<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
COMMISSION FILE NUMBER: 333-22141-03
FRANCHISE MORTGAGE ACCEPTANCE COMPANY LLC
CALIFORNIA 061-429737
- ------------------------------- ------------------------------------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
2049 CENTURY PARK EAST, SUITE 350, LOS ANGELES, CALIFORNIA 90067
(310) 229-2600
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No
-------- --------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest possible date:
CLASS SHARES OUTSTANDING AT MAY 12, 1997
----- ----------------------------------
NOT APPLICABLE NOT APPLICABLE
<PAGE>
FRANCHISE MORTGAGE ACCEPTANCE COMPANY LLC
FORM 10-Q
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PART 1 - FINANCIAL INFORMATION PAGE
------------------------------ ----
ITEM 1 FINANCIAL STATMENTS
-------------------
<S> <C>
Balance Sheets - March 31, 1997 and December 31, 1996................ 2
Statements of Income - Three months ended March 31, 1997 and 1996.... 3
Statements of Cash Flows Three months ended March 31, 1997 and 1996.. 4
Statement of Changes in Shareholders' Equity......................... 5
Notes to Financial Statements........................................ 6
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 8
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
PART II - OTHER INFORMATION
----------------------------
ITEMS 1-6 NOT APPLICABLE
--------------
SIGNATURES 13
----------
</TABLE>
FORWARD LOOKING STATEMENTS
When used in this Form 10-K or future filings by the Company with the
Securities and Exchange Commission, in the Company's press releases or other
public or shareholder communications, or in oral statements made with the
approval of an authorized executive officer, the words or phrases "would be",
"will allow", "intends to", "will likely result", "are expected to", "will
continue", "is anticipated", "estimate", "project", or similar expressions are
intended to identify "forward looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995.
The Company wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made, and to advise
readers that various factors, including regional and national economic
conditions, substantial changes in levels of market interest rates, credit and
other risks of lending and investment activities and competitive and regulatory
factors, could affect the Company's financial performance and could cause the
Company's actual results for future periods to differ materially from those
anticipated or projected.
The Company does not undertake, and specifically disclaims any obligation, to
update any forward-looking statements to reflect occurrences or unanticipated
events or circumstances after the date of such statements.
1
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
FRANCHISE MORTGAGE ACCEPTANCE COMPANY LLC
BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
(Unaudited)
March 31, December 31,
ASSETS 1997 1996
----------- ------------
<S> <C> <C>
Interest bearing deposits $ 2,630 $ 2,594
Securities available for sale, at market 2,685 39,349
Loans held for sale 249,220 98,915
Retained interest in loan and lease securitizations 6,601 6,908
Accrued interest on loans 1,190 560
Premises and equipment, net 1,341 1,162
Goodwill 4,251 4,332
Other assets 5,824 6,356
----------- -----------
Total assets $ 273,742 $ 160,176
=========== ===========
LIABILITIES AND MEMBERS' EQUITY
Book Overdraft $ 614 $ 171
Payable to Imperial Credit Industries, Inc. 20,935 17,728
Other borrowings 238,116 125,240
Accrued interest payable -- 148
Other liabilities 2,411 2,432
----------- -----------
Total liabilities $ 262,076 145,719
----------- -----------
Members' equity:
Members' Capital 5,792 5,792
Retained earnings 5,874 8,665
----------- -----------
Total members' equity 11,666 14,457
----------- -----------
Total liabilities and members' equity $ 273,742 $ 160,176
=========== ===========
</TABLE>
See accompanying notes to financial statements
2
<PAGE>
FRANCHISE MORTGAGE ACCEPTANCE COMPANY LLC
STATEMENTS OF INCOME
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1997 1996
------ ------
<S> <C> <C>
REVENUE:
Gain on sale of loans..................................... $ 390 $ 6,668
Interest income........................................... 3,342 656
-------- -------
Total interest income................................... 3,342 656
Interest expense.......................................... 2,699 633
-------- -------
Net interest income..................................... 643 23
-------- -------
Loan servicing income..................................... 640 282
Gain (loss) on sale of investment......................... (403) --
Other income.............................................. -- 63
-------- -------
Total other income...................................... 237 345
-------- -------
