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 31, 1998
MELLON BANK PREMIUM FINANCE LOAN MASTER TRUST
(Exact name of registrant as specified in charter)
NEW YORK 333-11961 25-0659306
(State or other (Commission File (IRS Employer Identification
jurisdiction of Number) Number)
incorporation)
ONE MELLON BANK CENTER, PITTSBURGH, PENNSYLVANIA 15258-0001
(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 Identified Portfolio for the year ended
December 31, 1997 and for the month ended January 31, 1998. 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 and the month ended January 31,
1998. 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 ended December 31, 1997 and the
month ended January 31, 1998. Capitalized but undefined terms used herein have
the meanings set forth in the Prospectus.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Net charge offs, as an annualized percentage of the average outstanding
principal balance of loans in the Identified Portfolio, increased to 0.31% for
the month ended January 31, 1998 from 0.16% for the twelve months ended December
31, 1997. This increase resulted from two factors.
First, the Servicer's policy is generally to charge off loans if
uncollected 270 days after cancellation of the related insurance policy. As a
result, in any period the annualized percentage of charge-offs is affected by
the delinquency profile of loans in the pool at the beginning of the period. [A
beginning of period pool characterized by delinquencies which are relatively low
in number and/or of relatively short duration will tend to have, all other
things being equal, a relatively lower annualized percentage of charge-offs in
the period.] The Identified Portfolio was initially constituted in December,
1996 with a bulk transfer of loans to the Trust. One of the requirements for the
loans to be transferred was that the loans could not at the time of transfer
have been delinquent for more than thirty days. Consequently, the Identified
Portfolio at the beginning of the twelve month period ended December 31, 1997
(approximately two weeks after the initial transfer of loans to the Trust),
contained a relatively low proportion of loans delinquent for more than thirty
days. By comparison, the delinquency profile of the loans in the Identified
Portfolio at the beginning of the month ended January 31, 1998 was not so
affected by a bulk transfer of non-delinquent loans shortly prior to the
beginning of the period. As a consequence, the annualized net charge-off
percentage for the latter period increased.
The increase in the annualized net charge-off percentage also resulted from
lower originations of new loans which, when compared to charge-offs resulting in
part from higher originations in the prior period, yielded a higher charge-off
percentage; 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.
In the accompanying table "Originators' Portfolio Yield/Identified
Portfolio", the Average Outstanding Principal Balance Receivables for the month
ended January 31, 1998 do not include amounts held on deposit during such period
in the Excess Funding Account, and the Interest and Fee Income does not include
earnings on amounts so held on deposit. Funds were deposited in the Excess
Funding Account in January, 1998 for the purpose of maintaining the required
Minimum Transferor Interest under the Pooling and Servicing Agreement. If the
amounts so held on deposit and the earnings on such amounts had been included in
the table, the Average Revenue Yield for the month ended January 31, 1998 would
have been 11.79%.
<PAGE>
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: May 12, 1998 By:
Name: Frederick B. Ollett, III
Title: Vice President and Chief
Financial Officer
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
19.1 Updated Tables
Exhibit 19.1
AFCO AGGREGATE RECEIVABLES BALANCE BY AMOUNT - IDENTIFIED PORTFOLIO
AS OF 1/31/98
<TABLE>
<CAPTION>
AGGREGATE RECEIVABLES BALANCE NUMBER OF ACCTS PERCENT OF AGGREGATE PERCENT OF
NUMBER OF RECEIVABLE AGGREGATE
ACCTS BALANCE RECEIVABLE
BALANCE
<S> <C> <C> <C> <C> <C>
1. 5,000 or less 36,701 70.06% $59,335,733.61 10.51%
