<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Year Ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File Number 1-7067
UNITED COMPANIES FINANCIAL CORPORATION
EMPLOYEES' SAVINGS PLAN
(Full title of the Plan)
4041 ESSEN LANE
BATON ROUGE, LOUISIANA 70809
(Address of the Plan)
UNITED COMPANIES FINANCIAL CORPORATION
(Name of Issuer)
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page Number
-----------
<S> <C>
(a) Financial Statements and Supplemental Schedules:
Independent Auditors' Report 2
Statement of Net Assets Available for Benefits with
Supplemental Fund Information - December 31, 1997 3
Statement of Net Assets Available for Benefits with
Supplemental Fund Information - December 31, 1996 4
Statement of Changes in Net Assets Available for Benefits with
Supplemental Fund Information - for the year ended
December 31, 1997 5
Statement of Changes in Net Assets Available for Benefits with
Supplemental Fund Information - for the year ended
December 31, 1996 6
Statement of Changes in Net Assets Available for Benefits with
Supplemental Fund Information - for the year ended
December 31, 1995 7
Notes to Financial Statements 8
Item 27a - Schedule of Assets Held for Investment Purposes -
December 31, 1997 11
Item 27b - Schedule of Loans or Fixed Income Obligations -
December 31, 1997 12
Item 27d - Schedule of Reportable Transactions - for the year
ended December 31, 1997 13
Signature 14
(b) Exhibits:
Index to Exhibits 15
</TABLE>
1
<PAGE> 3
INDEPENDENT AUDITORS' REPORT
To the Trustee and Participants of
United Companies Financial Corporation
Employees' Savings Plan
Baton Rouge, Louisiana
We have audited the accompanying statements of net assets available for benefits
of United Companies Financial Corporation Employees' Savings Plan (the "Plan")
as of December 31, 1997 and 1996, and the related statements of changes in net
assets available for benefits for each of the three years in the period ended
December 31, 1997. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 1997
and 1996 and the changes in net assets available for benefits for each of the
three years in the period ended December 31, 1997 in conformity with generally
accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
Table of Contents are presented for the purpose of additional analysis and are
not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental information by fund in the statements of net assets
available for benefits and the statements of changes in net assets available for
benefits is presented for the purpose of additional analysis rather than to
present the net assets available for benefits and changes in net assets
available for benefits of the individual funds. The supplemental schedules and
supplemental information by fund is the responsibility of the Plan's management.
Such supplemental schedules and supplemental information by fund have been
subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects when considered in relation to the basic financial statements taken as
a whole.
/s/ DELOITTE & TOUCHE LLP
Baton Rouge, Louisiana
June 22, 1998
2
<PAGE> 4
UNITED COMPANIES FINANCIAL CORPORATION
EMPLOYEES' SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE
FOR BENEFITS WITH SUPPLEMENTAL FUND INFORMATION
December 31, 1997
<TABLE>
<CAPTION>
SUPPLEMENTAL FUND INFORMATION
---------------------------------------------------------------------------
Tower Stock
UCFC Capital Government Guaranteed Emphasis
Stock Appreciation Securities Interest Balanced
Combined Fund Fund Account Account Account
------------ ----------- ------------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at fair value:
UCFC Common Stock;
$2 par value................ $ 9,566,312 $ 9,566,312
Equity Mutual Fund.............. 1,048,450 $ 1,048,450
Investment in The Principal
General Fund Account........ 608,485 $ 608,485
Investment in The Principal
Pooled Separate Accounts.... 4,799,755 $ 180,372 $ 1,098,704
Participant loans............... 530,036
------------ ----------- ------------- ----------- ------------ -----------
Total investments........... 16,553,038 9,566,312 1,048,450 180,372 608,485 1,098,704
Contributions receivable........... 389,014 314,193 8,318 5,934 9,196
Dividends and interest receivable.. 48,650 48,650
Other receivables.................. 7,614
------------ ----------- ------------- ----------- ------------ -----------
Total assets................ 16,998,316 9,929,155 1,056,768 180,372 614,419 1,107,900
------------ ----------- ------------- ----------- ------------ -----------
Net assets available for benefits.. $ 16,998,316 $ 9,929,155 $ 1,056,768 $ 180,372 $ 614,419 $ 1,107,900
============ =========== ============= =========== ============ ===========
<CAPTION>
SUPPLEMENTAL FUND INFORMATION
----------------------------------------------------------------------------------------------
Medium Small
Company Stock Money- Company Internat'l Real
Blend Index 500 market Value Stock Estate Loan
Account Account Account Account Account Account Fund
------------ ----------- ----------- ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at fair value:
UCFC Common Stock;
$2 par value................
