and other liabilities.......... 151,442 52,653
------------- -------------
Total liabilities........................... 151,442 52,653
------------- -------------
Net assets available for plan benefits...... $ 294,526,420 $ 197,230,068
============= =============
==============================================================================
See accompanying notes to the financial statements.
MBNA CORPORATION 401(k) PLUS SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
For the Year Ended
December 31,
----------------------------
1997 1996
------------- -------------
ADDITIONS
Investment income:
Interest...................................... $ 580,052 $ 1,107,384
Dividends from MBNA Corporation Common Stock.. 1,421,387 909,290
Income from common trust funds................ 1,137,966 517,880
Income from interest in registered investment
companies.................................... 1,281,087 1,256,831
Interest income from loans receivable......... 1,251,180 894,184
------------- -------------
Total investment income..................... 5,671,672 4,685,569
Contributions:
Employer...................................... 12,110,078 10,206,952
Employee...................................... 31,015,487 23,097,856
------------- -------------
Total additions............................. 48,797,237 37,990,377
DEDUCTIONS
Payments to participants....................... 8,872,985 5,280,039
Administrative expenses........................ 834,245 788,252
------------- -------------
Total deductions........................... 9,707,230 6,068,291
Net realized and unrealized appreciation in
fair value of investments..................... 58,206,345 36,525,133
------------- -------------
Net additions.............................. 97,296,352 68,447,219
Net assets available for plan benefits at
beginning of year............................. 197,230,068 128,782,849
------------- -------------
Net assets available for plan benefits at
end of year................................... $ 294,526,420 $ 197,230,068
============= =============
==============================================================================
See accompanying notes to the financial statements.
MBNA CORPORATION 401(k) PLUS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES
The MBNA Corporation 401(k) Plus Savings Plan's ("the Plan") financial
statements have been prepared in accordance with generally accepted accounting
principles on the accrual basis, which requires MBNA Corporation's
(the "Corporation") management to make estimates and assumptions that affect
the reported amount of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements as well as the
reported amount of revenues and expenses during the reporting period. Actual
results could differ from these estimates.
Investments, except for loans receivable and guaranteed investment contracts
which are "fully benefit responsive", are stated at aggregate fair value. The
guaranteed investment contracts have stated maturities and are valued at the
amount contributed plus interest earned less withdrawals. Certain of these
contracts contain early withdrawal penalties except to fulfill benefits elected
by plan participants in accordance with the terms of the contract. A "fully
benefit responsive" guaranteed investment contract provides a liquidity
guarantee by a financially responsible third party of principal and previously
accrued interest for liquidations, transfers, loans, or hardship withdrawals
initiated by plan participants exercising their rights to withdraw, borrow, or
transfer funds under the terms of the Plan. A guaranteed investment contract
which is "fully benefit responsive" is recorded at contract value. Securities
traded on a national securities exchange are valued at the last reported sales
price on the last business day of the year. Investments traded in the over-the-
counter market and listed securities for which no sale was reported on that
date are valued at the last reported bid price. Interest in registered
investment companies and investments in common trust funds are stated at the
Plan's interest in the fair value of the underlying assets in the registered
investment companies and common trust funds. Loans receivable are stated at
the amount borrowed by the participant less principal repayments.
The difference between fair value and cost of investments held, and net
realized gain or loss on sale of investments (difference between the proceeds
received and the average cost of investments sold), is reflected in the
Statement of Changes in Net Assets Available for Plan Benefits as net realized
and unrealized appreciation in fair value of investments.
Benefits are recognized when paid. Administrative expenses of $834,245 and
$788,252 in 1997 and 1996, respectively, including amounts paid to The Northern
Trust Company, for acting as trustee and custodian of the Plan's investments,
are paid by the Plan.
NOTE 2: DESCRIPTION OF THE PLAN
The Plan is a defined contribution plan which qualifies under section 401(k) of
the Internal Revenue Code (IRC). Employees can invest up to a maximum of 12%
of eligible earnings on a pre-tax basis (up to $9,500 per year for 1997 and
1996) and a maximum of 10% of eligible earnings on an after-tax basis.
