SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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)
December 31, 1997
MELLON BANK PREMIUM FINANCE LOAN MASTER TRUST
(Exact name of registrant as specified in charter)
NEW YORK 333-11961 25-0659306
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
ONE MELLON BANK CENTER, PITTSBURGH, PENNSYLVANIA 15258-0001
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (412) 234-5000
NOT APPLICABLE
- ------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
Item 5. Other Events
The tables attached hereto as Exhibit 19.1 (the "Updated Tables") update
the tables contained on pages 37 through 41 (the "Original Tables") of the
Mellon Bank Premium Finance Loan Master Trust Prospectus, dated December 12,
1996 (the "Prospectus"), which forms a part of the Registration Statement on
Form S-3, No. 333-11961. The "Geographic Concentration" table appearing on pages
38 and 39 of the Prospectus has been updated to reflect the fact that additional
states became Permitted States and that address changes for insureds have
occurred. The table under the caption "Loan Loss Experience" has been updated to
set forth loss experience for the Entire Portfolio for the years ended December
31, 1994, 1995 and 1996 and for the twelve month period ending December 31,
1997, and to set forth loss experience for the Identified Portfolio for the
twelve month period ending December 31, 1997. The table under the caption "Loan
Delinquency Experience Following Cancellation" has been updated to add a new
table to show delinquency experience for the Identified Portfolio for the twelve
month period ended December 31, 1997. The table under the caption "Originators'
Portfolio Yield" has been updated to add a new table to show portfolio yield
information for the Identified Portfolio for the twelve month period ending
December 31, 1997. Capitalized but undefined terms used herein have the meanings
set forth in the Prospectus.
MANAGEMENT'S DISCUSSION AND ANALYSIS
The loan loss experience for the Identified Portfolio for the twelve months
ended December 31, 1997 is not directly comparable to the loan loss experience
for the Entire Portfolio for the twelve months ended December 31, 1997 or prior
periods presented. Loans are generally charged off by the Servicer if
uncollected 270 days after cancellation of the related insurance policy. At the
beginning of each period presented, the Entire Portfolio included loans which at
such date were uncollected for a variety of lengths of time after cancellation
of the related insurance policy. Charge-offs generally occurred during each
period as time elapsed and loans remained uncollected for 270 days after policy
cancellation. One of the requirements for loans transferred to the Trust as part
of the Identified Portfolio is that such loans may not be delinquent more than
thirty days. Consequently, the Identified Portfolio, at the beginning of the
period presented (January 1, 1997, approximately two weeks after the initial
transfer of loans to the Trust), contained a substantially smaller proportion of
loans delinquent for more than thirty days than the Entire Portfolio as of the
beginning of any of the periods presented. As a result, charge- offs for the
Identified Portfolio for the period presented were substantially lower, both in
absolute terms and as a percentage of outstanding loans, than charge-offs for
the Entire Portfolio for any of the periods presented.
For the Entire Portfolio, net charge-offs as a percentage of the average
outstanding principal balance increased for the twelve months ended December 31,
1997 as compared to prior periods due to a number of factors. These factors
include lower originations of new loans which, when compared to charge-offs
resulting in part from higher originations in prior periods, have resulted in a
higher percentage of charge-offs; economic pressures affecting the insurance
industry, which have resulted in insurance companies being more assertive in
resisting making unearned premium refunds; the utilization of new insurance
agents and increased extended payment terms, which have resulted in increased
risk of nonpayment; and higher levels of borrower bankruptcies, which have
contributed to increased charge-offs.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
EXHIBIT NO.
19.1 Updated Tables
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MELLON BANK PREMIUM FINANCE LOAN MASTER TRUST
(Registrant)
By: AFCO Credit Corporation, on behalf
of Mellon Bank Premium Finance
Loan Master Trust
Date: February 10, 1998 By: /S/ FREDERICK B. OLLETT, III
Name: Frederick B. Ollett, III
Title: Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