Equity Mutual Fund..............
Investment in The Principal
General Fund Account........
Investment in The Principal
Pooled Separate Accounts.... $ 1,594,072 $ 1,412,914 $ 375,865 $ 57,311 $ 71,901 $ 8,616
Participant loans............... $ 530,036
------------ ----------- ----------- ------------ ----------- ----------- ------------
Total investments........... 1,594,072 1,412,914 375,865 57,311 71,901 8,616 530,036
Contributions receivable........... 16,473 20,766 3,692 4,449 5,180 813
Dividends and interest receivable..
Other receivables.................. 7,614
------------ ----------- ----------- ------------ ----------- ----------- ------------
Total assets................ 1,610,545 1,433,680 379,557 61,760 77,081 9,429 537,650
------------ ----------- ----------- ------------ ----------- ----------- ------------
Net assets available for benefits.. $ 1,610,545 $ 1,433,680 $ 379,557 $ 61,760 $ 77,081 $ 9,429 $ 537,650
============ =========== =========== ============ =========== =========== ============
</TABLE>
3
<PAGE> 5
UNITED COMPANIES FINANCIAL CORPORATION
EMPLOYEES' SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE
FOR BENEFITS WITH SUPPLEMENTAL FUND INFORMATION
December 31, 1996
<TABLE>
<CAPTION>
SUPPLEMENTAL FUND INFORMATION
---------------------------------------------------------------------------
Tower Stock
UCFC Capital Government Guaranteed Emphasis
Stock Appreciation Securities Interest Balanced
Combined Fund Fund Account Account Account
------------ ----------- ------------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at fair value:
UCFC Common Stock;
$2 par value................ $ 14,520,282 $14,520,282
Equity Mutual Fund.............. 760,785 $ 760,785
Investment in The Principal
General Fund Account........ 641,719 $ 641,719
Investment in The Principal
Pooled Separate Accounts.... 3,389,819 $ 191,539 $ 887,105
Participant loans............... 466,600
------------ ----------- ------------- ----------- ------------ -----------
Total investments........... 19,779,205 14,520,282 760,785 191,539 641,719 887,105
Dividends and interest receivable.. 42,793 42,793
------------ ----------- ------------- ----------- ------------ -----------
Total assets................ 19,821,998 14,563,075 760,785 191,539 641,719 887,105
------------ ----------- ------------- ----------- ------------ -----------
Net assets available for benefits.. $ 19,821,998 $14,563,075 $ 760,785 $ 191,539 $ 641,719 $ 887,105
============ =========== ============= =========== ============ ===========
<CAPTION>
SUPPLEMENTAL FUND INFORMATION
-----------------------------------------------------
Medium
Company Stock Money-
Blend Index 500 market Loan
Account Account Account Fund
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS
Investments at fair value:
UCFC Common Stock;
$2 par value................
Equity Mutual Fund..............
Investment in The Principal
General Fund Account........
Investment in The Principal
Pooled Separate Accounts.... $ 1,125,710 $ 691,862 $ 493,603
Participant loans............... $ 466,600
------------ ----------- ----------- ------------
Total investments........... 1,125,710 691,862 493,603 466,600
Dividends and interest receivable..
