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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
X Annual Report pursuant to section 13 or 15(d) of the Securities
________ Exchange Act of 1934 for the fiscal year ended December 31, 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: 33-84920 (no 1934 Act number)
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Exact name of Registrant as specified in its charter:
OLYMPIC AUTOMOBILE RECEIVABLES TRUST, 1996-B
State or other jurisdiction of incorporation or organization): Delaware
I.R.S. Employer Identification No.: 41-1840460
Address of principal executive offices:
7825 Washington Avenue So. Minneapolis, Minnnesota 55439-2435
Registrant's telephone number, including area code: (612) 942-9880
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
5.39% Class A-1 Automobile Receivables-Backed Notes
6.00% Class A-2 Automobile Receivables-Backed Notes
6.50% Class A-3 Automobile Receivables-Backed Notes
6.70% Class A-4 Automobile Receivables-Backed Notes
6.90% Class A-5 Automobile Receivables-Backed Notes
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
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Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
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PART I
Item 1. BUSINESS.
The sole business of Olympic Automobile Receivables Trust, 1996-B (the
"Trust") is to hold the Receivables and to apply the proceeds thereof
to make payments to the Noteholders and to the Certificateholders, as
described in the Trust's Prospectus Supplement (dated June 5, 1996)
to Prospectus dated March 7, 1996, and the related Registration
Statement on Form S-3 (File No. 33-84920).
Item 2. PROPERTIES.
Not applicable.
Item 3. LEGAL PROCEEDINGS.
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
As of December 31, 1996, the Trust had 10 holders of record of the
Certificates, 0 holders of record of Class A-1 Notes, 10 holders of
record of Class A-2 Notes, 19 holders of record of Class A-3
Notes, 12 holders of record of Class A-4 Notes, and 12 holders of
record of Class A-5 Notes, computed in accordance with Rule 12g5-1
under the Securities Exchange Act of 1934, as amended.
Item 6. SELECTED FINANCIAL DATA.
Not applicable.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION.
Not applicable.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Not applicable.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
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PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Not applicable.
Item 11. EXECUTIVE COMPENSATION.
Not applicable.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Not applicable.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Not applicable.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) The Report of Independent Auditors, delivered pursuant to Section
3.11 of the Sale and Servicing Agreement dated as of June 1, 1996, is
filed herewith.
(b) None.
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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 hereunto duly authorized.
OLYMPIC AUTOMOBILE RECEIVABLES TRUST, 1996-B
By ARCADIA FINANCIAL LTD., as Servicer with
respect to Olympic Automobile Receivables Trust,
1996-B
Dated: August 13, 1997 /s/ John A. Witham
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John A. Witham
Executive Vice President
and Chief Financial Officer
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EXHIBIT INDEX
Item
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99.1 The Report of Independent Auditors, delivered pursuant to Section 3.11
of the Sale and Servicing Agreement dated as of June 1, 1996.
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[Letterhead]
Report of Independent Auditors
Olympic Financial Ltd.
Board of Directors
We have audited, in accordance with generally accepted auditing standards, the
consolidated balance sheet of Olympic Financial Ltd. (the "Company") as of
December 31, 1996 and the related consolidated statements of operation,
shareholders' equity, and cash flows for the year ended December 31, 1996 and
have issued our report thereon dated January 21, 1997.
Our audit, referred to in the preceding paragraph, included procedures applied
to the documents and records relating to the servicing of automobile installment
contracts under certain pooling and servicing agreements and sale and servicing
agreements, and procedures applied to the delinquency and loss statistics
relating to the Company's portfolio of automobile installment contracts. These
procedures were determined on the basis of our objective to issue on opinion on
the financial statements referred to above taken as a whole. Because the
procedures referred to in this paragraph and described below do not constitute
an audit of the documents and records relating to the servicing of automobile
installment contracts or the delinquency and loss statistics relating to the
Company's portfolio of automobile installment contracts, we do not express an
opinion on those documents, records or statistics.
Our procedures were as follows:
DOCUMENTS AND RECORDS RELATING TO THE SERVICING OF AUTOMOBILE INSTALLMENT
CONTRACTS UNDER POOLING AND SERVICING AGREEMENTS AND SALE AND SERVICING
AGREEMENTS.
1. In 1995, we utilized an audit software application to analyze certain
characteristics of the entire servicing portfolio. We refer to our
letter dated January 19, 1996 that describes the procedures performed at
that time. At year-end 1996, using an audit software application
applied to the 1996-A, 1996-B, 1996-C, and 1996-D securitization pools,
we:
a. Recalculated the aging of the automobile installment contracts and
compared the number and amount of delinquent loans to the Company's
delinquency reports.
