================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 10-Q
------------------
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended June 30, 1997
THE STUDENT LOAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 16-1427135
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
99 Garnsey Road 14534
Pittsford, New York (Zip Code)
(Address of principal executive offices)
(716) 248-7187
(Registrant's telephone number, including area code)
------------------
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 requirements for the past 90 days.
Yes X No
--- ---
On August 8, 1997, there were 20,000,000 shares of The Student Loan
Corporation's Common Stock outstanding.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
THE STUDENT LOAN CORPORATION
STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
--------------------------------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUE
Interest income $144,567 $134,667 $287,346 $269,592
Interest expense 101,342 89,473 199,392 179,581
-------- -------- -------- --------
Net interest income 43,225 45,194 87,954 90,011
Provision for loan losses 747 622 1,452 1,240
-------- -------- -------- --------
Net interest income after provision
for loan losses 42,478 44,572 86,502 88,771
Fee and other income 20 13 42 26
-------- -------- -------- --------
Total revenue, net $ 42,498 $ 44,585 $ 86,544 $ 88,797
-------- -------- -------- --------
OPERATING EXPENSES
Salaries and employee benefits $ 7,770 $ 7,787 $ 15,332 $ 15,758
Other expenses 10,701 8,529 19,260 16,872
-------- -------- -------- --------
Total operating expenses $ 18,471 $ 16,316 $ 34,592 $ 32,630
-------- -------- -------- --------
Income before income taxes $ 24,027 $ 28,269 $ 51,952 $ 56,167
Income taxes 9,922 12,203 21,033 23,590
-------- -------- -------- --------
NET INCOME $ 14,105 $ 16,066 $ 30,919 $ 32,577
======== ======== ======== ========
NET INCOME - Core (excluding floor income) $ 13,845 $ 15,813 $ 30,340 $ 32,053
======== ======== ======== ========
NET INCOME -Floor $ 260 $ 253 $ 579 $ 524
======== ======== ======== ========
DIVIDENDS DECLARED $ 2,400 $ 1,200 $ 4,800 $ 2,400
======== ======== ======== ========
PER COMMON SHARE - (based on 20 million
average shares outstanding)
Net income - Core $ 0.69 $ 0.79 $ 1.52 $ 1.60
Net income - Floor $ 0.01 $ 0.01 $ 0.03 $ 0.03
-------- -------- -------- --------
Net income $ 0.70 $ 0.80 $ 1.55 $ 1.63
======== ======== ======== ========
Dividends declared $ 0.12 $ 0.06 $ 0.24 $ 0.12
======== ======== ======== ========
OPERATING RATIOS -
Net interest margin 2.42% 2.81% 2.48% 2.81%
Net interest margin - Core 2.39% 2.79% 2.45% 2.78%
Operating expense as a percentage of
average insured student loans 1.03% 1.02% 0.97% 1.02%
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
THE STUDENT LOAN CORPORATION
BALANCE SHEETS
(Dollars in thousands)
June 30, December 31,
1997 1996
---------- ----------
ASSETS
Insured student loans $7,163,758 $6,894,291
Allowance for loan losses 1,761 1,570
---------- ----------
Insured student loans, net 7,161,997 6,892,721
Cash 595 567
Deferred tax benefits 35,976 39,243
Other assets 206,139 185,804
---------- ----------
Total Assets $7,404,707 $7,118,335
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term borrowings $5,785,049 $4,509,251
Long-term notes 1,100,000 2,075,000
Payable to principal stockholder 18,910 19,833
Other liabilities 112,493 152,270
---------- ----------
Total Liabilities 7,016,452 6,756,354
---------- ----------
Common stock 200 200
Additional paid-in capital 134,264 134,109
Retained Earnings 253,791 227,672
---------- ----------
Total Stockholders' Equity 388,255 361,981
---------- ----------
Total Liabilities and Stockholders' Equity $7,404,707 $7,118,335
========== ==========
AVERAGE INSURED STUDENT LOANS $7,156,488 $6,547,514
(year-to-date) ========== ==========
See accompanying notes to financial statements.