Combined employee contributions, including after-tax contributions limited to
10%, may not exceed 17% of eligible earnings. MBNA Corporation (the
"Corporation") automatically contributes 1% of eligible earnings for each
participant and matches the first 6% of either before-tax or after-tax employee
contributions at fifty cents on the dollar. Both employee and employer
contributions for highly compensated employees have been limited to ensure the
passage of non-discrimination tests.
All contributions to the Plan are immediately 100% vested. Pre-tax
contributions, as well as the automatic 1% contribution by the Corporation, are
not available for withdrawal before attaining age 59-1/2 or termination of
employment. Pre-tax contributions may also be available in certain
circumstances of financial hardship.
Subject to certain limitations, participants may elect to withdraw all or part
of their after-tax and matching contributions plus earnings from the Plan. In
addition, participants can borrow money against their savings in the Plan.
The Plan provides seven investment options. A participant's contribution may be
invested in 5% increments in any of the available funds. In addition, not more
than 25% of new contributions may be invested in the MBNA Stock Fund.
Participants have the option to change the investment selection once a month or
as determined by the Pension and 401(k) Plan Committee. The Plan's investment
options are:
Fixed Income Fund - Assets in this fund are invested primarily in guaranteed
investment contracts issued by major insurance companies and banks. The fund
also includes synthetic and alternative guaranteed investment contracts.
Bond Fund - Assets in this fund are invested in corporate bonds, U.S.
Government fixed income securities, and money market instruments.
Diversified Fund - Assets in this fund are invested in investment grade stocks,
bonds and short-term investments such as U.S. Government notes, and
certificates of deposit.
Index Fund - Assets in this fund are primarily invested in stocks of most of
the companies included in the Standard & Poor's 500 Index. On October 15,
1996, the BZW Barclays Equity Index Fund was renamed to the Barclays Global
Equity Index Fund.
Growth Fund - Assets in this fund are invested in stocks of a wide range of
companies, both small and large.
MBNA Stock Fund - Assets in this fund are invested primarily in the common
stock of MBNA Corporation.
Aggressive Growth Fund - Assets in this fund are primarily invested in common
stocks and securities convertible into common stocks. However, up to 5% of its
assets may be invested in warrants and rights to purchase common stocks. The
Aggressive Growth Fund is a new investment option beginning in October 1997.
In addition to the seven investment options, borrowings by participants against
their savings in the Plan and related activity are reported in the Loan Fund.
Although it has not expressed any intention to do so, the Corporation has the
right to terminate the Plan in whole or in part at any time; however, in such
circumstances, the participants would receive the full value of their account.
The number of participants in each fund at December 31, 1997, is as follows:
Fixed Income Fund 7,242
Bond Fund 1,299
Diversified Fund 5,010
Index Fund 6,564
Growth Fund 5,586
MBNA Stock Fund 8,241
Aggressive Growth Fund 892
The total number of participants in the Plan is less than the sum of the fund
participants shown above because many participate in more than one fund.
Information about the Plan, including distribution provisions and withdrawal
limitations, is contained in the Summary Plan Description. Copies of the
Summary Plan Description are available from the Benefits and Compensation
Department of the Corporation.
