UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                    FORM 10-K

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1996

                           Commission File No. 1-11121

                              TFC ENTERPRISES, INC.
             (Exact name of registrant as specified in its charter)


                Delaware                                  54-1306895
    (State or other jurisdiction of            (IRS Employer Identification No.)
     incorporation or organization)

                              5425 Robin Hood Road
                                   Suite 101B
                             Norfolk, Virginia 23513
               (Address of principal executive offices) (Zip code)

       Registrant's telephone number, including area code - (757) 858-1400

           Securities registered pursuant to Section 12(b) of the Act
                                      None

           Securities registered pursuant to Section 12(g) of the Act:
                     Common Stock, $.01 par value per share

         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 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 [ ]

         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]

         The aggregate market value of voting stock held by non-affiliates of
the registrant as of March 18, 1997: Common Stock - $15,524,174.

         The number of shares outstanding of the registrant's common stock as of
March 18, 1997: 11,290,308.





<PAGE>




         In addition to historical information, this Form 10-K contains
forward-looking statements that are subject to risks and uncertainties that
could cause the Company's actual results to differ materially from those
anticipated in these forward-looking statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which reflect
management's current analysis. For example, during 1997 the Company's operations
could be materially adversely affected if interest rates were to rise, if credit
experience deteriorated, or the Company were to face increased competition.

                      Documents Incorporated by Reference

         Portions of the registrant's Annual Report to Shareholders (the "Annual
Report") are incorporated by reference in Part II of this Form 10-K and portions
of the definitive Proxy Statement (the "1997 Proxy Statement") to be used in
connection with the 1997 Annual Meeting of Shareholders are incorporated by
reference in Part III of this Form 10-K.

                                     PART I

Item 1.  Business

General

         TFC Enterprises, Inc. ("TFCE") conducts its consumer finance operations
through two wholly-owned subsidiaries, The Finance Company ("TFC") and First
Community Finance, Inc. ("FCF"), (TFCE, TFC, and FCF collectively, the
"Company"). Through TFC, the Company is engaged in purchasing and servicing
installment sales contracts originated by automobile and motorcycle dealers in
the sale of used automobiles, vans, light trucks, and new and used motorcycles
(collectively "vehicles"). Installment sales contracts are acquired on either an
individual basis after the Company has reviewed and approved the vehicle
purchaser's credit application (a "point-of-sale purchase"), or on a group basis
through purchase of a dealer's portfolio of existing installment sales contracts
(a "portfolio purchase"). The Company focuses its point-of-sale business on
installment sales contracts originated by dealers with consumers who are United
States military enlisted personnel, primarily in the E-1 through E-5 grades.
Portfolio purchases are primarily from dealers who finance their own contracts
with civilian customers and sell them after origination in bulk. To achieve an
acceptable rate of return and provide for credit risks, contracts are purchased
from dealers at a discount to the remaining principal balance. Most of the
discount is held in a nonrefundable reserve against which credit losses are
first applied. The amount of the discount reflects, among other things, a
contract's interest rate, remaining term and perceived credit risk.

         The Company has been engaged in consumer finance activities since its
founding in 1977. The Company's point-of-sale purchases provide TFC with the
ability to direct the credit underwriting process at the initiation of the
installment sales contract. Participating dealers benefit by having a source of
financing for a group of customers who typically find financing difficult to
obtain, thereby increasing the number of vehicles sold and improving dealer
profitability. Consumers also benefit because the financing provided by the
Company enables them to purchase a vehicle they otherwise would not be able to
buy. As of December 31, 1996, $80.7 million, or 64% of the Company's net
contract receivables represented point-of-sale purchases, compared to $134.3
million, or 78%, at December 31, 1995.

         TFC's portfolio purchase business emphasizes acquisitions of portfolios
of seasoned installment sales contracts. These contracts normally have a payment
history of at least three months. While the typical portfolio purchase involves
fewer than 100 individual contracts, TFC has, at times, purchased portfolios
totaling more than 1,000 contracts. Portfolio purchases provide TFC with
demographic diversification, as the majority of customers are not military
enlisted personnel. They also provide a payment history on which to evaluate and
price the credit risk of the contracts and a relatively efficient mechanism for
establishing dealer relationships in new areas. TFC's




<PAGE>



portfolio purchases benefit dealers by providing an immediate source of
liquidity. As of December 31, 1996, $36.7 million, or 29% of the Company's
portfolio of net contract receivables was attributable to portfolio purchases,
compared to $32.3 million, or 19%, at December 31, 1995.

         TFC operates two service centers: the Point-of-Sale Service Center in
Norfolk, Virginia, and the Portfolio Purchase Service Center in Jacksonville,
Florida. During 1996, TFC closed a third service center in Dallas, Texas. In
addition, TFC operates point-of-sale Loan Production Offices (LPO's) in Dallas,
Texas; San Diego, California; Norfolk, Virginia; and a portfolio purchase Loan
Production Office in Norfolk, Virginia.