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b. Recalculated the weighted average interest rates on automobile
contracts for each securitization pool.
2. Relating to automobile installment contracts included in Olympic Automobile
Receivables Trusts 1996-A, 1996-B, 1996-C, and 1996-D and/or serving as
collateral for warehouse facilities during 1996, we:
a Attempted to verbally confirm the original contract amount and monthly
payment amount with the primary obligor for a sample of 1,000
automobile installment contracts. Following is a summary of the
confirmation results:
Confirmed without exception - 418 or 42%
Confirmed vehicle purchase, unsure of original contract amount or
monthly payment amount - 91 or 9%
Exception noted in original contract amount or monthly payment amount-
9 or 1%
Unable to contact borrower, confirmed propriety of phone number
through discussion with person answering telephone or directory
assistance - 225 or 26%
Unable to contact borrower or confirm propriety of phone number
through directory assistance - 227 or 22%
b. For the automobile installment contracts identified in 2.a. above as
unable to contact borrower or confirm the propriety of the phone
number through directory assistance, we obtained the payment history
from the Company and determined whether subsequent payments had been
received. In some instances, the Company contacted the borrower
directly. We noted that payments had been subsequently received for
all of the automobile installment contracts selected or the Company
represented that they had contacted the borrower.
c. For a sample of 80 automobile installment contracts, we obtained from
the Company the payment history and compared the amount of the most
recent payment to the corresponding amount in the Company's cash
receipt records. Also, we recalculated the allocation of the payment
to principal, interest, and other charges, if applicable. No
exceptions were noted.
3. Obtained the reconciliation of automobile installment contracts suspense
accounts for a five day period subsequent to December 31, 1996 and observed
that suspense items cleared in a timely manner.
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4. Recalculated the yield earned on automobile installment contracts based on
the average loans held for sale balance during 1996. Compared the
recalculated yield to the weighted average annual percentage yield of loans
held for sale stated in the respective prospectus for 1996-A, 1996-B,
1996-C and 1996-D.
5. For a sample of 70 extensions granted during 1996, we noted that the
extension was approved by a designated officer of the Company and the
extension was granted in accordance with the Company policy. Additionally,
for a sample of 25 extensions granted in 1996, we obtained the loan history
noting that subsequent payments were made per the automobile installment
contract and noted that any additional extensions granted were made in
accordance with Company policy.
6. For the same sample of 1,000 automobile installment contracts included in
Olympic Automobile Receivables Trusts 1996-A, 1996-B, 1996-C, and 1996-D,
as referred to in 2.a. above, we obtained the loan files from the Company
and noted documentation of approval, title and insurance. We noted 41
automobile installments contracts where there was a discrepancy between
the loan file documentation and the random loan list, 104 automobile
installment contracts were not approved by the appropriate level of
management based on the Company's approval matrix, eight automobile
installment contracts did not have a title or application for title
listing the Company as the first lienholder, 42 automobile installment
contracts did not have evidence of physical damage insurance listing the
Company as loss payee and 17 automobile installment contracts where the
description (new or used) of the financed vehicle contained in the signed
note or information in the loan file did not agree with the description
set forth in the lien recording instrument or with the automobile
description code per the Random Loan List.
DELINQUENCY AND LOSS STATISTICS RELATING TO THE COMPANY'S PORTFOLIO OF
AUTOMOBILE INSTALLMENTS CONTRACTS.
1. Performed procedures referred to in 1.a. above.
2. Assessed the reasonableness of the methodology and criteria for determining
the allowance for credit losses (including the amount incorporated in the
fiance income receivable).
3. Compared the current period's charge-offs, recoveries and allowance for
credit losses (including the amount incorporated in the finance income
receivable) as a percentage of automobile installment contracts serviced to
the Company's historical experience.
4. Compared the valuation of ten repossessed automobiles based on the
Company's repossessed asset condition report to published retail and
wholesale values.
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The results provided satisfactory evidential matter for the purpose of our audit
of the financial statements, referred to in the introductory paragraph of this
letter, taken as a whole.
This report is intended solely for the use of specified users listed above and
should not be used by those who have not agreed to the procedures and taken
responsibility for the sufficiency of the procedures for their purposes.
Very truly yours,
/s/ERNST + YOUNG LLP
January 21, 1997
