MFN Financial Corporation Reports Results For First Quarter

Apr 24, 2001, 01:00 ET from MFN Financial Corporation

    LAKE FOREST, Ill., April 24 /PRNewswire Interactive News Release/ --
 MFN Financial Corporation (OTC Bulletin Board:   MFNF), today announced
 financial results for the first quarter ended March 31, 2001.
     Net income for the first quarter was $3.9 million compared to $6.3 million
 for the same period one year ago.  Earnings were $0.39 per share on a basic
 and diluted basis for the current quarter, compared to $0.63 per share on a
 basic and diluted basis for the same period one year ago.
     Automobile sales finance receivable purchases for the quarter were
 $79.7 million, compared to $79.5 million for the same period one year ago.
 Total sales finance receivable purchases for the quarters ended March 31, 2001
 and 2000 were $82.8 million and $84.9 million respectively.  Total delinquent
 accounts 60 days or more past due and net repossessed assets at March 31, 2001
 were $7.7 million, or 1.60% of finance receivables, compared to $11.1 million,
 or 2.19% of finance receivables at March 31, 2000.  Net charge-offs were
 $13.8 million or 11.49%, annualized, of average finance receivables, compared
 to $14.5 million or 11.32%, annualized, of average finance receivables for the
 quarter ended March 31, 2000.
     Total assets at March 31, 2001 were $505.4 million, compared to
 $593.8 million one year ago.  Finance receivables, net of unearned income,
 were $479.9 million, at March 31, 2001 compared to $508.4 million one year
 ago.  Direct loans and non-automobile sales finance receivables declined
 $22.6 million or 44.2% due to the strategic decision to exit these businesses.
 Automobile sales finance receivables declined $5.9 million or 1.3% when
 compared to one year ago.
     Reserves and allowances for credit losses totaled $65.3 million or 13.62%
 of finance receivables at March 31, 2001, compared to $71.1 million or 13.98%
 one year ago.
     "The Company took a major step in the first quarter with the refinancing
 of the senior debt," said Jeffrey B. Weeden, President and Chief Executive
 Officer.  "We have the systems, people and financing in place to continue to
 compete for business in the subprime market.  With this in mind, management
 continues to look for additional ways to improve shareholder value," Weeden
 concluded.
     Total debt at March 31, 2001 stood at $307.5 million compared to
 $403.7 million at March 31, 2000.  During the first quarter the Company
 entered into a $300 million receivable financing agreement and borrowed
 $285 million under the facility.  The Company used these funds and
 $57.9 million of available cash to retire the outstanding senior debt, at
 maturity on March 23, 2001.
     Total stockholder's equity was $128.5 million or $12.85 per share at
 March 31, 2001, compared to $111.8 million or $11.18 per share one year ago.
 
     MFN Financial Corporation, with headquarters in Lake Forest, IL, is a
 consumer finance company whose principal subsidiaries operate under the name
 of Mercury Finance Company LLC.  Mercury Finance Company LLC provides
 specialized, individual financing for automobile nonprime credit buyers
 through automobile dealerships.
 
     This news release may contain forward-looking statements pertaining to the
 success of the Company's new technology to process sales finance applications,
 expected operating results, loss provisions, refinancing debt and other
 matters.  These statements are subject to uncertainties and other factors.
 Should one or more of these uncertainties or other factors materialize, or
 should underlying assumptions prove incorrect, actual events or results may
 vary materially from those anticipated.  Such uncertainties and other factors
 include the Company's ability to acquire finance receivables on terms it deems
 acceptable, changes in the quality of finance receivables, trends in the
 automobile and finance industries, the success of new business methods and
 systems, the Company's ability to meet the terms of its new warehouse credit
 facility and general economic conditions.  The Company undertakes no
 obligation to update any such factor or to publicly announce the results of
 any revisions to any forward-looking statements contained herein to reflect
 future events or developments.
 
