SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998 Commission file number 0-23484
STANDARD FUNDING CORP.
- --------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
New York 11-2523559
- ------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
335 Crossways Park Drive, Woodbury, New York 11797
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip code)
(516) 364-0200
- --------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
----------------
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 |_|
----------------
Common Stock, $.001 par value, outstanding as of May 9, 1998: 2,760,000 shares
Transitional Small Business Disclosure Format: Yes |X| No |_|
<PAGE>
STANDARD FUNDING CORP.
- --------------------------------------------------------------------------------
Quarterly Report on Form 10-QSB
for the period ended March 31, 1998
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PART I - FINANCIAL INFORMATION
Item 1 Financial Statements
BALANCE SHEETS AT MARCH 31, 1998 AND
DECEMBER 31, 1997.......................................... 3
STATEMENTS OF INCOME FOR THE THREE MONTHS
ENDED MARCH 31, 1998 AND MARCH 31, 1997.................... 4
STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS
ENDED MARCH 31, 1998 AND MARCH 31, 1997.................... 5
NOTES TO FINANCIAL STATEMENTS................................. 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 8
PART II - OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K.............................. 12
- --------------------------------------------------------------------------------
-2-
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
STANDARD FUNDING CORP.
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
-------------- -----------------
(unaudited)
<S> <C> <C>
ASSETS:
Cash ............................................................ $ 124,969 $ 203,014
------------ ------------
Installment loans receivable
under premium finance agreements ............................ 46,427,824 43,167,571
Less: Unearned Interest ......................................... (1,039,983) (1,014,004)
Allowance for possible credit losses ...................... (310,000) (310,000)
------------ ------------
Installment loans receivable
under premium finance agreements - net ...................... 45,077,841 41,843,567
Due from officers ............................................... 149,123 153,933
Property and equipment - net .................................... 265,808 283,255
Other assets .................................................... 542,127 454,961
------------ ------------
Total ....................................................... $ 46,159,868 $ 42,938,730
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Notes payable to financial institutions ......................... $ 27,975,000 $ 26,500,000
Commercial paper issued ......................................... 2,476,186 2,428,398
Amounts due to insurance companies .............................. 2,787,247 1,389,346
Accrued expenses and other ...................................... 425,088 313,053
Deferred income taxes payable ................................... 267,392 192,027
------------ ------------
Total, exclusive of subordinated debt ....................... 33,930,913 30,822,824
Subordinated debt ............................................... 5,003,000 5,003,000
------------ ------------
Total Liabilities ........................................... 38,933,913 35,825,824
------------ ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, par value $.001 per share:
1,000,000 authorized, none issued ........................... -- --
Common stock, par value $.001 per share:
4,000,000 authorized, 2,760,000 shares issued and outstanding 2,760 2,760
Additional paid-in capital ...................................... 3,991,501 3,991,501
Retained earnings ............................................... 3,231,694 3,118,645
------------ ------------
Total Shareholders' Equity .................................. 7,225,955 7,112,906
------------ ------------
Total .................................................. $ 46,159,868 $ 42,938,730
============ ============
</TABLE>
See notes to financial statements.
-3-
<PAGE>
STANDARD FUNDING CORP.
STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, 1998 March 31, 1997
-------------- --------------
<S> <C> <C>
NET INTEREST INCOME:
Finance charge income and other .................. $1,661,236 $1,589,501
Less: Interest and other expenses on borrowings .. 684,386 547,032
---------- ----------
Net Interest Income ........................ 976,850 1,042,469
---------- ----------
OTHER EXPENSES:
Operating expenses ............................... 507,141 499,202
Selling expenses ................................. 194,787 151,905
Provisions for possible credit losses (Note 2) ... 86,507 149,668
---------- ----------
Total ....................................... 788,435 800,775
---------- ----------
INCOME BEFORE PROVISION FOR
INCOME TAXES ...................................... 188,415 241,694
PROVISION FOR INCOME TAXES ........................... 75,366 96,677
---------- ----------
NET INCOME ........................................... $ 113,049 $ 145,017
========== ==========
NET INCOME PER SHARE (Note 1)
BASIC .......................................... $ .04 $ .05
========== ==========
DILUTED ........................................ $ .04 $ .05
========== ==========
AVERAGE NUMBER OF
SHARES OUTSTANDING ................................. 2,760,000 2,760,000
========== ==========
</TABLE>
See notes to financial statements.
