SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q/A NO. 2
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For The Quarter Ended March 31, 1996 Commission File No. 1-10176
MERCURY FINANCE COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 36-3627010
(State or other jurisdiction of (I.R.S. Employer identification no.)
incorporation or organization)
100 FIELD DRIVE, LAKE FOREST, ILLINOIS 60045
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (847) 295-8600
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 for the
past 90 days.
Yes No X
Indicate the number of shares outstanding of each issuer's class of common
stock, as of the latest practicable date.
Common Stock - $1 par value, 176,649,812 shares as of April 30, 1996.
Treasury Stock - 3,996,557 shares as of April 30, 1996.
MERCURY FINANCE COMPANY
FORM 10-Q
INDEX
PAGE
PART I FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . 1
Consolidated Statements of Income . . . . . . . . . . . . . . 2
Consolidated Statements of Changes in Stockholders' Equity . . 3
Consolidated Statements of Cash Flows . . . . . . . . . . . . 4
Notes to Consolidated Financial Statements . . . . . . . . . . 5
Consolidated Average Balance Sheets . . . . . . . . . . . . . 8
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
CONSOLIDATED FINANCIAL CONDITION AND RESULTS
OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . 9
PART II OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . .19
Item 2. Changes in Securities . . . .. . . . . . . . . . . . . . . . . . .19
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . . .19
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . .19
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . .19
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . .19
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
INDEX OF EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Exhibit No. 11 - . Computation of Net Income Per Share . . .23
Exhibit No. 27 - . Financial Data Schedule . . . . . . . . .24
PART 1 - FINANCIAL INFORMATION
As more fully described in the Notes to Consolidated Financial Statements,
financial information in this Report has been restated to correct improper
adjustments reflected in previous reports which had the effect of overstating
earnings.
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
MERCURY FINANCE COMPANY
CONSOLIDATED BALANCE SHEETS (Restated)
<CAPTION>
March 31 Dec. 31
(Dollars in thousands) 1996 1995 1995
(Unaudited)
<S> <C> <C> <C>
ASSETS
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,050 $15,972 $22,967
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . 222,196 13,795 242,043
Finance receivables . . . . . . . . . . . . . . . . . . . . . . 1,207,117 1,095,675 1,197,776
Less allowance for finance credit losses . . . . . . . . . . . (49,178) (23,606) (46,366)
Less Nonrefundable dealer reserves . . . . . . . . . . . . . . (58,161) (69,908) (61,961)
Finance receivables, net . . . . . . . . . . . . . . . . . . . 1,099,778 1,002,161 1,089,449
Income tax receivable . . . . . . . . . . . . . . . . . . . . . 3,061 0 0
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . 19,220 7,999 21,353
Furniture, fixtures and equipment, net of
accumulated depreciation . . . . . . . . . . . . . . . . . . 7,854 3,477 7,022
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,071 15,201 15,274
Reinsurance receivable . . . . . . . . . . . . . . . . . . . . 49,144 0 89,962
Deferred acquisition costs . . . . . . . . . . . . . . . . . . 37,279 0 23,242
Other assets (including repossessions) . . . . . . . . . . . . 76,115 20,863 86,786
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . $1,534,768 $1,079,468 $1,598,098
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Senior debt, commercial paper and notes . . . . . . . . . . . . $464,127 $470,066 $489,990
Senior debt, term notes . . . . . . . . . . . . . . . . . . . . 473,750 265,375 438,750
Subordinated debt . . . . . . . . . . . . . . . . . . . . . . . 29,500 35,500 29,500
Accounts payable and other liabilities . . . . . . . . . . . . 74,761 63,607 70,268
Unearned premium and claim reserves . . . . . . . . . . . . . . 188,236 0 195,761
Reinsurance payable . . . . . . . . . . . . . . . . . . . . . . 43,368 0 105,081
Income taxes payable . . . . . . . . . . . . . . . . . . . . . - 15,734 9,261
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . 1,273,742 850,282 1,338,611
STOCKHOLDERS' EQUITY
Common stock - $1.00 par value: 300,000,000 shares authorized
Mar 31 1996 - 176,579,863 shares outstanding
Mar 31 1995 - 116,250,826 shares outstanding
Dec 31 1995 - 176,477,520 shares outstanding . . . . 176,580 116,251 176,478
Paid in capital . . . . . . . . . . . . . . . . . . . . . . . . 621 7,621 39
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . 121,709 130,384 118,138
Unrealized appreciation . . . . . . . . . . . . . . . . . . . . 341 0 1,969
Treasury stock at cost:
Mar 31 1996 - 3,996,557 shares outstanding
Mar 31 1995 - 1,983,105 shares outstanding
Dec 31 1995 - 3,896,557 shares outstanding . . . . . (38,225) (25,070) (37,137)
TOTAL STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . . . . . 261,026 229,186 259,487
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY. . . . . . . . . . . $1,534,768 $1,079,468 $1,598,098
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
MERCURY FINANCE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31 (Unaudited) (Restated)
Three Months Ended
(Dollars in thousands except per share amounts) 1996 1995
<S> <C> <C>
INTEREST INCOME
Finance charges and loan fees . . . . . . . . . . . . . . . . . . . . . . . . . . 65,167 59,070
Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,882 200
Finance charges, fees and other interest . . . . . . . . . . . . . . . . . . . . $68,049 $59,270
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,037 13,110
Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,012 46,160
Provision for finance credit losses . . . . . . . . . . . . . . . . . . . . . . . 18,611 2,424
Net interest income after provision for
finance credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,401 43,736
OTHER INCOME