         Historically, regional service centers were responsible for purchasing
and servicing contract receivables originated by dealers in their regions.
However, during 1996, TFC transferred the underwriting functions to three
point-of-sale LPO's and one portfolio purchase LPO. This was done to improve
TFC's control over the underwriting process. Additionally, during 1996 TFC
located all of its point-of-sale accounts in the service center located in
Norfolk, Virginia, and all of its portfolio purchase accounts in the service
center located in Jacksonville, Florida. This was done to improve TFC's
collection results.

         Through FCF, the Company is involved in the direct origination and
servicing of small consumer loans. FCF began operations in the first quarter of
1995 with the opening of two branch offices in Richmond, Virginia. Four
additional offices were opened in Virginia in 1995. During 1996, FCF opened four
branches in North Carolina. Net contract receivables relating to FCF at December
31, 1996, were $8.8 million, or 7% of the Company's net contract receivables
compared to $4.4 million or 3% of the net contract receivables at December 31,
1995.

Strategy

         During 1995 and 1996, there was a significant increase in the number of
competitors in the markets in which TFC operates and the access to funds that
most of those competitors enjoyed. The combination of increased competition and
in the industry's then improved access to funds in the capital markets resulted
in a general increase in prices offered to dealers for installment sales
contracts. In certain sectors of the market, prices increased to the point at
which anticipated credit losses relating to the contracts were not adequately
reflected in prices offered to dealers.

         As a result, management's focus beginning in 1996 has been on
redirecting the Company toward those sectors of the market in which management
believes pricing more closely reflects the risk inherent in the business. Areas
of focus include the military point-of-sale business, portfolio purchases and
consumer finance loans. During 1996, TFC came to the conclusion that it could
not profitably compete in the civilian point-of-sale business. Accordingly, TFC
has eliminated almost all purchases of civilian point-of-sale contracts and has
no present intention of competing in this market.

         The Company intends to accelerate the growth of FCF during 1997 and
future years. The pricing of these direct consumer loans coupled with the
significantly lower delinquencies and write offs offers the Company potentially
better yields than the non-prime civilian point-of-sale business. The Company
believes FCF has sufficient senior management in place to effectively manage its
growth plans.

         As a result of the Company's increase in delinquencies and credit
losses and the resultant net loss in 1995, the Company was not in compliance
with certain aspects of credit agreements with its lenders during 1996. The
Company's lenders agreed to forbear in the exercise of their rights and remedies
relating to the out-of-compliance situations during 1996. As part of the
forbearance agreements, which are more fully discussed in Note 5 of the Notes to
Consolidated Financial Statements in the Company's 1996 Annual Report,
incorporated by reference herein, the Company's funding costs increased and its
funds availability decreased. The Company's net loss in 1996 caused the Company
to remain out of compliance with two of its lenders and to go out of compliance
under its credit agreement





<PAGE>



with its principal lender, which had been amended in December 1996. Amended
credit agreements signed in April 1997, to correct the out-of-compliance
conditions, continue to impose high funding costs on the Company. One of our
primary goals for 1997 is to improve and stabilize performance so that the
Company will have a record that justifies lower funding costs prospectively.

History

         The Company's operations began in 1977 in Alexandria, Virginia, with
the founding of TFC by Robert S. Raley, Jr., the Company's current Chairman of
the Board, President and Chief Executive Officer, whose career has been
exclusively within the consumer finance industry. The Company was founded
specifically for the purpose of providing direct financing for the credit needs
of individuals having limited access to traditional sources of credit,
particularly young United States military enlisted personnel. Mr. Raley
recognized that the financing needs of that market segment were being ignored by
the traditional providers of consumer credit.

         With the significant increase in interest rates in the late 1970s and
early 1980s, the Company incurred operating losses as a result of the increased
costs of its funding. To offset those losses, the Company opened a used car
dealership near Fort Belvoir in northern Virginia. Within several months of
opening the northern Virginia dealership, the Company opened a second used car
dealership in Norfolk, Virginia, the home of the world's largest naval base. The
operation of these dealerships generated sufficient operating income to enable
the Company to survive and provided the Company expertise in used automobile
financing, particularly to United States military enlisted personnel. With the
reduction in interest rates that occurred in the mid-1980's, the Company sold
its used car dealerships. The Company's experience in owning and managing used
car dealerships identified the need that used automobile dealers have for a
reliable source of financing.

         In 1990, the Company consolidated its contract production branch system
into a regional service center system by merging all then existing contract
production branches into either the Mid-Atlantic Regional Service Center in
Norfolk, Virginia, or the Southern Regional Service Center in Jacksonville,
Florida. In 1993, TFC opened a Regional Service Center in Dallas, Texas,
although as discussed above, TFC has since closed this center. In 1995, TFC
opened a point-of-sale LPO in San Diego, California. In 1996, the Company opened
similar point-of-sale LPO's in Dallas, Texas, and Norfolk, Virginia; and a
portfolio purchase LPO in Norfolk, Virginia, all of which utilized existing
space.

