UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1998
--------------------
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from..........to...................................
Commission file number 1-3521
ARISTAR, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-4128205
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
8900 Grand Oak Circle, Tampa, FL 33637-1050
(Address of principal executive offices) (Zip Code)
(813) 632-4500
(Registrant's telephone number, including area code)
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
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of July 31, 1998, there were 1,000 shares of Common Stock outstanding.
Registrant meets the conditions set forth in General Instruction (H)(1)(a) and
(b) of Form 10-Q and is therefore filing this Form with the reduced disclosure
format.
<PAGE>
ARISTAR, INC. AND SUBSIDIARIES
FORM 10-Q
INDEX
Part I. Financial Information:
Item 1. Financial Statements
Consolidated Statements of Financial Condition -
June 30, 1998, December 31, 1997, and
June 30, 1997.......................................................3
Consolidated Statements of Operations, Comprehensive Income
and Retained Earnings -
Three Months and Six Months Ended June 30, 1998 and 1997............4
Consolidated Statements of Cash Flows -
Three Months and Six Months Ended June 30, 1998 and 1997............5
Notes to Consolidated Financial Statements........................6 - 8
Item 2. Management's Analysis of the
Results of Operations for the Six Months
Ended June 30, 1998.................................................. 9
Part II. Other Information:
Item 5. Other Information.........................................10
Item 6. Exhibits and Reports on Form 8-K.....................11 - 12
SIGNATURE..............................................................13
2
<PAGE>
Item 1. Financial Statements
<TABLE>
ARISTAR, INC. and Subsidiaries
Consolidated Statements of Financial Condition
June 30, December 31, June 30,
(Dollars in thousands) 1998 1997 1997
-------------- -------------- --------------
(Unaudited) (Unaudited)
ASSETS
<S> <C> <C> <C>
Consumer finance receivables, net $ 2,242,928 $ 2,254,389 $ 2,109,670
Investment securities 174,338 154,475 147,052
Cash and cash equivalents 11,403 26,446 22,062
Property and equipment, less accumulated
depreciation and amortization: 1998,
$23,182; 1997, $22,310 and $21,917 10,723 9,687 9,847
Excess of cost over equity of
companies acquired, less
accumulated amortization: 1998,
$61,587; 1997, $59,702 and $56,171 47,706 49,591 53,123
Other assets 38,934 39,440 36,845
------------ ------------ ------------
TOTAL ASSETS $ 2,526,032 $ 2,534,028 $ 2,378,599
============ ========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities
Short-term debt $ 314,798 $ 357,532 $ 452,683
Long-term debt 1,477,182 1,472,872 1,276,332
--------- --------- ---------
Total debt 1,791,980 1,830,404 1,729,015
Customer deposits 173,066 163,185 143,397
Accounts payable and other liabilities 47,724 47,209 51,247
Federal and state income taxes 14,730 24,628 11,507
Insurance claims and benefits reserves 8,851 7,824 7,489
Unearned insurance premiums and
commissions 65,001 62,594 56,939
------------ ------------ ------------
Total liabilities 2,101,352 2,135,844 1,999,594
------------ ------------ ------------
Stockholder's equity
Common stock: $1.00 par value;
10,000 shares authorized; 1,000
shares issued and outstanding 1 1 1
Paid-in capital 48,959 44,894 44,894
Retained earnings 374,834 352,756 334,476
Accumulated other comprehensive income:
Net unrealized holding gain (loss) on investment
securities 886 533 (366)
------------ ------------ -----------
Total stockholder's equity 424,680 398,184 379,005
------------ ------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $ 2,526,032 $ 2,534,028 $ 2,378,599
============ ========= ============
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE>
<TABLE>
ARISTAR, INC. and Subsidiaries
Consolidated Statements of Operations, Comprehensive Income and Retained Earnings
(Unaudited)
For the Three For the Six
Months Ended June 30, Months Ended June 30,
(Dollars in thousands) 1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Loan interest and fee income $ 97,683 $ 90,440 $ 194,895 $ 180,748
Investment securities income 2,967 2,530 5,822 4,983
----------- ----------- ----------- -----------
Total interest income 100,650 92,970 200,717 185,731
Interest and debt expense 32,693 31,586 65,853 63,415