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19.1 Updated Tables
EXHIBIT 19.1
<TABLE>
<CAPTION>
AFCO Aggregate Receivables Balance by Amount - Identified Portfolio
as of 12/31/97
AGGREGATE RECEIVABLES NUMBER OF ACCTS PERCENT OF AGGREGATE PERCENT OF
BALANCE NUMBER OF ACCTS RECEIVABLE AGGREGATE
BALANCE RECEIVABLE BALANCE
<S> <C> <C> <C> <C> <C>
1 5,000 or less 37,760 70.69% $61,391,254.40 11.23%
2 5,000 - 10,000 6,727 12.59% 47,430,558.78 8.68%
3 10,000 - 25,000 5,359 10.03% 83,056,650.30 15.19%
4 25,000 - 50,000 1,911 3.58% 66,399,294.91 12.15%
5 50,000 - 75,000 633 1.19% 38,348,622.98 7.02%
6 75,000 - 100,000 296 0.55% 25,442,244.59 4.65%
7 100,000 - 250,000 478 0.89% 71,479,551.18 13.08%
8 250,000 - 500,000 157 0.29% 53,167,571.16 9.73%
9 500,000 - 1,000,000 65 0.12% 46,722,229.70 8.55%
10 1,000,000 - 5,000,000 29 0.05% 53,213,132.97 9.73%
11 Over 5,000,000 0.00 0.00%
Total: 53,415 $546,651,110.97
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AFCO Composition of Receivables by Remaining Installment Term - Identified Portfolio
as of 12/31/97
REMAINING INSTALLMENT TERM NUMBER OF ACCTS PERCENT OF AGGREGATE PERCENT OF
BALANCE NUMBER OF ACCTS RECEIVABLE AGGREGATE
BALANCE RECEIVABLE BALANCE
<S> <C> <C> <C> <C>
03 Months or Less 22,092 41.36% $95,896,114.06 17.54%
04 to 06 Months 18,189 34.05% 175,758,280.40 32.15%
07 to 09 Months 12,676 23.73% 200,946,372.80 36.76%
10 to 12 Months 281 0.53% 34,147,983.99 6.25%
13 to 18 Months 75 0.14% 15,880,535.78 2.91%
More than 18 Months 102 0.19% 24,021,823.94 4.39%
Total: 53,415 $546,651,110.97
</TABLE>
<PAGE>
AFCO Geographic Concentration - Identified Portfolio
as of 12/31/97
STATES AGGREGATE PERCENTAGE OF
RECEIVABLES AGGREGATE
BALANCE RECEIVABLE BALANCE
CALIFORNIA $120,536,155.47 22.05%
TEXAS 70,376,266.47 12.87%
NEW YORK 64,109,926.76 11.73%
FLORIDA 39,224,751.77 7.18%
NEW JERSEY 34,364,814.72 6.29%
PENNSYLVANIA 19,030,494.47 3.48%
MASSACHUSETTS 17,153,334.58 3.14%
GEORGIA 16,587,353.79 3.03%
ILLINOIS 15,964,904.84 2.92%
WASHINGTON 15,845,604.07 2.90%
OHIO 14,489,740.32 2.65%
MICHIGAN 13,854,924.02 2.53%
COLORADO 8,764,818.19 1.60%
OREGON 7,791,285.97 1.43%
LOUISIANA 7,213,731.83 1.32%
SOUTH CAROLINA 7,190,146.21 1.32%
INDIANA 6,661,416.81 1.22%
NORTH CAROLINA 6,407,371.64 1.17%
CONNECTICUT 6,290,667.29 1.15%
ALABAMA 5,645,647.79 1.03%
ARKANSAS 4,973,345.88 0.91%
MINNESOTA 4,548,415.50 0.83%
MARYLAND 4,492,204.63 0.82%
OKLAHOMA 4,487,672.02 0.82%
WEST VIRGINIA 3,677,360.76 0.67%
ARIZONA 3,600,598.09 0.66%
HAWAII 3,159,631.72 0.58%
VIRGINIA 3,044,413.63 0.56%
IDAHO 2,581,685.99 0.47%
NEVADA 2,477,863.37 0.45%
KENTUCKY 2,236,433.70 0.41%
WISCONSIN 1,868,135.38 0.34%
NEW HAMPSHIRE 1,777,970.82 0.33%
UTAH 1,639,684.15 0.30%
MAINE 1,470,524.70 0.27%
RHODE ISLAND 830,801.32 0.15%
MONTANA 686,528.69 0.13%
IOWA 652,614.05 0.12%
NEBRASKA 370,576.20 0.07%
WYOMING 270,783.15 0.05%
SOUTH DAKOTA 185,763.17 0.03%
MISSOURI 77,209.14 0.01%
DELAWARE 14,700.00 0.00%
DISTRICT OF COLUMBIA 6,674.24 0.00%
ONTARIO 5,844.74 0.00%
NEW MEXICO 3,846.48 0.00%
MISSISSIPPI 3,751.10 0.00%
ALBERTA 970.41 0.00%
NORTH DAKOTA 759.40 0.00%
KANSAS 564.98 0.00%
VIRGIN ISLANDS 333.20 0.00%
ALASKA 93.35 0.00%
Total: $546,651,110.97
<PAGE>
<TABLE>
<CAPTION>
Loan Loss Experience(1)
(Dollars In Thousands)
IDENTIFIED PORTFOLIO ENTIRE PORTFOLIO
--------------------------------------------- -----------------------------------
TWELVE MONTHS TWELVE MONTHS
ENDED DECEMBER 31, ENDED DECEMBER 31, FOR THE YEAR ENDED DECEMBER 31,
1997 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Average Outstanding Principal Balance $ 562,229 $938,235 $1,010,105 $1,036,464 $1,105,789
Gross Charge-Offs 1,002 4,477 4,115 3,230 2,836
Recoveries 102 1,584 2,136 1,153 966
Net Charge-Offs 900 2,893 1,979 2,077 1,870
Net Charge Offs as a
Percentage of Average
Aggregate Outstanding
Principal Balance 0.16% 0.31% 0.20% 0.20% 0.17%
(1) A loan is generally written off to the extent it is uncollected 270 days
after the effective date of cancellation of the related insurance policy.
</TABLE>
<PAGE>
LOAN DELINQUENCY EXPERIENCE FOLLOWING CANCELLATION
IDENTIFIED PORTFOLIO
AT DECEMBER 31,
1997
----
Number of days a loan remains overdue
after cancellation of the related insurance policy
31-89 days 1.17%
90-270 days 0.93%
Over 270 days (1) 0.00%
----
Total 2.10%
====
(1) A loan is generally written off to the extent it is
uncollected 270 days after the effective date of
cancellation of the related insurance policy.
<PAGE>
ORIGINATORS' PORTFOLIO YIELD
IDENTIFIED PORTFOLIO
(DOLLARS IN THOUSANDS)
TWELVE MONTHS ENDED
DECEMBER 31, 1997
-----------------------------
Average Outstanding Principal $562,229
Balance Receivable
Interest & Fee Income 63,462
Average Revenue Yield 11.29%
