<PAGE> 1
Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act
of 1934
<TABLE>
<S> <C>
For the quarterly period Commission file number:
ended MARCH 31, 1996 0-22832
-------------- -----------------------
</TABLE>
ALLIED CAPITAL LENDING CORPORATION
--------------------------------------------------------
(exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
MARYLAND 52-1081052
- ----------------------- ------------------------
(State or jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
</TABLE>
C/O ALLIED CAPITAL ADVISERS, INC.
1666 K STREET, NW
9TH FLOOR
WASHINGTON, DC 20006
--------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (202) 331-1112
--------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 12 of 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods as 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
----- -----
On May 3, 1996 there were 4,389,461 shares outstanding of the Registrant's
common stock, $0.0001 par value.
<PAGE> 2
ALLIED CAPITAL LENDING CORPORATION
FORM 10-Q INDEX
<TABLE>
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet as of March 31, 1996
and December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Consolidated Statement of Operations - For the Three Months Ended
March 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Consolidated Statement of Changes in Net Assets - For the Three Months
Ended March 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statement of Cash Flows for the Three Months
Ended March 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . 9
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
<PAGE> 3
PART I - Financial Information
Item 1. Financial Statements
ALLIED CAPITAL LENDING CORPORATION
CONSOLIDATED BALANCE SHEET
(in thousands, except number of shares)
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
-------------- -----------------
(unaudited)
<S> <C> <C>
ASSETS
Investments at value:
Loans receivable (cost: 1996 - $43,946; 1995 - $46,451) . . . . . . $ 43,730 $ 46,223
Loan held for sale (cost: 1996 - $586; 1995 - $851) . . . . . . . . 626 924
-------- -------
Total investments . . . . . . . . . . . . . . . . . . . . . 44,356 47,147
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . 1,237 3,020
Accrued interest receivable . . . . . . . . . . . . . . . . . . . . . 703 732
Excess servicing asset . . . . . . . . . . . . . . . . . . . . . . . 4,230 3,828
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 638 753
-------- -------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . $ 51,164 $ 55,480
======== =======
LIABILITIES AND SHAREHOLDER'S EQUITY
Liabilities:
Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,008 $ 18,914
Accounts payable and accrued expenses . . . . . . . . . . . . . . . 1,877 3,012
Investment advisory fee payable . . . . . . . . . . . . . . . . . . 314 330
Dividends and distributions payable . . . . . . . . . . . . . . . . -- 340
-------- -------
Total liabilities . . . . . . . . . . . . . . . . . . . . . 18,199 22,596
-------- -------
Commitments and Contingencies
Shareholders' Equity
Common stock, $0.0001 par value; 20,000,000 shares
authorized; 4,389,461 and 4,384,921 shares issued and
outstanding at 3/31/96 and 12/31/95 . . . . . . . . . . . . . . . . -- --
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . 33,318 33,252
Net unrealized depreciation on investments . . . . . . . . . . . . . (176) (155)
Distributions in excess of accumulated earnings . . . . . . . . . . (177) (213)
-------- -------
Total shareholders' equity . . . . . . . . . . . . . . . . 32,965 32,884
-------- -------
Total liabilities and shareholders' equity . . . . . . . . $ 51,164 $ 55,480
======== =======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS
1
<PAGE> 4
ALLIED CAPITAL LENDING CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
-----------------------------
1996 1995
-------- ---------
<S> <C> <C>
Investment Income:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,591 $ 1,222
Premium income . . . . . . . . . . . . . . . . . . . . . . . . 662 605
-------- --------
Total investment income . . . . . . . . . . . . . . . . . . . 2,253 1,827
-------- --------
Expenses:
Investment advisory fee . . . . . . . . . . . . . . . . . . . . 314 224
Interest expense . . . . . . . . . . . . . . . . . . . . . . . 396 74
Other operating expenses . . . . . . . . . . . . . . . . . . . 132 135
-------- --------
Total expenses . . . . . . . . . . . . . . . . . . . . . . . 842 433
-------- --------
Net investment income . . . . . . . . . . . . . . . . . . . . . . 1,411 1,394
Net realized (losses) recoveries on investments . . . . . . . . . (60) 10
-------- --------
Net investment income before net unrealized
depreciation on investments . . . . . . . . . . . . . . . . . . 1,351 1,404
Net unrealized depreciation on investments . . . . . . . . . . . (21) (59)
-------- --------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,330 $ 1,345