-4-
<PAGE>
STANDARD FUNDING CORP.
STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, 1998 March 31, 1997
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ............................................. $ 113,049 $ 145,017
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for possible credit losses ................ 86,507 149,668
Deferred income taxes ............................... 75,366 96,677
Depreciation and amortization ....................... 30,347 18,737
Changes in assets and liabilities:
Due from officers and other assets ................ (82,356) (3,666)
Accrued expenses and other amounts
due to insurance companies ...................... 1,509,936 1,783,664
Funds due-accounts receivable participation program -- 286,859
------------ ------------
Net cash provided by operating activities ......... 1,732,849 2,476,956
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Installment loans receivable originated ............... (28,367,739) (25,188,385)
Collections of installment loans receivable ........... 25,039,164 20,721,900
Purchase of equipment ................................. (5,107) (31,708)
------------ ------------
Net cash used in investing activities ............. (3,333,682) (4,498,193)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from accounts receivable participation program -- 1,120,800
Payment of accounts receivable participation program .. -- (614,675)
Proceeds from bank notes - net ........................ 1,475,000 1,400,000
Proceeds (Repayment) of commercial paper issued - net . 47,788 128,554
Proceeds of subordinated debt ......................... -- 90,000
------------ ------------
Net cash provided by financing activities ......... 1,522,788 2,124,679
------------ ------------
INCREASE (DECREASE) IN CASH .............................. (78,045) 103,442
CASH AT BEGINNING OF YEAR ................................ 203,014 132,563
------------ ------------
CASH AT END OF PERIOD .................................... $ 124,969 $ 236,005
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS
INFORMATION:
Income taxes paid ................................... $ -- $ --
============ ============
Interest paid ....................................... $ 501,297 $ 417,372
============ ============
</TABLE>
See notes to financial statements.
-5-
<PAGE>
STANDARD FUNDING CORP.
NOTES TO FINANCIAL STATEMENTS
For the three months ended March 31, 1998 and 1997 (unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
Business - Standard Funding Corp. (the "Company") is a financial
service Company engaged in the business of financing the payment of
insurance premiums. The Company finances substantially all forms of
property, casualty and liability premiums on policies, which are
written through independent insurance agents and brokers.
Interim Financial Statements - The financial statements for the three
month periods ended March 31, 1998 and 1997 are unaudited. In the
opinion of management, the accompanying unaudited financial statements
contain all the adjustments necessary for a fair presentation of the
financial condition and results of operations for the three month
periods ended March 31, 1998 and 1997. The interim financial results
are not necessarily indicative of the results to be expected for a full
year.
Revenue Recognition - Unearned interest on installment loans receivable
under premium finance agreements is recognized as income using a method
which approximates the results which would be obtained using the
interest method.
The Company has entered into an agreement to tranfer, on a non-recourse
basis, interests in its installment loans receivable under premium
finance agreements to financial institutions. The differential of
stated interest to be recorded over the course of the finance period
and interest to be paid to the financial institution is recognized as
interest expense over the course of the outstanding transfer. As of
March 31, 1998 the Company had no outstanding borrowings under these
agreements.
Loan processing costs incurred are deferred and amortized on the
straight-line method over the term of the related installment loans
receivable under premium finance agreements. Cancellation fees and late
charges are recognized as income when received.
Allowance for Possible Credit Losses - The balance in the allowance for
possible credit losses are based on management's assessment of risk in
the installment loan portfolio. The Company writes off receivables upon
determination that no further collections are probable.