NOTE 3: INVESTMENTS
The fair value of the Plan's investments at December 31, 1997 and 1996 is as
follows:
December 31,
----------------------------
1997 1996
------------- -------------
Common trust funds:
Barclays Global Equity Index Fund............. $ 48,256,870 $ 31,778,051
Lasalle National Trust Income Plus Fund....... 6,172,668 22,474,588
------------- -------------
Total common trust funds.................... 54,429,538 54,252,639
Interest in registered investment companies:
American Balanced Fund........................ 34,400,361 27,958,545
Growth Fund of America ....................... - 21,844,503
MFS Research Fund............................. 32,530,219 -
Bond Fund of America.......................... 3,467,642 2,461,439
PBHG Growth Fund.............................. 3,630,058 -
------------- -------------
Total interest in registered investment
companies.................................. 74,028,280 52,264,487
Short-term investment fund...................... 5,062,981 2,384,829
Common Stock of MBNA Corporation................ 125,080,216 70,648,936
Guaranteed investment contracts................. 19,192,472 5,381,335
Loans receivable................................ 16,448,866 11,970,085
------------- -------------
Total investments $ 294,242,353 $ 196,902,311
============= =============
The net realized and unrealized appreciation in fair value of the Plan's
investments was as follows:
For the Year Ended
December 31,
----------------------------
1997 1996
------------- -------------
Common trust funds............................ $ 11,229,710 $ 5,340,895
Interest in registered investment companies... 10,231,450 4,586,706
Common Stock of MBNA Corporation.............. 36,745,185 26,597,532
------------- -------------
Total net realized and unrealized
appreciation in fair value of investments.. $ 58,206,345 $ 36,525,133
============= =============
The fair value of individual investments that represent 5% or more of the
Plan's net assets available for Plan benefits at December 31, 1997 and 1996 are
as follows:
1997 1996
---------------------- ----------------------
Units Fair Value Units Fair Value
--------- ------------ ---------- -----------
Common trust funds:
Barclays Global Equity Index
Fund......................... 1,846,093 $ 48,256,870 1,621,329 $31,778,051
Lasalle National Trust Income
Plus Fund.................... 6,172,668 6,172,668 22,474,588 22,474,588
Interest in registered
investment companies:
American Balanced Fund........ 2,193,901 34,400,361 1,921,549 27,958,545
Growth Fund of America........ - - 1,318,316 21,844,503
MFS Research Fund............. 1,527,958 32,530,219 - -
Common Stock of MBNA
Corporation.................... 4,579,596 125,080,216 1,702,384 70,648,936
The Plan's investments in guaranteed investment contracts in the aggregate for
the year ended December 31, 1997 and 1996 were as follows:
1997 1996
--------------- ---------------
Book value................................ $ 19,192,472 $ 5,381,335
Fair value................................ 19,192,472 5,381,335
Weighted average yield.................... 6.40% 6.64%
Crediting interest rates ranging from..... 5.90% to 6.46% 5.90% to 7.05%
Maturity dates ranging from............... 1998 to 2002 1997 to 1998
The guaranteed investment contracts held by the Plan at December 31, 1997 had
Standard and Poor's ratings ranging from A+ to AAA. The Plan holds fixed rate
guaranteed investment contracts. The fair value of the guaranteed investment
contracts approximates book value.
NOTE 4: TRANSACTIONS WITH PARTIES-IN-INTEREST
For the years ended December 31, 1997 and 1996, the Plan earned investment
income of $104,988 and $82,664, respectively, on its investments administered
by the trustee. In addition, for the years ended December 31, 1997 and 1996,
the Plan earned dividend income of $1,421,387 and $909,290, respectively, on
shares of MBNA Corporation common stock held by the Plan. For the years ended
December 31, 1997 and 1996, the Plan also had a dividend receivable of $375,992
and $256,524 on shares of MBNA Corporation common stock held by the Plan,
respectively.
Fees paid during the year for services rendered to the Plan by parties-in-
interest were based on customary and reasonable rates for such services.
NOTE 5: INCOME TAX STATUS
The Internal Revenue Service ("IRS") ruled on June 12, 1995, that the Plan, as
amended, qualified under sections 401(a) and 401(k) of the Internal Revenue
Code ("IRC") and is, therefore, not subject to tax under the present income tax
regulations. Under the Plan, participants are not subject to federal income tax
on either the employer or employee contributions and income of the Plan until
amounts are distributed to them. Once qualified, the Plan is required to
operate in conformity with the IRC to maintain its qualifications. The Pension
and 401(k) Plan Committee is not aware of any course of action or series of
events that have occurred that might adversely affect the Plan's qualified
status.
NOTE 6: RECONCILIATION TO FORM 5500
The financial statements for the years ended December 31, 1997 and 1996 differ
from the Form 5500 filed with the IRS in that net gains and losses and
unrealized appreciation and depreciation of investment assets have been
combined in the financial statements as net realized and unrealized
appreciation in fair value of investments rather than shown separately as on
lines 32b(4) and 32b(5) of Form 5500. In addition, a liability for benefits
payable of $68,826 and $19,627 at December 31, 1997 and 1996, respectively, has
been recorded on line 31(g) of the 1997 and 1996 Form 5500, respectively, and
has not been recorded in these financial statements.