Insurance premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,071 1,584
Fees, commissions and other . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,940 8,798
Total other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,011 10,382
OTHER EXPENSES
Salaries and employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . 13,323 11,203
Occupancy expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,442 1,127
Equipment expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 695 461
Data processing expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 723 741
Insurance claims expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,356 116
Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,288 5,382
Total other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,827 19,030
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,585 35,088
Applicable income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,077 13,448
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,508 $21,640
NET INCOME PER COMMON SHARE
(adjusted for all stock splits) . . . . . . . . . . . . . . . . . . . . . . $0.09 $0.12
Weighted average number of common and
common share equivalents outstanding . . . . . . . . . . . . . . . . . . . . 174,058 173,018
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
MERCURY FINANCE COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31 (Unaudited) (Restated)
<CAPTION>
Three Months Ended
(Dollars in thousands) 1996 1995
<S> <C> <C>
COMMON STOCK
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . $176,478 $116,080
Stock options exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 171
Stock traded in to exercise stock options . . . . . . . . . . . . . . . . . . . . 0 0
Stock split . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . $176,580 $116,251
PAID IN CAPITAL
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . $ 39 $6,384
Stock options exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208 689
Tax benefit from stock options exercised . . . . . . . . . . . . . . . . . . . . 374 548
Transfer from Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . 0 0
Stock split . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 621 $7,621
RETAINED EARNINGS
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . $118,138 $128,157
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,508 21,640
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,937) (19,413)
Transfer to Paid in Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . $121,709 $130,384
UNREALIZED APPRECIATION
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . 1,969 0
Change during the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,628) 0
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 341 $ 0
TREASURY STOCK
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . ($37,137) ($23,107)
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,088) (1,963)
Retirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . ($38,225) ($25,070)
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . $261,026 $229,186
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
MERCURY FINANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31 (Unaudited) (Restated)
Three Months Ended
(Dollars in thousands) 1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income/(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,508 $21,640
Adjustments to reconcile net income/(loss) to net cash
provided by operating activities:
Provision for finance credit losses . . . . . . . . . . . . . . . . . . . . 18,611 2,424
Credit for deferred income taxes . . . . . . . . . . . . . . . . . . . . . . 2,133 (709)
Change in income tax payable/receivable . . . . . . . . . . . . . . . . . . (9,261) 11,066
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 525 251
Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203 203
Net change in reinsurance receivable . . . . . . . . . . . . . . . . . . . . 40,818 0
Net change in unrealized appreciation/(depreciation) in securities
held for resale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,628) 0
Net change in deferred acquisition costs and present value of
future profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,037) 0
Net change in other assets . . . . . . . . . . . . . . . . . . . . . . . . . 7,610 4,288
Net change in reinsurance payable . . . . . . . . . . . . . . . . . . . . . (61,713) 0
Net change in unearned premium and claim reserves . . . . . . . . . . . . . (7,525) 0
Net change in other liabilities . . . . . . . . . . . . . . . . . . . . . . 4,493 10,206
Net change in nonrefundable dealer reserves . . . . . . . . . . . . . . . . (3,800) 3,431
Net cash provided/(used) in operating activities . . . . . . . . . . . . (7,063) 52,800
CASH FLOWS FROM INVESTING ACTIVITIES
Principal collected on finance receivables . . . . . . . . . . . . . . . . . . . 241,145 187,331
Finance receivables originated or acquired . . . . . . . . . . . . . . . . . . . (266,285) (244,445)
Net change in investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,847 389
Net purchase of premises and equipment . . . . . . . . . . . . . . . . . . . . . (1,357) (236)
Net cash provided by investing activities . . . . . . . . . . . . . . . (6,650) 55,655
CASH FLOWS FROM FINANCING ACTIVITIES
Net repayments of senior debt, commercial paper and notes . . . . . . . . . . . . 9,137 20,121
Treasury stock acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,088) (1,963)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,937) (19,413)
Stock options exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 684 1,408
Net cash provided/(used) in financing activities . . . . . . . . . . . . (4,204) 153
Net increase/decrease in cash . . . . . . . . . . . . . . . . . . . . . (17,917) (4,008)
CASH AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,967 19,980
CASH AT END OF PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,050 $15,972
SUPPLEMENTAL DISCLOSURES
Income taxes paid to federal and state governments . . . . . . . . . . . . . . . $8,337 $2,448
Interest paid to creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,997 $11,988
See accompanying notes to consolidated financial statements.