2. 5,000 - 10,000 6,560 12.52% 46,280,648.92 8.20%
3. 10,000 - 25,000 5,288 10.09% 82,181,243.12 14.56%
4. 25,000 - 50,000 2,046 3.91% 71,941,564.97 12.75%
5. 50,000 - 75,000 675 1.29% 40,961,397.13 7.26%
6. 75,000 - 100,000 356 0.68% 30,700,775.20 5.44%
7. 100,000 - 250,000 518 0.99% 80,024,860.77 14.18%
8. 250,000 - 500,000 149 0.28% 51,561,579.62 9.14%
9. 500,000 - 1,000,000 70 0.13% 51,150,297.91 9.06%
10. 1,000,000 - 5,000,000 24 0.05% 50,283,330.17 8.91%
11. Over 5,000,000 0.00 0.00%
Total: 52,387 $564,421,431.42
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AFCO COMPOSITION OF RECEIVABLES BY REMAINING INSTALLMENT TERM - IDENTIFIED PORTFOLIO
AS OF 1/31/98
REMAINING INSTALLMENT TERM NUMBER OF ACCTS PERCENT AGGREGATE PERCENT OF
OF NUMBER OF RECEIVABLES AGGREGATE
ACCTS BALANCE RECEIVABLES
BALANCE
<S> <C> <C> <C> <C>
03 Months or Less 21,739 41.50% $93,997,153.30 16.65%
04 to 06 Months 17,876 34.12% 166,806,602.05 29.55%
07 to 09 Months 11,988 22.88% 213,768,492.80 37.87%
10 to 12 Months 591 1.13% 48,964,419.08 8.68%
13 to 18 Months 85 0.16% 14,225,370.54 2.52%
More than 18 Months 108 0.21% 26,659,393.65 4.72%
Total: 52,387 $564,421,431.42
</TABLE>
<PAGE>
AFCO GEOGRAPHIC CONCENTRATION - IDENTIFIED PORTFOLIO
AS OF 1/31/98
<TABLE>
<CAPTION>
STATES AGGREGATE PERCENTAGE OF
RECEIVABLES AGGREGATE
BALANCE RECEIVABLES
BALANCE
<S> <C> <C>
CALIFORNIA $115,268,859.96 20.42%
TEXAS 73,182,504.46 12.97%
NEW YORK 64,582,507.05 11.44%
NEW JERSEY 42,042,759.00 7.45%
FLORIDA 39,818,491.25 7.05%
PENNSYLVANIA 22,505,573.43 3.99%
GEORGIA 17,729,313.87 3.14%
OHIO 16,657,956.65 2.95%
MASSACHUSETTS 16,211,675.65 2.87%
WASHINGTON 15,152,791.05 2.68%
ILLINOIS 14,138,692.14 2.50%
COLORADO 13,282,994.46 2.35%
MICHIGAN 13,206,253.89 2.34%
SOUTH CAROLINA 7,708,473.74 1.37%
OREGON 7,326,882.45 1.30%
LOUISIANA 7,218,106.76 1.28%
CONNECTICUT 6,769,992.84 1.20%
INDIANA 6,017,684.42 1.07%
ALABAMA 5,777,156.27 1.02%
NORTH CAROLINA 5,756,500.21 1.02%
VIRGINIA 5,076,818.96 0.90%
MINNESOTA 4,968,919.57 0.88%
OKLAHOMA 4,888,568.40 0.87%
MARYLAND 4,679,466.40 0.83%
ARKANSAS 4,088,638.16 0.72%
WEST VIRGINIA 3,776,924.92 0.67%
ARIZONA 3,727,893.54 0.66%
HAWAII 3,431,738.10 0.61%
KENTUCKY 3,014,581.08 0.53%
IDAHO 2,748,420.04 0.49%
NEVADA 2,508,061.28 0.44%
WISCONSIN 2,466,578.55 0.44%
UTAH 1,891,384.39 0.34%
NEW HAMPSHIRE 1,638,524.04 0.29%
MAINE 1,581,537.49 0.28%
RHODE ISLAND 1,027,686.82 0.18%
IOWA 901,402.27 0.16%
MONTANA 650,187.52 0.12%
NEBRASKA 422,914.82 0.07%
WYOMING 264,205.14 0.05%
SOUTH DAKOTA 184,960.37 0.03%
MISSOURI 65,633.64 0.01%
DELAWARE 35,339.76 0.00%
ONTARIO 16,093.80 0.00%
DISTRICT OF COLUMBIA 3,337.12 0.00%
MISSISSIPPI 2,681.95 0.00%
NEW MEXICO 1,775.73 0.00%
ALBERTA 693.15 0.00%
NORTH DAKOTA 607.52 0.00%
ALASKA 441.60 0.00%
VIRGIN ISLANDS 245.74 0.00%
Total: $564,421,431.42
</TABLE>
<PAGE>
LOAN LOSS EXPERIENCE(1)
IDENTIFIED PORTFOLIO
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ONE MONTH TWELVE MONTHS
ENDED JANUARY 31, ENDED DECEMBER 31,
1998 1997
---- ----
<S> <C> <C>
Average Month Outstanding Principal Balance $531,995 $562,229
Gross Charge Offs 179 1,002
Recoveries 40 102
Net Charge Offs 139 900
Net Charge Offs as a Percentage of Average
Month Outstanding Principal Balance 0.31% (2) 0.16%
(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.
(2) Calculated on an annualized basis.
</TABLE>
<PAGE>
LOAN DELINQUENCY EXPERIENCE FOLLOWING CANCELLATION
IDENTIFIED PORTFOLIO
<TABLE>
<CAPTION>
AT JANUARY 31, AT DECEMBER 31,
1998 1997
---- ----
Number of days a loan remains overdue after cancellation of
the related insurance policy
<S> <C> <C>
31-89 days 0.84% 1.17%
90-270 days 1.00% 0.93%
Over 270 days (1) 0.00% 0.00%
----- -----
Total 1.84% 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.
</TABLE>
<PAGE>
ORIGINATORS' PORTFOLIO YIELD
IDENTIFIED PORTFOLIO
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ONE MONTH ENDED TWELVE MONTHS ENDED
JANUARY 31, 1998 DECEMBER 31, 1997
---------------- -----------------
<S> <C> <C>
Average Outstanding Principal Balance $531,995 $562,229
Receivables
Interest & Fee Income 5,266 63,462
Average Revenue Yield 11.88% (1) 11.29%
(1) Calculated on an annualized basis.
</TABLE>