------------ ----------- ----------- ------------
Total assets................ 1,125,710 691,862 493,603 466,600
------------ ----------- ----------- ------------
Net assets available for benefits.. $ 1,125,710 $ 691,862 $ 493,603 $ 466,600
============ =========== =========== ============
</TABLE>
See notes to financial statements.
4
<PAGE> 6
UNITED COMPANIES FINANCIAL CORPORATION
EMPLOYEES' SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS WITH SUPPLEMENTAL FUND INFORMATION
For the year ended December 31, 1997
<TABLE>
<CAPTION>
SUPPLEMENTAL FUND INFORMATION
-----------------------------------------------------------------------
Tower Stock
UCFC Capital Government Guaranteed Emphasis
Stock Appreciation Securities Interest Balanced
Combined Fund Fund Account Account Account
------------ ------------- ------------ ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net assets available for benefits -
January 1, 1997................. $ 19,821,998 $ 14,563,075 $ 760,785 $ 191,539 $ 641,719 $ 887,105
Additions:
Interest and dividend income.... 373,428 185,854 114,862 39,277
Contributions
Employee.................... 3,251,457 1,475,930 201,602 31,821 141,981 237,637
Employer.................... 1,785,165 1,785,165
------------ ------------- ------------ ------------- ----------- -----------
Total.................... 5,036,622 3,261,095 201,602 31,821 141,981 237,637
------------ ------------- ------------ ------------- ----------- -----------
Total additions.......... 5,410,050 3,446,949 316,464 31,821 181,258 237,637
------------ ------------- ------------ ------------- ----------- -----------
Deductions:
Net depreciation (appreciation)
of investments.............. 5,598,180 6,496,657 (100,478) (19,429) (163,944)
Administrative expenses......... 35,034 26,040 2,973 1,212 1,155
Distributions to participants... 2,600,518 1,433,231 117,601 23,847 204,325 153,673
------------ ------------- ------------ ------------- ----------- -----------
Total deductions......... 8,233,732 7,955,928 17,123 7,391 205,537 (9,116)
------------ ------------- ------------ ------------- ----------- -----------
Net transfers between funds........ (124,941) (3,358) (35,597) (3,021) (25,958)
------------ ------------- ------------ ------------- ----------- -----------
Net change in net assets
available for benefits.......... (2,823,682) (4,633,920) 295,983 (11,167) (27,300) 220,795
------------ ------------- ------------ ------------- ----------- -----------
Net assets available for benefits -
December 31, 1997............... $ 16,998,316 $ 9,929,155 $ 1,056,768 $ 180,372 $ 614,419 $ 1,107,900
============ ============= ============ ============= =========== ===========
<CAPTION>
SUPPLEMENTAL FUND INFORMATION
--------------------------------------------------------------------------------------------
Medium Small
Company Stock Money- Company Internat'l Real
Blend Index 500 market Value Stock Estate Loan
Account Account Account Account Account Account Fund
----------- ------------ ---------- ------------ ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net assets available for benefits -
January 1, 1997................. $ 1,125,710 $ 691,862 $ 493,603 $ 466,600
Additions: 33,435
Interest and dividend income....
Contributions
Employee.................... 469,519 514,426 63,056 $ 52,669 $ 56,149 $ 6,667
Employer....................
