<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________________to _________________________
Commission file number 0-22474
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
American Business Credit, Inc. 401(k) Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
American Business Financial Services, Inc.
111 Presidential Blvd.
Bala Cynwyd, PA 19004
Index to Exhibits appears on page 16
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AMERICAN BUSINESS CREDIT, INC. 401(K) PLAN
INDEX TO
FINANCIAL STATEMENTS
Page
Independent Auditors' Report............................................. 1
Statements of Net Assets Available for Benefits.......................... 2
Statement of Changes in Net Assets Available for Benefits................ 3
Notes to Financial Statements............................................ 4
Independent Auditors' Report on Supplemental Material.................... 9
Schedule of Assets held for Investment Purposes.......................... 10
Schedule of Reportable Transactions...................................... 11
i
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Independent Auditors' Report
The Participants and Administrator of the
American Business Credit, Inc.
401(k) Plan
Bala Cynwyd, Pennsylvania
We have audited the accompanying statements of net assets available for benefits
of the American Business Credit, Inc. 401(k) Plan (the "Plan") as of December
31, 1999 and 1998, and the related statement of changes in net assets available
for benefits for the year ended December 31, 1999. 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 audits 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, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1999 and 1998, and the changes in net assets available for benefits
for the year ended December 31, 1999 in conformity with generally accepted
accounting principles.
/s/ BDO Seidman LLP
-----------------------------------------
BDO Seidman LLP
Philadelphia, PA
November 17, 2000
1
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American Business Credit, Inc.
401(k) Plan
Statements of Net Assets Available for Benefits
<TABLE>
<CAPTION>
December 31, 1999 1998
-------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Investments, at fair value (Note 3)
ML Ready Asset Trust $ 496,844 $ 255,042
Mutual funds
ML Fundamental Growth Fund 1,549,734 716,499
GAM International Fund 320,555 388,798
MFS Emerging Growth Fund 378,517 396,405
ML Capital Fund 741,476 659,823
ML S&P 500 Index Fund 956,700 317,997
ML Small Cap Index Fund 85,457 7,279
ML Aggregate 22,197 1,108
ML International Index 201,494 697
ML Federal Securities Trust 147,984 164,257
Davis New York Venture Fund Inc. 891,995 632,644
Common stock
American Business Financial Services 62,328 --
Participant loans 139,302 57,684
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Total investments 5,994,583 3,598,233
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Cash (2,781) 342,934
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Receivables
Employer's contribution 10,333 68,096
Participants' contributions 56,107 59,471
Accrued income 1,222 755
-------------------------------------------------------------------------------------------------
Total receivables 67,662 128,322
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Net assets available for benefits $6,059,464 $4,069,489
-------------------------------------------------------------------------------------------------
</TABLE>
See accompanying independent auditors' report and notes to financial statements.
2
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American Business Credit, Inc.
401(k) Plan
Statement of Changes in Net Assets Available for Benefits
<TABLE>
<CAPTION>
Year ended December 31, 1999
-------------------------------------------------------------------------------------------
<S> <C>
Additions
Investment income
Interest income
Money market funds $ 795
Participant loans 6,496
Dividend income 261,039
Net appreciation in fair value of investments 542,327
Net investment gain from mutual funds 38,706
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Total investment income 849,363
Participants' contributions 1,874,963
Employer contributions 265,616
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Total additions 2,989,942
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Deductions
Benefits paid to participants 655,236
Administrative expenses 1,900
Transfers out 342,831
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Total deductions 999,967
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Net increase 1,989,975
Net assets available for benefits at beginning of year 4,069,489
-------------------------------------------------------------------------------------------
Net assets available for benefits at end of year $6,059,464
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</TABLE>
See accompanying independent auditors' report and notes to financial statements.
3
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American Business Credit, Inc.
401(k) Plan
Notes to Financial Statements
--------------------------------------------------------------------------------
1. Description The American Business Credit, Inc. 401(k) Plan (the
of Plan "Plan") is a defined contribution plan established in 1995
which provides retirement and related benefits to full-time
employees of American Business Credit, Inc. (the "Company").
The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). The
following brief description of the Plan is provided for
general information purposes only. Participants should refer
to the Plan agreement for a more complete description of the
Plan's provisions.
Eligibility
Effective July 1, 1999, employees of the Company who have
one year of service and are at least 21 years of age are
eligible to participate in the Plan.