         Through FCF, the Company is involved in the direct origination and
servicing of small consumer loans. FCF began operations in the first quarter of
1995 with the opening of two branch offices in Richmond, Virginia. Four
additional offices were opened throughout Virginia in 1995. During 1996, FCF
opened four branches in North Carolina.

Industry Overview

         The automobile finance industry is dominated in certain respects by
commercial banks and captive finance companies of major automobile
manufacturers. While consumer credit risk classifications are not standardized,
those institutions generally focus on consumers that could be characterized as
being "low-risk" or "medium-risk" from a credit perspective. TFC's target market
involves consumers that are characterized as being "high-risk" from a credit
perspective.

         The direct consumer loan industry established in the early 1900's has
traditionally been serviced by major national companies, smaller regional
companies and small local independent companies. Over the last 10-15 years many
of the major national companies have retreated from or reduced their involvement
in this market.

         Management's focus in 1996 and continuing in 1997 has been on
redirecting the Company toward those sectors of the market in which management
believes pricing more closely reflects the risk inherent in the business. Areas
of focus include the military point-of-sale business, portfolio purchases and
small direct consumer loans.




<PAGE>




Automobile Finance Operations

Dealer Selection and Program

         Through its marketing efforts, TFC has established relationships with
dealers that originate installment sales contracts purchased by TFC, either
through point-of-sale purchases or portfolio purchases. TFC's relationships are
primarily with independent dealers that are not affiliated with an automobile
manufacturer, nor the Company.

         To achieve an acceptable rate of return and provide for credit risks,
contracts are purchased from dealers at a discount to the remaining principal
balance. With respect to point-of-sale purchases, the discount is the difference
between TFC's purchase price from the dealer and the amount financed, net of the
cost of ancillary products. With respect to portfolio purchases, the discount is
the difference between TFC's purchase price and the amount of the remaining
principal balance on the contract. The amount of the discount at which contracts
are purchased reflects, among other things, a contract's interest rate, term and
credit risk. Contracts are purchased in accordance with applicable underwriting
criteria and pursuant to a Master Dealer Agreement in the case of point-of-sale
purchases, and an Asset Purchase Agreement in the case of portfolio purchases.

         TFC believes that its dealer programs provide substantial benefits to
dealers by providing a source of financing for a group of customers who
typically find financing difficult to obtain, thereby increasing the number of
vehicles sold and improving dealer profitability. Additionally, TFC provides the
following services to dealers through its point of sale program: (1)
documentation designed to conform to applicable federal and state laws; (2)
timely response to credit applications; (3) timely payment for approved
installment contracts; and (4) access to a range of ancillary products.

Sales and Marketing

         TFC markets primarily to independent used car dealers. Initial contacts
are pursued through telemarketing and followed up by personal visits to dealer
facilities by TFC's Loan Production Office marketing personnel. TFC also
establishes relationships with dealers through referrals from existing dealers.
Other marketing efforts involve the distribution of marketing brochures and
advertisements in trade journals and other industry publications directed to
dealers. The Finance Company is also an exhibitor and major sponsor at the
annual convention of the National Independent Automobile Dealers Association
(the "NIADA") and other conventions in targeted states.

Competition

         There are numerous providers of financing for the purchase of used
vehicles either through the direct financing of such purchases or on an indirect
basis through dealers. These financing sources include commercial banks, savings
and loans associations, consumer finance companies, credit unions, financing
divisions of automobile manufacturers, small sales contract companies and other
consumer lenders. Many of these providers of vehicle financing have
significantly greater resources than TFC and have relationships with established
dealer networks. TFC has focused on a segment of the market comprised of
consumers who typically do not meet the more stringent credit requirements of
the traditional sources of consumer financing and whose needs, as a result, have
historically not been consistently addressed by such financing sources. If,
however, the other providers of consumer finance were to assert a significantly
greater effort to penetrate TFC's targeted market segment, given their financial
strength, TFC could be materially and adversely affected by this type of
competition.

         In 1995 and 1996 there was a significant increase in the number of
competitors in the automobile non-prime finance industry markets in which TFC
operates and in the access to funds that most of those competitors enjoyed. The
combination of increased competition and the industry's improved access to funds
resulted in a general increase in prices offered to dealers for installment
sales contracts. In certain sectors of the market, prices increased to the




<PAGE>



point at which anticipated credit losses relating to the contracts were not
adequately reflected in prices offered to dealers. As a result, the Company
found it increasingly difficult in 1996 to purchase contracts at what it
considers to be reasonable prices.