----------- ------------ ---------- ------------ ------------ ---------- -----------
Total.................... 469,519 514,426 63,056 52,669 56,149 6,667
----------- ------------ ---------- ------------ ------------ ---------- -----------
Total additions.......... 469,519 514,426 63,056 52,669 56,149 6,667 33,435
----------- ------------ ---------- ------------ ------------ ---------- -----------
Deductions:
Net depreciation (appreciation)
of investments.............. (320,706) (274,391) (21,257) 355 1,615 (242)
Administrative expenses......... 1,461 1,172 948 29 44
Distributions to participants... 268,049 104,870 209,046 10 5 85,861
----------- ------------ ---------- ------------ ------------ ---------- -----------
Total deductions......... (51,196) (168,349) 188,737 394 1,664 (242) 85,861
----------- ------------ ---------- ------------ ------------ ---------- -----------
Net transfers between funds........ (35,880) 59,043 11,635 9,485 22,596 2,520 123,476
----------- ------------ ---------- ------------ ------------ ---------- -----------
Net change in net assets
available for benefits.......... 484,835 741,818 (114,046) 61,760 77,081 9,429 71,050
----------- ------------ ---------- ------------ ------------ ---------- -----------
Net assets available for benefits -
December 31, 1997............... $ 1,610,545 $ 1,433,680 $ 379,557 $ 61,760 $ 77,081 $ 9,429 $ 537,650
=========== ============ ========== ============ ============ ========== ===========
</TABLE>
5
<PAGE> 7
UNITED COMPANIES FINANCIAL CORPORATION
EMPLOYEES' SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS WITH SUPPLEMENTAL FUND INFORMATION
For the year ended December 31, 1996
<TABLE>
<CAPTION>
SUPPLEMENTAL FUND INFORMATION
----------------------------------------------------------------------
Tower Stock
UCFC Capital Government Guaranteed Emphasis
Stock Appreciation Securities Interest Balanced
Combined Fund Fund Account Account Account
------------ ------------ ----------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net assets available for benefits -
January 1, 1996................. $ 19,949,414 $ 15,171,591 $ 805,655 $ 216,357 $ 549,366 $ 845,693
Additions:
Interest and dividend income.... 404,058 165,331 172,900 36,779
Contributions
Employee.................... 2,427,897 1,338,405 116,492 66,042 123,088 186,544
Employer.................... 1,550,212 1,550,212
------------ ------------ ----------- ------------ ----------- ----------
Total.................... 3,978,109 2,888,617 116,492 66,042 123,088 186,544
Net appreciation
of investments.................. 918,327 463,963 7,291 132,238
------------ ------------ ----------- ------------ ----------- ----------
Total additions.......... 5,300,494 3,517,911 289,392 73,333 159,867 318,782
------------ ------------ ----------- ------------ ----------- ----------
Deductions:
Administrative expenses......... 54,744 48,605 494 994 1,042
Distributions to
participants................ 5,373,166 4,027,547 277,472 31,965 114,401 237,722
------------ ------------ ----------- ------------ ----------- ----------
Total deductions......... 5,427,910 4,076,152 277,472 32,459 115,395 238,764
------------ ------------ ----------- ------------ ----------- ----------
Net transfers between funds........ (50,275) (56,790) (65,692) 47,881 (38,606)
------------ ------------ ----------- ------------ ----------- ----------
Net change in net assets
available for benefits.......... (127,416) (608,516) (44,870) (24,818) 92,353 41,412
------------ ------------ ----------- ------------ ----------- ----------
Net assets available for benefits -
December 31, 1996............... $ 19,821,998 $ 14,563,075 $ 760,785 $ 191,539 $ 641,719 $ 887,105
============ ============ =========== ============ =========== ==========
<CAPTION>
SUPPLEMENTAL FUND INFORMATION
---------------------------------------------------
Medium
Company Stock Money-
Blend Index 500 market Loan
Account Account Account Fund
----------- --------- --------- ----------
<S> <C> <C> <C> <C>
Net assets available for benefits -
January 1, 1996................. $ 853,497 $ 523,797 $ 564,515 $ 418,943
Additions:
Interest and dividend income.... 29,048
Contributions
Employee.................... 324,196 230,110 43,020
Employer....................
