<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C., 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-11011
THE FINOVA GROUP INC.
(Exact name of registrant as specified in its charter)
DELAWARE 86-0695381
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1850 North Central Ave., P. O. Box 2209, Phoenix, AZ 85002-2209
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 602/207-6900
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 such shorter period that the Registrant was
required to file such report), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of October 30, 1996, 27,508,000 shares of Common Stock ($0.01 par value) were
outstanding.
<PAGE> 2
THE FINOVA GROUP INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I FINANCIAL INFORMATION.
Item 1. Financial Statements.
Condensed Consolidated Financial Information:
Condensed Consolidated Balance Sheet - September 30, 1996 and
December 31, 1995 1
Condensed Consolidated Income Statement - Three and Nine Months
Ended September 30, 1996 and 1995 2
Condensed Consolidated Statement of Cash Flows - Nine Months
Ended September 30, 1996 and 1995 3
Notes to Interim Condensed Consolidated Financial Information 4 - 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6 - 8
PART II OTHER INFORMATION.
Item 6. Exhibits and Reports on Form 8-K 8
SIGNATURES 9
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE FINOVA GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
<TABLE>
<CAPTION>
(Unaudited)
September 30, December 31,
ASSETS: 1996 1995
----------- -----------
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 56,852 $ 90,280
INVESTMENT IN FINANCING TRANSACTIONS:
Loans and other financing contracts, less unearned
income of $381,182 and $354,961, respectively 5,041,061 4,794,181
Direct financing leases 1,016,546 828,713
Factored receivables 614,372 369,169
Operating leases 506,399 460,798
Leveraged leases 456,898 366,196
----------- -----------
7,635,276 6,819,057
Less reserve for possible credit losses (156,339) (140,333)
----------- -----------
Investment in financing transactions - net 7,478,937 6,678,724
OTHER ASSETS AND DEFERRED CHARGES 340,059 267,510
----------- -----------
$ 7,875,848 $ 7,036,514
=========== ===========
LIABILITIES:
Accounts payable and accrued expenses $ 94,057 $ 125,349
Due to clients 255,827 181,548
Interest payable 31,766 45,553
Senior debt 6,350,043 5,649,368
Deferred income taxes 247,574 209,512
----------- -----------
6,979,267 6,211,330
----------- -----------
STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value, 100,000,000 shares
authorized, 28,422,000 shares issued 284 284
Additional capital 684,493 686,382
Retained income 250,758 184,381
Cumulative translation adjustments (5,228) (5,686)
Common stock in treasury, 951,000 and 1,143,000
shares respectively (33,726) (40,177)
----------- -----------
896,581 825,184
----------- -----------
$ 7,875,848 $ 7,036,514
=========== ===========
</TABLE>
See notes to interim consolidated financial information.
1
<PAGE> 4
THE FINOVA GROUP INC.
CONDENSED CONSOLIDATED INCOME STATEMENT
(Dollars in Thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------- -------------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Interest and income earned from
financing transactions $ 197,998 $ 171,004 $ 569,091 $ 489,335
Operating lease income 23,356 21,283 71,371 62,402
Interest expense (101,858) (93,136) (298,158) (267,857)
Depreciation (15,247) (12,980) (47,150) (38,891)
------------ ------------ ------------ ------------
Interest margins earned 104,249 86,171 295,154 244,989
Provision for possible credit losses (14,050) (10,800) (38,800) (28,800)
------------ ------------ ------------ ------------
Net interest margins earned 90,199 75,371 256,354 216,189
Gains on sale of assets 2,714 4,646 10,253 11,699
------------ ------------ ------------ ------------
92,913 80,017 266,607 227,888
Selling, administrative and
other operating expenses (45,598) (39,583) (129,992) (112,578)
------------ ------------ ------------ ------------
Income before income taxes 47,315 40,434 136,615 115,310
Income taxes (17,552) (15,284) (51,610) (44,163)
------------ ------------ ------------ ------------
NET INCOME $ 29,763 $ 25,150 $ 85,005 $ 71,147
============ ============ ============ ============
EARNINGS PER COMMON
AND EQUIVALENT SHARE $ 1.06 $ 0.91 $ 3.04 $ 2.56
============ ============ ============ ============
DIVIDENDS DECLARED PER
COMMON SHARE $ 0.24 $ 0.22 $ 0.68 $ 0.62
============ ============ ============ ============
AVERAGE OUTSTANDING COMMON
AND EQUIVALENT SHARES 28,031,000 27,771,000 27,971,000 27,845,000
============ ============ ============ ============
</TABLE>
See notes to interim consolidated financial information.