Total revenue........................................... 1,270 7,036
-------- -------
EXPENSES:
Personnel expense......................................... 2,598 2,691
Occupancy expense......................................... 116 57
Data processing expense................................... 7 1
Professional services..................................... 478 69
Telephone and other communications........................ 86 3
General and administrative expense........................ 776 602
-------- -------
Total expenses.......................................... 4,061 3,423
-------- -------
Net income (loss)......................................... $ (2,791) $ 3,613
======== =======
</TABLE>
See accompanying notes to financial statements
3
<PAGE>
FRANCHISE MORTGAGE ACCEPTANCE COMPANY LLC
STATEMENTS OF CASH FLOW
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
------------------ ------------------
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income............................................................. $ (2,791) $ 3,613
Adjustments to reconcile net income to net cash, provided by (used in)
operating activities:
Depreciation........................................................... 110 15
Amortization........................................................... 81 78
Net change in loans held for sale...................................... (150,305) 156,396
Net change in accrued interest on loans................................ (630) 915
Net change in retained interest in loan and lease securitizations...... 307 --
Net change in accrued interest payable................................. (148) (1,062)
Net change in residual interest due owner.............................. -- (526)
Net change in other assets............................................. 532 (524)
Net change in other liabilities........................................ 21) 371
-------- --------
Net cash provided by (used in) operating activities: (152,865) 159,276
-------- --------
Cash flows from investing activities:
Net change in interest bearing deposits................................ (36) (724)
Net change in securities available for sale............................ 36,664 --
Purchases of premises and equipment.................................... (289) (73)
-------- --------
Net cash provided by (used in) investing activities: 36,339 (797)
-------- --------
Cash flows from financing activities:
Net change in receivable from affiliates............................... -- (1,113)
Net change in payable to affiliates.................................... 3,207 --
Net change in borrowings............................................... 112,876 (44,924)
Net change in bonds payable............................................ -- 111,995)
-------- --------
Net cash provided by (used in) financing activities: 116,083 (158,032)
-------- --------
Net change in cash........................................................ (443) 447
Cash at beginning of year................................................. (171) (445)
-------- --------
Cash at end of period..................................................... $ (614) $ 2
======== ========
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
FRANCHISE MORTGAGE ACCEPTANCE COMPANY LLC
STATEMENT OF CHANGES IN MEMBERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
RETAINED
EARNINGS TOTAL
MEMBERS' (ACCUMULATED MEMBERS'
CAPITAL DEFICIT) EQUITY
---------- ------------ ---------
<S> <C> <C> <C>
Balance, June 30, 1995 (inception) -- -- --
Members' Contribution - ICII 8,952 -- 8,952
Members' Contribution - Knyal.......... 645 -- 645
Return of capital - ICII............... (3,805) -- (3,805)
Net income............................. -- 8,665 8,665
---------- ------------ ---------
Balance, December 31, 1996............. 5,792 8,665 14,457
Net income............................. -- (2,791) (2,791)
---------- ------------ ---------
Balance, March 31, 1997 (unaudited).... 5,792 5,874 11,666
========== ============ =========
</TABLE>
See accompanying notes to financial statements
5
<PAGE>
1. ORGANIZATION
On June 30, 1995, Imperial Credit Industries, Inc. (ICII) acquired from
Greenwich Capital Financial Products, Inc. (Greenwich), certain assets of
Greenwich's Franchise Mortgage Acceptance Company division (the FMAC Division),
including all of Greenwich's rights under certain servicing contracts entered
into by the FMAC Division (the Servicing Contracts). The Servicing Contracts
pertain to the servicing of franchise loans owned by Greenwich not yet
securitized. Concurrent with the closing of the transactions described above,
ICII entered into an operating agreement with Wayne L. Knyal (Knyal), the former
president of the FMAC Division, for the formation of a California limited
liability company named Franchise Mortgage Acceptance Company LLC (the Company).
