ARISTAR INC
8-K, 2000-03-02
PERSONAL CREDIT INSTITUTIONS
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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): March 1, 2000

                                  ARISTAR, INC.
             (Exact name of registrant as specified in its charter)

        DELAWARE                         1-3521                  95-4128205
(State or other jurisdiction      (Commission File No.)        (IRS Employer
   of incorporation)                                         Identification No.)

                8900 Grand Oak Circle, Tampa, Florida 33637-1050
                     (Address of principal executive office)

                                 (813) 632-4500
               (Registrant's telephone number including area code)

Item 5.  Other Events

     On March 1, 2000, registrant changed its name to "Washington Mutual Finance
Corporation."

Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits

         (c)   Exhibits

         99.1  Material  presented  at an  investors'  conference  sponsored  by
               Donaldson Lufkin and Jenrette Securities  Corporation on March 2,
               2000.

<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 hereunto duly authorized.

                                           Washington Mutual Finance Corporation


                                           By:  /s/ Fay L. Chapman
                                                Fay L. Chapman
                                                Executive VicePresident

<PAGE>

                            A Company in Transition
                            -----------------------
                                4th Quarter 1999
                                   Financial
                                  Performance

                                 March 3, 2000


Exhibit 99.1

Company Profile

- -   Headquartered in Tampa, Florida
- -   $3.2 billion in assets
- -   $3.1 billion in loans
- -   Founded in 1927
- -   538 offices in 25 states
- -   2,766 full time employees

<PAGE>

Product Profile:

- -   Personal Unsecured (43%)                   $1.3 billion
    -   Average Loan Balance of $2,250

- -   Real Estate (47%)                          $1.5 billion
    -   60% First Mortgages and 40% Second Mortgages
    -   Average Loan-to-Value Approximately 73%
    -   Average Loan Balance of $27,700

- -   Sales Finance (10%)                        $.3 billion
    -   8,767 Dealerships in 25 States
    -   Average Loan Balance of $825

<PAGE>

The New Look......

[Washington Mutual Finance]

<PAGE>

Strategy - Expand the Reach

- -  Expand national "franchise"
- -  Reinforce our dominant position in small to mid-size markets
- -  Take on our competition in primary markets
- -  Diversify distribution beyond retail branch network
- -  Pursue  acquisitions

<PAGE>

Strategy - Nurture the Franchise

- -  Leverage existing customer base by
   -  Focusing on core products
   -  Up-selling and cross-selling
- -  Promote a sales  culture to improve the  historically slow receivables growth
   rate
- -  Eliminate unprofitable ancillary products

<PAGE>

Strategy - Low Cost Producer

- -   Target Mid to Low 30's Efficiency Ratio
- -   1999 Restructuring --> 2000
    Rationalization
- -   Centralization
- -   Infrastructure

<PAGE>

Strategy - Strengthen the Center

- -   Enhance credit risk capabilities
- -   Develop segmentation and target marketing capabilities
- -   Manage business mix
- -   Maintain financial discipline

<PAGE>

Fourth Quarter 1999 Results

- -    Net income  increased by $10.7 million (93%) to $22.2 million , compared to
     $11.5 million for the 4Q98

- -    Return on equity improved from 10.79% in 4Q98 to 19.03%

- -    Reserve coverage to charge-offs strengthened during the quarter

- -    Operating efficiency ratio improved from 51.26% in 4Q98 to 36.65%

<PAGE>

Fourth Quarter 1999 Results

Income Statement ($ Millions)
<TABLE>
<CAPTION>
                                                  Dollar         %
                           4Q99         4Q98      Change      Change
                           -----        -----     ------      ------
<S>                       <C>          <C>        <C>         <C>
Net Interest Income       $ 85.1       $ 76.5     $ 8.6       11.2%
Other Income                 8.5          7.0       1.5       21.4
                             ---         ----       ---       ----
   Net Margin             $ 93.6       $ 83.5     $ 10.1      12.1

Provision for
 loan losses                23.8         21.6        2.2      10.2
G & A Expense               34.3         42.8      ( 8.5)    (19.9)
                            ----         ----       ----     ------
  Net Income
  before taxes            $ 35.5       $ 19.1     $ 16.4      85.9
Provision for
 income taxes               13.3          7.6        5.7      75.0
                            ----          ---        ---      ----
            Net Income    $ 22.2       $ 11.5     $ 10.7      93.0%
</TABLE>

Key Ratios
- ----------
ROAA                         2.83%            1.72%
ROE                          9.03%           10.79%
Efficiency Ratio            36.65%           51.26%
Net Margin *                11.81%           12.38%

* Defined as net interest income and other income divided by average assets

<PAGE>

1999 Full Year Results

Income Statement ($ Millions)
<TABLE>
<CAPTION>
                                                   Dollar         %
                           1999         1998       Change       Change
                           ----         ----       -------     --------
<S>                        <C>          <C>        <C>         <C>
Net Interest Income       $325.4       $283.2      $ 42.2       14.9%
Other Inco                  29.5         27.1         2.4        8.9
                            ----         ----         ---        ---
         Net Margin       $354.9       $310.3      $ 44.6       14.3

