<PAGE>
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) October 23, 1996
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THE MONEY STORE INC.
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(Exact name of registrant as specified in its charter)
NEW JERSEY 001-10785 22-2293022
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(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) ID Number)
2840 Morris Avenue, Union, New Jersey 07083
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number,
including area code: (908) 686-2200
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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Attached as exhibits hereto are press releases of The Money Store Inc.
announcing (i) financial results for the third quarter ended September
30, 1996 and (ii) the execution of an agreement pursuant to which HFS
Incorporated ("HFS") has selected The Money Store Inc. to be its
preferred vendor to provide qualified franchisees of HFS' hotel brands
with SBA and conventional loans for financing hotel renovations and
conversions, purchases of new hotels and resales, and refinancing.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(c) Exhibits.
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The following exhibits are filed herewith:
Exhibit No. Description of Exhibit
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99.1 Press release of The Money Store Inc. dated
October 23, 1996.
99.2 Press release of The Money Store Inc. dated
October 23, 1996.
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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.
THE MONEY STORE INC.
By:/s/ MORTON DEAR
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Name: Morton Dear
Title: Executive Vice President and
Chief Financial Officer
Dated: October 23, 1996
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
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<C> <S>
99.1 Press release of The Money Store Inc. dated October 23,
1996.
99.2 Press release of The Money Store Inc. dated October 23,
1996.
</TABLE>
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EXHIBIT 99.1
[LOGO OF THE MONEY STORE]
NEWS RELEASE
FOR: The Money Store CONTACT: The Money Store Inc.
2840 Morris Avenue Paul Leliakov
Union, New Jersey 07083 (916) 554-4013
Michael Benoff
(916) 554-8010
HFS, Inc.
Neal Allen
(201) 952-8480
For Immediate Release: OCTOBER 23, 1996
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THE MONEY STORE IS SELECTED BY HFS INCORPORATED AS
PREFERRED VENDOR FOR LENDING TO HOTEL FRANCHISEES
MAJOR LENDER PROVIDES LOANS TO NEW HOTELS, EXPANSION AND RENOVATIONS
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Union, NJ--The Money Store (NASDAQ:MONE), the nation's largest lender of SBA
loans, has been selected by HFS Incorporated (NYSE:HFS), the world's largest
franchisor of hotels and residential real estate brokerage offices, to be its
preferred vendor to provide qualified franchisees of HFS' hotel brands with
SBA and conventional loans for financing hotel renovations and conversions,
purchases of new hotels and resales, and refinancing.
The three-year agreement provides qualified hotel franchisees with
competitive financing programs through The Money Store. HFS has more than
5,300 Days Inn, Howard Johnson, Knights Inn, Park Inn, Ramada, Super 8,
Travelodge, Villager Lodge and Wingate Inn franchised hotels with more than
490,000 rooms.
"The Money Store's competitive programs and exceptional service to hoteliers
are a welcome addition to HFS' industry-leading network of preferred vendors,"
said HFS Senior Vice President of Preferred Vendor Services John Chidsey.
New construction and expansion continue to be strong in the mass market
hotel segments represented by HFS brands. HFS' successful new Wingate Inns
brand is all-new-construction, while mature brands such as Days Inn and Super
8 are experiencing robust new-construction growth. The Money Store, operating
through its wholly-owned subsidiaries, The Money Store Investment Corporation
and The Money Store Commercial Mortgage, Inc., is an approved non-bank lender
for SBA Section 7(a) and SBA Section 504 loans, which are commonly used by SBA
approved hotel franchisees for new construction projects and renovations.
"The Money Store is well-positioned to generate competitive financing
packages for these hotel projects," Chidsey said.
"HFS is a leading national franchisor and we are pleased to offer a key
service to its franchisees," said The Money Store Commercial Lending Division
President, Paul Leliakov.
<PAGE>
"For The Money Store, this agreement represents an expansion of our
conventional and SBA lending programs," Leliakov said. "This is a positive
example of two industry leaders working together in a complementary way."