----------- ----------- ----------- -----------
Net interest income 67,957 61,384 134,864 122,316
Provision for credit losses 18,300 15,600 36,300 31,000
Net insurance operations 4,638 5,377 10,377 10,555
Other income 1,139 1,612 1,889 2,500
----------- ----------- ----------- -----------
Total other income 5,777 6,989 12,266 13,055
Other expenses
Personnel costs 18,985 16,727 38,044 34,980
Occupancy expenses 2,569 2,436 5,122 4,933
Advertising expenses 1,430 1,253 2,875 2,305
Amortization of excess cost over
equity of companies acquired 866 1,766 1,885 3,532
Other operating expenses 9,042 9,009 18,926 19,014
----------- ----------- ----------- -----------
Total other expense 32,892 31,191 66,852 64,764
----------- ----------- ----------- -----------
Income before income taxes 22,542 21,582 43,978 39,607
Provision for federal and state income
taxes 8,900 8,500 17,400 15,600
----------- ----------- ----------- -----------
Net income 13,642 13,082 26,578 24,007
Other comprehensive income, before tax:
Net unrealized holding gains (losses) on securities
arising during period 61 (159) 506 (1,335)
Income tax expense (benefit) related to
items of other comprehensive income 6 (74) 153 (593)
----------- ---------- ----------- ------------
Other comprehensive income (loss), net of tax 55 (85) 353 (742)
----------- ---------- ----------- ------------
Comprehensive income $ 13,697 $ 12,997 $ 26,931 $ 23,265
=========== =========== =========== =============
Retained earnings
Beginning of period $ 361,192 $ 327,894 $ 352,756 $ 323,969
Net income 13,642 13,082 26,578 24,007
Dividends paid (6,500) (4,500) (13,500)
End of period $ 374,834 $ 334,476 $ 374,834 $ 334,476
=========== =========== =========== ============
</TABLE>
See Notes to Consolidated Financial Statements.
4
<PAGE>
<TABLE>
ARISTAR, INC. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited) For the Three For the Six
Months Ended June Months Ended June 30,
(Dollars in thousands) 1998 1997 1998 1997
----------- ----------- ----------- ------------
Cash flows from operating activities
<S> <C> <C> <C> <C>
Net income $ 13,642 $ 13,082 $ 26,578 $ 24,007
Adjustments to reconcile net income to net cash
provided by operating activities
Provision for credit losses 18,300 15,600 36,300 31,000
Depreciation and amortization 2,211 2,880 4,590 5,733
Deferred income taxes (39) 74 (185) 593
Increase (decrease) in
Accounts payable and other liabilities 1,444 11,439 515 4,881
Unearned insurance premiums and commissions
and insurance claims and benefits reserves 1,408 7 3,434 (1,074)
Currently payable income taxes (18,296) (3,630) (9,898) (2,329)
Other assets 4,655 (1,878) 506 5,185
----------- --------- ----------- ------------
Net cash provided by operating activities 23,325 37,574 61,840 67,996
----------- ----------- ----------- ------------
Cash flows from investing activities
Investment securities purchased (36,533) (27,614) (49,838) (39,834)
Investment securities matured 18,557 12,074 30,539 28,501
Consumer finance receivables originated
or purchased (408,156) (370,917) (741,389) (698,803)
Consumer finance receivables repaid 361,575 335,534 714,954 680,153
Net change in property and equipment (1,582) (185) (1,861) ( 347)
--------- ----------- ----------- ----------
Net cash used in investing activities (66,139) (51,108) (47,595) (30,330)
---------- ---------- ----------- ------------
Cash flows from financing activities
Net change in short-term debt 19,396 (12,128) (42,734) 54,677
Proceeds from issuance of long-term debt 21,500 10,000 27,500
Repayments of long-term debt (6,000) (6,000) (104,200)
Net change in customer deposits 7,369 (1,151) 9,881 (2,741)
Dividends paid (6,500) (4,500) (13,500)
Proceeds from affiliate transfer 4,065 4,065
----------- ----------- -----------
Net cash provided by (used in) financing
activities 24,830 1,721 (29,288) (38,264)
----------- ----------- ---------- -----------
Net decrease in cash
and cash equivalents (17,984) (11,813) (15,043) (598)
Cash and cash equivalents
Beginning of period 29,387 33,875 26,446 22,660
----------- ----------- ----------- ------------
End of period $ 11,403 $ 22,062 $ 11,403 $ 22,062
=========== =========== =========== ============
Supplemental disclosures of cash flow information
Interest paid $ 34,033 $ 30,205 $ 64,573 $ 68,154
Net intercompany payment in lieu of federal
and state income taxes $ 27,197 $ 12,133 $ 27,300 $ 17,934
</TABLE>
See Notes to Consolidated Financial Statements.