----------- --------- --------- ----------
Total.................... 324,196 230,110 43,020
Net appreciation
of investments.................. 167,220 119,836 27,779
----------- --------- --------- ----------
Total additions.......... 491,416 349,946 70,799 29,048
----------- --------- --------- ----------
Deductions:
Administrative expenses......... 1,321 841 1,447
Distributions to
participants................ 173,720 135,186 286,813 88,340
----------- --------- --------- ----------
Total deductions......... 175,041 136,027 288,260 88,340
----------- --------- --------- ----------
Net transfers between funds........ (44,162) (45,854) 146,549 106,949
----------- --------- --------- ----------
Net change in net assets
available for benefits.......... 272,213 168,065 (70,912) 47,657
----------- --------- --------- ----------
Net assets available for benefits -
December 31, 1996............... $ 1,125,710 $ 691,862 $ 493,603 $ 466,600
=========== ========= ========= ==========
</TABLE>
6
<PAGE> 8
UNITED COMPANIES FINANCIAL CORPORATION
EMPLOYEES' SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS WITH SUPPLEMENTAL FUND INFORMATION
For the year ended December 31, 1995
<TABLE>
<CAPTION>
SUPPLEMENTAL FUND INFORMATION
--------------------------------------------------------------------------
Tower Stock
UCFC Capital Government Guaranteed Emphasis
Stock Appreciation Securities Interest Balanced
Combined Fund Fund Account Account Account
------------ ------------ ----------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net assets available for benefits -
January 1, 1995................. $ 11,409,528 $ 7,888,354 $ 693,229 $ 171,361 $ 286,209 $ 514,317
Additions:
Interest and dividend income.... 210,633 129,473 23,145 28,508
Contributions
Employee.................... 1,856,665 936,352 73,359 52,774 121,550 206,513
Employer.................... 1,304,713 1,303,072 1,641
------------ ------------ ----------- ------------- ------------- -----------
Total.................... 3,161,378 2,239,424 73,359 52,774 123,191 206,513
Net appreciation
of investments.................. 8,377,400 7,662,010 157,523 40,326 140,392
------------ ------------ ----------- ------------- ------------- -----------
Total additions.......... 11,749,411 10,030,907 254,027 93,100 151,699 346,905
------------ ------------ ----------- ------------- ------------- -----------
Deductions:
Administrative expenses......... 40,223 29,169 862 768 857
Distributions to
participants................ 3,169,302 2,457,300 67,902 88,162 28,118 62,823
------------ ------------ ----------- ------------- ------------- -----------
Total deductions......... 3,209,525 2,486,469 67,902 89,024 28,886 63,680
------------ ------------ ----------- ------------- ------------- -----------
Net transfers between funds........ (261,201) (73,699) 40,920 140,344 48,151
------------ ------------ ----------- ------------- ------------- -----------
Net change in net assets
available for benefits.......... 8,539,886 7,283,237 112,426 44,996 263,157 331,376
------------ ------------ ----------- ------------- ------------- -----------
Net assets available for benefits -
December 31, 1995............... $ 19,949,414 $ 15,171,591 $ 805,655 $ 216,357 $ 549,366 $ 845,693
============ ============ =========== ============= ============= ===========
<CAPTION>
SUPPLEMENTAL FUND INFORMATION
------------------------------------------------------
Medium
Company Stock Money-
Blend Index 500 market Loan
Account Account Account Fund
------------ ---------- ----------- -----------
<S> <C> <C> <C> <C>
Net assets available for benefits -
January 1, 1995................. $ 570,802 $ 275,677 $ 529,918 $ 479,661
Additions:
Interest and dividend income.... 29,507
Contributions
Employee.................... 260,710 159,162 46,245
Employer....................