         Management's focus in 1996 and continuing in 1997 has been on
redirecting the Company toward those sectors of the market in which management
believes pricing more closely reflects the risk inherent in the business. Areas
of focus will include the military point-of-sale and portfolio business lines.

Point-of-Sale Purchase Program

         In its point-of-sale program, TFC establishes relationships with
dealers that meet its financial, organizational and compliance criteria. TFC
currently makes point-of-sale purchases from dealers in approximately 30 states.

         The Finance Company purchases contracts relating to its point-of-sale
program pursuant to a Master Dealer Agreement. Upon entering into a Master
Dealer Agreement, TFC provides the dealer with necessary documentation for the
origination of installment sales contracts and trains its personnel regarding
the use of TFC's documentation. The Master Dealer Agreement contains
representations and warranties by the dealer to TFC with respect to certain
matters, including the security interest in the vehicle, and sets forth the
general terms upon which installment contracts will be purchased by TFC. The
agreements are nonexclusive and do not obligate a dealer to sell, or TFC to
purchase, any particular contract or volume of contracts. The Master Dealer
Agreement may be terminated at any time by TFC or by the dealer.

         Typically, a dealer will submit a customer's credit application to more
than one financing source for review. Under TFC's program, a dealer is required
to provide TFC with a completed credit application which lists the applicant's
assets, liabilities, income, credit and employment history, and other personal
information bearing on the decision to extend credit.

         The application and related information are then analyzed by one of
TFC's credit analysts. A credit analyst evaluates the applicant's ability to
make regular payments and other factors, including the amount of money to be
financed in relation to the purchase price and value of the vehicle. TFC
generally determines the value of the vehicle based upon the NADA's Used Car
Guide Books on Retail and Wholesale Values and/or the Kelley Blue Book. Upon
completion of the credit application review, a credit analyst will decide
whether to approve the financing as submitted, decline the financing or
conditionally approve the financing.

         Typically, installment contracts are purchased by and assigned to TFC
at a price that reflects a discount from the amount financed. Most of the
discount is held in a non-refundable reserve against which credit losses are
first applied. The assigning dealer makes certain warranties as to the validity
of the contract and compliance with certain laws and generally agrees to
indemnify TFC for any claim, defense and set-off against the dealer that may be
asserted against TFC by reason of the assignment. TFC requires physical damage
insurance on all automobiles covered by the installment sales contracts that it
purchases through its point-of-sale program. To the extent that material terms
of a contract prove to be inaccurate, TFC generally has the right to require the
dealer to repurchase such contract under the terms of the Master Dealer
Agreement.





<PAGE>



Portfolio Purchase Program

         Many dealers finance automobile sales through the use of their own
funds. TFC currently purchases portfolios of seasoned installment contracts from
such dealers in approximately 20 states. TFC limits consideration of dealers to
those that generate sufficient business volume, employ satisfactory credit
approval procedures and adequately monitor and report loan performance data.
Portfolio purchases are made pursuant to an Asset Purchase Agreement which
requires the dealer to make representations and warranties to TFC with respect
to each contract to be purchased by TFC and with respect to security interests
in the related vehicles. Unlike a point-of-sale purchase, with respect to which
TFC has the opportunity to verify various information relating to the
installment contract prior to its purchase, portfolio purchases are made
subsequent to the origination of the installment contract. Thus, the typical
Asset Purchase Agreement provides TFC with more extensive remedies than the
Master Dealer Agreement. Generally, if a representation or warranty is breached,
TFC, under the Asset Purchase Agreement, can require the dealer to repurchase
the contract. In certain cases, a special reserve or holdback is established,
against which payment defaults on contracts can be charged.

         Generally, TFC purchases that portion of the dealer's portfolio that
meets or exceeds TFC's underwriting standards. TFC's due diligence normally
begins with a review of information obtained from the dealer on TFC's standard
information-gathering forms. Additional information is then obtained to verify
the dealer's compliance with licensing, bonding and organizational requirements.
TFC then performs extensive due diligence procedures that it has developed
during its years of operation to determine whether to do business with that
particular dealer.

         Within 90 days after completing a portfolio purchase, TFC confirms by
telephone various terms of most contracts with the purchaser of the vehicle. To
the extent that material terms of any contract prove to be inaccurate, TFC
generally has the right to require the dealer to repurchase such contract under
the terms of the Asset Purchase Agreement.

Contract Purchases

         Contracts in TFC's point of sale portfolio have initial durations
normally ranging from 18 to 48 months, with an average original maturity of
approximately three years. Portfolio purchase contracts generally have an
average remaining maturity of 18 to 24 months at the time of purchase.


         The following table sets forth, for the periods indicated, TFC's
contract purchase volume, as well as the number and average size of its
purchased contracts.