Property and Equipment - net - Property and equipment are stated at
cost. Depreciation is provided on the straight-line basis over such
assets' estimated useful service lives which range from three to five
years. Leasehold improvements are amortized over the shorter of their
estimated useful lives or the remaining term of the lease.
Revenue and Credit Concentration - The Company receives substantially
all of its revenues from financing arrangements made within New York,
New Jersey, Connecticut, Pennsylvania and Massachusetts. Accordingly,
at March 31, 1998, substantially all of the Company's installment loans
outstanding were from this geographic region.
-6-
<PAGE>
STANDARD FUNDING CORP.
NOTES TO FINANCIAL STATEMENTS - (Continued)
Income Taxes - The Company accounts for income taxes pursuant to
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("SFAS No. 109"). SFAS No. 109 requires recognition of
deferred tax assets and liabilities for the expected future tax
consequences of events that have been included in the Company's
financial statements or tax returns. Under this method, deferred tax
assets and liabilities are determined based on the differences between
the financial accounting and tax bases of assets and liabilities using
enacted tax rates in effect for the year in which the differences are
expected to reverse.
Stock-based Compensation - The Company accounts for stock-based awards
to employees using the intrinsic value method in accordance with APB
No. 25, "Accounting for Stock Issued to Employees" ("APB 25").
Impairment of Long-Lived Assets - In accordance with Statement of
Financial Accounting Standards No. 121, "Accounting For the Impairment
of Long-Lived Assets and Four Long-Lived Assets To Be Disposed Of"
("SFAS No. 121"), the Company reviews its long-lived assets, including
property and equipment, and other assets for impairment whenever events
or changes in circumstances indicate that the carrying amount of the
assets may not be fully be recoverable. To determine recoverability of
its long-lived assets, the Company evaluates the probability that
future undiscounted net cash flows, without interest charges, will be
less than the carrying amount of the assets. Impairment is measured at
fair value. SFAS No. 121 had no effect on the Company's financial
statement.
Earnings Per Share - The Company has adopted Financial Accounting
Standards No. 128 "Earnings per Share" ("SFAS No. 128") which requires
dual presentation of basic and diluted earnings per share on the face
of the income statement.
Basic earnings per share are based on the weighted average number of
shares of common stock outstanding during the period. Diluted earnings
per share are based on the weighted average number of shares of common
stock and common stock equivalents (options and warrants) outstanding
during the period, computed in accordance with the treasury stock
method.
2. INSTALLMENT LOANS RECEIVABLE UNDER PREMIUM FINANCE AGREEMENTS
Substantially all installment loans receivable under premium finance
agreements are repayable in less than one year. In the event of default
by a borrower, the Company is entitled to cancel the underlying
insurance policy financed and receive a refund for the unused term of
such policy from the insurance carrier.
In October 1996, the Company entered into an agreement with a financial
institution to transfer, on a non-recourse basis, a fifty percent
interest in certain designated installment loans receivable, not to
exceed $1,000,000 at any one point. This limit was increased to
$2,000,000 in April 1997. The Company entered into similar financing
agreements with two additional financial institutions with an aggregate
borrowing limit of $4,000,000 during 1997. Under terms of these
agreements, the Company remitted each financial institution's share of
the monthly installment loans receivable collected. Interest was
payable monthly based upon the average outstanding balance under this
-7-
<PAGE>
agreement at a rate equal to LIBOR (at the time of purchase) plus 200
or 225 basis points as stipulated in these agreements.
During 1997, the Company adopted the provision of Statement of
Financial Accounting Standards No. 125, "Accounting For Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities" ("SFAS
No. 125"). Installment loans receivables under this agreement were
classified as securitized loan payable. As of March 31, 1998 the
Company had no outstanding borrowings under these agreements. One of
these agreements with aggregate maximum borrowings of $2,000,000
expires on October 1998. The agreements with the other financial
institutions do not stipulate a termination date.