2
<PAGE> 5
THE FINOVA GROUP INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------------------
OPERATING ACTIVITIES: 1996 1995
----------- -----------
<S> <C> <C>
Net income $ 85,005 $ 71,147
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for possible credit losses 38,800 28,800
Depreciation and amortization 59,441 50,740
Gains on sale of assets (10,253) (11,699)
Deferred income taxes 32,008 13,674
Change in assets and liabilities, net of effects from subsidiaries
purchased (112,383) 15,571
----------- -----------
Net cash provided by operating activities 92,618 168,233
----------- -----------
INVESTING ACTIVITIES:
Proceeds from sale of assets 156,700 48,191
Proceeds from assets securitized 100,000
Principal collections on financing transactions 1,008,971 770,426
Expenditures for financing transactions (1,711,893) (1,379,847)
Net change in short-term financing transactions (112,373) (311,248)
Purchase of portfolios, net of cash received (7,455) (127,045)
Other 2,062 1,675
----------- -----------
Net cash used by investing activities (563,988) (997,848)
----------- -----------
FINANCING ACTIVITIES:
Net borrowings under commercial paper 467,219 494,292
Long-term borrowings 564,988 825,000
Repayment of long-term borrowings (586,237) (489,323)
Proceeds from exercise of stock options 5,410 3,751
Common stock purchased for treasury (22,760)
Dividends (18,628) (17,078)
Net change in due to clients 5,190 6,151
----------- -----------
Net cash provided by financing activities 437,942 800,033
----------- -----------
DECREASE IN CASH AND CASH EQUIVALENTS (33,428) (29,582)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 90,280 49,875
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 56,852 $ 20,293
=========== ===========
</TABLE>
See notes to interim consolidated financial information.
3
<PAGE> 6
THE FINOVA GROUP INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
NOTE A BASIS OF PREPARATION
The consolidated financial statements present the financial position,
results of operations and cash flows of The FINOVA Group Inc. and its
subsidiaries (collectively, "FINOVA" or the "Company"), including FINOVA Capital
Corporation and its subsidiaries (collectively, "FINOVA Capital").
The interim consolidated financial information is unaudited. In the
opinion of management all adjustments, consisting of normal recurring items,
necessary to present fairly the financial position as of September 30, 1996, the
results of operations for the quarter and nine months ended September 30, 1996
and 1995 and cash flows for the nine months ended September 30, 1996 and 1995,
have been included. Interim results of operations are not necessarily indicative
of the results of operations for the full year.
NOTE B SIGNIFICANT ACCOUNTING POLICIES
In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of",
effective for fiscal years beginning after December 15, 1995. This statement
establishes accounting standards for the impairment of long-lived assets,
certain identifiable intangibles and goodwill related to those assets to be held
and used and long-lived assets and certain identifiable intangibles to be
disposed of. The statement requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. In addition, the statement
requires that certain long-lived assets and intangibles to be disposed of be
reported at the lower of carrying amount or fair value less cost to sell. The
Company adopted this accounting standard effective January 1, 1996, as required.
The effect on the Company's financial position and the results of operations was
not material.
In October 1995, the FASB issued SFAS No. 123, "Accounting for
Stock-Based Compensation", effective for transactions entered into in fiscal
years that begin after December 15, 1995. As permitted under the provisions of
SFAS 123, the Company continues to account for such compensation under rules
existing prior to SFAS 123. The Company will provide the required pro forma
disclosures in the 1996 Annual Report with respect to SFAS 123 for 1995 and
1996.
In June 1996, the FASB issued SFAS No. 125, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities", effective
for transactions entered into after December 31, 1996. This statement changes
the accounting treatment of future transactions which transfer financial assets
but retain the servicing rights, such as securitizations. The future effect on
the Company's financial position and the results of operations has not been
determined.
NOTE C PORTFOLIO QUALITY
The following table presents a breakdown (by line of business) of the
Company's investment in financing transactions before the reserve for possible
credit losses at the dates indicated.