<TABLE>
<CAPTION>

                                       1996        1995            1994          1993           1992
                                       ----        ----            ----          ----           ----
<S> <C>
(dollars in thousands)
Contracts purchased or originated:
Point-of-sale                      $ 58,623    $231,877        $145,193      $101,615       $ 80,065
Portfolio                            61,391      61,261          76,990        53,583         38,487
                                    -------    --------        --------      --------       --------
Total                              $120,014    $293,138        $222,183      $155,198       $118,552
                                   ========    ========        ========      ========       ========
Number of contracts purchased or
originated:
Point-of-sale                         6,154      24,095          15,610        12,228         10,481
Portfolio                            11,853      14,084          21,324        15,598         12,653
                                    -------      ------          ------        ------         ------
Total                                18,007      38,179          36,952        27,826         23,134
                                    =======      ======          ======        ======         ======
Average size of contract: (in
dollars)
Point-of-sale                      $  9,526      $9,623          $9,301        $8,310         $7,369
Portfolio                             5,179       4,349           3,607         3,435          3,042
Weighted average                      6,665       7,678           6,013         5,577          5,125

</TABLE>

         The Finance Company's contract purchase volume is discussed more fully
in Management's Discussion and Analysis of Financial Condition and Results of
Operations included in the TFC Enterprises, Inc. 1996 Annual Report, which is
incorporated herein by reference.




<PAGE>



Ancillary Products

         In connection with its point of sale business, TFC offers, through its
dealers in certain states, warranty and motor club products, as well as credit
life insurance, credit accident and health insurance and physical damage
insurance. These products are provided and underwritten by third-party vendors.
Accordingly, liabilities under the ancillary products are not obligations of
TFC. TFC offers these products to dealers so that they, in turn, may provide
vehicle purchasers a more complete line of products and services. Additionally,
certain of these products protect TFC's collateral as well as the vehicle
purchasers' ability to repay the installment contract in the event of an
accident, sickness or disability. By offering these products, TFC is able to
generate supplementary revenue without incurring significant additional
expenses. During 1996 and 1995, TFC generated gross revenues of approximately
$1.2 million and $2.1 million, respectively, from the sale of ancillary products
through its dealers.

Collections

         Payments on purchased installment sales contracts are received by TFC
through a number of different means. Payments are monitored by TFC to maintain
current information regarding each customer's current address and banking data.
Customers occasionally make payments in person at one of TFC's service centers
or Loan Production Offices. Collections Department personnel, at times, will
make a collection through a field visit to the customer.

         Monitoring the payment history of accounts and implementing appropriate
remedial action is the responsibility of the Collections Department within each
service center. At year-end 1996, a total of 171 employees, or 56% of TFC's
total full-time equivalent employees, worked in the Collections Departments of
the two service centers.

         One of the primary responsibilities of the Collections Department is to
monitor customer accounts that are delinquent in payment. Collections Department
personnel work with customers to resolve payment problems and bring accounts to
current status at the earliest possible stage of delinquency. Collections
Department employees are compensated, in part, through bonuses tied to their
monthly collection performance.

         When calling a delinquent account, Collections Department personnel
utilize TFC's Collections Training Manual developed by TFC. The manual specifies
the procedure to follow in different circumstances in order to maximize the
effectiveness of the call. Specific action with respect to a delinquent account
will depend on the customer's particular circumstances as well as the past
payment history of the account. However, in all cases, the primary focus is
resolving the problem causing the delinquency, arranging a modified payment
plan, or working out a settlement agreement. At times, Collections Department
personnel meet with customers in the field or at a service center.

         When TFC has difficulty locating a customer, Collections Department
personnel will attempt to find the individual through skip tracing, which
utilizes various sources of information about a customer to which TFC has
access. All communications with and efforts to locate the customer are reflected
in TFC's data files.

         In certain situations, TFC will repossess a vehicle. To the extent that
a deficiency balance exists upon repossession and sale of a vehicle, TFC may
take action to obtain a judgment.

         Decisions to charge off accounts are made at the end of each month.
Accounts on which there has been no significant payment activity for 90 days are
generally charged off when they are 180 days contractually past due.
Additionally, the carrying value of repossessed assets is reduced, through
charge-off, to the lower of the unpaid contract balance or anticipated
liquidation proceeds. Once an account is charged off, it is transferred to the
Recovery Unit. Customers are called regularly and attempts are made to set up
repayment plans or workout settlement agreements as appropriate to a customer's
circumstances. Each Recovery Unit employee is responsible for keeping records of
all collection activity and for following up on callback and broken promise
dates as appropriate.




<PAGE>



         The Company's charge-off and delinquency experience is discussed more
fully in Management's Discussion and Analysis of Financial Condition and Results
of Operations included in the TFC Enterprises, Inc. 1996 Annual Report, which is
incorporated herein by reference.