NOTE 7: STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND
Fixed Diversified
Income Fund Bond Fund Fund
------------ ------------ ------------
December 31, 1997
ASSETS
Investments....................... $ 28,030,470 $ 3,467,642 $ 34,400,361
Income receivable................. 59,507 - -
Interfund (payable)/receivable.... (220,163) (24,920) (24,728)
------------ ------------ ------------
Total assets.................. 27,869,814 3,442,722 34,375,633
LIABILITIES
Accrued expenses and other
liabilities...................... 4,141 1,101 8,351
------------ ------------ ------------
Total liabilities............. 4,141 1,101 8,351
------------ ------------ ------------
Net assets available for
plan benefits................ $ 27,865,673 $ 3,441,621 $ 34,367,282
============ ============ ============
December 31, 1996
ASSETS
Investments....................... $ 27,986,934 $ 2,461,439 $ 27,958,545
Income receivable................. 110,629 - 168
Interfund (payable)/receivable.... (234,850) (25,350) (11,391)
------------ ------------ ------------
Total assets.................. 27,862,713 2,436,089 27,947,322
LIABILITIES
Accrued expenses and other
liabilities...................... 8,061 935 7,731
------------ ------------ ------------
Total liabilities............. 8,061 935 7,731
------------ ------------ ------------
Net assets available for
plan benefits................ $ 27,854,652 $ 2,435,154 $ 27,939,591
============ ============ ============
MBNA
Index Fund Growth Fund Stock Fund
------------ ------------ ------------
December 31, 1997
ASSETS
Investments....................... $ 48,256,870 $ 32,530,219 $127,477,867
Income receivable................. - - 375,992
Interfund (payable)/receivable.... (16,154) 78,587 86,331
------------ ------------ ------------
Total assets.................. 48,240,716 32,608,806 127,940,190
LIABILITIES
Accrued expenses and other
liabilities...................... 15,437 7,701 32,119
------------ ------------ ------------
Total liabilities............. 15,437 7,701 32,119
------------ ------------ ------------
Net assets available for
plan benefits................ $ 48,225,279 $ 32,601,105 $127,908,071
============ ============ ============
December 31, 1996
ASSETS
Investments....................... $ 31,778,051 $ 21,844,503 $ 72,902,754
Income receivable................. - - 269,613
Interfund (payable)/receivable.... (25,645) (587) 270,364
------------ ------------ ------------
Total assets.................. 31,752,406 21,843,916 73,442,731
LIABILITIES
Accrued expenses and other
liabilities...................... 11,073 5,488 19,365
------------ ------------ ------------
Total liabilities............. 11,073 5,488 19,365
------------ ------------ ------------
Net assets available for
plan benefits................ $ 31,741,333 $ 21,838,428 $ 73,423,366
============ ============ ============
Aggressive
Growth Fund Loan Fund Total
------------ ------------ ------------
December 31, 1997
ASSETS
Investments....................... $ 3,630,058 $ 16,448,866 $294,242,353
Income receivable................. - 10 435,509
Interfund (payable)/receivable.... 82,189 38,858 -
------------ ------------ ------------
Total assets.................. 3,712,247 16,487,734 294,677,862
LIABILITIES
Accrued expenses and other
liabilities...................... - 82,592 151,442
------------ ------------ ------------
Total liabilities............. - 82,592 151,442
------------ ------------ ------------
Net assets available for
plan benefits................ $ 3,712,247 $ 16,405,142 $294,526,420
============ ============ ============
December 31, 1996
ASSETS
Investments....................... $ - $ 11,970,085 $196,902,311
Income receivable................. - - 380,410
Interfund (payable)/receivable.... - 27,459 -
------------ ------------ ------------
Total assets.................. - 11,997,544 197,282,721
LIABILITIES
Accrued expenses and other
liabilities...................... - - 52,653
------------ ------------ ------------