------------ ---------- ----------- -----------
Total.................... 260,710 159,162 46,245
Net appreciation
of investments.................. 200,361 126,410 50,378
------------ ---------- ----------- -----------
Total additions.......... 461,071 285,572 96,623 29,507
------------ ---------- ----------- -----------
Deductions:
Administrative expenses......... 853 828 6,886
Distributions to
participants................ 63,505 68,900 265,581 67,011
------------ ---------- ----------- -----------
Total deductions......... 64,358 69,728 272,467 67,011
------------ ---------- ----------- -----------
Net transfers between funds........ (114,018) 32,276 210,441 (23,214)
------------ ---------- ----------- -----------
Net change in net assets
available for benefits.......... 282,695 248,120 34,597 (60,718)
------------ ---------- ----------- -----------
Net assets available for benefits -
December 31, 1995............... $ 853,497 $ 523,797 $ 564,515 $ 418,943
============ ========== =========== ===========
</TABLE>
See notes to financial statements.
7
<PAGE> 9
UNITED COMPANIES FINANCIAL CORPORATION
EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the United Companies Financial
Corporation Employees' Savings Plan (the "Plan") are prepared on the accrual
basis. Investments are reported at fair value by reference to market prices on
the valuation date when available, with the exception of participant loans which
are valued at cost, which approximates fair value.
2. ELIGIBILITY, CONTRIBUTIONS AND INVESTMENT PROGRAMS
The following description of the Plan's provisions provides
general information regarding eligibility, contributions and investment
programs. Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
Employees are eligible to participate in the Plan provided they
have completed one year of service and have attained the age of twenty-one
prior to the election date. The employee must complete 1,000 hours of service
during the one year waiting period to participate in the Plan. Effective July
1, 1998, employees are eligible to participate in the Plan provided they have
completed six months of service and have attained the age of twenty-one prior
to the election date. For the years ended December 31, 1997, 1996 and 1995,
United Companies Financial Corporation ("UCFC") provided matching contributions
of 100% of the participant's contribution up to 5% of the participant's salary.
Salary for purposes of the Plan is limited to $150,000 for any Plan year,
adjusted for cost of living increases. The matching employer contributions are
invested in UCFC stock.
Participants are 100% vested in employee contributions ("elective
deferrals") and earnings thereon. Vesting in the employer contributions and
earnings thereon is based on years of service. Participants generally have no
vesting rights until completion of five (5) years of service with the Company at
which time they will become 100% vested in employer matching contributions. The
non-vested portion of a participant's account will be forfeited upon
distribution of the participant's vested portion or incurring 5 consecutive
one-year breaks in service. Amounts forfeited may be used to reduce the employer
contributions or pay administrative expenses.
Employee contributions are supplemented by the matching employer
contributions, and the employee contributions are invested as directed by the
participant in one or more of the following eleven funds:
(a) UCFC Stock Fund -- Contributions to this fund are
invested primarily in $2 par value common stock of United
Companies Financial Corporation.
(b) Tower Capital Appreciation Fund -- Contributions to this
fund are invested primarily in a professionally managed
and diversified portfolio of common stocks of high
quality companies.
(c) Government Securities Account -- Contributions to this
fund are invested in pooled separate accounts of
Principal Mutual Life Insurance Company, primarily in
obligations issued or guaranteed by the U.S. Government
or its agencies. Effective July 1, 1997, contributions
and transfers into the Government Securities Account were
not accepted.
(d) Guaranteed Interest Account -- Contributions to this fund
are invested in the general account of Principal Mutual
Life Insurance Company at a guaranteed interest rate for
a specified period of time.
(e) Stock Emphasis Balanced Account -- Contributions to this
fund are invested in pooled separate accounts of
Principal Mutual Life Insurance Company, weighted toward
equity accounts.
(f) Medium Company Blend Account -- Contributions to this
fund are invested in pooled separate accounts of
Principal Mutual Life Insurance Company, primarily in
common stocks of medium sized companies that are
anticipated to generate long term capital growth.
8
<PAGE> 10
(g) Stock Index 500 Account -- Contributions to this fund are
invested in pooled separate accounts of Principal Mutual
Life Insurance Company, primarily in the common stock of
those companies included in the Standard & Poor's 500
Stock Index.