Consumer Finance Operations

Consumer Loan Program

         In its Consumer Loan Program, FCF originates direct loans through a
branch network. Loans are obtained through print media, customer referrals,
renewals and other sources. Applications are primarily received directly from
the consumer either by telephone or in person at one of the branches.

         Once an application has been received, a background investigation is
performed on the applicant, including such things as employment and income
verification, residence verification, direct references from other creditors and
review of credit bureau files. This information is reviewed by a branch manager
or assistant manager to determine credit worthiness. If the applicant is
approved, the applicant would visit the appropriate branch to execute necessary
documents and receive funding.

Loan Originations

         Most contracts have initial durations of 36 months or less.

         The following table sets forth for the periods indicated FCF's loan
volume as well as the number and average size of its loans. (FCF commenced
operations in 1995.)

<TABLE>
<CAPTION>

                                                       1996                       1995
                                                       ----                       ----
<S> <C>
         Loans originated (in thousands)               $13,174                   $6,257
                                                        ======                    =====

         Number of loans originated                      6,623                    3,254
                                                        ======                    =====

         Average size of loan                          $ 1,989                   $1,923
                                                        ======                    =====

</TABLE>

         FCF's loan volume is discussed more fully in Management's Discussion
and Analysis of Financial Condition and Results of Operations included in the
TFC Enterprises, Inc. 1996 Annual Report, which is incorporated herein by
reference.

Ancillary Products

         In connection with its consumer loan business, FCF offers its customers
credit life, credit accident and health insurance, and property insurance. These
products are provided and underwritten by third-party vendors. Accordingly,
liabilities under the ancillary products are not obligations of the Company.
These products protect the customer as well as providing supplementary revenue
to FCF. During 1996, FCF generated gross revenues of approximately $0.1 million
from the sale of ancillary products. Such revenues in 1995, FCF's first year of
operation, were not significant.

Collections

         Payments on consumer loans are received by FCF primarily through the
mail or the customer pays at the appropriate branch. Each branch monitors
payments to maintain current information regarding each customer's current
address and banking data. Branch personnel, at times, will make a collection
through a field visit to the




<PAGE>



customer.  Monitoring the payment history of the accounts and implementing
appropriate remedial action is the responsibility of the branch.

         One of the primary responsibilities of the branch is to monitor
customer accounts that are delinquent in payment. Branch personnel work with
customers to resolve payment problems and bring accounts to current status at
the earliest possible stage of delinquency. Specific action with respect to a
delinquent account will depend on the customer's particular circumstances as
well as the past payment history of the account. However, in all cases the
primary focus is resolving the problem causing the delinquency, arranging a
modified payment plan or working out a settlement. At times branch personnel
meet with the customers in the field or at the branch. When FCF has difficulty
locating a customer, collections personnel will attempt to locate the individual
through skip tracing, which utilizes various sources of information about a
customer to which FCF has access. All communications with and efforts to locate
the customer are reflected in FCF's data files.

         Decisions to charge off accounts are made at the end of each month.
Accounts that reach a 180 day contractually past due status are generally
charged off. Once an account is charged off, collection activity will continue.
The Company's charge off and delinquency experience is discussed more fully in
Management's Discussion and Analysis of Financial Condition and Results of
Operations included in the TFC Enterprises. Inc. 1996 Annual Report, which is
incorporated herein by reference.

Funding


Debt outstanding at December 31 consisted of the following:

<TABLE>
<CAPTION>
(in thousands)                                                                                1996               1995
                                                                                              ----               ----
<S> <C>
Revolving line of credit (a)                                                              $ 72,562            $59,475
Term Notes:
         9.50% Term Note, due 1996                                                            ----             25,000
         7.92% Term Note, due 1997                                                           6,964             12,500
         7.56% Term Note, due 1997                                                          12,500             12,500
6.14% Automobile Receivables-Backed Notes, due 2001                                         15,843             47,252
Subordinated Notes:
         9.38% Senior Subordinated Notes, due 2002                                          10,000             10,000
         13.50% Subordinated Non-Convertible Notes due 1994
           to 1998 (b)                                                                       2,509              3,732
                                                                                          --------           --------
         Total debt                                                                       $120,378           $170,459
                                                                                          ========           ========
</TABLE>
         (a)    The revolving line of credit is net of unamortized discount
                totaling $0.4 million at December 31, 1996.

         (b)   The 13.50% Subordinated Non-Convertible Notes are net of
               unamortized discount totaling $0.1 million at December 31, 1996
               and 1995.