3
<PAGE>
THE STUDENT LOAN CORPORATION
STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Six months ended
June 30,
------------------------
1997 1996
----------- -----------
Cash flows from operating activities:
Net income $ 30,919 $ 32,577
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation and amortization 2,938 1,590
Provision for loan losses 1,452 1,240
Deferred tax provision 3,267 5,684
Increase in accrued interest receivable (20,976) (16,527)
(Increase) decrease in other assets 1,081 (2,059)
Decrease in other liabilities (40,544) (18,384)
----------- -----------
Net cash (used) provided by operating activities (21,863) (4,121)
----------- -----------
Cash flows from investing activities:
Origination of loans (649,941) (647,568)
Sale of loans, net of purchases 22,472 25,367
Repayment of loans 354,847 331,959
Capital expenditures on premises and equipment (1,485) (558)
----------- -----------
Net cash used in investing activities (274,107) (290,800)
----------- -----------
Cash flows from financing activities:
Net increase in short-term borrowings 225,798 289,064
Proceeds from long-term borrowings 75,000 --
Dividends paid (4,800) (2,400)
----------- -----------
Net cash provided by financing activities 295,998 286,664
----------- -----------
Net increase (decrease) in cash 28 (15)
Cash - beginning of period 567 579
----------- -----------
Cash - end of period $ 595 $ 564
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the periods for:
Interest $ 195,362 $ 160,488
Income taxes $ 10,482 $ 40,517
See accompanying notes to financial statements.
4
<PAGE>
THE STUDENT LOAN CORPORATION
Notes to Financial Statements
June 30, 1997
1. Significant Accounting Policies
Interim Financial Information
The financial information of The Student Loan Corporation (the "Company")
as of June 30, 1997 and for the three and six-month periods ended June
30, 1997 includes all adjustments (consisting of normal recurring
accruals) which, in the opinion of management, are necessary to state the
Company's financial position and results of operations in accordance with
generally accepted accounting principles.
Certain amounts in the prior period's financial statements have been
reclassified to conform with the current period's presentation. Such
reclassification had no effect on the results of operations as previously
reported.
Definitions
Core net income represents net income excluding floor income,
attributable to the fixed minimum interest rates on certain loans in the
Company's portfolio.
2. Commitments and Contingencies
Regulatory Impacts
The 1997-98 Federal budget reconciliation process made no changes to the
fee and rate structure currently applicable to lenders and holders of
FFEL Program loans. The FFEL program is scheduled for reauthorization in
1998. At that time, Congress may impose additional costs on lenders and
guarantors and/or decrease Federal interest subsidies even further. Any
such action may further impair the Company's ability to maintain its
current net interest margins.
The Company estimates that direct lending accounted for approximately
35%, on a national basis, of all guaranteed student loans made in the
1995-96 academic year. The FDSL Program is authorized to originate up to
50% of all such loans in each of 1996-97 and 1997-1998, and at least 60%
in 1998-99. Any increases in direct lending would effectively reduce the
number of potential new loans available for origination under the FFEL
Program by lenders such as the Company.
The Company has experienced a decline in net interest margin over the
last few years due to the provisions of the 1993 Amendments, as new loans
with these provisions were added to the portfolio and older, more
profitable loans were repaid. The interest spread for in-school, grace
and deferment periods declined for loans disbursed on or after July 1,
1995, with a full-year impact occurring in 1996. Therefore, in order to
maintain or improve its net income in future years, the Company needs to
substantially increase the size of its portfolio; there is no assurance
that the Company will be able to do so. Since 1994, the Company has
aggressively pursued both new and existing marketing programs, expanded
its guarantor relationships, and sought new ways to meet the education
finance needs of schools and students, including the implementation of
non-Federally guaranteed loan programs, such as CitiAssist, that are not
dependent on Federal funding and authorization.