A summary of activity in the allowance for possible credit losses is as
follows:
Three Months
Ended Year Ended
March 31, 1998 December 31, 1997
-------------- -----------------
Balance, beginning of period ................. $ 310,000 $ 300,000
Provision .................................... 86,507 572,297
Charge-offs - net of recoveries of $9,149 and
$44,504, respectively ........................ (86,507) (562,297)
--------- ---------
Balance, end of period ....................... $ 310,000 $ 310,000
========= =========
-8-
<PAGE>
STANDARD FUNDING CORP.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
Comparison of Three Months Ended March 31, 1998 to Three Months Ended
March 31, 1997
Finance charge income increased by 4.5% to $1,661,236 in the first
three months of 1998 from $1,589,501 in the first three months of 1997 primarily
because of an increase in total installment loans financed during the respective
periods. Total installment loans financed increased 12.6% to $28,367,739 from
$25,188,385. The Company's average receivables for the period ended March 31,
1998 increased 23.5% to $44,732,819 from $36,215,987 for the period ended March
31, 1997. This increase in installment loans receivable is consistent with the
increase in financing activity. Interest expense for the period ended March 31,
1998 increased 25.1% to $684,386 from $547,032 for the period ended March 31,
1997, an increase of $137,354, due to an increase in borrowings. Selling and
operating expenses increased during the period ended March 31, 1998 to $701,928
from $651,107 in the period ended March 31, 1997. This increase was primarily
attributable to staff additions and expenses. Due to the 4.5% increase in
finance charge income, compared to a 25.1% increase in interest expense, there
was a 6.3% decrease in the "spread" to $976,850 for the period ended March 31,
1998 from $1,042,469 for the period ended March 31,1997.
The provision for possible credit losses decreased to $86,507 for the
period ended March 31, 1998 from $149,668 for the period ended March 31, 1997.
This decrease of $63,161 is due primarily to the curtailment of financing
assigned risk automobile policies.
Liquidity and Capital Resources
The Company's operations are dependent upon the continued availability
of funds on satisfactory terms and rates. The Company uses such funds
principally to finance the origination of installment loans under premium
finance agreements. The Company obtains required funds from a variety of
sources, including internal generation of funds, unsecured borrowings under
lines of credit, direct issuance of commercial paper, placement of subordinated
debt, the transfer of accounts receivable participation program and the sale of
common equity.
As the Company increases the size of its business, it originates more
installment loans receivable than it collects, resulting in a larger outstanding
balance of installment loans receivable. For the three month periods ended March
31, 1998 and 1997, the Company originated installment loans receivable of
$28,367,739 and $25,188,385, respectively, compared to installment loans
collected for each period of $25,039,164 and $20,721,900, respectively. The
result was an increase in outstanding installment loan receivables to
$45,966,577 from $35,426,279 at March 31, 1998 and 1997, respectively.
The growth in the Company's loan portfolio has been the single largest
factor influencing the Company's cash flow from operations. The determining
factor influencing the growth in the loan portfolio
-9-
<PAGE>
has been the extent to which the Company has been able to leverage its capital
into subordinated debt and then into short-term senior debt. For the three month
periods ended March 31, 1998 and 1997, net cash provided by operating activities
was $1,732,849 and $2,476,956, respectively, which amounts were comprised
primarily of net earnings, loss provisions, depreciation and amortization and
other changes in assets and liabilities. For the three month periods ended March
31, 1998 and 1997, net cash provided by financing activities was $1,522,788 and
$2,124,679 respectively, comprised primarily of proceeds from bank notes and
repayment of bank notes, net proceeds from sales and repayments of commercial
paper, net proceeds of subordinated debt and the sale of accounts receivable
participation program.
The following table sets forth the amounts of installment loans
receivable originated and the collections of installment loans receivable for
the periods indicated.