5
<PAGE>
ARISTAR, INC. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
Note 1 Basis of Presentation
The accompanying unaudited consolidated financial statements of Aristar, Inc.
and subsidiaries (the "Company") have been prepared in accordance with the
instructions to Form 10-Q and 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. These statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Certain amounts in prior periods have been reclassified to conform to the
current period's presentation.
Note 2 Ownership
The company is an indirect, wholly-owned subsidiary of Washington Mutual, Inc.
6
<PAGE>
ARISTAR, INC. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
<TABLE>
Note 3 Finance Receivables
Consumer finance receivables consisted of the following:
June 30, December 31, June 30,
(Dollars in thousands) 1998 1997 1997
------------- ---------------- --------------
Consumer finance receivables
<S> <C> <C> <C>
Real estate secured loans $ 1,163,924 $ 1,094,061 $ 1,054,338
Other installment loans 1,169,784 1,197,788 1,062,407
Retail installment contracts 309,645 362,373 367,698
------------- ------------- --------------
Gross consumer finance receivables 2,643,353 2,654,222 2,484,443
Less: Unearned finance charges and
deferred loan fees (324,326) (325,510) (303,920)
------------ ------------ -------------
Consumer finance receivables net of unearned
finance charges and deferred loan fees 2,319,027 2,328,712 2,180,523
Less: Allowance for credit losses (76,099) (74,323) (70,853)
------------ ------------ -------------
Net consumer finance receivables $ 2,242,928 $ 2,254,389 $ 2,109,670
============= ============= ==============
</TABLE>
Activity in the Company's allowance for credit losses is as follows:
<TABLE>
Three Months Ended Six Months Ended
June 30, June 30,
(Dollars in thousands) 1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Balance, beginning of period $ 74,491 $ 70,346 $ 74,323 $ 70,045
Provision for credit losses 18,300 15,600 36,300 31,000
Amounts charged-off
Real estate secured loans (264) (288) (714) (524)
Other installment loans (17,674) (15,792) (35,617) (31,631)
Retail installment contracts (3,650) (3,334) (7,328) (6,498)
----------- ----------- --------- -----------
(21,588) (19,414) (43,659) (38,653)
Recoveries
Real estate secured loans 143 53 320 148
Other installment loans 3,568 3,064 6,691 6,116
Retail installment contracts 779 672 1,521 1,359
------------ ----------- ---------- -----------
4,490 3,789 8,532 7,623
------------ ----------- ---------- -----------
Net charge-offs (17,098) (15,625) (35,127) (31,030)
Allowances on notes purchased 406 532 603 838
------------ ----------- ---------- -----------
Balance, end of period $ 76,099 $ 70,853 $ 76,099 $ 70,853
============ ============ ========== ===========
Allowance as a percentage of:
Consumer finance receivables net
of unearned finance charges and
deferred loan fees at period end 3.3% 3.2% 3.3% 3.2%
Current period annualized net charge-offs 111.3% 113.4% 108.3% 114.2%
</TABLE>
7
<PAGE>
ARISTAR, INC. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
<TABLE>
The following table sets forth the ratio of receivables delinquent for 60 days
or more, on a contractual basis, to gross receivables outstanding:
June 30, December 31, June 30,
1998 1997 1997
------------ -------------- -------------
<S> <C> <C> <C>
Real estate secured loans 0.8% 0.8% 0.7%
Other installment loans 4.6 4.3 4.2
Retail installment contracts 3.4 3.2 3.0
------------ -------------- -------------
2.7% 2.7% 2.6%
=========== ============= ============
</TABLE>
The table below sets forth certain percentages relative to the spread between
interest income received on the loan portfolio and interest expense:
<TABLE>
Three Months Ended Six Months Ended
June 30 June 30
--------------------------------- --------------------
1998 1997 1998 1997
---- ---- ---- ----
Ratio to Average Net Receivables:
<S> <C> <C> <C> <C>
Interest and Fee Income 17.5% 17.1% 16.9% 16.6%
Interest and Debt Expense 5.7 5.8 5.7 5.8
----------- ---------- ----------- ---------
Net Interest Spread 11.8% 11.3% 11.2% 10.8%
========== ========= ========== ========
</TABLE>
Note 4 Long-term Debt
Long-term debt consisted of the following:
<TABLE>
(Dollars in thousands) June 30, December 31, June 30,
1998 1997 1997
--------------- ------------ -------------
<S> <C> <C> <C>
Senior Notes and Debentures $ 1,248,430 $ 1,248,205 $ 1,049,147
Senior Subordinated Notes
and Debentures 199,852 199,767 199,685
Federal Home Loan Bank Notes 28,900 24,900 27,500
--------------- ------------- --------------
$ 1,477,182 $ 1,472,872 $ 1,276,332
=============== ============= ==============
</TABLE>
Note 5 Customer Deposits
Customer deposits consisted of the following:
<TABLE>
(Dollars in thousands) June 30, December 31, June 30,
1998 1997 1997
--------------- ------------- ---------
<S> <C> <C> <C>
Money market accounts $ 14,651 $ 15,883 $ 15,041
Savings accounts 1,033 1,493 1,811
Certificates of deposit
under $100,000 142,370 133,041 116,024
Certificates of deposit
$100,000 and over 15,012 12,768 10,521
--------------- ------------- --------------
$ 173,066 $ 163,185 $ 143,397
=============== ============= ==============
</TABLE>
8
<PAGE>
Item 2. MANAGEMENT'S ANALYSIS OF THE RESULTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
Net income for the six months ended June 30, 1998 of $26.6 million increased
10.7% from $24.0 million for the same period of 1997. The improvement reflects
an increase in net interest income resulting from higher receivables and net
interest spread, partially offset by higher credit and operating costs.