5
<PAGE>
3. Related Party Transactions
Citibank (New York State) ("CNYS"), a subsidiary of Citicorp, owns 80% of
the outstanding common stock of the Company. A number of significant
transactions are carried out between the Company on the one hand and
Citicorp and its affiliates on the other hand. At June 30, 1997, the
Company had outstanding short-term borrowings of $5.2 billion and
long-term borrowings of $1.1 billion with CNYS, compared to short-term
and long-term borrowings of $4.0 billion and $1.5 billion, respectively,
with CNYS at December 31, 1996. The amounts classified as short-term debt
as of June 30, 1997 and December 31, 1996 included $2.6 billion and $1.4
billion, respectively, of debt originally issued as long-term that, as of
these dates, matures within 12 months. For the six-month period ending
June 30, 1997, the Company incurred $176.3 million in interest expense
payable to CNYS and its affiliates, compared to $149.1 million in
interest expenses payable to CNYS and its affiliates for the same period
in 1996. In addition, Citicorp and its subsidiaries engage in other
transactions and servicing activities, including cash management, data
processing, income tax payments, employee benefits and facilities
management, with the Company. Management believes that the terms of these
transactions are, in the aggregate, no less favorable to the Company than
those which could be obtained from unaffiliated parties.
4. Interest Rate Swap Agreements
The Company, from time to time, enters into interest rate swap agreements
with related and third parties solely to hedge interest rate exposure on
certain interest bearing liabilities. The swap agreements are intended to
reduce the risk caused by differences between borrowing and lending
rates. Entering into swap agreements to pay interest based on the
interest rate characteristics of the Company's assets and to receive
interest based on the characteristics of the Company's liabilities
effectively limits the risk of the potential interest rate variability.
The counterparty for all interest rate swap agreements outstanding at
June 30, 1997 was either CNYS, the majority stockholder, or one of its
affiliates.
Interest rate swap agreements with a carrying value of $8.5 million,
representing accrued interest payable, were determined to have an
estimated fair value of $8.0 million at June 30, 1997. At December 31,
1996, interest rate swap agreements with a carrying value of $9.3 million
of interest payable had an estimated fair value of $11.1 million. The
fair values, based on approximate values obtained from the Company's
dealer in these financial instruments, represent the estimated amounts
which would be payable upon termination of the agreements. Market values
vary from period to period based on changes in such factors as LIBOR and
Treasury Bill interest rates and timing of contractual settlements. The
aggregate notional principal amounts outstanding at June 30, 1997 and
December 31, 1996 totaled $2.2 billion and $2.0 billion, respectively.
5. Short and Long-Term Borrowings
On March 1, 1997, a new credit agreement with CNYS was established,
replacing the prior one. Under the new agreement, all existing debt
remained unchanged until maturity. However, the terms of the new
agreement increased the maximum credit allowable under short-term
borrowings to $4.5 billion, from $2.8 billion at December 31, 1996, and
increased the maximum aggregate credit level to $8.0 billion from $6.4
billion at December 31, 1996. Also, any unused credit within the $8.0
billion limit was made eligible for long-term borrowings. In each of the
first two quarters of 1997, $0.04 billion per quarter in new long-term
borrowings was made under the new credit facility. In addition, $0.7
billion in new short-term borrowings was made in the first quarter of
1997. In the second quarter of 1997, $0.06 billion in short-term
borrowings
6
<PAGE>
was paid off.
During the first quarter of 1997, $0.6 billion of long-term debt became
due within one year and was reclassified to short-term. In addition, in
the second quarter of 1997, $0.5 billion of long-term debt became due
within one year and was reclassified to short-term. Also, although all of
the commercial paper that had been outstanding during the first quarter
of 1997 under the Company's commercial paper program matured by March 31,
1997 and no new commercial paper was issued, the program remains open and
available for future borrowings.