In connection with the acquisition, the Company or its affiliates assumed
certain liabilities related to the Servicing Contracts and Greenwich agreed to
act as the Company's exclusive agent in connection with securitization of
franchise loans for a period of 24 months.
The Company was formed to originate, securitize and service franchise loans.
Under the terms of the operating agreement, in exchange for a 66 2/3% ownership
interest in the Company, ICII was obligated to contribute to the Company $1.3
million in cash and all of the assets purchased from Greenwich. In exchange for
a 33 1/3% ownership interest in the Company, Knyal caused his wholly owned
company, Franchise Mortgage Acceptance Corporation ("FMAC Corporation"), to
contribute to the Company all of its rights under a servicing contract
pertaining to franchise loans that were previously securitized by FMAC
Corporation.
On June 30, 1995, ICII completed the acquisition of certain net assets of the
FMAC Division for a net purchase price of $7.6 million which included $3.8
million in contingent consideration based on loan originations after the date of
acquisition up to a maximum principal amount of such loans equal to $250.0
million.
2. BASIS OF PRESENTATION
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles and with the instructions to form 10-Q
and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered necessary
for a fair presentation have been included. Operating results for the three
months ended March 31, 1997 are not necessarily indicative of the results that
may be expected for the year ended December 31, 1997.
In preparing the financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the dates of the balance sheets and revenues and expenses for
the periods presented. Actual results could differ significantly from those
estimates. Prior year's financial statements have been reclassified to conform
to the 1997 presentation.
6
<PAGE>
3. LOANS HELD FOR SALE
Loans held for sale consisted of the following at March 31, 1997 and
December 31, 1996: (In thousands)
<TABLE>
At March 31, At December 31,
1997 1996
------------ --------------
<S> <C> <C>
Franchise loans held for sale....................................... $ 242,075 $ 94,490
Franchise equipment loans and leases held for sale.................. 12,212 4,385
Net deferred loan fees.............................................. (3,249) (750)
Unearned lease income............................................... (2,053) (497)
Deferred hedging loss............................................... 235 1,287
------------ -----------
$ 249,220 $ 98,915
============ ===========
</TABLE>
4. ACCOUNTING PRONOUNCEMENT
The Company has adopted Financial Accounting Standards Board ("FASB")
Statement of Financial Accounting Standards ("SFAS") No. 125 "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities."
("SFAS 125"), which establishes accounting for transfers and servicing of
financial assets and extinguishment of liabilities. This statement specifies
when financial assets and liabilities are to be removed from an entity's
financial statements, the accounting for servicing assets and liabilities and
the accounting for assets that can be contractually prepaid in such a way that
the holder would not recover substantially all of its recorded investment.
Under SFAS 125, an entity recognizes only assets it controls and liabilities
it has incurred, discontinues recognition of assets only when control has been
surrendered, and discontinues recognition of liabilities only when they have
been extinguished. SFAS 125 requires that the selling entity continue to carry
retained interests, including servicing assets, relating to assets it no longer
recognizes. Such retained interests are based on the relative fair values of the
retained interests of the subject assets at the date of transfer. Transfers not
meeting the criteria for sale recognition are accounted for as a secured
borrowing with a pledge of collateral.
SFAS 125 requires an entity to recognize its obligation to service financial
assets that are retained in a transfer of assets in the form of a servicing
asset or liability. The servicing asset or liability is to be amortized in
proportion to, and over the period of, net servicing income or loss. Servicing
assets and liabilities are to be assessed for impairment based on their fair
value.
SFAS 125 modifies the accounting for interest-only strips or retained
interests in securitizations, such as capitalized servicing fees receivable,
that can be contractually prepaid or otherwise settled in such a way that the
holder would not recover substantially all of its recorded investment. In this
case, it requires that they be classified as available for sale or as trading
securities. Interest-only strips and retained interests are to be recorded at
market value.
Under the provisions of SFAS 125, management has determined that mortgage
backed securities retained by the Company as a result of securitization
transactions will be classified as trading securities. All other retained
securities will be classified as available for sale or trading as determined at
the time of securitization.