Total liabilities............. - - 52,653
------------ ------------ ------------
Net assets available for
plan benefits................ $ - $ 11,997,544 $197,230,068
============ ============ ============
NOTE 8: STATEMENTS OF CHANGES NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND
Fixed Diversified
Income Fund Bond Fund Fund
------------ ------------ ------------
For the Year Ended
December 31, 1997
ADDITIONS
Investment income................. $ 1,613,030 $ 191,239 $ 1,089,848
Contributions:
Employer........................ 2,243,788 236,443 1,820,498
Employee........................ 3,810,286 629,794 4,317,700
------------ ------------ ------------
Total additions............... 7,667,104 1,057,476 7,228,046
DEDUCTIONS
Payments to participants.......... 1,321,661 102,343 1,047,525
Administrative expenses........... 85,940 11,868 105,879
------------ ------------ ------------
Total deductions.............. 1,407,601 114,211 1,153,404
Interfund transfers............... (6,248,482) 10,507 (4,383,502)
Net realized and unrealized
appreciation/(depreciation) in
fair value of investments........ - 52,695 4,736,551
------------ ------------ ------------
Net additions................. 11,021 1,006,467 6,427,691
Net assets available for plan
benefits at beginning of year.... 27,854,652 2,435,154 27,939,591
------------ ------------ ------------
Net assets available for plan
benefits at end of year.......... $ 27,865,673 $ 3,441,621 $ 34,367,282
============ ============ ============
MBNA
Index Fund Growth Fund Stock Fund
------------ ------------ ------------
For the Year Ended
December 31, 1997
ADDITIONS
Investment income................. $ - $ - $ 1,526,375
Contributions:
Employer........................ 2,953,960 2,403,441 2,397,767
Employee........................ 7,810,466 6,489,191 7,747,854
------------ ------------ ------------
Total additions............... 10,764,426 8,892,632 11,671,996
DEDUCTIONS
Payments to participants.......... 1,097,421 798,039 4,078,612
Administrative expenses........... 169,808 87,207 373,543
------------ ------------ ------------
Total deductions.............. 1,267,229 885,246 4,452,155
Interfund transfers............... (4,242,961) (2,910,690) 10,519,679
Net realized and unrealized
appreciation/(depreciation) in
fair value of investments........ 11,229,710 5,665,981 36,745,185
------------ ------------ ------------
Net additions................. 16,483,946 10,762,677 54,484,705
Net assets available for plan
benefits at beginning of year.... 31,741,333 21,838,428 73,423,366
------------ ------------ ------------
Net assets available for plan
benefits at end of year.......... $ 48,225,279 $ 32,601,105 $127,908,071
============ ============ ============
Aggressive
Growth Fund Loan Fund Total
------------ ------------ ------------
For the Year Ended
December 31, 1997
ADDITIONS
Investment income................. $ - $ 1,251,180 $ 5,671,672
Contributions:
Employer........................ 54,181 - 12,110,078
Employee........................ 210,196 - 31,015,487
------------ ------------ ------------
Total additions............... 264,377 1,251,180 48,797,237
DEDUCTIONS
Payments to participants.......... 989 426,395 8,872,985
Administrative expenses........... - - 834,245
------------ ------------ ------------
Total deductions.............. 989 426,395 9,707,230
Interfund transfers............... 3,672,636 3,582,813 -
Net realized and unrealized
appreciation/(depreciation) in
fair value of investments........ (223,777) - 58,206,345
------------ ------------ ------------
Net additions................. 3,712,247 4,407,598 97,296,352
Net assets available for plan
benefits at beginning of year.... - 11,997,544 197,230,068
------------ ------------ ------------
Net assets available for plan
benefits at end of year.......... $ 3,712,247 $ 16,405,142 $294,526,420
============ ============ ============
Fixed Diversified
Income Fund Bond Fund Fund
------------ ------------ ------------
For the Year Ended
December 31, 1996
