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)
April 30, 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 four month period ended April 30, 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 four month
period ended April 30, 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 four month period ended April 30, 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 .40% for
the four month period ended April 30, 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 four month period ended April 30, 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 four
month period ended April 30, 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, March and April, 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 four
month period ended April 30, 1998 would have been 11.48%.
<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: June 5, 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
19.1 Updated Tables
Exhibit 19.1
AFCO AGGREGATE RECEIVABLES BALANCE BY AMOUNT -
IDENTIFIED PORTFOLIO
AS OF 4/30/98
<TABLE>
<CAPTION>
AGGREGATE RECEIVABLES NUMBER OF ACCOUNTS PERCENT OF NUMBER AGGREGATE RECEIVABLE PERCENT OF AGGREGATE
BALANCE OF ACCTS BALANCE RECEIVABLE BALANCE
<S> <C> <C> <C> <C>
1. 5,000 or less 35,284 69.81% $58,780,705.86 10.78%
2. 5,000 - 10,000 6,450 12.76% 45,686,894.34 8.38%
3. 10,000 - 25,000 5,124 10.14% 79,700,596.90 14.62%
4. 25,000 - 50,000 1,993 3.94% 69,330,219.94 12.72%
5. 50,000 - 75,000 642 1.27% 39,167,908.19 7.18%
6. 75,000 - 100,000 280 0.55% 24,256,081.91 4.45%
7. 100,000 - 250,000 517 1.02% 78,792,081.08 14.45%
8. 250,000 - 500,000 158 0.31% 54,411,597.76 9.98%
9. 500,000 - 1,000,000 68 0.13% 45,905,741.75 8.42%
10. 1,000,000 - 5,000,000 29 0.06% 44,058,655.08 8.08%
11. Over 5,000,000 1 5,059,890.00 0.93%
Total: 50,546 $545,150,372.81
</TABLE>
<PAGE>
AFCO COMPOSITION OF RECEIVABLES BY REMAINING
INSTALLMENT TERM - IDENTIFIED PORTFOLIO
AS OF 4/30/98
<TABLE>
<CAPTION>
REMAINING INSTALLMENT NUMBER OF ACCTS PERCENT AGGREGATE PERCENT OF
TERM OF NUMBER OF RECEIVABLES AGGREGATE
ACCTS BALANCE RECEIVABLES
BALANCE
<S> <C> <C> <C> <C>
03 Months or Less 20,142 39.85% $80,419,898.01 14.75%
04 to 06 Months 16,354 32.35% 183,492,946.79 33.66%
07 to 09 Months 13,454 26.62% 202,206,662.79 37.09%
10 to 12 Months 392 0.78% 36,565,674.04 6.71%
13 to 18 Months 95 0.19% 13,978,701.47 2.56%
More than 18 Months 109 0.22% 28,486,489.71 5.23%
Total: 50,546 $545,150,372.81
</TABLE>
<PAGE>
AFCO GEOGRAPHIC CONCENTRATION - IDENTIFIED PORTFLIO
AS OF 4/30/98
STATES AGGREGATE PERCENTAGE OF
RECEIVABLES AGGREGATE
BALANCE RECEIVABLES
BALANCE
CALIFORNIA $108,803,909.35 19.96%
TEXAS 62,197,573.57 11.41%
NEW YORK 55,108,457.31 10.11%
NEW JERSEY 36,122,545.20 6.63%
FLORIDA 36,003,080.44 6.60%
PENNSYLVANIA 24,571,299.48 4.51%
WASHINGTON 15,400,301.83 2.82%
GEORGIA 15,175,073.89 2.78%
ILLINOIS 14,770,221.54 2.71%
OHIO 13,494,216.47 2.48%
MASSACHUSETTS 12,152,776.19 2.23%
MICHIGAN 11,697,483.12 2.15%
COLORADO 10,393,407.11 1.91%
INDIANA 10,212,925.42 1.87%
LOUISIANA 9,191,903.81 1.69%
ALASKA 8,406,810.09 1.54%
NORTH CAROLINA 8,016,359.95 1.47%
CONNECTICUT 7,286,274.65 1.34%
VIRGINIA 7,182,729.66 1.32%
SOUTH CAROLINA 7,055,505.03 1.29%
OREGON 6,485,374.15 1.19%
MINNESOTA 5,518,596.59 1.01%
MARYLAND 5,283,765.83 0.97%
MISSOURI 5,257,689.31 0.96%
OKLAHOMA 4,986,582.94 0.91%
ALABAMA 4,528,328.17 0.83%
ARIZONA 4,053,254.45 0.74%
WEST VIRGINIA 4,018,075.46 0.74%
WISCONSIN 3,812,719.71 0.70%
KENTUCKY 3,615,176.42 0.66%
ARKANSAS 3,387,962.56 0.62%
HAWAII 3,074,375.06 0.56%
MISSISSIPPI 3,004,963.17 0.55%
TENNESSEE 2,872,621.11 0.53%
NEVADA 2,187,778.71 0.40%
NEW HAMPSHIRE 1,691,985.51 0.31%
UTAH 1,601,935.81 0.29%
IDAHO 1,523,086.81 0.28%
MAINE 1,335,289.33 0.24%
NEBRASKA 911,889.59 0.17%
IOWA 766,316.87 0.14%
MONTANA 713,664.10 0.13%
RHODE ISLAND 706,142.75 0.13%
WYOMING 420,738.64 0.08%
SOUTH DAKOTA 109,472.49 0.02%
DELAWARE 26,020.92 0.00%
ONTARIO 10,729.20 0.00%
KANSAS 1,181.55 0.00%
BRITISH COLUMBIA 962.64 0.00%
NEW MEXICO 409.83 0.00%
ALBERTA 277.26 0.00%
NORTH DAKOTA 151.76 0.00%
Total: $545,150,372.81
<PAGE>
LOAN LOSS EXPERIENCE(1)
IDENTIFIED PORTFOLIO
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOUR MONTHS TWELVE MONTHS
ENDED APRIL 30, ENDED DECEMBER 31,
1998 1997
---- ----
<S> <C> <C>
Average Outstanding Principal Balance $533,478 $562,229
Gross Charge Offs 872 1,002
Recoveries 164 102
Net Charge Offs 708 900
Net Charge Offs as a Percentage of Average
Aggregate Outstanding Principal Balance 0.40% (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 APRIL 30, 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 1.28% 1.17%
90-270 days 1.01% 0.93%
Over 270 days (1) 0.00% 0.00%
----- -----
2.29% 2.10%
===== =====
Total
(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>
FOUR MONTHS ENDED TWELVE MONTHS ENDED
APRIL 30, 1998 DECEMBER 31, 1997
-------------- -----------------
<S> <C> <C>
Average Outstanding Principal $533,478 $562,229
Balance Receivables
Interest & Fee Income 20,631 63,462
Average Revenue Yield 11.60% (1) 11.29%
(1) Calculated on an annualized basis.
</TABLE>