Changes in market value are included in operations, if classified as trading
securities, or in shareholders' equity as unrealized gains or losses, net of the
related tax effect, if classified as available for sale. SFAS 125 was effective
for the Company on January 1, 1997. The implementation of SFAS 125 did not have
a material impact on the Company's financial condition or results of operations.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
Franchise Mortgage Acceptance Company LLC (the Company) is a specialty finance
company engaged in the business of originating long-term, fixed- and adjustable-
rate loans and leases to established franchisees of major restaurant franchise
concepts, which are then securitized into investment grade structures and sold
to institutional investors. The Company principally offers self-amortizing,
fixed- or variable-rate, term loan facilities to franchise operators and
interest only, short-term loans to finance the acquisition or construction of
proven franchise concepts.
The Company originates the majority of its loans and leases through its
marketing department, comprised of account executives that have established
relationships with franchise operators located in 40 states. The Company
maintains offices in Los Angeles, California; Greenwich, Connecticut; Atlanta,
Georgia; Denver, Colorado; and Columbus, Nebraska.
The Company is one of a limited number of franchise lenders operating in the
rapidly growing franchise lending business. As of March 31, 1997, the Company
had a portfolio of approximately $249.2 million in loans to over 350 restaurant
locations. The Company focuses on lending only to the top regional and national
franchise concepts such as Taco Bell, Wendy's, Pizza Hut, Hardee's and Kentucky
Fried Chicken, quick service restaurants.
Several major concepts have named the Company as a preferred lender for their
franchises. The Company is actively seeking to expand and diversify its
financing operations pursuant to selected franchise operating statistics and
other criteria developed by the Company, which are intended to identify the most
attractive markets for the Company's products. In addition to offering
franchisee financing, the Company recently began offering development loans to
allow franchisees to finance new unit sites as well as equipment lease
financing. The Company utilizes experienced loan originators recruited from
banking and commercial finance companies to analyze operations data, asses real
estate values, process and document loan files, and implement the Company's
business growth strategy.
BUSINESS STRATEGY
Focus on Successful Regional and National Franchises: The Company believes that
through building long-term relationships with major regional and national
franchise concepts, it can increase the level of loan originations through an
existing network and through repeat lending opportunities. The Company
primarily focuses on lending to successful regional and national franchise
concepts with proven track records of successful operations.
Maximize Interest Income While Originating Low-Risk Loans: The Company seeks to
maximize its return on investment while minimizing credit loss exposure. The
Company maintains a high spread by typically lending at LIBOR + 375 basis
points. The Company's maximum loan-to-value ratio is 70% of the appraised value
on Acquisition and Construction Loans (65% for single-unit operators) and 65% of
the appraised value on Enterprise Loans. In addition, credit risk is decreased
as the Company requires that all loans are collateralized by a first lien on
substantially all of the franchisee's furniture, fixtures, and equipment,
collateral assignment of leases or a leasehold mortgage. The Company also
imposes a high prepayment penalty and strict yield maintenance programs to
increase interest income and deter prepayment of loans.
Commitment to the Company's Underwriting Guidelines: The Company believes a key
factor in its success to date has been its ability to minimize its delinquency
levels and its losses when lending to the Company's borrowers.
8
<PAGE>
The Company has been able to achieve these standards by maintaining low
geographic concentrations with each franchisee, continually monitoring the
performance of its loans as well as reevaluating its underwriting guidelines and
quality control criteria. As a result of these factors, the Company has been
consistently able to maintain delinquency and foreclosure ratios at or below
industry levels.
EXPANSION STRATEGY
Expand Product Line and Increase Equity Participation: The Company intends to
further leverage its reputation as leader in franchise mortgage lending by
acting as a full-service franchise lending institution. The Company seeks to
increase its focus on lending money to franchisees to finance the construction
of franchise units, and equity participation therein. The Company believes that
the potential for equity participation will attract additional franchise
borrowers and franchise concepts.