6. Impact of Recently Issued Accounting Standards
During the first quarter of 1997, Statement of Financial Accounting
Standards, (SFAS) No. 128, "Earnings per Share," was issued. The
statement provides new standards for calculating and presenting earnings
per share. The standard will be effective for year-end 1997. Adoption of
the new standard is not expected to have a material impact on the
Company.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Financial Condition
During the six months ended June 30, 1997, the net insured student loan
portfolio of The Student Loan Corporation (the "Company") grew by $269.3 million
(4%) from the balance at December 31, 1996. This growth was the result of loan
disbursements totaling $649.9 million in the first six months of 1997, partially
offset by $354.8 million in loan reductions (attributable to repayments and
claims paid by guarantors), loan sales net of loan purchases of $22.5 million
and other adjustments of $3.3 million. This compares to loan disbursements of
$647.6 million, loan reductions of $332.0 million, loan sales net of loan
purchases of $25.4 million, and other adjustments of $2.0 million in the first
six months of 1996.
The Company's new loan disbursements of $649.9 million made in the first half of
1997 were $2.3 million more than those made in the same period of 1996. This
increase is attributable primarily to new FFELP loan disbursements of $644.7 in
the first six months of 1997 compared to $590.6 million during the same period
of 1996. This increase of $54.1 million (9%) in FFELP disbursements was
partially offset by the phase out of a special loan consolidation program the
Company maintained under various agreements with the Department of Education and
several of its contractors. Under this program, $53.2 million in loan
consolidations were made in the first six months of 1996. Since this program was
ended in mid-1996, no loan consolidations of this type will be made in 1997. The
increase in loan disbursements occurred despite increased competition from the
Federal Direct Student Loan ("FDSL") Program maintained by the Department of
Education. The Company estimates that the FDSL Program accounted for
approximately 35% of new loan volume nationally in the 1995-1996 academic year.
The FDSL Program's share of all guaranteed student loans made nationally is
authorized to increase to 50% for 1996-1997 and 1997-1998 and to at least 60% in
subsequent years. This increase in FDSL Program lending could lead to declines
in the Company's disbursements in future periods; such declines could adversely
affect the Company's net income.
During the first six months of 1997, the Company made $195.4 million in interest
payments principally to CNYS or one of its affiliates, compared to the $160.5
million paid in the same period in 1996. The difference is due to increases in
both the size of the borrowings and interest rates, as well as timing of
interest payments. The Company paid $10.5 million in income taxes during the
first six months of 1997, compared to $40.5 million for the same period last
year. The difference in the amount of taxes paid is primarily due to a timing
difference in making intercompany tax payments, and does not reflect any
significant changes in applicable income tax rates.
Other assets increased $20.3 million (11%) from the December 31, 1996 level,
principally as a result of additional interest receivable attributable to the
growth in the student loan portfolio and timing of interest receipts. Other
liabilities, principally comprised of accrued interest and income taxes payable,
decreased by $39.8 million (26%) from December 31, 1996, primarily due to timing
differences for payables and intercompany interest payments.
On March 1, 1997, a new credit agreement with CNYS was established, replacing
the prior one. Under the new agreement, all existing debt remained unchanged
until maturity. However, the terms of the new agreement increased the maximum
credit allowable under short-term borrowings to $4.5 billion, from $2.8 billion
at December 31, 1996, and increased the maximum aggregate credit level to $8.0
billion from $6.4 billion at December 31, 1996. Also, any unused credit within
the $8.0 billion limit was made eligible for long-term borrowings. In each of
the first two quarters of 1997, $0.04 billion per quarter in new long-term
borrowings was made under the new credit facility. In addition, $0.7 billion in
new short-term borrowings was made in the first quarter of 1997. In the second
quarter of 1997, $0.06 billion in short-term borrowings was paid off.
8
<PAGE>
During the first quarter of 1997, $0.6 billion of long-term debt became due
within one year and was reclassified to short-term. In addition, in the second
quarter of 1997, $0.5 billion of long-term debt became due within one year and
was reclassified to short-term. Also, although all of the commercial paper that
had been outstanding during the first quarter of 1997 under the Company's
commercial paper program matured by March 31, 1997 and no new commercial paper
was issued, the program remains open and available for future borrowings.
