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) July 15, 1996
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Commercial Credit Company
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(Exact name of registrant as specified in its charter)
Delaware 1-6594 52-0883351
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
300 Saint Paul Place, Baltimore, Maryland 21202
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(Address of principal executive offices) (Zip Code)
(410) 332-3000
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(Registrant's telephone number, including area code)
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COMMERCIAL CREDIT COMPANY
Current Report on Form 8-K
Item 5. Other Events
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Results of Operations
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The net income of Commercial Credit Company (the "Company") for the three months
and six months ended June 30, 1996 was $54.3 million and $102.7 million,
respectively, compared to $54.2 million and $101.3 million, respectively, in the
corresponding 1995 periods. The Company's income before income taxes for the
three months and six months ended June 30, 1996 was $82.3 million and $156.5
million, respectively, compared to $84.2 million and $157.5 million,
respectively, in the corresponding 1995 periods. The Company's revenues for the
three months and six months ended June 30, 1996 were $355.1 million and $710.7
million, respectively, compared to $347.3 million and $680.5 million,
respectively, in the corresponding 1995 periods.
The Consumer Finance segment results for the second quarter of 1996 continued to
be influenced by a higher level of loan losses, which the Company now believes
should continue throughout this year, as a result of a higher level of personal
bankruptcies. Also, near-term earnings for this segment are expected to be
affected by a higher level of expenses, as the Company implements additional
investments in marketing, training and systems enhancements in order to
capitalize on future growth opportunities. Consequently, the segment's
operating earnings in the second half of 1996 could be 15% or more below
comparable 1995 levels. The Company expects improvement in the second half of
1997, however, which would make year-over-year, 1997 to 1996, result comparisons
favorable.
The statements contained in the foregoing paragraph may be deemed to be
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Forward-looking statements are typically
identified by the words "believe," "expect," "anticipate," "intend," "estimate,"
and similar expressions. These forward-looking statements are based largely on
the Company's expectations and are subject to a number of risks and
uncertainties, certain of which are beyond the Company's control. Actual results
could differ materially from these forward-looking statements as a result of a
number of factors, including (i) changes in the consumer lending industry as a
result of economic or regulatory influences, (ii) changes in the interest rate
environment and general economic conditions, (iii) the composition of the
Company's receivables portfolio (i.e. product mix) and (iv) the level of
business competition. The Company undertakes no obligation to update publicly
or revise any forward-looking statements.
At June 30, 1996 the Company had total debt consisting of certificates of
deposit of $168.6 million, short-term borrowings of $1,435.8 million and
long-term debt of $5,400.0 million. In addition the Company's total
stockholder's equity at June 30, 1995 was $1,209.8 million.
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<PAGE>
COMMERCIAL CREDIT COMPANY
SELECTED FINANCIAL DATA
(In millions of dollars)
<TABLE><CAPTION>
Three months ended Six months ended
Business Segment Data June 30, June 30,
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1996 1995 1996 1995
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<S> <C> <C> <C> <C>
Revenues:
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Consumer Finance $ 346.7 $ 337.1 $694.2 $660.4
Corporate and Other 8.4 10.2 16.5 20.1
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Revenues $ 355.1 $ 347.3 $710.7 $680.5
======= ======= ====== ======
Net Income:
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Consumer Finance $ 60.5 $ 60.0 $ 116.0 $ 115.5
Corporate and Other (6.2) (5.8) (13.3) (14.2)
------- ------- ------- -------
Net Income $ 54.3 $ 54.2 $ 102.7 $ 101.3
======= ======= ======= =======
<CAPTION>
As of, and for, the As of, and for, the
three months ended six months ended
Consumer Finance Operations June 30, June 30,
--------------------------- ----------------------------- ------------------------------
1996 1995 1996 1995
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<S> <C> <C> <C> <C>
Net receivables
Real estate - secured loans $3,105.8 $2,917.1 $3,105.8 $2,917.1
Personal loans 3,038.2 3,009.4 3,038.2 3,009.4
Credit cards 849.5 734.6 849.5 734.6
Sales finance and other 469.7 441.9 469.7 441.9
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Consumer finance receivables
net of unearned finance charges 7,463.2 7,103.0 7,463.2 7,103.0
Accrued interest receivable 44.7 40.5 44.7 40.5
Allowance for credit losses (217.6) (187.8) (217.6) (187.8)
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Consumer finance receivables, net $7,290.3 $6,955.7 $7,290.3 $6,955.7
======== ======== ======== ========
Average yield 15.40% 15.57% 15.41% 15.50%
Average net interest margin 8.82% 8.69% 8.78% 8.67%
Charge-off rate 2.92% 2.14% 2.89% 2.15%
60+ days past due as % of
receivables 2.18% 1.86% 2.18% 1.86%
Reserves as % of net receivables 2.92% 2.64% 2.92% 2.64%
</TABLE>
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SIGNATURE
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 hereunto duly authorized.
Dated: July 17, 1996 COMMERCIAL CREDIT COMPANY
By /s/ Irwin Ettinger
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Irwin Ettinger
Executive Vice President
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