(h) Money-market Account -- Contributions to this fund are
invested in pooled separate accounts of Principal Mutual
Life Insurance Company, primarily in money market
instruments.
(i) Small Company Value Account -- Contributions to this fund
are invested in pooled separate accounts of Principal
Mutual Life Insurance Company, primarily in common stocks
of small companies that are evaluated as being under
valued at the time of purchase.
(j) International Stock Account -- Contributions to this fund
are invested in pooled separate accounts of Principal
Mutual Life Insurance Company, primarily in common stocks
of corporations located outside the United States, and
occasionally in preferred stocks or convertible bonds of
these corporations. Account assets may also be invested
in U.S. or non-U.S. securities other than stocks or
retained in cash.
(k) Real Estate Account -- Contributions to this fund are
invested in pooled separate accounts of Principal Mutual
Life Insurance Company, primarily in owned commercial
property. Effective July 1, 1998, contributions and
transfers into the Real Estate Account will not be
accepted.
Investment options (c), (e), (f), (g), (h), (i), (j) and (k) are
offered through a pooled separate account, The Principal Pooled Separate
Accounts, and are classified as such in the statement of net assets available
for benefits. Effective July 1, 1998, the following four investment options will
be added to the Plan: Vanguard Bond Index Total Bond Market Fund, Vanguard
Windsor II, Principal Large Company Growth Account and T. Rowe Price Mid-Cap
Growth Fund.
The Plan allows participants to borrow from the Plan in amounts up
to 50% of each participant's vested interest in the Plan. Participant loans are
considered another investment option of the Plan and require the approval of the
Plan Administrator. Loan payments, including principal and interest, must be
made no less frequently than quarterly, with level amortization over the term of
the loan. The maximum loan term is 5 years.
3. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for
benefits as reflected in the financial statements to Form 5500:
<TABLE>
<CAPTION>
December 31,
-----------------------------------------
1997 1996
-------------- ---------------
<S> <C> <C>
Net assets available for benefits
per the financial statements........................ $ 16,998,316 $ 19,821,998
Accrued dividend income................................... (48,650) (42,793)
-------------- ---------------
Net assets available for benefits
per Form 5500....................................... $ 16,949,666 $ 19,779,205
============== ===============
</TABLE>
The following is a reconciliation of changes in net assets according to
the financial statements to Form 5500:
<TABLE>
<CAPTION>
Year Ended
December 31,
1997
----------------
<S> <C>
Changes in net assets
per the financial statements...................... $ (2,823,682)
Add: Accrued dividend income,
December 31, 1996.............................. 42,793
Less: Accrued dividend income
December 31, 1997.............................. (48,650)
---------------
Changes in net assets
per Form 5500..................................... $ (2,829,539)
===============
</TABLE>
9
<PAGE> 11
4. INCOME TAXES
A determination letter dated August 10, 1988 has been received from the
Internal Revenue Service to the effect that the Plan as currently in effect is
qualified as to form under Section 401(a) of the Code; the trust is exempt from
Federal income tax under Section 501(a) of the Code; and employer contributions
paid to the trust under the Plan will be allowable to the Employer as Federal
income tax deductions subject to the conditions and limitations of Section 404
of the Code. It is intended that the Plan, as modified by the provisions of the
Tax Reform Act of 1986, will continue to meet the requirements of Section 401(a)
of the Code. Accordingly, no provisions for Federal income taxes have been made
in the accompanying financial statements.