</TABLE>
MERCURY FINANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation.
The consolidated financial statements of Mercury Finance Company and
Subsidiaries are unaudited, but in the opinion of management reflect all
necessary adjustments, consisting only of normal recurring accruals, for a fair
presentation of results as of the dates and for the periods covered by the
financial statements. The results for the interim periods are not necessarily
indicative of the results of operations that may be expected for the fiscal
year. It is suggested that the unaudited interim consolidated financial
statements contained herein be used in conjunction with the financial statements
and the accompanying notes to the financial statements included in the Company's
Amendment No. 3 to the Annual Report on Form 10-K for the year ended December
31, 1995.
2. Per Share Amounts.
Net income per common share amounts are based on the average number of common
shares and common stock equivalents outstanding. All per share amounts have
been adjusted to reflect all stock splits declared by the Company.
3. Reclassifications.
Certain data from the prior year has been reclassified to conform to the 1996
presentation.
4. Restatement of Financial Statements.
In January 1997, Mercury discovered that certain improper adjustments had been
made to overstate earnings in previously issued financial statements. As a
result, a Special Committee of the Board of Directors commenced an investigation
of the misstatements of previously issued financial statements. As a result of
this investigation, Mercury has restated the financial statements for the first
quarter of 1996 as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1996
<S> <C>
Decrease in finance charges, fees
and other interest ( 6,331)
Increase in provision for credit losses (15,732)
Decrease in other income ( 1,123)
Increase in other expense ( 2,717)
Decrease in provision for income taxes 10,158
Decrease in net income (15,745)
Decrease in beginning retained earnings (24,778)
Decrease in ending retained earnings (40,523)
Decrease in net income per common shares ($0.09)
</TABLE>
See the Company's Annual Report on Form 10-K for the year ended December 31,
1996, for more information regarding the impact of the overstatement of earnings
and the restatement of previously issued financial statements.
5. Adoption in 3rd Quarter 1996 of "Static Pooling" Method for Determining
Finance Credit Losses
Sales finance contracts are generally acquired at a discount from the principal
amount. This discount is normally referred to as a non-refundable dealer
reserve. The amount of the discount is based upon the credit risk of the
borrower, the note rate of the contract and competitive factors. In 1994 and
prior, the non-refundable dealer reserve was considered to be adequate to absorb
the majority of losses on the acquired receivables. However, as the sub-prime
market has evolved and become more competitive, the dealer reserve has proven to
be inadequate to absorb all of the credit losses. Through the second quarter of
1996, it was the Company's policy to maintain a balance of the combined non-
refundable dealer reserves and allowance for finance credit losses in an amount
sufficient to cover losses that were expected to be incurred on receivables that
had demonstrated a risk of loss based upon delinquency or bankruptcy status.
In the third quarter of 1996, Mercury adopted a loss reserving methodology
commonly referred to as "static pooling." The static pooling methodology
provides that the Company stratify the components of its sales finance
receivable portfolio (i.e. dealer reserve, principal loan balances and related
chargeoffs) into separately identified pools based upon the period the loans
were acquired (monthly). Under Mercury's application of static pooling, the
dealer reserve is amortized and made available to absorb credit losses over the
life of the pool of receivables. The dealer reserve cannot be utilized to
offset provision for finance for credit losses immediately, but must be held to
offset future losses. See the Company's Annual Report on Form 10-K for the year
ended December 31, 1996, for more information regarding the impact of the
Company's adoption of the static pooling methodology.
<TABLE>
MERCURY FINANCE COMPANY
CONSOLIDATED AVERAGE BALANCE SHEETS
THREE MONTHS ENDED MARCH 31 (Unaudited) (Restated)
<CAPTION>
Three Months Ended
(Dollars in thousands) 1996 1995
<S> <C> <C>
ASSETS
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14,009 $17,786
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232,120 13,240
Finance receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,202,447 1,064,352
Less allowance for finance credit losses . . . . . . . . . . . . . . . . . . . (47,772) (22,955)
Less nonrefundable dealer reserves . . . . . . . . . . . . . . . . . . . . . . (60,061) (67,931)
Finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,094,614 973,466
Prepaid pension expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254 507
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,287 7,531
Furniture, fixtures and equipment, net of accumulated depreciation . . . . . . . 7,438 3,482
Reinsurance receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,553 0
Deferred acquisition costs and present value of future profits . . . . . . . . . 30,261 0
Other assets (including repossessions & goodwill) . . . . . . . . . . . . . . . . 96,370 37,319
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,564,906 $1,053,331
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Senior debt, commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . $477,059 $453,593
Senior debt, term notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456,250 265,375
Subordinated debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,500 35,500
Accounts payable and other liabilities . . . . . . . . . . . . . . . . . . . . . 72,516 61,173
Unearned premium and claim reserve . . . . . . . . . . . . . . . . . . . . . . . 191,999 0
Reinsurance payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74,225 0
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,100 10,354
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,304,649 825,995
STOCKHOLDERS' EQUITY
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176,529 116,202
Paid in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330 7,230
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119,924 128,647
Unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,155 0
Treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (37,681) (24,743)
TOTAL STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . 260,257 227,336
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . . . . . $1,564,906 $1,053,331
NUMBER OF DAYS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 90
MONTHS COMPLETED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3
RATIOS (Annualized)
Return on average equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.51% 38.08%
Return on average assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.24% 8.22%
Yield on earning assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.08% 22.00%
Rate on interest bearing liabilities . . . . . . . . . . . . . . . . . . . . . . 6.70% 7.05%
Net interest margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.58% 17.07%
</TABLE>
PART 1 - FINANCIAL INFORMATION
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
As more fully described in the Notes to Consolidated Financial Statements,
financial information in this Report has been restated to correct improper
adjustments reflected in previous reports which had the effect of overstating
earnings.