ADDITIONS
Investment income................. $ 1,545,700 $ 157,286 $ 965,110
Contributions:
Employer........................ 2,527,105 231,798 1,678,666
Employee........................ 3,562,404 558,714 3,706,604
------------ ------------ ------------
Total additions............... 7,635,209 947,798 6,350,380
DEDUCTIONS
Payments to participants.......... 1,680,197 47,801 731,111
Administrative expenses........... 136,249 12,714 132,198
------------ ------------ ------------
Total deductions.............. 1,816,446 60,515 863,309
Interfund transfers............... (2,391,490) (258,888) (3,309,731)
Net realized and unrealized
appreciation/(depreciation) in
fair value of investments........ - (20,815) 2,215,055
------------ ------------ ------------
Net additions................. 3,427,273 607,580 4,392,395
Net assets available for plan
benefits at beginning of year.... 24,427,379 1,827,574 23,547,196
------------ ------------ ------------
Net assets available for plan
benefits at end of year.......... $ 27,854,652 $ 2,435,154 $ 27,939,591
============ ============ ============
MBNA
Index Fund Growth Fund Stock Fund
------------ ------------ ------------
For the Year Ended
December 31, 1996
ADDITIONS
Investment income................. $ - $ 134,435 $ 988,854
Contributions:
Employer........................ 2,014,848 1,947,986 1,806,549
Employee........................ 4,988,385 4,963,174 5,318,575
------------ ------------ ------------
Total additions............... 7,003,233 7,045,595 8,113,978
DEDUCTIONS
Payments to participants.......... 544,660 335,962 1,587,213
Administrative expenses........... 152,349 91,739 263,003
------------ ------------ ------------
Total deductions.............. 697,009 427,701 1,850,216
Interfund transfers............... 87,859 (858,183) 4,206,250
Net realized and unrealized
appreciation/(depreciation) in
fair value of investments........ 5,340,895 2,392,466 26,597,532
------------ ----------- ------------
Net additions................. 11,734,978 8,152,177 37,067,544
Net assets available for plan
benefits at beginning of year.... 20,006,355 13,686,251 36,355,822
------------ ------------ ------------
Net assets available for plan
benefits at end of year.......... $ 31,741,333 $ 21,838,428 $ 73,423,366
============ ============ ============
Aggressive
Growth Fund Loan Fund Total
------------ ------------ ------------
For the Year Ended
December 31, 1996
ADDITIONS
Investment income................. $ - $ 894,184 $ 4,685,569
Contributions:
Employer........................ - - 10,206,952
Employee........................ - - 23,097,856
------------ ------------ ------------
Total additions............... - 894,184 37,990,377
DEDUCTIONS
Payments to participants.......... - 353,095 5,280,039
Administrative expenses........... - - 788,252
------------ ------------ ------------
Total deductions.............. - 353,095 6,068,291
Interfund transfers............... - 2,524,183 -
Net realized and unrealized
appreciation/(depreciation) in
fair value of investments........ - - 36,525,133
------------ ------------ ------------
Net additions................. - 3,065,272 68,447,219
Net assets available for plan
benefits at beginning of year.... - 8,932,272 128,782,849
------------ ------------ ------------
Net assets available for plan
benefits at end of year.......... $ - $ 11,997,544 $197,230,068
============ ============ ============
NOTE 9: Year 2000 Issue (unaudited)
The Corporation has substantially completed an assessment of its internal
computer systems affected by the Year 2000 issue, and is executing a plan to
make the necessary programming changes, and has begun to test and implement
those changes. This also includes determining whether third party service
providers have reasonable strategies in place to become Year 2000 compliant.
The Corporation currently expects the project to be complete by the middle of
1999. The Corporation does not expect this project to have a significant
impact on the Plan's operations.