 
     MFN FINANCIAL CORPORATION
     CONDENSED CONSOLIDATED BALANCE SHEET
 
     (Dollars in thousands)
                                               March 31, 2001    March 31, 2000
     Assets
          Cash & Equivalents                        $69,215          $141,485
          Finance Receivables, Net of
           Unearned Income
             Direct Loans                             9,774            26,100
             Sales Finance
                    Automobile                      451,353           457,247
                    Non-automobile                   18,748            25,013
                            Total Sales
                             Finance                470,101           482,260
                    Finance Receivables
                     Before Allowances              479,875           508,360
             Less:    Allowance for Credit
              Losses                                 37,974            37,961
             Less:    Dealer Reserves                27,368            33,113
          Net Finance Receivables                   414,533           437,286
          Other Assets                               21,616            15,069
               Total Assets                        $505,364          $593,840
 
     Liabilities
          Warehouse Credit Facility                $285,000     $            -
          Senior Notes                                     -          381,242
          Subordinated Notes                         22,500            22,500
          Excess of Revalued Net Assets
           Over
               Liabilities and
                Stockholders' Investment             29,640            39,521
          Other Liabilities                          39,686            38,784
               Total Liabilities                    376,826           482,047
     Stockholders' Equity                           128,538           111,793
                Total Liabilities and
                 Equity                            $505,364          $593,840
 
 
     CONDENSED CONSOLIDATED FINANCIAL RATIOS
     (Amounts in thousands, except per share data)
 
                                         Three Months Ended  Three Months Ended
                                             March 31, 2001     March 31, 2000
     Weighted Average Common Shares
      Outstanding:
          Basic                                      10,000             10,000
          Diluted                                    10,061             10,009
     Earnings Per Common Share:
          Basic                                       $0.39              $0.63
          Diluted                                      0.39               0.63
     Earnings Per Common Share Excluding
      Amortization:
          Basic                                       $0.14              $0.38
          Diluted                                      0.14               0.38
 
     Debt to Equity Ratio                              2.39               3.61
 
     Net Interest Margin                             14.35%             13.45%
 
     Delinquencies and Repossessions
          Delinquent Finance Receivables,
           Net of Unearned Income                    $5,644             $9,704
          Repossessed Assets, Net of
           Reserves                                   2,012              1,422
               Total Delinquencies and
                Repossessions                        $7,656            $11,126
 
     Delinquencies and Repossessions as a
      Percent of Finance
          Receivables Net of Unearned
           Income                                     1.60%              2.19%
 
     Allowance for Credit Losses and
      Dealer Reserves as a
          Percent of Finance Receivables,
           Net of Unearned Income                    13.62%             13.98%
 
     Net Charge-offs as a Percent of
      Average Finance
          Receivables, Net of Unearned
           Income                                    11.49%             11.32%
 
 
     MFN FINANCIAL CORPORATION
     CONDENSED CONSOLIDATED INCOME STATEMENT
     (Dollars in thousands)
                                         Three Months Ended  Three Months Ended
                                             March 31, 2001     March 31, 2000
 
     Interest Income                                $30,657           $31,889
     Interest Expense                                 8,807            10,085
     Net Interest Income Before Provision            21,850            21,804
     Provision for Credit Losses                      4,197             1,230
     Net Interest Margin                             17,653            20,574
     Other Operating Revenue
          Insurance Premiums and
           Commissions                                2,398             3,531
          Other Revenue                                  43               539
               Total Other Operating
                Revenue                               2,441             4,070
     Other Operating Expenses
          Personnel                                  10,133            11,199
          Occupancy                                     838               784
          Equipment                                     672               442
          Data Processing                               238               227
          Telecommunications                            621               670
          Credit Information                            412               238
          Postage                                       470               325
          Insurance Claims and
           Underwriting Expense                       1,674             2,036
          Amortization                               (2,470)           (2,470)
          Other                                       2,685             2,451
               Total Other Operating
                Expenses                             15,273            15,902
     Operating Income Before Income Taxes             4,821             8,742
     Income Tax Provision                               928             2,478
     Net Income                                      $3,893            $6,264
 