Mercury Finance Company ("Mercury") ("Company") is a consumer finance concern
engaged, through its operating subsidiaries, in the business of acquiring
individual installment sales finance contracts from automobile dealers and
retail vendors, extending short-term installment loans directly to consumers and
selling credit insurance and other related products.
Mercury's operating subsidiaries commenced operations in February 1984 for the
purpose of penetrating the market for small dollar amount consumer loans
(average of $3,000 or less). The initial focus was toward small, short term,
direct installment loans made to the U.S. military servicemen. Building on this
direct lending niche, Mercury has also built a substantial, diversified consumer
finance portfolio by acquiring individual installment sales finance contracts
from retail vendors and automobile dealers.
On April 1, 1993 Mercury acquired all the shares of Gulfco Investment Inc. for
$22.3 million in cash. Gulfco Investment Inc. was the parent company which
owned all of the stock of Gulfco Finance Company and Gulfco Life Insurance
Company. Gulfco Finance Company conducted its consumer finance business through
a branch network of 62 offices located in Louisiana, Mississippi and Texas. On
September 30, 1994 Mercury acquired all the shares of Midland Finance Co. for
$15.1 million in cash and the assumption of its net liabilities. Midland
Finance Co. conducted its consumer finance business through a central office in
Chicago, Illinois. The acquisitions were accounted for under the purchase
method of accounting. Accordingly their results of operations have been
included in the consolidated financial statements of income and statements of
cash flow since the dates of acquisitions. The excess of cost over fair value
of net assets acquired (goodwill) relating to the acquisitions is being
amortized over twenty years on the straight line method.
On October 20, 1995 Mercury acquired all the shares of ITT Lyndon Property and
ITT Lyndon Life Insurance Company for $72.5 million in cash and the assumption
of their net liabilities. ITT Lyndon Property and ITT Lyndon Life Insurance
Company conducted their business through a central office in St. Louis,
Missouri. Following the acquisition, the names of the companies were changed to
Lyndon Property and Lyndon Life Insurance Companies ("Lyndon"). The acquisition
was accounted for under the purchase method of accounting. Accordingly their
results of operations have been included in the consolidated statements of
income and statements of cash flow since the date of acquisition. The excess of
fair value over cost of nets assets acquired (negative goodwill of $10,299)
relating to the acquisition was offset against the present value of future
profits of acquired insurance in force. The balance of the present value of
future profits was $16.6 million at December 31, 1995 and is being amortized
over an approximate three year period.
Mercury's sales finance contracts and loans range for periods from 3 months to
48 months at annual interest rates ranging, with minor exception, from 18% to
40%. Generally all loans are repayable in monthly installments. Generally late
payment fees are assessed to accounts which fail to make their scheduled
payments within 10 days of the scheduled due date.
Direct finance receivables on which no payment is received within 149 days, on a
recency basis, are charged off. Sales finance receivables which are
contractually delinquent 150 days are charged off in the month before they
become 180 days delinquent. Accounts which are deemed uncollectible prior to
the maximum charge off period are charged off immediately. Management may
authorize an extension if collection appears imminent during the next calendar
month. Accounts which become 60 or more days contractually delinquent and no
full contractual payment is received in the month the account attains such
delinquency status cease earning interest.
The following is management's discussion and analysis of the consolidated
financial condition of the Company at March 31, 1996 (unaudited) when compared
with March 31, 1995 (unaudited) and December 31, 1995 and the results of
operations for the three months ended March 31, 1996 and 1995 (unaudited).
Reports previously filed by the Company have restated results for fiscal 1995
and each of the 1995 quarters as a result of the overstatement of earnings
described above. This discussion, which reflects both the restatement contained
herein and the 1995 restatement, should be read in conjunction with the
Company's consolidated financial statements and notes thereto appearing
elsewhere in this quarterly report.
