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)
May 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 five month period ended May 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 five month
period ended May 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 five month period ended May 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 .43% for
the five month period ended May 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 five month period ended May 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 five
month period ended May 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, March, April and May, 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 five
month period ended May 31, 1998 would have been 11.41% as compared to 11.54% set
forth in the accompanying "Originators' Portfolio Yield/Identified Portfolio"
table.
<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: July 7, 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
<TABLE>
<CAPTION>
AFCO AGGREGATE RECEIVABLES BALANCE BY AMOUNT - IDENTIFIED PORTFOLIO
AS OF 5/31/98
Aggregate Receivables Balance Number of Accts Percent of Aggregate Percent of
Number of Receivable Aggregate
Accts Balance Receivable Balance
<S> <C> <C> <C> <C>
1. 5,000 or less 34,665 69.53% $57,773,465.95 10.91%
2. 5,000 - 10,000 6,409 12.86% 45,384,363.09 8.57%
3. 10,000 - 25,000 5,130 10.29% 79,754,861.82 15.07%
4. 25,000 - 50,000 1,993 4.00% 69,186,674.07 13.07%
5. 50,000 - 75,000 614 1.23% 37,312,151.65 7.05%
6. 75,000 - 100,000 290 0.58% 24,956,177.89 4.71%
7. 100,000 - 250,000 516 1.04% 78,816,185.33 14.89%
8. 250,000 - 500,000 148 0.30% 50,711,089.16 9.58%
9. 500,000 - 1,000,000 66 0.13% 46,546,666.57 8.79%
10. 1,000,000 - 5,000,000 23 0.05% 38,925,516.19 7.35%
11. Over 5,000,000 0 0.00 0.00%
Total: 49,854 $529,367,151.72
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AFCO COMPOSITION OF RECEIVABLES BY REMAINING INSTALLMENT TERM - IDENTIFIED PORTFOLIO
AS OF 5/31/98
Remaining Installment Term Number of Accts Percent of Aggregate Percent of
Number of Receivables Aggregate
Accts Balance Receivables Balance
<S> <C> <C> <C> <C>
03 Months or Less 19,160 38.43% $75,977,595.94 14.35%
04 to 06 Months 17,004 34.11% 181,322,600.21 34.25%
07 to 09 Months 13,168 26.41% 199,531,403.57 37.69%
10 to 12 Months 319 0.64% 31,979,043.86 6.04%
13 to 18 Months 102 0.20% 16,787,440.36 3.17%
More than 18 Months 101 0.20% 23,769,067.78 4.49%
Total: 49,854 $529,367,151.72
</TABLE>
<PAGE>
AFCO GEOGRAPHIC CONCENTRATION - IDENTIFIED PORTFLIO
AS OF 5/31/98
States Aggregate Percentage of
Receivables Aggregate
Balance Receivables Balance
CALIFORNIA $109,985,629.39 20.78%
TEXAS 62,119,700.78 11.73%
NEW YORK 51,605,225.67 9.75%
NEW JERSEY 35,063,949.23 6.62%
FLORIDA 34,673,574.57 6.55%
PENNSYLVANIA 22,596,555.19 4.27%
WASHINGTON 15,715,845.53 2.97%
GEORGIA 14,154,516.95 2.67%
ILLINOIS 13,428,836.01 2.54%
MASSACHUSETTS 12,363,712.22 2.34%
OHIO 12,277,105.28 2.32%
LOUISIANA 10,710,510.40 2.02%
MICHIGAN 10,469,959.50 1.98%
COLORADO 9,676,549.11 1.83%
INDIANA 8,943,453.77 1.69%
ALASKA 8,086,454.94 1.53%
NORTH CAROLINA 7,652,820.31 1.45%
SOUTH CAROLINA 7,368,457.95 1.39%
CONNECTICUT 7,308,878.65 1.38%
VIRGINIA 6,450,527.87 1.22%
OREGON 6,071,978.37 1.15%
MINNESOTA 5,050,534.69 0.95%
MARYLAND 4,889,511.61 0.92%
WISCONSIN 4,862,876.46 0.92%
OKLAHOMA 4,580,211.16 0.87%
MISSOURI 4,515,690.70 0.85%
ALABAMA 4,266,644.36 0.81%
ARIZONA 3,825,325.45 0.72%
WEST VIRGINIA 3,574,463.95 0.68%
ARKANSAS 3,543,314.56 0.67%
KENTUCKY 3,369,394.40 0.64%
HAWAII 3,082,432.81 0.58%
MISSISSIPPI 2,983,292.09 0.56%
TENNESSEE 2,680,540.27 0.51%
NEVADA 2,202,707.43 0.42%
NEW HAMPSHIRE 1,670,859.59 0.32%
UTAH 1,411,806.72 0.27%
IDAHO 1,294,270.02 0.24%
MAINE 1,179,309.04 0.22%
NEBRASKA 902,475.32 0.17%
MONTANA 852,389.07 0.16%
IOWA 705,493.89 0.13%
RHODE ISLAND 692,327.93 0.13%
WYOMING 392,445.84 0.07%
SOUTH DAKOTA 80,996.28 0.02%
DELAWARE 22,099.35 0.00%
ONTARIO 8,941.00 0.00%
KANSAS 1,181.55 0.00%
BRITISH COLUMBIA 962.64 0.00%
NEW MEXICO 273.22 0.00%
ALBERTA 138.63 0.00%
0.00%
Total: $529,367,151.72
<PAGE>
LOAN LOSS EXPERIENCE(1)
IDENTIFIED PORTFOLIO
(DOLLARS IN THOUSANDS)
FIVE MONTHS TWELVE MONTHS
ENDED MAY 31, ENDED DECEMBER 31,
1998 1997
---- ----
Average Outstanding Principal Balance $532,761 $562,229
Gross Charge Offs 1,236 1,002
Recoveries 273 102
Net Charge Offs 963 900
Net Charge Offs as a Percentage of Average
Aggregate Outstanding Principal Balance 0.43% (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.
<PAGE>
LOAN DELINQUENCY EXPERIENCE FOLLOWING CANCELLATION
IDENTIFIED PORTFOLIO
AT MAY 31, AT DECEMBER 31,
1998 1997
---- ----
Number of days a loan remains overdue
after cancellation of
the related insurance policy
31-89 days 1.45% 1.17%
90-270 days 0.83% 0.93%
Over 270 days (1) 0.00% 0.00%
----- -----
Total 2.28% 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)
FIVE MONTHS ENDED TWELVE MONTHS ENDED
MAY 31, 1998 DECEMBER 31, 1997
------------ -----------------
Average Outstanding Principal Balance
Receivables $532,761 $562,229
Interest & Fee Income 25,626 63,462
Average Revenue Yield 11.54% (1) 11.29%
(1) Calculated on an annualized basis.