For the Three Month Period
Ended March 31,
----------------------------
1998 1997
---- ----
Installment loans originated......... $28,367,739 $25,188,385
Installment loans collected.......... $25,039,164 $20,721,900
The Company has no present plans related to significant capital
expenditures but does intend to add marketing locations in order to increase its
volume of new business. The Company does not expect that such additional
marketing locations will require any significant capital expenditures. The
Company is not aware of any pending legislation that would have a material
effect on its capital requirements or business prospects.
The Company is subject to minimum capital requirements imposed by
certain of the states in which it is licensed. In addition, the Company is
prohibited from declaring or paying any dividends on its capital stock (other
than dividends payable solely in shares of Common Stock) pursuant to one of the
Company's subordinated debt arrangements which matures on December 27, 2000.
The sources of funds (other than internal generation of funds) which
are presently available or have been utilized by the Company are described
below. Management believes that the sources of funds presently available to the
Company are adequate for the conduct of its business at its present level. To
the extent that the Company in the future expands its business and increases its
total installment receivables outstanding beyond its present levels, funding may
not be available or, if available, may not be on terms acceptable to the
Company.
Lines of Credit
The Company entered into a $45,000,000 revolving credit agreement with
a consortium of banks in January 1998. Borrowing under this agreement bears
interest at a rate stipulated by the agreement that is contingent upon borrowing
levels. The borrowing will be unsecured and there are no compensating balance
agreements. This revolving credit agreement expires on January 2001. During the
three month period ended March 31, 1998, the maximum aggregate amount
outstanding under the revolving credit agreement at any time was $27,975,000 and
during the prior comparable period, the maximum aggregate amount outstanding
under the Company's advised line facilities was $19,000,000. The Company
terminated the advised line facilities when it entered into the revolving credit
agreement.
-10-
<PAGE>
Commercial Paper
The Company directly issues its own commercial paper with maturities of
up to 270 days, which is unsecured and is unrated by commercial paper rating
agencies. Commercial paper outstanding at March 31, 1998 bore interest at fixed
annual rates ranging from 5.94% to 6.66%. During the three month periods ended
March 31, 1998, the maximum outstanding commercial paper at any month end was
$2,486,339. Such commercial paper is generally sold to officers of the Company
and their affiliates and to non-affiliated investors. The Company has obtained
no commitments from any purchaser of its commercial paper regarding additional
or future purchases. It is the Company's policy to maintain unused short-term
bank lines of credit in an amount in excess of the amount of commercial paper
outstanding. The interest rate on the Company's commercial paper has been and
will continue to be determined by reference to prevailing interest rates in the
commercial paper market. The Company does not anticipate any change in the level
of financing provided by affiliates of the Company or any changes in the costs
of financing provided by such affiliates. There can be no assurance, however,
that such levels of financing will be maintained in the future.
Subordinated Debt
The Company has obtained unsecured senior subordinated debt in the
amount of $4,100,000 from outside investors. The notes bear interest at fixed
rates from 10% to 14.25% and are due from June 27, 1998 to March 31, 2002. The
notes restrict the Company's ability, among other things, to merge, pay
dividends and permit its business to be heavily concentrated with a single
broker or agency. Several of the underlying agreements also contain various
covenants requiring the Company to meet certain financial ratios and other
restrictions on acquisitions and investments. The Company may, at its option,
prepay the loans in whole or in part. However, with respect to several of the
notes, the Company must reimburse the investors for any loss of margin on
reemployment of the funds so repaid. The Company does not currently anticipate
prepaying or otherwise refinancing its existing senior subordinated debt prior
to its maturity. In addition, the Company has obtained unsecured junior
subordinated debt from various investors. The interest rates are fixed and vary
in term. The following table indicates amounts, rates and maturity dates as at
March 31, 1998.