FINANCIAL CONDITION
ASSETS AND FINANCE RECEIVABLES
Total assets of the Company increased 42% to $1,534.8 million from $1,079.5
million one year ago. The increase in Company assets, exclusive of the growth
in finance receivables, was primarily the result of the October 1995 acquisition
of Lyndon. Finance receivables increased 10% to $1,207.1 million at March 31,
1996 from one year ago. The increase in finance receivables was primarily
attributable to the production of receivables from the increased number of
offices operated by the Company.
During the period from December 31, 1995 through March 31, 1996 total assets
decreased 15.94% (annualized) or $63.3 million, principally because of
offsetting reductions in reinsurance receivable and payable.
The Company's offices in Florida, Texas and Louisiana accounted for
approximately 46% of all gross earned finance receivables, with the remainder
being originated in the other 28 states where offices are located. The total
number of offices at March 31, 1996 was 282 compared to 252 at March 31, 1995
and 276 at December 31, 1995.
The following table summarizes the composition of finance receivables at the
dates indicated (dollars in thousands):
<TABLE>
<CAPTION>
MARCH 31, 1996 MARCH 31, 1995 DEC. 31, 1995
% of % of % of
Amount Total Amount Total Amount Total
<S> <C> <C> <C> <C> <C> <C>
Gross Finance Receivables:
Sales . . . . . . . . . . . . . . . . . . $1,282,264 90% $1,209,257 90% $1,256,631 89%
Direct . . . . . . . . . . . . . . . . . 141,876 10% 131,531 10% 152,125 11%
Total gross finance receivables . . . . . 1,424,140 100% 1,340,788 100% 1,408,756 100%
Unearned finance charges . . . . . . . . (243,868) (236,627) (234,792)
Unearned insurance commissions,
insurance premiums and
insurance reserves . . . . . . . . . (8,400) (8,486) (8,720)
Gross earned finance receivables . . . . $1,171,872 $1,095,675 $1,165,244
Credit card . . . . . . . . . . . . . . . 35,245 0 32,532
Total finance receivables . . . . . . . . $1,207,117 $1,095,675 $1,197,776
</TABLE>
ALLOWANCE AND PROVISION FOR FINANCE CREDIT LOSSES
The Company maintains an allowance for finance credit losses at a level which,
in the opinion of management, provides adequately for current losses in the
finance receivables portfolio. Management evaluates allowance requirements by
examining current delinquencies, the characteristics of the accounts, the value
of the underlying collateral, and general economic conditions and trends.
Management also evaluates the availability of dealer reserves to absorb finance
credit losses (losses on sales finance contracts are primarily charged off
against nonrefundable dealer reserves). A provision for losses is charged to
earnings in an amount sufficient to maintain the allowance. The following table
sets forth a reconciliation of the changes in the allowance for finance credit
losses for the three month periods ended March 31 (dollars in thousands):
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Balance at beginning of period . . . . . . . . . . . . . . . . . . $46,366 $22,488
Provision charged to expense . . . . . . . . . . . . . . . . . . . 18,611 2,424
Finance receivables charged-off, net off recoveries . . . . . . . . (15,799) (1,306)
Balance at March 31 . . . . . . . . . . . . . . . . . . . . . . . . $49,178 $23,606
Allowance as a percent of gross earned finance receivables
outstanding at end of period . . . . . . . . . . . . . . . . . 4.20% 2.15%
</TABLE>
The increase in the provision and allowance for finance credit losses in 1996 is
primarily attributable to an increase in delinquencies and chargeoffs combined
with a lower level of acquired nonrefundable dealer reserves.
NONREFUNDABLE DEALER RESERVES
Mercury acquires a majority of its sales finance contracts from dealers at a
discount. Mercury negotiates the amount of the discounts with the dealers based
upon various criteria, one of which is the credit risk associated with the sales
finance contracts being acquired. The following table sets forth a
reconciliation of the changes in nonrefundable dealer reserves for the three
month periods ended March 31 (dollars in thousands).
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Balance at beginning of period . . . . . . . . . . . . . . . . . . $61,961 $66,477
Discounts acquired on new volume . . . . . . . . . . . . . . . . . 20,425 22,533
Losses absorbed . . . . . . . . . . . . . . . . . . . . . . . . . (24,225) (19,102)
Balance at March 31 . . . . . . . . . . . . . . . . . . . . . . . . $58,161 $69,908
</TABLE>
DEBT
The primary source for funding the Company's finance receivables comes from the
issuance of debt. At March 31, 1996 the Company had total debt of $967.4
million which compares with $770.9 million at March 31, 1995.
In addition to the Company's outstanding debt the Company has revolving credit
facilities and a back up line of credit which total $525 million. The revolving
credit facilities and the back up line are totally available for use by the
Company, and at March 31, 1996 nothing was outstanding under these arrangements.