Employer Contributions
a) Employer Discretionary Contributions
The Company, at the sole discretion of the Board of
Directors, contributes an annual amount from the net
income (as defined) of the Company. The contribution is
allocated to all participants in proportion to their
compensation and is limited by provisions in the Internal
Revenue Code (the "Code").
b) Employer Matching
A matching contribution is allocated to each participant
who contributed to his/her account during the year. This
amount is equal to 25% of the first 5% of participants'
annual contribution.
See accompanying independent auditors' report.
4
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American Business Credit, Inc.
401(k) Plan
Notes to Financial Statements
--------------------------------------------------------------------------------
Employee Contributions
Each year, participants may contribute an amount of pretax
annual compensation, as defined by the Plan, up to the
maximum allowed by the Code. Participants may also
contribute amounts representing distributions from other
qualified defined benefit or contribution plans
Participant Accounts
Each participant's account is credited with the
participant's contribution and allocation of the Company's
contribution and Plan earnings. Allocations are based on
participant earnings or account balances, as defined.
Forfeited balances of terminated participants' nonvested
accounts are used to reduce future employer contributions.
The benefit to which a participant is entitled is the
benefit that can be provided from the participant's vested
account.
Vesting
Participants are immediately vested in their voluntary
contributions plus actual earnings thereon. Vesting in the
remainder of their accounts is based on years of continuous
service. Effective July 1, 1999, a participant is 100%
vested after two years of credited service, upon attainment
of normal retirement date or upon death or total disability.
See accompanying independent auditors' report.
5
<PAGE>
American Business Credit, Inc.
401(k) Plan
Notes to Financial Statements
--------------------------------------------------------------------------------
Investment Options
Upon enrollment in the Plan, a participant may direct
employee contributions in 1% increments in any of eleven
investment options as follows:
o ML Fundamental Growth Fund Class D
o GAM International Fund Class A
o MFS Emerging Growth Fund Class A
o ML Capital Fund Class D
o ML S&P 500 Index Fund Class A
o ML Small Cap Index
o ML Aggregate
o ML International Index Fund Class A
o ML Federal Securities Trust Class D
o Davis New York Venture Fund Inc.
o American Business Financial Services Common Stock
Participant Loans
Participants may borrow from their fund accounts a minimum
of $1,000 up to a maximum equal to the lesser of $50,000 or
50% of their respective vested account balances. Loan terms
range from one to five years, with an interest rate equal to
the prime rate when the loan is originated.
Payment of Benefits
On termination of service, a participant may elect to
receive either a lump-sum amount equal to the vested value
of his or her account, or may elect to receive benefits in
the form of an annuity or in annual installments.
See accompanying independent auditors' report.
6
<PAGE>
American Business Credit, Inc.
401(k) Plan
Notes to Financial Statements
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2. Summary of Basis of Accounting
Significant
Accounting The financial statements of the Plan are prepared under the
Policies accrual method of accounting.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires the Plan
administrator to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly,
actual results may differ from those estimates.
Investment Valuation and Income Recognition
Investments are stated at market value based upon quoted
market price. Purchases and sales of securities are recorded
on a trade-date basis. Interest income is recorded on the
accrual basis. Dividends are recorded on the ex-dividend
date.
Payment of Benefits
Benefits are recorded when paid.
Administrative Expenses
Substantially all administrative and operating costs of the
Plan are borne by the Company.
See accompanying independent auditors' report.
7
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American Business Credit, Inc.
401(k) Plan
Notes to Financial Statements
--------------------------------------------------------------------------------
3. Investments The Plan's investments are held by a bank-administered
trust fund.
4. Related Party The Plan's investments are in separate accounts managed by
Transactions Merrill Lynch, the Trustee of the Plan as defined.
Therefore, these transactions qualify as party-in-interest.
Fees paid by the Plan for investment management services
approximated $1,900 for the year ended December 31, 1999.
5. Income Taxes The Plan is an adoptor of the Merrill Lynch Special
Prototype Defined Contribution Plan and Trust which has
received a letter from the Internal Revenue Service dated
June 29, 1993. The Plan has been amended since its initial
adoption. However, the Plan administrator believes that the
Plan is currently designed and being operated in compliance
with the applicable requirements of the Code. Accordingly,
no taxes have been provided for in the accompanying
financial statements.
See accompanying independent auditors' report.
8
<PAGE>
Independent Auditors'
Report on
Supplemental Material
The Participants and Administrator of the
American Business Credit, Inc.