 
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SOURCE MFN Financial Corporation
    LAKE FOREST, Ill., April 24 /PRNewswire Interactive News Release/ --
 MFN Financial Corporation (OTC Bulletin Board:   MFNF), today announced
 financial results for the first quarter ended March 31, 2001.
     Net income for the first quarter was $3.9 million compared to $6.3 million
 for the same period one year ago.  Earnings were $0.39 per share on a basic
 and diluted basis for the current quarter, compared to $0.63 per share on a
 basic and diluted basis for the same period one year ago.
     Automobile sales finance receivable purchases for the quarter were
 $79.7 million, compared to $79.5 million for the same period one year ago.
 Total sales finance receivable purchases for the quarters ended March 31, 2001
 and 2000 were $82.8 million and $84.9 million respectively.  Total delinquent
 accounts 60 days or more past due and net repossessed assets at March 31, 2001
 were $7.7 million, or 1.60% of finance receivables, compared to $11.1 million,
 or 2.19% of finance receivables at March 31, 2000.  Net charge-offs were
 $13.8 million or 11.49%, annualized, of average finance receivables, compared
 to $14.5 million or 11.32%, annualized, of average finance receivables for the
 quarter ended March 31, 2000.
     Total assets at March 31, 2001 were $505.4 million, compared to
 $593.8 million one year ago.  Finance receivables, net of unearned income,
 were $479.9 million, at March 31, 2001 compared to $508.4 million one year
 ago.  Direct loans and non-automobile sales finance receivables declined
 $22.6 million or 44.2% due to the strategic decision to exit these businesses.
 Automobile sales finance receivables declined $5.9 million or 1.3% when
 compared to one year ago.
     Reserves and allowances for credit losses totaled $65.3 million or 13.62%
 of finance receivables at March 31, 2001, compared to $71.1 million or 13.98%
 one year ago.
     "The Company took a major step in the first quarter with the refinancing
 of the senior debt," said Jeffrey B. Weeden, President and Chief Executive
 Officer.  "We have the systems, people and financing in place to continue to
 compete for business in the subprime market.  With this in mind, management
 continues to look for additional ways to improve shareholder value," Weeden
 concluded.
     Total debt at March 31, 2001 stood at $307.5 million compared to
 $403.7 million at March 31, 2000.  During the first quarter the Company
 entered into a $300 million receivable financing agreement and borrowed
 $285 million under the facility.  The Company used these funds and
 $57.9 million of available cash to retire the outstanding senior debt, at
 maturity on March 23, 2001.
     Total stockholder's equity was $128.5 million or $12.85 per share at
 March 31, 2001, compared to $111.8 million or $11.18 per share one year ago.
 
     MFN Financial Corporation, with headquarters in Lake Forest, IL, is a
 consumer finance company whose principal subsidiaries operate under the name
 of Mercury Finance Company LLC.  Mercury Finance Company LLC provides
 specialized, individual financing for automobile nonprime credit buyers
 through automobile dealerships.
 
     This news release may contain forward-looking statements pertaining to the
 success of the Company's new technology to process sales finance applications,
 expected operating results, loss provisions, refinancing debt and other
 matters.  These statements are subject to uncertainties and other factors.
 Should one or more of these uncertainties or other factors materialize, or
 should underlying assumptions prove incorrect, actual events or results may
 vary materially from those anticipated.  Such uncertainties and other factors
 include the Company's ability to acquire finance receivables on terms it deems
 acceptable, changes in the quality of finance receivables, trends in the
 automobile and finance industries, the success of new business methods and
 systems, the Company's ability to meet the terms of its new warehouse credit
 facility and general economic conditions.  The Company undertakes no
 obligation to update any such factor or to publicly announce the results of
 any revisions to any forward-looking statements contained herein to reflect
 future events or developments.
 