Leveraging Strategic Relationships and Selective Acquisitions: The Company
intends to continue to take advantage of existing strategic relationships to
access additional franchise opportunities. In addition, the Company seeks to
increase its capital and lending capabilities through acquisitions of synergetic
commercial finance companies.
Expand into New Franchise Concepts: The Company believes that substantial
opportunities exist to extend its existing franchise financing methodology into
non-restaurant concepts. The Company intends to increase its loan origination
volume by expanding into other franchise concepts, such as automobile, energy,
golf course refinancing, and other non-restaurant concepts.
LOAN ORIGINATIONS
Overview
The Company generally finances renovations, expansions, and improvements to
existing franchise operations, equipment purchases, new unit development, real
estate acquisition, unit acquisition, working capital, and debt refinancing.
During the three months ended March 31, 1997, the Company originated
approximately $140 million in new loans.
Generally, the Company's borrowers own three or more units, have three or
more years of ownership in the concept, or have an equivalent ownership tenure
in a different major fast food concept. For Enterprise Loans, the Company
secures its interest by taking a first lien on substantially all of the
borrower's furniture, fixtures and equipment. Additionally, the Company secures
its interest by taking a leasehold mortgage or collateral assignment of the
franchisee's leases. For Acquisition and Construction Loans, in addition to the
enterprise value, the Company takes an assignment of the land lease (with term
or options extending beyond the proposed loan term) in addition to a first lien
on the building and the furniture, fixture and equipment associated with the
enterprise value of the loan. The Company obtains a first mortgage on any
property financed in addition to a first lien on the furniture, fixtures and
equipment associated with the enterprise value of the loan. Enterprise loans
may have a term and amortization of up to 15 years. Acquisition and
Construction Loans have a maximum term and amortization of 20 years. In no
event will a loan term exceed an existing lease term (including any option to
renew) or a remaining franchise term (including any standard renewal term).
LOAN SALES AND SECURITIZATIONS
9
<PAGE>
The Company sells a majority of its loan origination volume in the secondary
market through its securitization program, and to a lesser extent, through whole
loan sales. The Company's securitization program allows it to retain a high-
yielding interest on its original loans while improving liquidity and reducing
its exposure to fluctuations in interest rates. During the three months ended
March 31, 1997, the Company did not complete any loan securitizations.
LOAN SERVICING AND DELINQUENCIES
FMAC's Servicing Department is responsible for loan accounting, compliance
monitoring and, if necessary, problem loan collections. Currently, FMAC
services over 1,200 loans across the United States representing over $850
million in principal balances.
FUNDING
Lines of Credit
The Company maintains various revolving warehouse lines of credit.
Outstanding amounts available at March 31, 1997, are as follows: (In thousands)
<TABLE>
<CAPTION>
Weighted
Average
interest Commitment Outstanding Index
rate ---------- ----------- -----
----
<S> <C> <C> <C> <C>
Southern Pacific Thrift & Loan....... 9.17% $ 25,227 $ 25,227 Coupon - approx. 50 bp's
Banco Santander...................... 7.69% 50,000 45,577 Libor + 225 bp's
Sanwa Bank........................... 7.04% 15,000 6,110 Eurodollars + 200 bp's
CS First Boston...................... 7.04% 200,000 161,202 Libor + 160 bp's
-------- --------
$290,227 $238,116
======== ========
</TABLE>
10
<PAGE>
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996
Net income for the three months ended March 31, 1997 resulted in a net loss of
$2.8 million as compared to a gain of $3.6 million for the same period last
year.
REVENUES
Total revenues for the Company during the first quarter ended March 31, 1997
were $1.3 million, a decrease of $5.8 million or 82.9% from the $7.0 million
reported for the same period in 1996. The decrease in total revenues was
primarily attributable to a decrease of $6.3 million in the gain on sale of
loans.
Gain on sale of loans
The gain on sale of loans in the first quarter of 1996 of $6.7 million is a
result of the Company's December, 1995 loan securitization, for which the gain
was deferred due to certain retained interests. Such interests were sold by the
Company in the first quarter of 1996.