The Money Store is a national financial services company headquartered in
Union, NJ. The Company is one of America's leading home equity lenders, the
nation's leading Small Business Administration (SBA) lender and one of the
country's largest originators of government-guaranteed student loans. In
addition, the Company provides vehicle financing, primarily for used
automobiles. At September 30, 1996, the Company operated 206 branch offices in
50 states, the District of Columbia and the Commonwealth of Puerto Rico.
HFS Incorporated is a global consumer services company. The Company is the
largest franchisor of hotels and residential real estate brokerage offices,
owns Avis, Inc., the world's second largest rental car system, and expects to
acquire Resort Condominiums International, Inc., the largest provider of
vacation timeshare exchanges worldwide, in November.
<PAGE>
EXHIBIT 99.2
NEWS RELEASE
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FOR: The Money Store Contact: The Money Store Inc.
2840 Morris Avenue Michael Benoff
Union, New Jersey 07083 (916) 554-8010
Jeff Rogers
(916) 554-8333
The Marcus Group
Cyndi Nicholas
(609) 393-2211
For Immediate Release: October 23, 1996
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The Money Store Reports 72% Increase in Third Quarter Earnings to
Record Level, 79% Increase for First Nine Months, Increases Dividend;
and Announces Mandatory Convertible Preferred Stock Offering
Union, NJ - The Money Store Inc. (Nasdaq-MONE) today reported an increase in net
income of 72% for the third quarter of 1996 and 79% for the first nine months of
1996, compared with 1995 results for each period. Net income rose to $22.7
million for the quarter ended September 30, 1996, compared to 1995 third quarter
net income of $13.2 million, and to $55.8 million for the first nine months of
1996, compared to $31.2 million for the comparable 1995 period.
Earnings per share for the third quarter of 1996 were $0.38, an increase of 46%
from earnings per share of $0.26 in the third quarter of 1995. Earnings per
share for the first nine months of 1996 were $0.95, up 56% from earnings per
share of $0.61 for the same period in 1995. Per share amounts have been restated
to reflect a stock split in December 1995. The weighted average number of shares
outstanding for the quarter was up 16% to 59.1 million compared to the prior-
year period, primarily due to the issuance of 5.9 million new common shares on
March 11, 1996 in an underwritten public offering. Net income and earnings per
share for the third quarter were records in the Company's 29-year history.
The Company also declared a cash dividend of $0.03 per share of common stock
payable on December 1, 1996 to shareholders of record as of November 15, 1996.
The new quarterly rate represents a 20% increase from the prior rate of $0.025
per share. The increase in the quarterly dividend is the sixth increase in the
last ten quarters.
The Company also announced that it expects to commence an offering of
approximately 4.6 million shares of mandatory convertible preferred stock in
late October 1996. The net proceeds of the shares sold by the Company will be
used for general corporate purposes. The managing underwriters for the offering
are expected to be Prudential Securities Incorporated,
Page 1 of 5
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Bear, Stearns & Co. Inc., Montgomery Securities and Oppenheimer & Co., Inc.
Copies of the prospectus related to the offering may be obtained from any of the
managing underwriters or from the persons listed above.
"The Money Store continues to post strong growth in loan origination, serviced
loans, revenues and net income. The Company's historically strong growth rates
coupled with the strength of the overall stock market make this an appropriate
time to raise capital. This will give us the opportunity to continue to develop
our business lines. Most significantly, we believe that the issuance of the
additional shares will facilitate the ongoing building of shareholder value,"
stated Marc Turtletaub, president and chief executive officer of The Money
Store.
Turtletaub continued, "The third quarter was a very strong quarter overall. Our
three more mature divisions -- home equity lending, small business lending and
student lending -- increased their loan originations in the third quarter of
1996 by 53%, 36% and 37%, respectively, when compared to the prior year quarter.