The following table presents the Company's debt instruments and the stated
interest rates on the debt at the periods indicated (dollars in thousands):
<TABLE>
<CAPTION>
MARCH 31, 1996 MARCH 31, 1995 DEC. 31, 1995
Balance Rate Balance Rate Balance Rate
<S> <C> <C> <C> <C> <C> <C>
Senior Debt:
Commercial paper . . . . . . . . . . . $464,127 5.5% $470,066 6.3% $489,990 6.0%
Term notes . . . . . . . . . . . . . . 473,750 7.0% 265,375 7.1% 438,750 7.2%
Subordinated debt . . . . . . . . . . . . 29,500 10.2% 35,500 10.2% 29,500 10.2%
Total . . . . . . . . . . . . . . $967,377 6.4% $770,941 6.8% $958,240 6.6%
</TABLE>
STOCKHOLDERS' EQUITY
The other primary source for funding comes from the retention of earnings by the
Company and the exercise of stock options by eligible employees. Total
stockholders' equity at March 31, 1996 was $261.0 million which compares with
$229.2 million at March 31, 1995 and $259.5 million at December 31, 1995. For
the three months ended March 31, 1996 the Company had net income of $16.5
million and declared cash dividends of $12.9 million. In addition, eligible
employees of the Company exercised options to purchase shares resulting in $684
thousand being added to the equity of the Company.
At March 31, 1996 stockholders' equity stated as a percent of total assets was
17.0% which compares with 21.2% at March 31, 1995 and 16.2% at December 31,
1995.
RESULTS OF OPERATIONS
NET INCOME
For the three months ended March 31, 1996 the Company had net income of $16.5
million which represents a decrease of 24% from the $21.6 million earned in
1995. The decrease in net income is primarily attributable to the increase in
the provision for finance credit losses.
INTEREST INCOME AND INTEREST EXPENSE
The largest single component of net income is net interest income which is the
difference between interest earned on finance receivables and interest paid on
borrowings. For the three months ended March 31, 1996 the Company's net
interest income increased 13% to $52.0 million when compared with $46.2 million
in 1995. The net interest margin (annualized) which is the ratio of net
interest income divided by average interest earning assets was 14.58% in 1996
compared with 17.07% in 1995. The change in net interest margin is primarily
attributable to lower yielding investment assets and interest rate changes on
the Company's various debt instruments. The changes in interest rates are
reflective of general interest rate trends in the U.S. economy. The following
table summarizes the amount of the net interest margin for the three months
ended March 31 (dollars in thousands):
<TABLE>
<CAPTION>
1996 1995
Annualized Annualized
THREE MONTHS ENDED Average Interest Rate Average Interest Rate
Out- Income/ Earned Out- Income/ Earned
standing Expense and Paid standing Expense and Paid
<S> <C> <C> <C> <C> <C> <C>
Interest earning assets . . . .
$1,434,567 $68,049 19.08% $1,077,592 $59,270 22.00%
Interest bearing liabilities . 962,809 16,037 6.70% 754,468 13,110 6.95%
Net . . . . . . . . . . . . . . $471,758 $52,012 12.38% $323,124 $46,160 15.05%
Net interest margin as a
percentage of average interest
earning assets . . . . . . . 14.58% 17.07%
</TABLE>
OTHER INCOME
In addition to finance charges and interest, the Company derives commission
income from the sale of other credit related products. These products include
insurance relating to the issuance of credit life, accident and health and other
credit insurance policies to borrowers of the Company. Other credit-related
sources of revenue are derived from the sale of other products and services.
Insurance premiums are earned by the life insurance subsidiaries as direct
writers and reinsurers of credit life and accident and health policies issued
through the Company's branch offices.
For the three months ended March 31, 1996, the Company experienced increases in
its insurance premiums which is primarily attributable to the acquisition of
Lyndon Insurance Companies in 1995. Commission income decreased as a result of
premiums being earned by Lyndon in lieu of commissions being earned by the
Company. The following table summarizes the amounts earned from these products
for the three months ended March 31 (dollars in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
1996 1995
<S> <C> <C>
Insurance premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,071 1,584
Fees, commissions and other . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,940 8,798
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,011 $10,382
Other income as a % of average interest
earnings assets (Annualized) . . . . . . . . . . . . . . . . . . . . . . . . . . 5.61% 3.85%
</TABLE>
OTHER EXPENSES
In addition to interest expense and the provision for finance credit losses, the
Company incurs other operating expenses in the conduct of its business.
During 1996 other operating expenses increased 46.2% over 1995. The increase
primarily relates to the acquisitions of Lyndon. The following table summarizes
the components of other expenses for the three months ended March 31 (dollars in
thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
1996 1995
<S> <C> <C>
Salaries and employees benefits . . . . . . . . . . . . . . . . . . . . . . . . . $13,323 $11,203
Insurance claims expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,356 116
Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,148 7,711
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $27,827 $19,030
Other expenses as a % of average interest
earning assets (Annualized) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.80% 7.06%
</TABLE>
INCOME TAXES
Income taxes increased due to a higher level of pretax income in 1996. The
effective tax rate was 35.5% in 1996 and 38.3% in 1995.