======== ========
Earnings per share . . . . . . . . . . . . . . . . . . . . . . . $ 0.30 $ 0.31
======== ========
Weighted average number of shares and share
equivalents outstanding . . . . . . . . . . . . . . . . . . . . 4,386 4,370
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS
2
<PAGE> 5
ALLIED CAPITAL LENDING CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
--------------------------------------------
1996 1995
----------- -----------
<S> <C> <C>
Increase in Net Assets Resulting from Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . $ 1,411 $ 1,394
Net realized (losses) recoveries on investments . . . . . . . . (60) 10
Net change in unrealized depreciation on investments . . . . . (21) (59)
-------- --------
Net increase in net assets resulting from operations . . . 1,330 1,345
Distributions to Shareholders from:
Net investment income . . . . . . . . . . . . . . . . . . . . (1,315) (1,179)
Capital Share Transactions:
Issuance of common shares in connection with dividend
reinvestment plan . . . . . . . . . . . . . . . . . . . . . . . . . 66 43
-------- --------
Total increase in net assets . . . . . . . . . . . . . . . . . . . 81 209
Net assets at beginning of period . . . . . . . . . . . . . . . . . 32,884 32,788
-------- --------
Net assets at end of period . . . . . . . . . . . . . . . . . . . . $ 32,965 $ 32,997
======== ========
Net asset value per share . . . . . . . . . . . . . . . . . . . . . $ 7.51 $ 7.55
======== ========
Shares outstanding at end of period . . . . . . . . . . . . . . . . 4,389 4,373
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS
3
<PAGE> 6
ALLIED CAPITAL LENDING CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
For the three months ended March 31,
------------------------------------
1996 1995
----- -----
<S> <C> <C>
Cash Flows from Operating Activities:
Net increase in net assets resulting from operations . . . . . . . . . . . . . . $ 1,330 $ 1,345
Adjustments to reconcile net increase in assets resulting from operations to net
cash provided by (used in) operating activities:
Premium income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (662) (605)
Amortization of loan discounts and fees . . . . . . . . . . . . . . . . . . (100) (110)
Net realized loss (recoveries) on investments . . . . . . . . . . . . . . . 60 (10)
Net unrealized depreciation on investments . . . . . . . . . . . . . . . . 21 59
Changes in assets and liabilities:
Accrued interest receivable. . . . . . . . . . . . . . . . . . . . . . . . . . 29 (156)
Excess servicing asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . (402) (256)
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 267
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . (1,135) 111
Investment advisory fee payable . . . . . . . . . . . . . . . . . . . . . . . (16) (5)
---------- ----------
Net cash (used in)provided by operating activities . . . . . . . . . . . . (760) 640
---------- ----------
Cash flows from Investing Activities:
Loan originations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,509) (8,917)
Proceeds from the sale of loans . . . . . . . . . . . . . . . . . . . . . . . . 8,080 9,981
Collection of principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,901 566
---------- ----------
Net cash provided by investing activities . . . . . . . . . . . . . . . . 3,472 1,630
---------- ----------
Cash Flows from Financing Activities:
Dividends and distributions paid . . . . . . . . . . . . . . . . . . . . . . . (1,589) (1,398)
Net borrowings (repayments) under revolving lines of credit . . . . . . . . . (2,906) (735)
---------- ----------
Net cash used in financing activities . . . . . . . . . . . . . . . . . (4,495) (2,133)
---------- ----------
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . (1,783) 137
Cash and cash equivalents, beginning of period . . . . . . . . . . . . . . . 3,020 1,297
---------- ----------
Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . . . $ 1,237 $ 1,434
========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
4
<PAGE> 7
ALLIED CAPITAL LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)
NOTE 1. GENERAL
In the opinion of management, the accompanying unaudited consolidated
financial statements of Allied Capital Lending Corporation (the
Company) contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the Company's consolidated
financial position as of March 31, 1996 and the results of operations
and changes in net assets for the periods indicated. Certain
information and footnote disclosures normally included in the
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's
December 31, 1995 Annual Report. The results of operations for the
three months ended March 31, 1996 are not necessarily indicative of
the operating results to be expected for the full year. Certain
reclassifications have been made to the 1995 financial statements in
order to conform to the 1996 presentation.