The Company paid a quarterly dividend of $0.12 per common share on June 2, 1997.
The Board of Directors has declared a regular quarterly dividend on the
Company's common stock at an increased rate of $0.15 per share to be paid on
September 1, 1997 to stockholders of record on August 15, 1997.
Results of Operations
Quarter Ended June 30, 1997
Core net income (excluding floor income) was $13.8 million ($0.69 per share) for
the second quarter of 1997, a decrease of $2.0 million (12%) from the level of
$15.8 million ($0.79 per share) achieved for the same period last year. The
decline was primarily attributable to lower net interest margins, despite higher
interest income generated by growth in the student loan portfolio, as well as
higher operating costs.
Total net income for the second quarter of 1997 was $14.1 million, or $0.70 per
share, a decrease of $2.0 million (12%) from net income of $16.1 million, or
$0.80 per share, for the same period last year. The Company earned $0.3 million
of net income from interest rate floors in the second quarter of 1997, the same
as that earned for the second quarter of 1996, due to a generally stable
interest rate environment.
The core net interest margin for the second quarter of 1997 was 2.39%, 0.40%
lower than the 2.79% margin for the second quarter of 1996. The decline in the
margin was primarily the result of a reduced spread between the base rate for
the Company's assets (the 91-day Treasury Bill rate) and the base rate for the
Company's funding (other short-term money market rates) during the quarter.
Additionally, the June 30, 1997 loan portfolio carried a greater proportion of
loans originated after July 1, 1995, which carry lower in-school yields than
those originated prior to that date.
Second quarter 1997 net income also declined because of higher operating
expenses. Operating expenses for the second quarter were up $2.2 million (13%)
from the same period last year. Operating expenses as a percentage of average
insured student loans increased 0.01% to 1.03% from the second quarter of 1996
expense ratio of 1.02%. The increase in the expense ratio is primarily
attributable to higher marketing costs, incurred to promote CitiAssist, the
Company's new alternative loan product. These higher marketing costs are
expected to continue into the third quarter of 1997.
The provision for loan losses was $0.1 million (20%) higher for the second
quarter of 1997 than that recorded for the same period last year. This increase
was due to larger amounts of loans disbursed on or after October 1, 1993 rolling
into repayment, becoming delinquent, and thus requiring a reserve for the
estimated 2% risk-sharing cost to be potentially incurred in the future.
Six Months Ended June 30, 1997
Core net income was $30.3 million ($1.52 per share) for the first half of 1997,
a decrease of $1.7 million (5%) from first half 1996 levels of $32.1 million
($1.60 per share). The decline was primarily attributable to lower net interest
margins, despite higher interest income generated by growth in the student loan
portfolio, as well as higher operating costs.
9
<PAGE>
The Company earned net income of $30.9 million, or $1.55 per share, for the six
months ended June 30, 1997, a $1.7 million (5%) decrease from $32.6 million, or
$1.63 per share, for the first six months of 1996. The Company earned $0.6
million ($0.03 per share) of net income from interest rate floors in the first
two quarters of 1997, compared to $0.5 million ($0.03 per share) for the same
period last year.
Total operating expenses for the first half of 1997 were $34.6 million, an
increase of $2.0 million (6%) from the first half of 1996. The increase in the
expense is primarily attributable to higher marketing costs, incurred to promote
CitiAssist, the Company's new alternative loan product. These higher marketing
costs are expected to continue into the third quarter of 1997. Operating
expenses as a percentage of average insured student loans for the first half of
1997 decreased to 0.97%, an improvement of 0.05% compared to the first half of
1996, primarily attributable to nonrecurring costs reflected in the first
quarter of 1996 related to the consolidation of Customer Service operations in
Pittsford, New York and the closing of the Sacramento, CA facility.
The provision for loan losses was $0.2 million greater for the first six months
of 1997 compared to the same period of 1996. This was due to larger amounts of
loans disbursed on or after October 1, 1993 rolling into repayment, becoming
delinquent, and thus requiring a reserve for the estimated 2% risk-sharing cost
to be potentially incurred in the future.