CREDIT LOSSES AND DELINQUENCIES
CREDIT LOSSES
Direct finance receivables on which no payment is received within 149 days, on a
recency basis, are charged off. Sales finance receivable accounts which are
contractually delinquent 150 days are charged off monthly before they become 180
days delinquent. Accounts which are deemed uncollectible prior to the maximum
charge off period are charged off immediately. Management may authorize an
extension if collection appears imminent during the next calendar month. The
following table sets forth information relating to charge-offs, the allowance
for finance credit losses and dealer reserves:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
1996 1995
<S> <C> <C>
Loss provision charged to income . . . . . . . . . . . . . . . . . . . . . . . . $18,611 $2,424
Net charge-offs against allowance . . . . . . . . . . . . . . . . . . . . . . . . 15,799 1,306
Net charge-offs against nonrefundable dealer reserves . . . . . . . . . . . . . . 24,225 19,102
Allowance for finance credit losses at end of period . . . . . . . . . . . . . . 49,178 23,606
Dealer reserves at end of period . . . . . . . . . . . . . . . . . . . . . . . . 58,161 69,908
Ratios:
Net charge-offs (annualized) against allowance
to average total finance receivables . . . . . . . . . . . . . . . . . . . . . . 5.28% 0.49%
Net charge-offs (annualized) against nonrefundable dealer
reserves to average total finance receivables . . . . . . . . . . . . . . . . . . 8.10% 7.28%
Allowance for finance credit losses to total gross finance
receivables at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . 3.45% 1.76%
Dealer reserves to gross sales finance receivables
at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.54% 5.78%
</TABLE>
DELINQUENCIES AND REPOSSESSIONS
The Company generally suspends the accrual of interest when an account becomes
60 days or more contractually delinquent and no full contractual payment is
received in the month the account obtains such status or if the borrower has
filed for bankruptcy protection. The following table sets forth certain
information with respect to the contractually delinquent receivables and
repossessed assets (in thousands):
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
<S> <C> <C>
Delinquent gross receivables $47,072 $46,467
Bankrupt accounts 25,948 16,906
Repossessed assets 4,925 10,621
Total $77,945 $73,994
Delinquent gross receivables and bankrupt
accounts to gross finance receivables 5.13% 4.50%
Delinquent gross receivables, bankrupt
accounts and repossessed assets to gross
finance receivables plus repossessed assets 5.45% 5.21%
</TABLE>
Loan collateral is repossessed when debtors are 120 days late or more on
payments. Automobiles are generally sold within 60 days at auction.
LIQUIDITY AND FINANCIAL RESOURCES
Because the consumer finance business involves the purchase and carrying of
receivables, a relatively high ratio of borrowings to net worth is customary and
is an important element in the Company's operations. The Company endeavors to
maximize its liquidity by diversifying its sources of funds which include (a)
cash from operations, (b) the issuance of short term commercial paper, and (c)
direct borrowings available from commercial banks and insurance companies,
consisting of short term lines of credit and long term senior and subordinated
notes. Most of the assets are at fixed rates, and have an average initial
maturity of approximately 26 months. Of the Company's total debt, 50% has an
original maturity of greater than one year at a fixed rate of interest.
The Company also maintains back up lines of credit totalling $25 million and
revolving credit facilities totalling $500 million. At March 31, 1996, the
Company had no debt outstanding under these credit arrangements.
CONTINGENCIES AND LEGAL MATTERS
In the normal course of its business, Mercury and its subsidiaries are named as
defendants in legal proceedings. A number of such actions, including ten cases
which have been brought as putative class actions, are pending in the various
states in which subsidiaries of Mercury do business. It is the policy of
Mercury and its subsidiaries to vigorously defend litigation, but Mercury and
(or) its subsidiaries have and may in the future enter into settlements of
claims where management deems appropriate.
See Item 3 in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, for more information regarding the litigation arising from
the overstatement of earnings and the restatement of previously issued
financial statements.
Although management is of the opinion that the resolution of these proceedings
will not have a material effect on the financial position of Mercury, it is not
possible at this time to estimate the amount of damages or settlement expenses
that may be incurred. Accordingly, no provision has been made in the
consolidated financial statements for any of the pending proceedings.
RECENT DEVELOPMENTS
In January 1997, Mercury discovered that certain improper adjustments had been
made to overstate earnings in previously issued financial statements. As a
result, a Special Committee of the Board of Directors commenced an investigation
of the misstatements of previously issued financial statements. As a result of
this investigation, Mercury has restated the financial statements for fiscal
1995, each of the 1995 quarters, and for the first three quarters of 1996. See
the Company's Annual Report on Form 10-K for the year ended December 31, 1996
for more information regarding the impact of the overstatement of earnings and
the restatement of previously issued financial statements.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - See the Company's Annual Report on Form 10-K for
the year ended December 31, 1996.
Item 2. Changes in Securities - Not Applicable
Item 3. Defaults Upon Senior Securities - See the Company's Annual Report on
Form 10-K for the year ended December 31, 1996.
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) Exhibits - See Exhibit Index following the signature page
(b) Reports of Form 8-K - The Company filed an Item 2 and Item 7
Current Report on Form 8-K on January 11, 1996, containing the
following financial statements:
Pro Forma Balance Sheet of Mercury and Lyndon Insurance Companies
as of December 31, 1994.