ATTACHMENT TO FORM 5500
EIN: 52-1713008
PN: 001
SCHEDULE I - ITEM 27a
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
MBNA CORPORATION 401(k) PLUS SAVINGS PLAN
December 31, 1997
Identity of Issue, Borrower, Description of Fair
Lessor or Similar Party Investment Cost Value
- ---------------------------------- --------------- ------------ ------------
Common trust funds:
Barclay Global Equity Index Fund 1,846,093 units $ 31,287,961 $ 48,256,870
Lasalle National Trust Income
Plus Fund 6,172,668 units 6,172,668 6,172,668
------------ ------------
Total common trust funds 37,460,629 54,429,538
Interest in registered
investment companies:
American Balanced Fund 2,193,901 units 30,552,222 34,400,361
MFS Research Fund 1,527,958 units 35,066,351 32,530,219
Bond Fund of America 247,689 units 3,411,408 3,467,642
PBHG Growth Fund 142,972 units 3,849,103 3,630,058
------------ ------------
Total interest in registered
investment companies 72,879,084 74,028,280
Short-term investment fund 5,062,981 5,062,981
Common Stock of MBNA Corporation 4,579,596 units 61,868,969 125,080,216
Guaranteed investment
contracts ("GIC"):
Peoples Security GIC 2,000,000 2,000,000
Provident Life Insurance Co. GIC 1,016,198 1,016,198
Sun America GIC 3,000,000 3,000,000
State Street Bank & Trust
Synthetic GIC 13,176,274 13,176,274
------------ ------------
Total guaranteed investment
contracts 19,192,472 19,192,472
Loans receivable 16,448,866 16,448,866
------------ ------------
Total investments $212,913,001 $294,242,353
============ ============
ATTACHMENT TO FORM 5500
EIN: 52-1713008
PN: 001
SCHEDULE II - ITEM 27d
SCHEDULE OF REPORTABLE TRANSACTIONS
MBNA CORPORATION 401(k) PLUS SAVINGS PLAN
Year Ended December 31, 1997
Category (i) - Series of Single Transactions in Excess of 5% of Plan Assets:
Identity of Description
Party Involved of Assets Purchase Price Selling Price
- -------------- ------------------ --------------- ---------------
Northern Trust Growth Fund of $ - $ 31,997,696
America
Northern Trust MFS Research Fund 32,089,414 -
Northern Trust Short-term 11,067,646 -
investment fund
Northern Trust Short-term 12,787,864 -
investment fund
Northern Trust Short-term - 13,210,363
investment fund
Northern Trust Short-term - 10,050,115
investment fund
Northern Trust Lasalle National - 11,067,646
Trust Income
Plus Fund
Northern Trust State Street Bank 10,000,000 -
& Trust Synthetic
Guaranteed
Investment
Contract
Fair Value of
Asset on
Identity of Description Transaction
Party Involved of Assets Cost of Asset Date Net Gain
- -------------- ------------------ ------------- ------------- -----------
Northern Trust Growth Fund of $ 25,550,749 $ 31,997,696 $ 6,446,947
America
Northern Trust MFS Research Fund 32,089,414 32,089,414 -
Northern Trust Short-term 11,067,646 11,067,646 -
investment fund
Northern Trust Short-term 12,787,864 12,787,864 -
investment fund
Northern Trust Short-term 13,210,363 13,210,363 -
investment fund
Northern Trust Short-term 10,050,115 10,050,115 -
investment fund
Northern Trust Lasalle National 11,067,646 11,067,646 -
Trust Income
Plus Fund
Northern Trust State Street Bank 10,000,000 10,000,000 -
& Trust Synthetic
Guaranteed
Investment
Contract
ATTACHMENT TO FORM 5500
EIN: 52-1713008
PN: 001
SCHEDULE II - ITEM 27d
SCHEDULE OF REPORTABLE TRANSACTIONS
MBNA CORPORATION 401(k) PLUS SAVINGS PLAN
Year Ended December 31, 1997
Category (iii) - Series of Transactions (Aggregate) in Excess of 5%
of Plan Assets:
Identity of Description
Party Involved of Assets Purchase Price Selling Price
- -------------- ------------------ --------------- ---------------
Northern Trust American Balanced $ 10,997,999 $ -
Fund (88 purchases)
Northern Trust American Balanced - 6,696,677
Fund (171 sales)
Northern Trust Growth Fund of 8,346,981 -
America (71 purchases)
Northern Trust Growth Fund of - 37,023,049
America (124 sales)
Northern Trust MBNA Corporation 26,433,052 -
Common Stock (39 purchases)
Northern Trust MBNA Corporation - 8,233,281
Common Stock (12 sales)
Northern Trust MFS Research Fund 36,282,021 -
(29 purchases)
Northern Trust MFS Research Fund - 1,158,978
(32 sales)
Northern Trust Barclays Global 15,054,895 -