Income Taxes
The Company's effective tax rate was approximately 40.5% for the first half
1997, compared to 42.0% for the same period in 1996.
Regulatory Impacts
The 1997-98 Federal budget reconciliation process made no changes to the fee and
rate structure currently applicable to lenders and holders of FFEL Program
loans. The FFEL Program is scheduled for reauthorization in 1998. At that time,
Congress may impose additional costs on lenders and guarantors and/or decrease
Federal interest subsidies even further. Any such action may further impair the
Company's ability to maintain its current net interest margins.
The Company estimates that direct lending accounted for approximately 35%, on a
national basis, of all guaranteed student loans made in the 1995-96 academic
year. The FDSL Program is authorized to originate up to 50% of all such loans in
each of 1996-97 and 1997-98, and at least 60% in 1998-99. Any increases in
direct lending would effectively reduce the number of potential new loans
available for origination under the FFEL Program by lenders such as the Company.
The Company has experienced a decline in net interest margin over the last few
years due to the provisions of the 1993 Amendments, as new loans with these
provisions were added to the portfolio and older, more profitable loans were
repaid. The interest spread for in-school, grace and deferment periods declined
for loans disbursed on or after July 1, 1995, with a full-year impact occurring
in 1996. Therefore, in order to maintain or improve its net income in future
years, the Company needs to substantially increase the size of its portfolio;
there is no assurance that the Company will be able to do so. Since 1994, the
Company has aggressively pursued both new and existing marketing programs,
expanded its guarantor relationships, and sought new ways to meet the education
finance needs of schools and students, including the implementation of
non-Federally guaranteed loan programs, such as CitiAssist, that are not
dependent on Federal funding and authorization.
10
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders.
At the Company's 1997 Annual Meeting of Stockholders, held May 9, 1997,
the Company's stockholders took the following actions:
1) Two directors were re-elected to the Board of Directors: Dr. Evelyn
Handler (with holders of 18,019,424 shares voting in favor, 252,460
voting against and 150 abstaining); Carl Levinson (with holders of
17,917,569 shares voting in favor, 354,315 voting against and 150
abstaining). Dr. Handler and Mr. Levinson will each serve until the year
2000 meeting of stockholders. On July 24, 1997, the Board of Directors
elected Carl Levinson Chairman.
2) The selection of KPMG Peat Marwick as the Company's independent auditors
for the 1997 fiscal year was ratified, with holders of 18,265,885 shares
voting in favor, 6,000 voting against and 150 abstaining.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K: none.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: August 8, 1997
THE STUDENT LOAN CORPORATION
By /s/ Michael S. Piemonte
-------------------------
Michael S. Piemonte
Vice President, Treasurer and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE STUDENT
LOAN CORPORATION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1.000
<CASH> 595
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
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<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 7,163,758
<ALLOWANCE> 1,761
<TOTAL-ASSETS> 7,404,707
<DEPOSITS> 0
<SHORT-TERM> 5,785,049
<LIABILITIES-OTHER> 112,493
<LONG-TERM> 1,100,000
0
0
<COMMON> 200
<OTHER-SE> 388,055
<TOTAL-LIABILITIES-AND-EQUITY> 7,404,707
<INTEREST-LOAN> 287,346
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<INTEREST-DEPOSIT> 0
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<INTEREST-INCOME-NET> 87,954
<LOAN-LOSSES> 1,452
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 34,592
<INCOME-PRETAX> 51,952
<INCOME-PRE-EXTRAORDINARY> 30,919
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 30,919
<EPS-PRIMARY> 1.55
<EPS-DILUTED> 1.55
<YIELD-ACTUAL> 0 <F1>
<LOANS-NON> 0 <F1>
<LOANS-PAST> 0 <F1>
<LOANS-TROUBLED> 0 <F1>
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<FN>
<F1> Not applicable.
</FN>
</TABLE>