Pro Forma Balance Sheet of Mercury and Lyndon Insurance Companies
as of September 30, 1995.
Pro Forma Income Statement of Mercury and Lyndon Insurance
Companies for the year ended December 31, 1994.
Pro Forma Income Statement of Mercury and Lyndon Insurance
Companies for the nine months ended September 30, 1995.
Balance Sheets of ITT Lyndon Property Insurance Company at
December 31, 1994 and 1993.
Statements of Income of ITT Lyndon Property Insurance Company for
the years ended December 31, 1994 and 1993.
Statements of Retained Earnings of ITT Lyndon Property Insurance
Company for the years ended December 31, 1994 and 1993.
Statements of Cash Flows for ITT Lyndon Property Insurance
Company for the years ended December 31, 1994 and 1993.
Balance Sheets of ITT Lyndon Life Insurance Company at December
31, 1994 and 1993.
Statements of Income of ITT Lyndon Life Insurance Company for the
years ended December 31, 1994 and 1993.
Statements of Retained Earnings of ITT Lyndon Life Insurance
Company for the years ended December 31, 1994 and 1993.
Statements of Cash Flows for ITT Lyndon Life Insurance Company
for the years ended December 31, 1994 and 1993.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to the Quarterly Report to be signed
on its behalf by the undersigned thereunto duly authorized.
MERCURY FINANCE COMPANY
(Registrant)
Date: February 19, 1998 /s/ William A. Brandt, Jr.
William A. Brandt, Jr.
President & Chief
Executive Officer
INDEX OF EXHIBITS
Exhibit No. Description
11. Computation of Net Income Per Share
27. Financial Data Schedule
MERCURY FINANCE COMPANY
EXHIBIT 11
COMPUTATION OF NET INCOME PER SHARE
THREE MONTHS ENDED MARCH 31
(Unaudited)
Net income per share is computed by dividing net income by the total of the
weighted average common shares and common stock equivalents outstanding during
the period. Average common shares and common stock equivalents have been
adjusted to reflect the four-for-three stock splits of Mercury Finance Company
distributed to stockholders on December 28, 1989, October 31, 1990, June 10,
1991 and December 5, 1991, the two-for-one stock split distributed on June 19,
1992, the four-for-three stock split distributed on June 22, 1993 and the three-
for-two stock split distributed on October 31, 1995.
<TABLE>
<CAPTION>
Three Months Ended
(Dollars in thousands except per share amounts) 1996 1995
<S> <C> <C>
INCOME DATA:
1. Net income Mercury Finance Company . . . . . . . . . . . . . . . . . . . . $ 16,508 $21,640
2. Weighted average common shares
outstanding (adjusted for stock split) . . . . . . . . . . . . . . . . . . 176,518 174,301
3. Treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,997) (2,975)
EFFECT OF COMMON STOCK EQUIVALENTS (C.S.E.):
4. Weighted average shares reserved for
stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,537 1,692
NET INCOME PER COMMON SHARE:
5. Weighted average common share and
common stock equivalents (line 2+3+4) . . . . . . . . . . . . . . . . . . 174,058 173,018
6. Mercury Finance Company
net income per share (line 1 / line 5) . . . . . . . . . . . . . . . . . . $0.09 $0.12
</TABLE>
As the Company incurred a net loss for the three months ended March 31, 1996,
common share equivalents totaling 923,236 would be anti-dilutive to earnings per
share and have not been included in the weighted average shares calculation.
The Company has determined that the implementation of SFAS 128 "Earnings Per
Share", would have had no effect on the calculated earnings per share for the
three months ended March 31, 1996. This standard prescribes that when computing
the dilution of options, the Company is to use its average stock price for the
period, rather than the more dilutive greater of the average share price or end-
of-period share price required by APB Opinion 15. As the options are excluded
from the calculation due to the anti-dilutive characteristics indicated above,
there is no effect on the earnings per share calculation.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 5,050
<SECURITIES> 62,174
<RECEIVABLES> 1,207,117
<ALLOWANCES> (107,339)
<INVENTORY> 0
<CURRENT-ASSETS> 1,295,322
<PP&E> 15,584
<DEPRECIATION> (7,730)
<TOTAL-ASSETS> 1,534,768
<CURRENT-LIABILITIES> 1,273,742
<BONDS> 0
0
0
<COMMON> 176,580
<OTHER-SE> 84,446
<TOTAL-LIABILITY-AND-EQUITY> 1,534,768
<SALES> 68,049
<TOTAL-REVENUES> 88,060
<CGS> 0
<TOTAL-COSTS> 27,827
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 18,611
<INTEREST-EXPENSE> 16,037
<INCOME-PRETAX> 25,585
<INCOME-TAX> 9,077
<INCOME-CONTINUING> 16,508
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,508
<EPS-PRIMARY> 0.09
<EPS-DILUTED> 0.09
</TABLE>