4
<PAGE> 7
INVESTMENT IN FINANCING TRANSACTIONS
BY LINE OF BUSINESS
SEPTEMBER 30, 1996
(Dollars in Thousands)
<TABLE>
<CAPTION>
Revenue Accruing Nonaccruing
------------------------------------ ------------------------------------
Repos-
sessed Repos- Leases Total
Market Assets sessed & Carrying
Rate (1) Impaired (2) Impaired Assets Other Amount
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Transportation Finance (3) $1,222,595 $ $ $ $ $ $1,222,595
Resort Finance 1,049,791 2,834 13,741 1,056 28,678 1,096,100
Commercial Real Estate Finance 685,087 19,246 41,885 2,609 16,117 988 765,932
Corporate Finance (4) 687,815 5,382 12,288 335 705,820
Manufacturer & Dealer Services (4)(5) 518,042 259 58,669 576,970
Medical Finance 555,078 1,133 1,749 557,960
Commercial Equipment Finance 508,128 4,600 4,792 517,520
Communications Finance 478,338 10,035 14,334 3,287 505,994
Rediscount Finance 412,868 412,868
Franchise Finance 360,561 1,258 2,516 745 365,080
Inventory Finance 275,525 395 275,920
Factoring Services 236,832 3,415 240,247
Commercial Finance 192,310 9,741 202,051
Government Finance 139,479 2 139,481
Other 45,680 413 4,645 50,738
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL (4) $7,368,129 $ 38,755 $ 55,626 $ 52,761 $ 48,417 $ 71,588 $7,635,276
========== ========== ========== ========== ========== ========== ==========
</TABLE>
- ----------
(1) Represents original or renegotiated market rate terms, excluding
impaired transactions.
(2) The Company earned income totaling $4.2 million on repossessed
assets during the nine months ended September 30, 1996, including
$3.5 million in Commercial Real Estate Finance and $0.7 million in
Resort Finance.
(3) Transportation Finance includes $183.7 million of new aircraft
financing business booked through the London office.
(4) Excludes $334.9 million of assets securitized which the Company
manages, including $300.0 million in Corporate Finance and $34.9
million in Manufacturer and Dealer Services.
(5) On October 21, 1996, the Company announced that it has entered
into a definitive agreement to sell its Manufacturer & Dealer
Services business. See Recent Developments and Business Outlook
in Management's Discussion and Analysis for further detail.
--------------------
<PAGE> 8
RESERVE FOR POSSIBLE CREDIT LOSSES:
The reserve for possible credit losses of $156.3 million at September
30, 1996 represents 2.0% of managed assets (investment in financing transactions
and securitized assets) before deducting such reserve. Changes in the reserve
for possible credit losses were as follows:
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
--------------------------
1996 1995
--------- ---------
(Dollars in Thousands)
<S> <C> <C>
Balance, beginning of period $ 140,333 $ 109,245
Provision for possible credit losses 38,800 28,800
Write-offs (31,007) (22,868)
Recoveries 2,062 1,675
Other 6,151 2,750
--------- ---------
Balance, end of period $ 156,339 $ 119,602
========= =========
</TABLE>
The Company believes that collateral values significantly reduce its
loss exposure and that the reserve for possible credit losses is adequate.
The specific impairment reserve of $9.3 million at September 30, 1996
applies to $30.6 million of the $91.5 million of impaired loans. The remaining
$147.0 million of the reserve for possible credit losses is designated for
general purposes and represents management's estimate of the amount to cover
potential losses in the portfolio considering delinquencies, loss experience and
collateral. Additions to general and specific reserves are reflected in current
operations. Management may transfer reserves between the general and specific
reserves as considered necessary.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 1996
TO THE NINE MONTHS ENDED SEPTEMBER 30, 1995
The following discussion relates to The FINOVA Group Inc. and its
subsidiaries (collectively, "FINOVA" or the "Company"), including FINOVA Capital
Corporation and its subsidiaries (collectively, "FINOVA Capital").
RESULTS OF OPERATIONS
Net income for the nine months ended September 30, 1996 was $85.0
million ($3.04 per common and equivalent share), compared to $71.1 million
($2.56 per common and equivalent share) for the first nine months of 1995,
representing a 19% increase in net income and earnings per share. The increase
in earnings was primarily due to portfolio growth, higher interest margins
earned, lower nonearnings and improved operating efficiencies (operating
expenses as a percentage of interest margins earned), as detailed below.
INTEREST MARGINS EARNED. Interest margins earned, which represent the
difference between (a) interest and income earned from financing transactions
and operating lease income and (b) interest expense and depreciation, were
$295.2 million for the nine months ended September 30, 1996, compared with
$245.0 million during the same period in 1995, an increase of 20%. The increase
in interest margins earned was primarily due to a 19% growth in average managed
assets (funds employed and assets sold under securitization agreements and
managed by the Company) and an increase in the interest
6
<PAGE> 9
margin as a percentage of average earning assets, which increased to 5.9% for
the nine months ended September 30, 1996 from 5.8% for the same period in 1995.