The $390 thousand gain on sale of loans in the first quarter of 1997 was
primarily due to the additional cash received related to the Company's June 30,
1996 securitization.
Net interest income
Net interest income increased to $643 thousand during the quarter ended March
31, 1997 from $23 thousand for the same period last year. The increase is
primarily attributable to the increase in loans held for sale between the two
periods from $24.9 million on March 31, 1996 to $249.2 million on March 31,
1997.
Loan servicing income
Loan servicing income increased to $640 thousand during the first quarter
ended March 31, 1997 from $282 thousand for the same period last year. The
increase is primarily attributable to the increase loan servicing portfolio of
approximately 175% over the same period last year.
Loss on sale of investments
The loss on sale of investments in the first quarter of 1997 of $403 thousand
relates to the Company's repurchase of bonds from a securitization of the
Company's loans in 1991 ("1991-A"). The Company repurchased the remaining bonds
totaling approximately $35 million in December of 1996, financed by a loan from
Greenwich Capital. In January of 1997, approximately $20 million of the loans
were securitized resulting in a loss of $403 thousand. The remaining loans of
approximately $15 million were retained by the Company, the majority of which
were refinanced with the borrowers.
EXPENSES
Total expenses for the Company during the first quarter 1997 were $4.1
million, an increase of $0.6 million from the $3.4 million reported for the same
period in 1996. The increases were primarily attributable to the
11
<PAGE>
Company's growth as evidenced by increases in loan origination volume to $140.6
million in the first quarter of 1997 compared to $100.5 million for the same
period last year.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal liquidity requirements result from the need for the
Company to fund franchise mortgage loans originated or acquired for purposes of
sale or investment. In addition, the Company, as a loan servicer, requires
funding to make advances of delinquent principal and interest payments and
escrow balances, and as basic working capital.
The Company has an ongoing need for capital to finance its lending
activities. This need is expected to increase as the volume of the Company's
loan and lease originations and acquisitions increases. The Company's primary
cash requirements include the funding of (i) loan and lease originations and
acquisitions pending their pooling and sale, (ii) points and expenses paid in
connection with the acquisition of wholesale loans, (iii) fees and expenses
incurred in connection with its securitization programs, (iv)
overcollateralization or reserve account requirements in connection with loans
and leases pooled and sold, (v) ongoing administrative and other operating
expenses, and (vi) the costs of the Company's warehouse credit and repurchase
facilities with certain financial institutions. The Company has financed its
activities through warehouse lines of credit from financial institutions,
borrowings from ICII, and securitizations. The Company believes that such
sources will be sufficient to fund the Company's liquidity requirements for the
foreseeable future.
The Company currently pools and sells through securitization a substantial
portion of the loans or leases which it originates or purchases. Accordingly,
adverse changes in the securitization market could impair the Company's ability
to originate, purchase and sell loans or leases on a favorable or timely basis.
The Company is dependent upon its ability to access warehouse credit and
repurchase facilities, in addition to its ability to continue to pool and sell
loans and leases in the secondary market, in order to fund new originations and
purchases. The Company has warehouse lines of credit and repurchase facilities
under which it had available an aggregate of approximately $265.0 million in
financing at March 31, 1997.
The Company believes that, with liquidity available at FMAC, the Company's
lending activities will be adequately funded. The combination of cash from
operations and borrowings from ICII have allowed the Company to meet its
required liquidity needs for 1996 and 1997.
12
<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.
FRANCHISE MORTGAGE ACCEPTANCE COMPANY LLC
Date: May 19, 1997 By: /s/ Raedelle Walker
--------------------
Raedelle Walker
Executive Vice President and CFO
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,630
<SECURITIES> 9,286
<RECEIVABLES> 250,410
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 262,326
<PP&E> 11,650
<DEPRECIATION> (234)
<TOTAL-ASSETS> 273,742
<CURRENT-LIABILITIES> 262,076
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 11,666
<TOTAL-LIABILITY-AND-EQUITY> 273,742
<SALES> 1,270
<TOTAL-REVENUES> 1,270
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,061
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,791)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,791)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,791)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