         The Company reported a net loss of $(6.5) million in 1995. This loss
reflected a substantial increase in the provision for credit losses resulting
from a significant increase in delinquencies and credit losses in the Company's
portfolio of contract receivables. As a result of the reported loss and the
increase in delinquencies and credit losses, the Company was not in compliance
at December 31, 1995, and remained out of compliance throughout 1996, with
certain aspects of the credit agreements relating to its revolving line of
credit, term notes and subordinated notes. Under the terms of those credit
agreements, the Company must comply with various restrictive debt covenants that
require the Company to meet or maintain certain financial ratios and other
financial conditions. As a consequence,





<PAGE>



the Company was in technical default under its revolving line of credit, term
notes and subordinated notes during 1996. To resolve this situation, the Company
reached agreement with its lenders in 1996 to forbear in the exercise of their
rights and remedies relating to the technical defaults. These forbearance
agreements extended through December 31, 1996.

         In December 1996, the Company signed a new revolving line of credit
agreement with its primary lender that extends through December 31, 1998. This
new agreement was amended in April 1997, to correct out-ofcompliance conditions
that arose as of December 31, 1996. This amended agreement also provided for the
consolidation of the Company's debt under its term notes into the revolving line
of credit. In April 1997, the Company signed an amended credit agreement
relating to its subordinated notes. These new agreements replaced the
forbearance agreements under which the Company had been operating with each of
its lenders during most of 1996. While the new credit agreements cured the
technical defaults that existed during 1996, they also increased the Company's
funding costs by approximately 100 basis points for 1997 compared to 1996. The
forbearance agreements executed with the Company's lenders in 1996 increased
funding costs by approximately 100 basis points for 1996 compared to 1995.

A complete discussion of the Company's outstanding debt is included in Note 5 of
the Notes to Consolidated Financial Statements of the Company's 1996 Annual
Report which is incorporated by reference herein. The Company's credit
agreements and related forbearance agreements are discussed more fully in the
"Liquidity and Capital Resources" section of Management's Discussion and
Analysis of Financial Condition and Results of Operations included in the TFC
Enterprises, Inc. 1996 Annual Report, which is incorporated herein by reference.

Information Systems

         The Company processes all data relating to its contract receivables and
financial reporting through a distributed network of computers. TFC's computer
systems are networked together to provide information to management for analysis
as well as automatic posting to the general ledger for financial reporting
purposes. The systems provide for complete contract processing from the purchase
of the contract, payment to the dealer, posting of payments and all other
collection activity from the inception date of the installment contract. TFC's
systems operate on software which has been adapted to the specific manner in
which TFC operates its business.

         The TFC systems are interfaced with a predictive dialing system
designed to enhance collection activity by increasing the number of customer
contacts per collector hour. This system dials multiple telephone numbers
simultaneously based on parameters defined by the Collections Department. Calls
are connected automatically to a collector at the same time the customer's
account is displayed on the collector's computer screen. The process permits
better control of calling patterns for more effective calling and improved
customer contact rates. By eliminating busy signals, no answers and answering
machines, the system enables the collector to speak to more customers. The
system also reports collection performance by collector for improved supervision
and results. The Company has invested in technology that enables TFC to
mechanically process and score credit applications, thereby increasing capacity,
reducing processing time and improving standardization of credit underwriting
without significant staff increases.


         First Community Finance uses a third-party computer system designed for
the consumer loan industry. Each branch processes all data relating to that
branch on a computer within the branch. The system provides for complete
contract processing from the closing of the loan, posting of payments and all
collection activity. These systems are networked together to provide
consolidated management information and automatic posting to the Company's
general ledger for financial reporting.

         The Company believes that it has sufficient management information
systems in place, or in the process of being implemented, to meet the Company's
current and near-term future requirements.




<PAGE>



Regulation

         The Company's businesses are subject to regulation and licensing under
various federal, state and local statutes and regulations. Most of the states in
which the Company operates limit the interest rate, fees and other charges that
may be collected. In addition, many states prescribe certain terms in the
contract.

         Numerous federal and state consumer protection laws and related
regulations impose substantive disclosure requirements upon lenders and
servicers involved in motor vehicle financing. Some of the federal laws and
regulations include the Truth-in-Lending Act, the Equal Credit Opportunity Act,
the Federal Trade Commission Act, the Fair Credit Reporting Act, the Fair Debt
Collection Practices Act, the Motor Vehicle Information and Cost Savings Act,
the Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations B and Z,
and the Soldiers' and Sailors' Civil Relief Act.

         In addition, the Federal Trade Commission ("FTC") has adopted the
holder-in-due-course rule, which has the effect of subjecting persons that
finance consumer credit transactions (and certain related lenders and their
assignees) to all claims and defenses which the purchaser could assert against
the seller of the goods and services. With respect to used automobiles
specifically, the FTC's rule on Sale of Used Vehicles requires that all sellers
of used vehicles prepare, complete and display a Buyer's guide which explains
the warranty coverage for such vehicles. The Credit Practices Rules of the FTC
impose additional restrictions on sales contract provisions and credit
practices.