The Company's net interest income before provision for credit losses increased
$12.5 million, or 10.3%, to $134.9 million for the six months ended June 30,
1998, compared to the same period of 1997. Average net consumer finance
receivables outstanding of $2.3 billion were $124.8 million, or 5.8%, greater
for the six months ended June 30, 1998, as compared to the same period of 1997.
The increase in receivables reflects originations, excluding renewals, of $741.4
million which was up 6.1% compared to the same period during 1997. The increased
lending volume is due to home equity originations. A substantial portion of the
increase in home equity originations is in the state of Texas as a result of a
change in legislation that expanded the availability of that product as well as
increased lending in the Company's other markets. The overall portfolio yield
increased 30 basis points to 17.0% from 16.7% for the six months ended June 30,
1998 as compared to the same 1997 period. As a result, loan interest and fee
income increased $14.1 million, or 7.8%, for the six months ended June 30, 1998,
as compared to the six months ended June 30, 1997. Income from investment
securities increased $839 thousand, or 16.8%, for the six months ended June 30,
1998, as compared to the same 1997 period. As a result, total interest income
increased by $15.0 million, or 8.1%, for the six months ended June 30, 1998, as
compared to the six months ended June 30, 1997. Average debt outstanding of $2.0
billion increased $82 million, or 4.4%, and the weighted average interest rate
on such debt decreased by 3 basis points, resulting in an increase in interest
and debt expense of $2.4 million, or 3.8%, for the six months ended June 30,
1998, as compared to the same 1997 period.
The provision for credit losses for the six months ended June 30, 1998 was 3.17%
as an annualized percentage of average net consumer finance receivables for that
period, as compared to 2.86% for the first half of 1997. Net credit charge-offs
for the six months ended June 30, 1998 were 3.06% on an annualized percentage of
average net finance receivables, as compared to 2.86% for the same 1997 period.
The increase is due primarily to the national rise in bankruptcies which has
resulted in higher credit losses for the industry. At June 30, 1998 the
allowance for credit losses as a percentage of consumer finance receivables net
of unearned finance charges and deferred loan fees at period end equated to 3.3%
as compared to 3.2% at June 30, 1997.
Personnel costs were $3.1 million, or 8.8%, higher for the six months ended June
30, 1998, as compared to the same 1997 period. This is primarily due to normal
compensation increases and increased lending volumes.
Productivity, defined as the ratio of operating and administrative expenses
(before deferral of direct loan costs) to average outstanding finance
receivables, improved to 6.1% in the six months ended June 30, 1998 as compared
to 6.3% in the first half of 1997.
The Company has initiated a program to prepare the Company's computer system and
applications for years after 1999. Many computer programs use two digits to
identify the year in a date field. When computations involve years after 1999,
such programs could create erroneous results or fail. The Company is assessing
all internal programs and systems as well as contacting software vendors and
others with which it conducts business to ensure that potential problems are
identified and resolved. The Company expects to incur internal staff costs as
well as consulting and other expenses related to infrastructure enhancements
necessary to prepare the systems for the years after 1999 and to perform
appropriate testing. The Company does not believe that such process will
result in a material cost to the Company.