Rate Due Date Amount
---- -------- ------
14.25% 06/30/2001 $ 810,000
14.00% 11/01/2000 500,000
14.00% 06/27/1998 400,000
14.00% 12/27/1998 400,000
14.00% 06/27/1999 400,000
14.00% 12/27/1999 400,000
14.00% 06/27/2000 400,000
14.00% 12/27/2000 1,000,000
12.50% 03/31/2001 510,000
12.00% 02/16/2001 50,000
11.25% 09/30/2001 43,000
10.00% 03/31/2002 90,000
----------
$5,003,000
==========
Subordinated debt is generally sold to officers and directors of the
Company and their affiliates and to non-affiliated investors. The Company has
obtained no commitments from any holder of its subordinated debt regarding
additional or future purchases.
-11-
<PAGE>
Other Sources
In addition to the sources of funds described above, pursuant to
certain financing agreements the Company has transferred to banks participating
interests in certain receivables. The interests in these receivables have been
transferred on a pari passu basis without any recourse to the Company. As of
March 31, 1998 there was a zero balance with these institutions.
The Company continually engages in discussions with both current and
prospective lenders regarding obtaining increases in, extensions of or additions
to, both its short-term lines of credit, its subordinated borrowings and its
participation program. The Company is currently engaged in such discussions with
several lenders, but can give no assurance as to whether or when such
discussions will be favorably consummated.
Year 2000 Matters
The year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Any of the
Company's computer programs that have time-sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result in
a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary liability to process transactions,
invoices, or engage in similar normal business activities.
In 1997, the Company initiated a conversion from existing accounting
software to programs that are year 2000 compliant. Management has determined
that the year 2000 issue will not pose significant operational problems for its
computer systems. All costs associated with this conversion are being expensed
as incurred.
The Company has initiated formal communications with all of its
significant suppliers and large customers to determine the extent to which the
Company's interface systems are vulnerable to those third parties' failure to
remediate their own Year 2000 issues. There can be no guarantee that the systems
of other companies on which the Company's system rely will be timely converted
or that the failure to make such a conversion will not have an adverse effect on
the Company's systems.
The Company will utilize both internal and external resources to
reprogram, or replace, and test its software for Year 2000 modifications. The
Company anticipates completing the Year 2000 project during the third quarter of
1998, which is prior to any anticipated impact on its operating systems. The
total cost of the Year 2000 project is estimated at $15,000.00 and is being
funded through operating cash flows. The total project cost is attributable to
the re-engineering of current software and such costs will be expensed as
incurred.
The costs of the project and the date on which the Company believes it
will complete the Year 2000 modifications are based on management's best
estimates, which were derived utilizing numerous assumptions of future events,
including the continued availability of certain resources, third party
modification plans and other factors. However, there can be no guarantee that
these estimates will be achieved, and actual results could differ materially
from those anticipated. Specific factors that might cause such material delays
or difficulties in implementing the project include, but are not limited to, the
availability and cost of personnel trained in this area, the ability to locate
and correct all relevant computer codes, and similar uncertainties.
-12-
<PAGE>
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
None.
(b) Reports on Form 8-K
None.
-13-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
STANDARD FUNDING CORP.
Date: May 09, 1998 /s/ Alan J. Karp
----------------------------------------
Alan J. Karp
President and Chief Executive Officer
Date: May 09, 1998 /s/ David E. Fisher
----------------------------------------
David E. Fisher
Treasurer and Chief Financial Officer
-14-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from 3-31-98 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 124,969
<SECURITIES> 0
<RECEIVABLES> 45,077,841
<ALLOWANCES> 310,000
<INVENTORY> 0
<CURRENT-ASSETS> 45,894,060
<PP&E> 690,646
<DEPRECIATION> 424,833
<TOTAL-ASSETS> 46,159,868
<CURRENT-LIABILITIES> 38,933,913
<BONDS> 0
0
0
<COMMON> 2,760
<OTHER-SE> 7,223,195
<TOTAL-LIABILITY-AND-EQUITY> 46,159,868
<SALES> 0
<TOTAL-REVENUES> 1,661,236
<CGS> 0
<TOTAL-COSTS> 701,928
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 86,507
<INTEREST-EXPENSE> 684,386
<INCOME-PRETAX> 188,415
<INCOME-TAX> 75,366
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 113,049
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