NOTE 2. DISTRIBUTIONS
The Company's board of directors declared and the Company paid a
dividend of $0.30 per share for the first quarter of 1996. The
Company's board of directors also declared an extra distribution in
December 1995 of $0.0775 per share, which was paid to stockholders on
January 31, 1996, for a total distribution in 1995 equal to $1.22 per
share.
NOTE 3. NOTES PAYABLE
The Company has a $19,000,000 secured line of credit with a bank which
expires December 31, 1996. The interest rate associated with this
line of credit is equal to the one-month LIBOR plus 2.2 percent per
annum, payable monthly. As of March 31, 1996 and December 31, 1995,
the Company was paying interest at 7.51 percent and 7.95 percent per
annum, respectively, on the amounts outstanding under this line. The
line of credit requires a quarterly facility fee of 0.375 percent per
annum on the unused portion of the line of credit. As of March 31,
1996 and December 31, 1995, the Company had outstanding borrowings
under the secured line of credit equal to $8,950,000 and $13,335,000,
respectively.
The Company had a $2,000,000 unsecured line of credit with a bank,
which charged interest at The Wall Street Journal prime rate plus 0.25
percent per annum, payable monthly, that expired April 24, 1996. As
of March 31, 1996 and December 31, 1995, the Company was paying
interest at 8.50 percent and 8.75 percent per annum, respectively, on
the amounts outstanding under this line. The line of credit required a
quarterly facility fee of 0.375 percent per annum on the unused
portion of the line of credit. As of March 31, 1996 and December 31,
1995, the Company had outstanding borrowings under the unsecured line
of credit equal to $775,000 and $1,055,000, respectively
The Company's subsidiary has a credit agreement whereby the subsidiary
can borrow up to $20,000,000 in order to finance its loans to small
business concerns. This credit agreement bears interest at a rate
equal to one-month LIBOR plus 2 percent per annum, payable monthly,
and expires on September 27, 1996. As of March 31, 1996 and December
31, 1995, the subsidiary was paying interest of 7.44 percent and
ranging from 7.75 to 7.93 percent per annum, respectively, on the
amounts outstanding under this line. The agreement requires a
quarterly facility fee of 0.15 percent per annum on the unused portion
of the line. As of March 31, 1996 and December 31, 1995, the
subsidiary had outstanding borrowings under this agreement equal to
$6,283,000 and $4,524,000, respectively.
NOTE 4. SUBSEQUENT EVENTS
The Company issued to common stockholders of record at the close of
business on April 26, 1996, non-transferable subscription rights that
entitle record date stockholders to subscribe for and purchase from
the Company up to one authorized, but heretofore unissued share of the
Company's common stock for each five
5
<PAGE> 8
ALLIED CAPITAL LENDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)
subscription rights held. The offer commenced on May 6, 1996 and the
Company is offering a total of 628,909 shares of common stock pursuant
to this offer. Stockholders who fully exercise their subscription
rights are entitled to the additional privilege of subscribing for
shares from the offering not acquired by the exercise of subscription
rights. In addition, the Company at its option may increase the
number of shares subject to subscription by up to 15 percent, or up to
94,336 shares, for an aggregate total of 723,245 shares available
under the offering.
The subscription price per common share will be equal to 95 percent of
the average of the last reported sale price of a share of common stock
on the Nasdaq National Market on June 4, 1996 (the expiration date)
and each of the four preceding business days.
NOTE 5. COMMITMENTS AND CONTINGENCIES
Commitments. The Company had loan commitments outstanding equal to
$32.8 million at March 31, 1996 to invest in various existing and
prospective portfolio companies.
