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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): January 26, 1995
________________________________________________________________________________
GREYHOUND FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-7543 94-1278569
______________________________________________________________________________
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
DIAL CORPORATE CENTER, PHOENIX, ARIZONA 85077
_______________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 602/207-6900
_____________________________
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Item 5. Other Events.
Greyhound Financial Corporation, the principal operating company of GFC
Financial Corporation, who announced on January 25, 1995 its name
change, effective February 1, 1995, to The FINOVA Group Inc. along with
the change in its principal operating subsidiary's name to FINOVA
Capital Corporation, announced on January 26, 1995 revenues, net income
and selected financial data and ratios for the fourth quarter and year
ended December 31, 1994 (unaudited).
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
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<CAPTION>
Exhibits Title
_______________ ________________________________________
<S> <C>
28 Press Release of Greyhound Financial Corporation
dated January 26, 1995.
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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.
GREYHOUND FINANCIAL CORPORATION
(Registrant)
Dated: January 26, 1995 By /s/ Bruno A. Marszowski
____________________________________________________
Bruno A. Marszowski, Senior Vice President, Chief
Financial Officer
Principal Financial Officer/Authorized Officer
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EXHIBIT 28
Robert J. Fitzsimmons Immediate
602/ 207-5759 Release
THESE ARE THE EARNINGS FOR GREYHOUND FINANCIAL CORPORATION
THE PRINCIPAL SUBSIDIARY OF GFC FINANCIAL CORPORATION
_____________________________________________________
WHOSE EARNINGS WERE RELEASED JANUARY 24, 1995
GREYHOUND FINANCIAL CORPORATION
ANNOUNCES 1994 RESULTS FOR THE
FOURTH QUARTER AND YEAR-TO-DATE
PHOENIX, Arizona, January 26, 1995 -- Greyhound Financial Corporation, who
announced on January 25, 1995 that its name will change to FINOVA Capital
Corporation as of February 1, 1995, (the "Company") today reported strong
results for the fourth quarter and the year ended December 31, 1994, resulting
from its recent acquisitions, quality portfolio growth and sustained interest
margins.
Net income was $23.1 million for the fourth quarter of 1994 compared
to $10.8 million for the fourth quarter of 1993, a 114% increase in net income.
Net income for 1994 rose 104% to $74.3 million from $36.4 million in 1993. The
results for 1994 include income from TriCon Capital ("TriCon") acquired on
April 30, 1994 and Ambassador Factors ("Ambassador") acquired on February 14,
1994.
Sam Eichenfield, Chairman, President and Chief Executive Officer of
the Company, said that 1994 results reflect the enhanced earnings power of the
Company created by acquisitions in 1993 and 1994 as well as outstanding
performance from the Company's charter lines of business. Eichenfield said
that he was pleased with the growth of the portfolio, which doubled to $5.7
billion in 1994 due to the acquisitions and a record $1.8 billion of new
business volume. The portfolio grew at an annualized rate of 22% for the last
half of the year. Fee based business, primarily generated by Ambassador, grew
in 1994 with factoring volume exceeding $1.1 billion. The Company's portfolio
growth was achieved with high quality profitable assets, reflected in the fact
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that nonearnings continued to decline to 2.9% (from 3.6% at December 31, 1993)
of ending funds employed and securitizations ("managed assets").
Interest margins earned continue to hold at 6.0% of average earning
assets. This measurement compares favorably to 5.2% for the 1993 period,
reflecting the contributions of the acquisitions made in 1994 as well as the
continuing strong returns of the charter financial operations.
In early 1995, the Company helped protect its margins on floating-rate
transactions by hedging an additional $750 million of floating-rate debt to
lock in the spread between the Company's lending and borrowing rates. With
this hedge, the Company protected its margins on $1.5 billion of floating-rate
transactions (or approximately 50% of its floating-rate liabilities). Growth in
interest margins more than offset the higher provisions for possible credit
losses and the higher selling, administrative and other operating expenses
("operating expenses") in the 1994 periods.
The Company increased its loss provisions in 1994 due to the dynamics
and loss experience of the businesses acquired. Reserves and accrued
liabilities for possible credit losses are adequate at December 31, 1994,
representing 2.1% of managed assets, as well as 72.4% of nonearning assets.