Provision for
loan losses                100.6         79.7        20.9       26.2
G & A Expense              135.6        143.0        (7.4)      (5.2)
                           -----        -----        ----        ----
         Net Income
         before taxes     $118.7        $87.6      $ 31.1       35.5
Provision for
income taxes                45.7         34.7        11.0       31.7
                            ----         ----        ----       ----
         Net Income       $ 73.0         52.9       $20.1       38.0%
</TABLE>

Key Ratios
- ----------
ROAA                                   2.48%              2.05%
ROE                                   16.39%           12.70%
Operating Efficiency                  38.21%           46.08%
Net Margin                            11.88%           11.81%
Net C/O to Average Receivables         2.87%             3.10%
Reserve to Total Loans                 3.28%             3.13%

* Defined as net interest income and other income divided by average assets

<PAGE>

1999 Full Year Results

Loans Receivables Growth  ($ Millions)
<TABLE>
<CAPTION>
                                                   Dollar       %
                          12/31/99   12/31/98      Change     Change
                           -----       -----        ---        ----
<S>                       <C>         <C>          <C>         <C>
Real Estate               $1,630      $1,270       $360        28.3%
Personal Loans             1,567       1,362        205        15.0
Sales Finance                328         328          0         0.0
                             ---         ---          -         ---
Total Loans               $3,525      $2,960       $565        19.1%

Allowance for
Unearned Income
And
Deferred Charges            (464)       (385)       (79)       20.5
Reserve for
 loan losses                (100)        (81)       (19)       23.5
                            -----        ----       ----       ----
Total Loans Net
of Reserves               $2,961      $2,494       $467        18.7%
</TABLE>

<PAGE>

Best In Class Comparison

<TABLE>
<CAPTION>
                                     Best In
                    Aristar           Class       Peer AVG
                    -------           -----       --------
<S>                 <C>              <C>          <C>
ROE                  15.01            16.92         13.62
ROA                   2.37             2.51          1.98
Growth               16.45            16.45         11.08
Net Margin           11.2             11.2           7.31
Efficiency Ratio     38.9             38.9          48.4
Charge-Off            2.88             1.77          2.70
Delinquency           2.35             1.67          3.29
</TABLE>

Source: SNL Database, Peer Analysis,  Financial ratios presented as of September
30, 1999 YTD.

The Peer Group includes American General Finance  Corporation,  Associates North
America,  Household Finance  Corporation,  Norwest Financial Inc. and Commercial
Credit Company

<PAGE>

Balance Sheet Management


- -   Target Capital Structure
    - Firm manages  capital by targeting  debt to tangible  equity, current debt
      to tangible  equity is 6.0%
    - We plan to increase  leverage  modestly  over 2000 but will not jeopardize
      rating
    - Dividend  policy is  smoothed based on  our forecast of receivables growth
      and the impact on overall leverage
    - WM Finance targets  a  25/75  ratio of  short-term and long-term corporate
      borrowings, currently at a 10/90 ratio

<PAGE>

Debt Ratings

                          S/T        L/T Unsecured
Agency                    Debt          Debt
- --------                  ----          ----
Duff & Phelps             D-1            A
Fitch IBCA                F-1            A
Moody's                   P-2            A3
Standard & Poors          A-2            A-

<PAGE>

Balance Sheet Management

- -    Liquidity and Funding Strategy

  -  Company  currently   maintains  a  $1.2  billion  fully  committed  back-up
     facility,  providing more than 1:1 coverage of short term debt requirements

  -  Company has filed a shelf  registration  with the SEC for $1.0  billion and
     participated in two recent debt offerings for $250 million and $300 million
     to facilitate acquisitions and reduce outstanding commercial paper, leaving
     $450 million capacity  available

  -  No further senior issues planned for 1st half of 2000


<PAGE>

Balance Sheet Management

- -   Liquidity and Funding Strategy (Cont'd)

  -  Manage interest rate risk through duration-matching strategy, nominal value
     at risk

  -  No Derivatives

  -  No Securitizations

<PAGE>

Credit Performance

- -    While  delinquency  %'s are at a 4 year low, the improvement is clearly not
     just growth driven.  Delinquency  and credit quality control remains strong
     in the portfolio.

     -  30day + delinquency dollar growth in `99 was slower than in 1997 & 1998.

     -  As of January we have 7,600 less  delinquent  accounts on the books than
        we did same time last year - and the lowest for any January since 1997.

     -  The  first payment default rate for 1999 booked  loans  outperformed the
        1997 and 1998 vintages in every month.

     -  `99 vintages show continued signs of improvement over prior years.

<PAGE>

Conclusion:

- -        A unique investment story
- -        Strong historic franchise
- -        Excellent fundamental performance
- -        A strategy of rapid modernization
- -        Makes the credit a relative value
         -   Current high spread is not justified




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