6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company originated $6.5 million in new loans during the first
quarter of 1996. Net of loan sales, repayments and changes in
portfolio valuation, the Company's total loans to small businesses
decreased by $2.8 million to $44.4 million at March 31, 1996 as
compared to December 31, 1995. At March 31, 1996, loans to small
businesses totaled 87% of the Company's total assets, compared to 85%
at December 31, 1995.
As of March 31, 1996 and December 31, 1995, the Company was paying an
interest rate of 7.51% and 7.95% per annum, respectively for its $19
million secured line of credit. The secured line of credit expires
December 31, 1996. The Company had total borrowings under this
facility equal to $8.9 million at March 31, 1996. In April 1996, this
line of credit was amended to increase the borrowing limit to $20
million. This line of credit is used to finance loans made under the
Section 7(a) guaranteed loan program.
As of March 31, 1996 the Company had an unsecured line of credit with
a borrowing limit of $2 million that bears interest at The Wall Street
Journal prime rate plus 0.25% per annum. As of March 31, 1996 and
December 31, 1995, the Company was paying an interest rate of 8.50%
and 8.75% per annum, respectively, and had total borrowings under the
facility equal to $0.8 million at March 31, 1996. In April 1996, the
Company canceled this unsecured line of credit.
The Company, through its subsidiary, has a credit agreement with an
investment bank whereby the subsidiary can borrow up to $20 million in
order to finance its loans closed under the SBA 504 program and
companion loans closed in conjunction with guaranteed loans. This
credit agreement bears interest at one-month LIBOR plus 2% per annum
and expires in September 1996. As of March 31, 1996 and December 31,
1995, the Company was paying interest of 7.44% and ranging from 7.75%
to 7.93% per annum, respectively. The Company had total borrowings
under this agreement equal to $6.3 million at March 31, 1996.
In addition, the Company's subsidiary entered into a new line of
credit with a bank in April 1996 to borrow up to $15 million at
one-month LIBOR plus 2.7% which expires May 31, 1997. This line of
credit will also be used to finance the subsidiary's loans closed
under the Section 504 program and companion loans closed in
conjunction with guaranteed loans.
Management plans to continue to use leverage to finance the growth of
the Company, however as a business development company (BDC), the
Company must maintain 200% asset coverage for indebtedness
representing senior securities, which will limit the Company's ability
to borrow. It is management's belief that the Company will have
access to the capital resources necessary to expand and develop its
business. The Company may seek to obtain funds through additional
equity offerings, debt financings, or loan sales. The Company
anticipates that adequate cash will be available to make new loans,
fund its operating and administrative expenses, satisfy debt service
obligations and pay dividends throughout 1996.
The Company issued to common stockholders of record at the close of
business on April 26, 1996, non-transferable subscription rights that
entitle record date stockholders to subscribe for and purchase from
the Company up to one authorized, but heretofore unissued share of the
Company's common stock for each five subscription rights held. The
offer commenced on May 6, 1996 and the Company is offering a total of
628,909 shares of common stock pursuant to this offer. Stockholders
who fully exercise their subscription rights are entitled to the
additional privilege of subscribing for shares from the offering not
acquired by the exercise of subscription rights. In addition, the
Company at its option may increase the number of shares subject to
subscription by up to 15 percent, or up to 94,336 shares, for an
aggregate total of 723,245 shares available under the offering.
The subscription price per common share will be equal to 95 percent of
the average of the last reported sale price of a share of common stock
on the Nasdaq National Market on June 4, 1996 (the expiration date)
and each of the four preceding business days.
The Company is anticipating a reorganization of its corporate
structure and is in the process of seeking exemptive relief from the
Commission and permission from the SBA for the new structure. Under
the proposed new structure the Company would become a holding company
with two wholly owned subsidiaries ("Subsidiary I" and "Subsidiary
II"). The Company will transfer its SBLC license and all Section 7(a)
loans and related assets
7
<PAGE> 10
to Subsidiary I in return for 100% of Subsidiary I's stock. The
Company will contribute its 99% limited partnership interest in its
Subsidiary and all of its loans and related assets to Subsidiary II in
return for 100% of its stock. Simultaneously with this transaction,
Subsidiary II will purchase the 1% limited partnership interest of the
Subsidiary not owned by the Company from the limited partner at a
nominal purchase price. The Company believes the new structure will
provide the Company and its proposed subsidiaries with greater
flexibility to operate within certain regulatory constraints and
further increase its ability to generate loans.