5. OTHER
The following represents investments in excess of 5 percent of the
current value of net assets available for benefits as of December 31, 1997 and
1996:
<TABLE>
<CAPTION>
December 31,
Investment 1997
- ---------- ------------------
<S> <C>
UCFC Common Stock $ 9,566,312
Medium Company Blend Account $ 1,594,072
Stock Index 500 Account $ 1,412,914
Stock Emphasis Balanced Account $ 1,098,704
Tower Capital Appreciation Fund $ 1,048,450
</TABLE>
<TABLE>
<CAPTION>
December 31,
Investment 1996
- ---------- ------------------
<S> <C>
UCFC Common Stock $ 14,520,282
Medium Company Blend Account $ 1,125,710
</TABLE>
10
<PAGE> 12
UNITED COMPANIES FINANCIAL CORPORATION
EMPLOYEES' SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
IDENTITY DESCRIPTION CURRENT
OF ISSUE OF INVESTMENT COST VALUE
------------------------ -------------------------------- --------------- ---------------
<S> <C> <C> <C>
* United Companies United Companies
Financial Corporation Financial Corporation,
$2 par value common stock,
617,181.4 shares $ 11,180,210 $ 9,566,312
Hibernia National Bank Tower Capital Appreciation Fund 846,258 1,048,450
Principal Mutual Guaranteed Interest Account 608,515 608,485
Life Insurance Company
Principal Mutual Pooled Separate Accounts 3,507,259 4,799,755
Life Insurance Company
Participant Loans Range of Interest Rates
From 6.5% to 12.0% 0 530,036
--------------- ---------------
$ 16,142,242 $ 16,553,038
=============== ===============
</TABLE>
*Denotes "Exempt related party transaction".
11
<PAGE> 13
UNITED COMPANIES FINANCIAL CORPORATION
EMPLOYEES' SAVINGS PLAN
ITEM 27b - SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Description of Loan Amount Received Amount
- --------------------------------------------- During 1997 Unpaid Overdue
Loan Maturity Interest Collateral ------------------- Balance ----------------------
Date Date Rate Amount Principal Interest at 12/31/97 Principal Interest
- -------- -------- ------ ---------- --------- -------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/95 5/11/97 9.75% $ 1,200 0 0 $ 407 $ 407 $ 7
7/31/95 5/11/97 10.00% $ 1,000 0 0 $ 894 $ 894 $ 87
</TABLE>
12
<PAGE> 14
UNITED COMPANIES FINANCIAL CORPORATION
EMPLOYEES' SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Total Price
at
Identity of Description Transaction Number of Net
Party Involved of Asset Date Transactions Gain
- ------------------------- ------------------------ ------------- -------------- -----------
<S> <C> <C> <C> <C>
Purchase Transactions
- ---------------------
United Companies United Companies
Financial Corporation Financial Corporation,
$2 par value
common stock $ 4,082,510 165
============= ==============
Hibernia National Bank Tower Capital
Appreciation Fund $ 1,256,317 78
============= ==============
Selling Transactions
- --------------------
United Companies United Companies
Financial Corporation Financial Corporation
$2 par value
Common Stock $ 2,535,152 145 $ 1,122,076
============= ============== ============
Hibernia National Bank Tower Capital
Appreciation Fund $ 1,081,065 47 $ 164,430
============= ============== ============
</TABLE>
13
<PAGE> 15
SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Plan Administrative Committee of the United Companies Financial
Corporation Employees' Savings Plan have duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
UNITED COMPANIES FINANCIAL CORPORATION
EMPLOYEES' SAVINGS PLAN
By: /s/ JESSE O. GRIFFIN
----------------------------------------
Jesse O. Griffin
Sr. Vice President and Director
of Accounting Services
Date: June 22, 1998
14
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ---------------------------------
<S> <C>
23 Independent Auditors' Consent
</TABLE>
<PAGE> 1
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-17366 of United Companies Financial Corporation on Form S-8 of our report
dated June 22, 1998, appearing in this Annual Report on Form 11-K of United
Companies Financial Corporation Employees' Savings Plan for the year ended
December 31, 1997.
/s/ DELOITTE & TOUCHE LLP
Baton Rouge, Louisiana
June 22, 1998