NON-INTEREST EXPENSE. The provision for possible credit losses, which
increases the reserve for possible credit losses, increased to $38.8 million for
the first nine months of 1996 from $28.8 million in 1995, primarily due to the
increase in managed assets. The reserve for possible credit losses as a
percentage of nonaccruing assets increased to 90.5% at September 30, 1996 from
77.8% at September 30, 1995.
Selling, administrative and other operating expenses were higher during
the first nine months of 1996 than in 1995, due primarily to the growth in
managed assets and higher incentive compensation expense related to the
Company's improved results and stock performance. As a percentage of interest
margins earned, these expenses decreased to 44.0% in the first nine months of
1996, from 46.0% during the same period in 1995.
GAINS ON SALE OF ASSETS. Gains on sale of assets were lower in 1996
compared to 1995, primarily due to the amount and type of assets coming off
lease during the respective periods. The timing of such gains is sporadic in
nature.
INCOME TAXES. Income taxes increased during the nine months ended
September 30, 1996, primarily due to the increase in pre-tax income, partially
offset by a lower effective tax rate. The lower effective tax rate, which
decreased from 38.3% in 1995 to 37.8% in the first nine months of 1996, was
primarily related to lower foreign tax effects and increased tax exempt
municipal income.
FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES
Managed assets grew by $847.8 million during the first nine months of
1996 and totaled $7.97 billion at September 30, 1996. The increase was
attributable primarily to new business of $2.10 billion during the period,
compared to $1.69 billion for the nine months ended September 30, 1995, and the
addition of $318 million of acquired portfolios, offset partially by portfolio
prepayments and amoritization.
The reserve for possible credit losses increased to $156.3 million at
September 30, 1996 from $140.3 million at December 31, 1995, primarily due to
the increase in managed assets. Write-offs during the period were $31.0 million
compared to $22.9 million during 1995, while recoveries increased to $2.1
million for the first nine months of 1996, from $1.7 million in 1995.
Nonaccruing assets increased to $172.8 million at September 30, 1996, compared
to $167.9 million at the end of 1995; however, nonaccruing assets as a
percentage of managed assets decreased to 2.2% from 2.4% at December 31, 1995.
Growth in funds employed is generally financed by the company's
internally generated cash flows and new borrowings. During the nine months
ended September 30, 1996, FINOVA Capital issued $565 million in new long-term
borrowings and recognized a net increase in commercial paper borrowings of
approximately $467 million. Repayments of long-term debt totaled $586 million
during the first nine months of 1996. The company had total debt of $6.35
billion at September 30, 1996 compared to year-end 1995 debt of $5.65 billion.
The Company also had deferred income taxes of $247.6 million, generally used to
reduce debt and, therefore, help finance lending activities.
RECENT DEVELOPMENTS AND BUSINESS OUTLOOK
On August 29, 1996, the Company consummated the acquisition of
Financing for Science International, Inc. (now known as FINOVA Technology
Finance, Inc.), a specialty leasing company servicing the high technology life
sciences, environmental technology and health care industries in the United
States. The transaction added a portfolio of approximately $188 million to the
Company's investment in financing transactions.
7
<PAGE> 10
On October 21, 1996, the Company announced that it has entered into a
definitive agreement to sell its Manufacturer & Dealer Services business
("MDS") to Green Tree Financial Corporation for approximately $610 million,
including the assumption of certain liabilities. The purchase price reflects a
premium of approximately $58 million over the book value of MDS's assets, prior
to allocation and accrual of related costs and expenses. MDS is a provider of
vendor-oriented sales finance programs involving small-ticket leasing and
financing products for commercial end-user customers. The transaction, which is
subject to usual closing conditions, including compliance with the
Hart-Scott-Rodino Act, has a scheduled closing date of November 30, 1996.
NEW ACCOUNTING STANDARDS
See Note B of Notes to Interim Condensed Consolidated Financial
Information in Part I, Item 1 of this report.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The following exhibits are filed herewith:
Exhibit No. Document
----------- ---------------------------------------------------
11 Computation of Earnings Per Share.
12 Computation of Ratio of Income to Combined Fixed
Charges and Preferred Stock Dividends
(interim period).
