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)
February 28, 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 page
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 years ended
December 31, 1997 and for the two month period ending February 28, 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
two month period ended February 28, 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 ending December 31, 1997 and the two month period ended February 28,
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 0.28% for
the two months ended February 28, 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 two month period ended February 28, 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 was 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 two
months ended February 28, 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 two months ended
February 28, 1998 would have been 11.59%.
<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 2/28/98
<TABLE>
<CAPTION>
PERCENT OF
PERCENT OF AGGREGATE AGGREGATE
NUMBER OF RECEIVABLE RECEIVABLE
AGGREGATE RECEIVABLES BALANCE NUMBER OF ACCTS ACCTS BALANCE BALANCE
<S> <C> <C> <C> <C> <C>
1. 5,000 or less 36,887 70.05% $60,303,164.17 10.83%
2. 5,000 - 10,000 6,672 12.67% 47,271,928.43 8.49%
3. 10,000 - 25,000 5,245 9.96% 81,233,826.28 14.60%
4. 25,000 - 50,000 2,083 3.96% 72,305,419.33 12.99%
5. 50,000 - 75,000 684 1.30% 41,744,365.90 7.50%
6. 75,000 - 100,000 318 0.60% 27,260,330.84 4.90%
7. 100,000 - 250,000 531 1.01% 80,423,490.01 14.45%
8. 250,000 - 500,000 144 0.27% 49,316,165.80 8.86%
9. 500,000 - 1,000,000 68 0.13% 46,568,349.50 8.37%
10. 1,000,000 - 5,000,000 26 0.05% 50,137,707.99 9.01%
11. Over 5,000,000 0.00 0.00%
Total: 52,658 $556,564,748.25
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AFCO COMPOSITION OF RECEIVABLES BY REMAINING INSTALLMENT TERM - IDENTIFIED PORTFOLIO
AS OF 2/28/98
PERCENT OF
PERCENT AGGREGATE AGGREGATE
OF NUMBER OF RECEIVABLES RECEIVABLES
REMAINING INSTALLMENT TERM NUMBER OF ACCTS ACCTS BALANCE BALANCE
<S> <C> <C> <C> <C>
03 Months or Less 21,562 40.95% $84,264,117.44 15.14%
04 to 06 Months 17,515 33.26% 174,510,204.51 31.35%
07 to 09 Months 12,944 24.58% 216,072,195.28 38.82%
10 to 12 Months 440 0.84% 38,074,346.91 6.84%
13 to 18 Months 90 0.17% 13,534,643.93 2.43%
More than 18 Months 107 0.20% 30,109,240.18 5.41%
Total: 52,658 $556,564,748.25
</TABLE>
<PAGE>
AFCO GEOGRAPHIC CONCENTRATION - IDENTIFIED PORTFOLIO
AS OF 2/28/98
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE AGGREGATE
RECEIVABLES RECEIVABLES
STATES BALANCE BALANCE
<S> <C> <C>
CALIFORNIA $109,056,852.27 19.59%
TEXAS 70,925,088.69 12.74%
NEW YORK 62,234,704.97 11.18%
NEW JERSEY 41,865,204.20 7.52%
FLORIDA 38,597,279.80 6.93%
PENNSYLVANIA 22,172,807.50 3.98%
GEORGIA 16,769,353.53 3.01%
MASSACHUSETTS 15,566,223.00 2.80%
OHIO 15,402,298.01 2.77%
WASHINGTON 14,532,260.12 2.61%
ILLINOIS 14,227,041.52 2.56%
MICHIGAN 12,650,569.92 2.27%
COLORADO 12,456,565.55 2.24%
VIRGINIA 7,743,419.16 1.39%
ALASKA 7,552,047.46 1.36%
SOUTH CAROLINA 7,364,480.15 1.32%
OREGON 7,030,523.94 1.26%
CONNECTICUT 6,998,572.10 1.26%
LOUISIANA 6,808,296.20 1.22%
INDIANA 6,319,511.56 1.14%
MINNESOTA 5,780,285.62 1.04%
ALABAMA 5,430,768.66 0.98%
NORTH CAROLINA 5,087,452.89 0.91%
OKLAHOMA 4,701,593.33 0.84%
MARYLAND 4,474,886.35 0.80%
ARKANSAS 4,214,103.90 0.76%
KENTUCKY 3,990,952.00 0.72%
WEST VIRGINIA 3,678,530.37 0.66%
ARIZONA 3,632,097.69 0.65%
HAWAII 3,556,281.61 0.64%
NEVADA 2,725,165.40 0.49%
IDAHO 2,358,475.16 0.42%
WISCONSIN 2,293,962.51 0.41%
UTAH 1,668,902.33 0.30%
NEW HAMPSHIRE 1,603,554.57 0.29%
MAINE 1,430,614.94 0.26%
RHODE ISLAND 862,345.02 0.15%
IOWA 844,194.59 0.15%
MONTANA 712,907.83 0.13%
NEBRASKA 545,051.12 0.10%
WYOMING 448,398.09 0.08%
SOUTH DAKOTA 146,866.15 0.03%
MISSOURI 36,357.04 0.00%
DELAWARE 31,372.56 0.00%
TENNESSEE 15,438.58 0.00%
ONTARIO 14,305.60 0.00%
MISSISSIPPI 2,145.56 0.00%
BRITISH COLUMBIA 1,684.62 0.00%
NEW MEXICO 1,639.12 0.00%
ALBERTA 693.15 0.00%
NORTH DAKOTA 455.64 0.00%
VIRGIN ISLANDS 166.60 0.00%
Total: $556,564,748.25
</TABLE>
<PAGE>
LOAN LOSS EXPERIENCE(1)
IDENTIFIED PORTFOLIO
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
TWO MONTHS TWELVE MONTHS
ENDED FEBRUARY 28, ENDED DECEMBER 31,
1998 1997
---- ----
<S> <C> <C>
Average Outstanding Principal Balance $540,432 $562,229
Gross Charge Offs 325 1,002
Recoveries 77 102
Net Charge Offs 248 900
Net Charge Offs as a Percentage of Average
Aggregate Outstanding Principal Balance 0.28% (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 FEBRUARY 28, 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 1.12% 1.17%
90-270 days 0.87% 0.93%
Over 270 days (1) 0.00% 0.00%
----- -----
Total 1.99% 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>
TWO MONTHS ENDED TWELVE MONTHS ENDED
FEBRUARY 28, 1998 DECEMBER 31, 1997
----------------- -----------------
<S> <C> <C>
Average Outstanding Principal Balance Receivables $540,432 $562,229
Interest & Fee Income 10,478 63,462
Average Revenue Yield 11.63% (1) 11.29%
(1) Calculated on an annualized basis.
</TABLE>