The higher operating expenses are primarily attributable to the
additions of TriCon and Ambassador in 1994. The running rate of these
expenses, measured as a percent of interest margins earned, was 46.1% (for the
combined entities) in 1994 (45.9% for the fourth quarter of 1994), an
improvement over 47.5% in 1993.
Income taxes were higher in the fourth quarter of 1994 due to an
increase in income before income taxes and to a higher tax rate in effect
during the fourth quarter of 1994 (primarily attributable to foreign income
taxes provided). Income taxes for the twelve months of 1993 included a $4.9
million adjustment for increases in federal and state income tax rates
applicable to deferred taxes on leveraged leases.
Greyhound Financial Corporation, with assets of $5.8 billion, is a
Phoenix-based major domestic commercial finance company providing secured
lending to middle-market companies, making loans from $500,000 to $35 million.
The Company also offers financing programs to manufacturers, distributors,
vendors and franchisors to facilitate the sale of their products to end-users.
####
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GREYHOUND FINANCIAL CORPORATION
AND CONSOLIDATED SUBSIDIARIES
SUMMARY OF CONSOLIDATED INCOME
(UNAUDITED)
(Dollars in Thousands)
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<CAPTION>
Quarter Ended December 31, Year Ended December 31,
_______________________________________________________
1994 1993 1994 1993
_______________________________________________________
<S> <C> <C> <C> <C>
Interest earned from
financing transactions $159,850 $66,810 $503,351 $255,216
Interest expense 69,538 33,373 222,929 126,152
Depreciation 15,111 2,178 36,737 6,516
-------- ------- -------- --------
Interest margins earned 75,201 31,259 243,685 122,548
Provision for possible
credit losses 6,317 2,000 16,670 5,706
Gains on securitizations
and sale of assets 3,373 3,199 9,045 5,439
Selling, administrative and
other operating expenses 34,509 16,114 112,305 58,158
-------- ------- -------- --------
Income before income taxes 37,748 16,344 123,755 64,123
Income taxes (1) 14,604 5,521 49,442 27,682
-------- ------- -------- --------
Net Income $ 23,144 $10,823 $ 74,313 $ 36,441
======== ======= ======== ========
</TABLE>
(1) The results of operations for the year ended December 31, 1993 include an
adjustment of $4,857,000 representing the effect of federal tax increases
and state income taxes primarily applicable to deferred income taxes
generated by the company's leveraged lease portfolio.
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GREYHOUND FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA AND RATIOS (UNAUDITED)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Year Ended or as of
December 31,
______________________________
1994 (1) 1993 (4)
______________________________
<S> <C> <C>
FINANCIAL DATA:
Average funds employed (AFE) and securitizations (2) $4,629,578 $2,666,208
Ending funds employed (EFE) 5,667,644 2,846,571
Securitizations (2) 253,386
Average earning assets (3) 4,064,971 2,350,019
Nonearning assets 168,761 102,607
Reserve and accrued liabilities for possible credit losses (5) 122,233 64,280
Total debt 4,574,962 2,082,350
Stockholder's equity 781,986 345,291
New business 1,799,331 1,007,794
Factoring volume 1,129,936
Backlog (includes lines of credit) 764,326 419,455
Write-offs:
Quarter 16,118 4,238
Year-to-date 35,127 12,575
RATIOS:
Write-offs as a % of AFE and securitizations 0.8% 0.5%
Nonearning assets as a % of EFE and securitizations 2.9% 3.6%
Reserve and accrued liabilities for possible credit losses as a % of:
Ending funds employed and securitizations 2.1% 2.3%
Nonearning assets 72.4% 62.6%
Interest margins earned as a % of average earning assets:
Quarter (annualized) 5.9% 5.2%
Year-to-date 6.0% 5.2%
Selling, administrative and other operating expenses as a %
of interest margins earned:
Quarter 45.9% 51.5%
Year-to-date 46.1% 47.5%
Total debt to stockholder's equity 5.85 6.03
</TABLE>
___________
(1) Includes financial results from the acquisitions of Ambassador (February
14, 1994) and TriCon (April 30, 1994).
(2) Securitizations are assets sold under securitization agreements and
managed by the Company.
(3) Average earning assets are net of average deferred taxes on leveraged
leases and average nonaccruing assets for the periods presented.
(4) The 1993 periods exclude TriCon and Ambassador.
(5) Loss reserves for securitized transactions total $12,988 and are
classified as accrued liabilities in the balance sheet.
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