27 Financial Data Schedule.
(b) Reports on Form 8-K:
A Report on Form 8-K, dated October 16, 1996, was filed by
Registrant which reported under Items 5 and 7 the revenues, net income
and selected financial data and ratios for the third quarter ended
September 30, 1996 (unaudited).
A Report on Form 8-K, dated October 21, 1996, was filed by
Registrant which reported under Items 5 and 7 the definitive agreement,
by its wholly-owned subsidiary, FINOVA Capital Corporation, to sell its
Manufacturing and Dealer Services business to Green Tree Financial
Corporation.
8
<PAGE> 11
THE FINOVA GROUP INC.
SIGNATURES
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 FINOVA GROUP INC.
(Registrant)
Dated: November 4, 1996 By: /s/ Bruno A. Marszowski
-------------------------------------------
Bruno A. Marszowski, Senior Vice President,
Chief Financial Officer and Controller
Principal Financial and Accounting Officer
9
<PAGE> 12
THE FINOVA GROUP INC.
COMMISSION FILE NUMBER 1-11011
EXHIBIT INDEX
SEPTEMBER 30, 1996 FORM 10-Q
Exhibit No. Document
----------- ---------------------------------------------------
11 Computation of Earnings Per Share.
12 Computation of Ratio of Income to Combined Fixed
Charges and Preferred Stock Dividends (interim
period).
27 Financial Data Schedule.
10
<PAGE> 1
EXHIBIT 11
THE FINOVA GROUP INC.
Computation of Earnings Per Share
(Dollars in Thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net income and earnings
available to common
shareholders $ 29,763 $ 25,150 $ 85,005 $ 71,147
=========== =========== =========== ===========
Average common shares
outstanding before
common equivalents 27,432,000 27,370,000 27,372,000 27,515,000
Common equivalent stock
options 599,000 401,000 599,000 330,000
----------- ----------- ----------- -----------
Average outstanding common
and equivalent shares 28,031,000 27,771,000 27,971,000 27,845,000
=========== =========== =========== ===========
Earnings per common
and equivalent share $ 1.06 $ 0.91 $ 3.04 $ 2.56
=========== =========== =========== ===========
</TABLE>
11
<PAGE> 1
EXHIBIT 12
THE FINOVA GROUP INC.
Computation of Ratio of Income to Combined Fixed Charges
and Preferred Stock Dividends
(Dollars in Thousands)
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30, December 31,
--------------------- ----------------------------------
1996 1995 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Income before income
taxes $136,615 $115,310 $157,240 $123,771 $ 66,422
Add fixed charges:
Interest expense 298,158 267,857 366,822 222,200 123,853
One-third rentals 1,863 1,844 2,478 2,041 1,387
-------- -------- -------- -------- --------
Total fixed charges 300,021 269,701 369,300 224,241 125,240
-------- -------- -------- -------- --------
Income as adjusted $436,636 $385,011 $526,540 $348,012 $191,662
-------- -------- -------- -------- --------
Ratio of income to fixed
charges 1.46 1.43 1.43 1.55 1.53
======== ======== ======== ======== ========
Preferred stock dividends
on a pre-tax basis $ 0 $ 0 $ 0 $ 0 $ 2,139
Total combined fixed
charges and preferred
stock dividends $300,021 $269,701 $369,300 $224,241 $127,379
-------- -------- -------- -------- --------
Ratio of income to combined
fixed charges and preferred
stock dividends 1.46 1.43 1,43 1.55 1.50
======== ======== ======== ======== ========
</TABLE>
12
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-30-1996
<PERIOD-END> SEP-30-1996
<CASH> 56,852
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 7,635,276
<ALLOWANCE> 156,339
<TOTAL-ASSETS> 7,875,848
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 629,224
<LONG-TERM> 6,350,043
0
0
<COMMON> 284
<OTHER-SE> 896,297
<TOTAL-LIABILITIES-AND-EQUITY> 7,875,848
<INTEREST-LOAN> 640,462
<INTEREST-INVEST> 0
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 0
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 298,158
<INTEREST-INCOME-NET> 295,154
<LOAN-LOSSES> 38,800
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 129,992
<INCOME-PRETAX> 136,615
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 85,005
<EPS-PRIMARY> 3.04
<EPS-DILUTED> 0
<YIELD-ACTUAL> 5.9
<LOANS-NON> 172,766
<LOANS-PAST> 0
<LOANS-TROUBLED> 38,755
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 140,333
<CHARGE-OFFS> (31,007)
<RECOVERIES> 2,062
<ALLOWANCE-CLOSE> 156,339
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