Our auto finance division, established in January 1995, originated $127 million
in the third quarter. This represents 226% growth over the third quarter of 1995
and a 27% increase over the second quarter of 1996. Due to the strong
origination growth throughout the Company, the serviced loan portfolio was 43%
higher at September 30, 1996 than it was a year earlier. In addition, revenues
for the quarter grew 39%, driven by loan sales in excess of $1.4 billion during
the quarter, compared to originations of $1.5 billion."
Turtletaub noted, "Our loan portfolio continued to perform as expected. The
overall increase in delinquencies in the third quarter was consistent with what
we had projected. We continued to build our credit loss reserves during the
quarter, as we have over the last five years, by increasing the allowance for
credit losses to 2.39% of our at-risk portfolio. The Company's allowance for
credit losses at September 30, 1996 equals five times the annualized charge-off
rate for the first nine months of 1996."
"Finally, we're very pleased that the performance of the Company and the
strengthening of its balance sheet permit us to declare our 17th consecutive
dividend and increase our dividend rate for the sixth time in the last ten
quarters," Turtletaub concluded.
Selected results for the quarter and the nine months ended September 30, 1996,
are as follows:
. Revenues for the third quarter of 1996 were $202 million, an increase of 39%
over revenues of $145 million in the third quarter of 1995. For the first
nine months of 1996, revenues were $535 million, an increase of 53% over
revenues of $350 million in the first nine months of 1995.
. Serviced loans increased 43% to $11.2 billion at September 30, 1996, from
$7.8 billion at September 30, 1995. Home equity loans serviced increased 46%
to $7.6 billion; SBA loans serviced increased 19% to $2.1 billion; student
loans serviced increased 42% to $1.1 billion; and auto loans serviced
increased 432% to $364 million.
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. Loan originations for the third quarter of 1996 were a record level of $1.5
billion, a 57% increase over originations of $951 million for the prior year
quarter. Loan originations in the third quarter of 1996 and the increases
they represent over the third quarter of 1995 for the respective divisions
are as follows: home equity loans of $1.1 billion, up 53%; SBA loans of $154
million, up 36%; student loans of $140 million, up 37%; and auto loans of
$127 million, up 226%.
. Loan originations for the first nine months of 1996 were a Company record of
$4.0 billion, a 54% increase over originations of $2.6 billion in the prior-
year period. Loan originations for the first nine months of 1996 and the
increases they represent over the first nine months of 1995 for the
respective divisions are as follows: home equity loans of $3.0 billion, up
48%; SBA loans of $428 million, up 56%; student loans of $310 million, up
25%; and auto loans of $302 million, up 308%.
. Loans sold by division during the third quarter and year-to-date,
respectively, were as follows: home equity, $1.2 billion and $3.0 billion;
SBA, $143 million and $401 million; student lending, $0 and $250 million; and
auto finance, $50 million and $200 million.
. The excess servicing spreads for loans sold during the third quarter and
year-to-date, respectively, were as follows: home equity, 3.73% and 3.42%;
SBA, 1.23% and 1.93%; and auto finance, 10.05% and 9.86%. There were no
student loans sold in the third quarter; year-to-date excess servicing
spreads for student loans sold were 1.41%.
. Shareholders' equity of $418 million at September 30, 1996, was up 74% from
$241 million at the end of 1995. Of that increase, $122 million resulted from
the common stock offering in March 1996.
. Thirty day-and-over delinquencies as of September 30, 1996, increased 39
basis points to 5.74% of home equity loans serviced; increased 30 basis
points to 6.00% of SBA loans serviced; and increased 36 basis points to 3.19%
of auto loans serviced, from the levels at June 30, 1996. Of The Money
Store's total serviced loan portfolio, home equity loans represent 67.9%; the
unguaranteed portions of SBA and student loans represent 5.1% and 0.2%,
respectively; auto loans represent 3.2%; and the government-guaranteed
portions of the SBA and student loans represent 14.0% and 9.6%, respectively.
. For the quarter ended September 30, 1996, net home equity loans charged off
were $10.4 million, which annualizes to 55 basis points of loans serviced,
compared with 50 basis points annualized for the third quarter of 1995. Net
home equity loans charged off for the first nine months of 1996 were $26.4
million, which annualizes to 46 basis points of home equity loans serviced.