401(k) Plan
Bala Cynwyd, Pennsylvania
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
American Business Credit, Inc. 401(k) Plan (the "Plan") as of December 31, 1999
and for the year then ended 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 schedules are the responsibility of the
Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
The schedule of assets held for investment purposes and schedule of reportable
transactions that accompany the Plan's financial statements do not disclose the
historical cost of certain plan assets held by the Plan Trustee. Disclosure of
this information is required by the Department of Labor's Rules and Regulations
for Reporting and Disclosure under the Employee Retirement Income Security Act
of 1974.
/s/ BDO Seidman LLP
-----------------------------------------
BDO Seidman LLP
Philadelphia, PA
November 17, 2000
9
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American Business Credit, Inc.
401(k) Plan
Schedule of Assets Held for Investment Purposes at End of Year
Federal Identification Number 23-1567035 - Plan Number 001
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 31, 1999
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(a) (b) (c) (d) (e)
Identity of Issue,
Borrower, Lessor or Similar Current
Party Description of Investment Cost (1) Value
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
* Merrill Lynch Ready Asset Trust $ 496,844 $ 496,844
* Merrill Lynch Fundamental Growth Fund 1,312,452 1,549,734
* Merrill Lynch GAM International Fund 286,780 320,555
* Merrill Lynch MFS Emerging Growth Fund 253,985 378,517
* Merrill Lynch Capital Fund 796,685 741,476
* Merrill Lynch S&P 500 Index Fund 863,112 956,700
* Merrill Lynch Small Cap Index 77,211 85,457
* Merrill Lynch Aggregate Fund 22,860 22,197
* Merrill Lynch International Index Fund - Class A 182,173 201,494
* Merrill Lynch Federal Securities Trust - Class C 153,455 147,984
* Merrill Lynch Davis New York Venture Fund 802,067 891,995
* American Business Common Stock 65,329 62,328
Financial Services
Participants Loans, 8% - 11% -- 139,302
</TABLE>
* Party-in-interest
(1) Revalued cost
10
<PAGE>
American Business Credit, Inc.
401(k) Plan
Schedule of Reportable Transactions
Federal Identification Number 23-1567035 - Plan Number 001
<TABLE>
<CAPTION>
Year ended December 31, 1999
------------------------------------------------------------------------------------------------------------------
Description of Asset
Identity of (include interest rate and maturity Purchase Selling Cost
Party Involved in the case of a loan) Price Price of Asset
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Merrill Lynch ML Ready Asset Trust $381,682 $ $
Merrill Lynch ML Fundamental Growth FD Class D 882,086
Merrill Lynch ML Capital Fund Class D 432,406
Merrill Lynch ML S&P 500 Index Fund Class A 660,668
Merrill Lynch Davis New York Venture FD Inc. 378,345
Merrill Lynch ML Fundamental Growth FD Class D 240,623 (1) 306,190 240,623 (1)
Merrill Lynch GAM International FD Class A 245,168 (1) 253,277 245,168 (1)
Merrill Lynch ML Capital Fund Class D 273,694 (1) 300,423 273,694 (1)
</TABLE>
[RESTUB TABLE]
<TABLE>
<CAPTION>
Year ended December 31, 1999
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Current Value
Description of Asset of Asset on Net
Identity of (include interest rate and maturity Transaction Gain
Party Involved in the case of a loan) Date (Loss)
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Merrill Lynch ML Ready Asset Trust $381,682 $
Merrill Lynch ML Fundamental Growth FD Class D 882,086
Merrill Lynch ML Capital Fund Class D 432,406
Merrill Lynch ML S&P 500 Index Fund Class A 660,668
Merrill Lynch Davis New York Venture FD Inc. 378,345
Merrill Lynch ML Fundamental Growth FD Class D 240,623 65,567
Merrill Lynch GAM International FD Class A 245,168 8,109
Merrill Lynch ML Capital Fund Class D 273,694 26,729
</TABLE>
(1) Revalued cost
11
<PAGE>
Exhibits:
The following exhibits are filed herewith.
Regulation S-K Exhibit No. Description
-------------------------- -----------
23 Consent of BDO Seidman LLP
II-1
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN BUSINESS
CREDIT, INC. 401(K) PLAN
--------------------------
(Name of Plan)
Date: January 8, 2001 By: /s/ Albert W. Mandia
--------------- ------------------------------------
Albert W. Mandia, Trustee
Date: January 8, 2001 /s/ Stephen M. Giroux
--------------- ------------------------------------
Stephen M. Giroux, Trustee
Date: January 8, 2001 /s/ John Baran
--------------- ------------------------------------
John Baran, Trustee
II-2
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EXHIBIT INDEX
Regulation S-K Exhibit No. Description
-------------------------- -----------
23.1 Consent of BDO Seidman LLP