 
     MFN FINANCIAL CORPORATION
     CONDENSED CONSOLIDATED BALANCE SHEET
 
     (Dollars in thousands)
                                               March 31, 2001    March 31, 2000
     Assets
          Cash & Equivalents                        $69,215          $141,485
          Finance Receivables, Net of
           Unearned Income
             Direct Loans                             9,774            26,100
             Sales Finance
                    Automobile                      451,353           457,247
                    Non-automobile                   18,748            25,013
                            Total Sales
                             Finance                470,101           482,260
                    Finance Receivables
                     Before Allowances              479,875           508,360
             Less:    Allowance for Credit
              Losses                                 37,974            37,961
             Less:    Dealer Reserves                27,368            33,113
          Net Finance Receivables                   414,533           437,286
          Other Assets                               21,616            15,069
               Total Assets                        $505,364          $593,840
 
     Liabilities
          Warehouse Credit Facility                $285,000     $            -
          Senior Notes                                     -          381,242
          Subordinated Notes                         22,500            22,500
          Excess of Revalued Net Assets
           Over
               Liabilities and
                Stockholders' Investment             29,640            39,521
          Other Liabilities                          39,686            38,784
               Total Liabilities                    376,826           482,047
     Stockholders' Equity                           128,538           111,793
                Total Liabilities and
                 Equity                            $505,364          $593,840
 
 
     CONDENSED CONSOLIDATED FINANCIAL RATIOS
     (Amounts in thousands, except per share data)
 
                                         Three Months Ended  Three Months Ended
                                             March 31, 2001     March 31, 2000
     Weighted Average Common Shares
      Outstanding:
          Basic                                      10,000             10,000
          Diluted                                    10,061             10,009
     Earnings Per Common Share:
          Basic                                       $0.39              $0.63
          Diluted                                      0.39               0.63
     Earnings Per Common Share Excluding
      Amortization:
          Basic                                       $0.14              $0.38
          Diluted                                      0.14               0.38
 
     Debt to Equity Ratio                              2.39               3.61
 
     Net Interest Margin                             14.35%             13.45%
 
     Delinquencies and Repossessions
          Delinquent Finance Receivables,
           Net of Unearned Income                    $5,644             $9,704
          Repossessed Assets, Net of
           Reserves                                   2,012              1,422
               Total Delinquencies and
                Repossessions                        $7,656            $11,126
 
     Delinquencies and Repossessions as a
      Percent of Finance
          Receivables Net of Unearned
           Income                                     1.60%              2.19%
 
     Allowance for Credit Losses and
      Dealer Reserves as a
          Percent of Finance Receivables,
           Net of Unearned Income                    13.62%             13.98%
 
     Net Charge-offs as a Percent of
      Average Finance
          Receivables, Net of Unearned
           Income                                    11.49%             11.32%
 
 
     MFN FINANCIAL CORPORATION
     CONDENSED CONSOLIDATED INCOME STATEMENT
     (Dollars in thousands)
                                         Three Months Ended  Three Months Ended
                                             March 31, 2001     March 31, 2000
 
     Interest Income                                $30,657           $31,889
     Interest Expense                                 8,807            10,085
     Net Interest Income Before Provision            21,850            21,804
     Provision for Credit Losses                      4,197             1,230
     Net Interest Margin                             17,653            20,574
     Other Operating Revenue
          Insurance Premiums and
           Commissions                                2,398             3,531
          Other Revenue                                  43               539
               Total Other Operating
                Revenue                               2,441             4,070
     Other Operating Expenses
          Personnel                                  10,133            11,199
          Occupancy                                     838               784
          Equipment                                     672               442
          Data Processing                               238               227
          Telecommunications                            621               670
          Credit Information                            412               238
          Postage                                       470               325
          Insurance Claims and
           Underwriting Expense                       1,674             2,036
          Amortization                               (2,470)           (2,470)
          Other                                       2,685             2,451
               Total Other Operating
                Expenses                             15,273            15,902
     Operating Income Before Income Taxes             4,821             8,742
     Income Tax Provision                               928             2,478
     Net Income                                      $3,893            $6,264
 
 
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 SOURCE  MFN Financial Corporation