For all of 1995, net home equity loans charged off were $24.2 million, or 42
basis points of home equity loans serviced. Net SBA loans charged off were
$711,000 for the third quarter of 1996, or 50 basis points annualized of
unguaranteed SBA loans serviced, compared with 46 basis points annualized for
the same period in 1995. Net SBA loans
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charged off for the first nine months of 1996 were $2.0 million, which
annualizes to 48 basis points of unguaranteed SBA loans serviced. SBA loans
charged off were $1.7 million, or 40 basis points of unguaranteed SBA loans
serviced for all of 1995. Net auto loans charged off for the third quarter
of 1996 were $1.8 million, or 196 basis points annualized of the auto loan
portfolio. Net auto loans charged off for the first nine months of 1996
were $4.0 million, which annualized to 146 basis points of auto loans
serviced. Auto loans charged off for all of 1995 were $290,000 or 25 basis
points of the portfolio.
. Collateral owned at September 30, 1996 was $36 million.
The Money Store is a national financial services company headquartered in Union,
NJ. The Company is one of America's leading home equity lenders, the nation's
leading Small Business Administration (SBA) lender and one of the country's
largest originators of government-guaranteed student loans. In addition, the
Company provides vehicle financing, primarily for used automobiles. At September
30, 1996, the Company operated 206 branch offices in 50 states, the District of
Columbia and the Commonwealth of Puerto Rico.
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THE MONEY STORE INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(Dollars in thousands except per share data)
(Unaudited)
Consolidated Statement of Income Data:
<TABLE>
<CAPTION>
Three months Nine months
ended September 30, ended September 30,
1996 1995 1996 1995
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<S> <C> <C> <C> <C>
Revenues
Gain on sale of receivables $ 143,701 $ 103,675 $ 359,513 $ 242,993
Finance income, fees earned
and other income 58,483 41,586 175,791 106,691
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202,184 145,261 535,304 349,684
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Expenses
Salaries/employee benefits 42,892 32,338 117,001 86,031
Other operating expenses 52,372 29,997 138,528 82,871
Provision for credit losses 35,870 33,800 94,891 61,752
Interest 32,993 26,612 91,426 65,990
164,127 122,747 441,846 286,644
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Income before income taxes 38,057 22,514 93,458 53,040
Income taxes 15,337 9,281 37,637 21,797
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Net income $ 22,720 $ 13,233 $ 55,821 $ 31,243
=========== =========== =========== ===========
Net income per share $ 0.38 $ 0.26 $ 0.95 $ 0.61
=========== =========== =========== ===========
Weighted average number of
common shares outstanding 59,090,793 51,096,575 58,629,987 50,934,678
=========== =========== =========== ===========
Cash dividends $ 1,438 $ 920 $ 3,954 $ 2,411
=========== =========== =========== ===========
</TABLE>
Consolidated Statement of Financial Condition Data:
<TABLE>
<CAPTION>
As of As of
September 30, December 31,
1996 1995
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(Audited)
<S> <C> <C>
Receivables, net of allowance for credit losses
of $19,902 and $15,591 in 1996 and 1995 $1,339,394 $1,029,853
Excess servicing asset $ 706,557 $ 524,359
Total assets $2,375,794 $1,792,248
Notes payable $1,378,016 $1,075,892
Allowance for credit losses on loans sold $ 184,330 $ 125,155
Subordinated debt $ 13,000 $ 24,000
Shareholders' equity $ 418,408 $ 241,126
</TABLE>
Other Selected Financial Data:
<TABLE>
<CAPTION>
For the For the
Three months Nine months
ended September 30, ended September 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Volume of loans originated
or purchased $ 1,489,524 $ 950,546 $ 4,039,226 $2,626,513
Serviced loan portfolio $11,174,863 $7,812,260 $11,174,863 $7,812,260
</TABLE>
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