RESULTS OF OPERATIONS
Comparison of the Three Months Ended March 31, 1996 to March 31, 1995
For the three months ended March 31, 1996, the net increase in net
assets resulting from operations was $1.3 million, or $0.30 per share,
which was even with $1.3 million, or $0.31 per share, for the same
period for 1995.
Investment income increased $426,000 or 23%, over the comparative
three months in 1995 to $2.3 million. This increase is due to the net
increase in loans of $12.5 million from March 31, 1995, which
increased interest income earned by the Company. Premium income from
the sales of the guaranteed portion of the Section 7(a) guaranteed
loans was $662,000 in the three months ended March 31, 1996 as
compared to $605,000 for the three months ended March 31, 1995.
Investment advisory fees increased from $314,000 for the three months
ended March 31, 1996, a 40% increase over $224,000 for the three
months ended March 31, 1995. This increase is a result of an increase
in invested and other assets on which the advisory fee is based.
Interest expense was $369,000 for the three months ended March 31,
1996 as compared to $74,000 for the same period in 1995. This
increase is due to the Company and its subsidiary financing its new
investments in loans by using leverage, which resulted in an increase
in notes payable outstanding of $16 million at March 31, 1996 compared
to $2.4 million at March 31, 1995. All other expenses of $132,000
for the three months ended March 31, 1996 were approximately constant
with $135,000 for the same period of 1995.
8
<PAGE> 11
Part II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The Company is not a defendant in any material pending legal
proceeding and no such material proceedings are known to be
contemplated.
Item 2. CHANGES IN SECURITIES
No material changes have occurred in the securities of the Registrant.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
Not applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) List of Exhibits
11 Statement of Computation of Earnings Per Share
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the
quarter ended March 31, 1996.
9
<PAGE> 12
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 thereunder duly authorized.
ALLIED CAPITAL LENDING CORPORATION
----------------------------------
(Registrant)
/s/ Jon A.DeLuca
----------------------------------
Date: May 13, 1995 Jon A. DeLuca
------------ Executive Vice President and
Chief Financial Officer
10
<PAGE> 1
Allied Capital Lending Corporation
Exhibit 11 Computation of Earnings Per Common Share
Form 10-Q
March 31, 1994
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
----------------------------------
1996 1995
----------------------------------
<S> <C> <C>
Primary Earnings Per Common Share:
Net Increase in Net Assets Resulting
from Operations $1,330,000 $1,345,000
==================================
Weighted average number of
shares outstanding 4,370,434 4,370,434
Weighted average number of
shares issuable on exercise
of outstanding stock options - -
----------------------------------
Weighted average number of shares and
share equivalents outstanding 4,385,564 4,370,434
==================================
Earnings per Share $0.30 $0.31
==================================
Fully Diluted Earnings Per Common Share:
Net Increase in Net Assets Resulting
from Operations $1,330,000 $1,345,000
==================================
Weighted average number of
shares and share equivalents
outstanding as computed for
primary earnings per share 4,385,564 4,370,434
Weighted average of additional
shares issuable on exercise
of outstanding stock options - -
----------------------------------
Weighted average of shares and
share equivalents outstanding, as adjusted 4,385,564 4,370,434
==================================
Earnings per Share $0.30 $0.31
==================================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ALLIED
CAPITAL LENDING CORPORATION AND SUBSIDIARY'S CONSOLIDATED BALANCE SHEET AND
CONSOLIDATED STATEMENTS OF OPERATIONS, CHANGES IN NET ASSETS AND CASH FLOWS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<INVESTMENTS-AT-COST> 44,532
<INVESTMENTS-AT-VALUE> 44,356
<RECEIVABLES> 703
<ASSETS-OTHER> 638
<OTHER-ITEMS-ASSETS> 5,467
<TOTAL-ASSETS> 51,164
<PAYABLE-FOR-SECURITIES> 0
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</TABLE>