Equity Index Fund (98 purchases)
Northern Trust Barclays Global - 9,805,616
Equity Index Fund (156 sales)
Northern Trust Short-term 84,047,285 -
investment fund (254 purchases)
Northern Trust Short-term - 81,049,878
investment fund (259 sales)
Northern Trust Lasalle National 17,676,682 -
Trust Income (84 purchases)
Plus Fund
Fair Value of
Asset on
Identity of Description Transaction Net Gain/
Party Involved of Assets Cost of Asset Date (Loss)
- -------------- ------------------ ------------- ------------- -----------
Northern Trust American Balanced $ 10,997,999 $ 10,997,999 $ -
Fund
Northern Trust American Balanced 5,696,276 6,696,677 1,000,401
Fund
Northern Trust Growth Fund of 8,346,981 8,346,981 -
America
Northern Trust Growth Fund of 28,474,280 37,023,049 8,548,769
America
Northern Trust MBNA Corporation 26,433,052 26,433,052 -
Common Stock
Northern Trust MBNA Corporation 4,045,855 8,233,281 4,187,426
Common Stock
Northern Trust MFS Research Fund 36,282,021 36,282,021 -
Northern Trust MFS Research Fund 1,215,670 1,158,978 (56,692)
Northern Trust Barclays Global 15,054,895 15,054,895 -
Equity Index Fund
Northern Trust Barclays Global 6,511,836 9,805,616 3,293,780
Equity Index Fund
Northern Trust Short-term 84,047,285 84,047,285 -
investment fund
Northern Trust Short-term 81,049,878 81,049,878 -
investment fund
Northern Trust Lasalle National 17,676,682 17,676,682 -
Trust Income
Plus Fund
Identity of Description
Party Involved of Assets Purchase Price Selling Price
- -------------- ------------------ --------------- ---------------
Northern Trust Lasalle National $ - $ 33,978,602
Trust Income (124 sales)
Plus Fund
Northern Trust State Street Bank 13,176,274 -
& Trust Synthetic (6 purchases)
Guaranteed
Investment
Contract
Northern Trust MBNA Corporation 10,466,149 -
401(k) Plus (254 purchases)
Savings Trust
Loan Asset
Northern Trust MBNA Corporation - 5,987,368
401(k) Plus (148 sales)
Savings Trust
Loan Asset
There were no category (ii) or (iv) reportable transactions for the year
ended December 31, 1997.
Fair Value of
Asset on
Identity of Description Transaction Net Gain/
Party Involved of Assets Cost of Asset Date (Loss)
- -------------- ------------------ ------------- -------------- ----------
Northern Trust Lasalle National $ 33,978,602 $ 33,978,602 $ -
Trust Income
Plus Fund
Northern Trust State Street Bank 13,176,274 13,176,274 -
& Trust Synthetic
Guaranteed
Investment
Contract
Northern Trust MBNA Corporation 10,466,149 10,466,149 -
401(k) Plus
Savings Trust
Loan Asset
Northern Trust MBNA Corporation 5,987,368 5,987,368 -
401(k) Plus
Savings Trust
Loan Asset
EXHIBIT 23: CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the following Registration
Statements of MBNA Corporation, and in the related Prospectuses, of our report
dated June 26, 1998 included in Form 10-K/A-2, with respect to the financial
statements and schedules of the MBNA Corporation 401(k) Plus Savings Plan for
the year ended December 31, 1997:
Number 33-41936 on Form S-8 dated July 22, 1991
Number 33-41895 on Form S-8 dated July 24, 1991
Number 33-50498 on Form S-3 (as amended by Post-Effective
Amendment No. 1) dated August 28, 1992
Number 33-71640 on Form S-8 dated November 15, 1993
Number 33-76278 on Form S-3 (as amended by Amendment No. 1)
dated April 8, 1994
Number 33-95438 on Form S-8 dated August 4, 1995
Number 33-95600 on Form S-3 (as amended by Pre-Effective
Amendment No. 1) dated September 1, 1995
Number 333-17187 on Form S-3 dated December 3, 1996
Number 333-15721 on Form S-3 (as amended by Amendment
No. 2) dated December 10, 1996
Number 333-21181 on Form S-4 (as amended by Amendment
No. 1) dated February 25, 1997
Number 333-06824 on Form S-8 dated April 22, 1997
Number 333-47179 on Form S-3 (as amended by Amendment
No. 1) dated April 6, 1998
Number 333-51477 on Form S-8 dated April 30, 1998
/s/ Ernst & Young LLP
Ernst & Young LLP
Baltimore, Maryland
June 26, 1998
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) 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: June 29, 1998 By: /s/ M. Scot Kaufman
---------------------------
M. Scot Kaufman
Executive Vice President
and Chief Financial Officer