9
<PAGE>
PART II. OTHER INFORMATION
Item 5. Other Information
<TABLE>
The calculation of the Company's ratio of earnings to fixed charges as of the
dates indicated is shown below:
Six Months Year Six Months
Ended Ended Ended
June 30, December 31, June 30,
1998 1997 1997
------------ ------------ ------------
<S> <C> <C> <C>
Income before income taxes $ 43,978 $ 76,031 $ 39,607
------------ ------------ ------------
Fixed charges:
Interest and debt expense on
all indebtedness 65,853 128,887 63,415
Appropriate portion of
rentals (33%) 1,303 3,565 1,746
------------ ------------ ------------
Total fixed charges 67,156 132,452 65,161
------------ ------------ ------------
Earnings available for
fixed charges $ 111,134 $ 208,483 $ 104,768
============ ============ ============
Ratio of earnings
to fixed charges 1.65 1.57 1.61
============ ============ ============
</TABLE>
10
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(3) (a) Certificate of Incorporation of Aristar, Inc. as presently in
effect. (1)
(b) By Laws of Aristar, Inc. as presently in effect. (1)
(4) (a) Indenture dated as of May 1, 1991 between Aristar, Inc. and
Security Pacific National Bank, as trustee. (2)
(b) Indenture dated as of May 1, 1991 between Aristar, Inc. and
The First National Bank of Boston, as trustee. (2)
(c) Indenture dated as of July 1, 1992 between Aristar, Inc. and
The Chase Manhattan Bank, N.A., as trustee. (3)
(d) Indenture dated as of July 1, 1992 between Aristar, Inc. and
Citibank, N.A., as trustee. (3)
(e) Indenture dated as of July 1, 1995 between Aristar, Inc. and
The Bank of New York, as trustee. (4)
(f) Indenture dated as of October 1, 1997 between Aristar, Inc.
and First Union National Bank, as trustee, (5)
(g) The registrant hereby agrees to furnish the Securities and
Exchange Commission upon request with copies of all
instruments defining rights of holders of long-term debt of
Aristar, Inc. and its consolidated subsidiaries.
(27) Financial Data Schedule
11
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
Cont.
(1) Incorporated by reference to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1987, Commission
file number 1-3521.
(2) Incorporated by reference to Registrant's Current Report on
Form 8-K dated May 29, 1991, Commission file number 1-3521.
(3) Incorporated by reference to Registrant's Current Report on
Form 8-K dated June 24, 1992, Commission file number 1-3521.
(4) Incorporated by reference to Registrant's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1995, Commission
file number 1-3521.
(5) Incorporated by reference to Registrant's Current Report on
Form 8-K dated October 6, 1997, Commission file number
1-3521.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the period covered by this
Report.
12
<PAGE>
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 thereunto duly authorized.
ARISTAR, INC.
Date: August 14, 1998 By: /s/ Douglas G. Wisdorf
-------------------------------- ----------------------------
Douglas G. Wisdorf
Senior Vice President and
Chief Financial Officer
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This Schedule contains summary financial information extracted from the
Company's financial statements filed as part of its Report on Form 10-Q for the
six months ended June 30, 1998 and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<CIK> 0000007214
<NAME> Aristar
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-END> Jun-30-1998
<CASH> 11,403
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 174,338
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 2,319,027
<ALLOWANCE> (76,099)
<TOTAL-ASSETS> 2,526,032
<DEPOSITS> 173,066
<SHORT-TERM> 314,798
<LIABILITIES-OTHER> 47,724
<LONG-TERM> 1,477,182
0
0
<COMMON> 1
<OTHER-SE> 424,679
<TOTAL-LIABILITIES-AND-EQUITY> 2,526,032
<INTEREST-LOAN> 194,895
<INTEREST-INVEST> 5,822
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 200,717
<INTEREST-DEPOSIT> 4,863
<INTEREST-EXPENSE> 65,853
<INTEREST-INCOME-NET> 134,864
<LOAN-LOSSES> 36,300
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 66,852
<INCOME-PRETAX> 43,978
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,578
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 7.94
<LOANS-NON> 51,060
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 74,323
<CHARGE-OFFS> (43,659)
<RECOVERIES> 8,532
<ALLOWANCE-CLOSE> 76,099
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 76,099
<FN>
Aristar, Inc. is technically a Commercial and Industrial Company subject to
Article 5 of Regulation S-X. However, as its primary business is consumer
finance, the Company, although not a bank holding company, is engaged in similar
lending activities. Therefore, in accordance with Staff Accounting Bulletin
Topic 11-K, "Application of Article 9 and Guide 3," the Company has prepared its
Financial Data Schedule for the six months ended June 30, 1998 using the Article
9 format.
</FN>
</TABLE>