         Certain states where the Company operates have adopted motor vehicle
retail installment sales acts or variations thereof and consumer finance acts.
Such laws regulate, among other things, the interest rates and terms and
conditions of motor vehicle retail installment sales contracts and also impose
restrictions on consumer transactions and require sales contract disclosures in
addition to the requirements under federal law. Those requirements impose
specific statutory liabilities upon creditors who fail to comply.

         The Company believes that it is in compliance with all applicable laws
and regulations.

Employees

         At December 31, 1996, the Company had 366 full-time equivalent
employees. No employees are currently covered by collective bargaining
agreements. The Company believes that its employee relations are excellent.

Risk Factors

         In evaluating the Company, prospective investors should consider
carefully all of the information set forth in this Form 10-K and, in particular,
should evaluate the following risk factors.

Fluctuating Interest Rates and Dependence on Line of Credit

         The Company's operations require substantial borrowings to provide
funding for the installment contracts purchased by TFC and originated by FCF.
Consequently, profitability is impacted by the difference between the rate of
interest paid on the funds it borrows and the rate of interest charged on the
installment contracts, which rate in some states is limited by law. Currently,
the principal source of borrowing by the Company is its revolving line of
credit, guaranteed by TFCEI (the "Line of Credit") with General Electric Capital
Corporation ("G.E. Capital"). The maximum amount of borrowings available under
the Line of Credit was $150 million at December 31, 1996 (reduced to $110
million in April 1997). At December 31, 1996, TFC had $72.6 million outstanding
under the Line of Credit. The floating interest rate for borrowings under the
Line of Credit is equal to the average 30-day London Interbank Offered Rate
("LIBOR") plus 4.00%. Thus, future increases in interest rates could adversely
affect the Company's profitability. In an effort to reduce its exposure to an
increase in interest rates, TFC has purchased an interest rate cap which ensures
that the interest rate on $50 million of the borrowings under the Line of Credit
will not exceed




<PAGE>



a LIBOR ceiling of 6.5%. This interest rate cap expires September 30, 1997. In
addition to the purchase of interest rate caps, the Company believes it has
certain flexibility to increase the discount at which installment contracts are
purchased, or to increase the rate of interest charged on future installment
contracts (to the extent not limited by state law), in order to offset the
adverse impact of any interest rate increase on profitability.

         The Finance Company has maintained a Line of Credit with G.E. Capital
since 1992. The current Line of Credit was executed in December 1996, amended in
April 1997, and expires December 31, 1998. There is no assurance that a new Line
of Credit will be executed when the current Line of Credit expires. If the new
Line of Credit is not executed, TFC would be required to seek alternative
financing sources and repay its outstanding balance on or before the expiration
of the current Line of Credit on December 31, 1998. No assurance can be given
that alternative financing sources would be available in such event. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources" included in the TFC Enterprises,
Inc. 1996 Annual Report, which is incorporated herein by reference.

Defaults on Installment Contracts

         The Company is engaged primarily in purchasing installment contracts
entered into by dealers with consumers who have limited access to traditional
sources of consumer credit. The inability of an individual to finance a used
automobile purchase by means of traditional credit sources is generally due to
such individual's past credit history or insufficient cash to make the required
down payment on an automobile. As a result, installment contracts purchased by
the Company are generally with purchasers of automobiles who are considered to
have a higher risk of default on an installment contract than certain other
automobile purchasers. Accordingly, the consumer loan activities engaged in by
the Company typically have a higher risk of loss than those of other consumer
financings. While the Company believes that its expertise in used automobile
financing, particularly for enlisted personnel, enables it to evaluate and price
accurately the higher risk associated with the Company's business, a significant
economic downturn in the markets in which the Company operates could materially
increase the number of charged off and delinquent installment contracts
experienced by TFC as compared to its historical losses. If TFC were to
experience a material increase in charge-offs or delinquencies, its
profitability could be adversely affected. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Credit Losses and
Delinquency" included in the TFC Enterprises, Inc. 1996 Annual Report, which is
incorporated herein by reference.


Dependence Upon Key Executive

         The Company's growth and development to date have been largely
dependent upon the services of Robert S. Raley, Jr., Chairman of the Board,
President and Chief Executive Officer. The loss of Mr. Raley's services could
have a material adverse effect on the Company.

Competition

         There are numerous providers of financing for the purchase of used
automobiles either through the direct financing of such purchases or on an
indirect basis through a dealer. Those financing sources include commercial
banks, savings and loan associations, consumer finance companies, credit unions,
financing divisions of automobile manufacturers or automobile retailers, small
sales contract companies and other consumer lenders. Many of those providers of
automobile financing have significantly greater financial resources than TFC and
have relationships with established dealer networks. The Company has focused on
a segment of the market composed of consumers who typically do not meet the more
stringent credit requirements of the traditional consumer financing sources and
whose needs, as a result, have not been addressed consistently by such financing
sources. If, however, the other providers of consumer finance were to assert a
significantly greater effort to penetrate TFC's targeted market segment, TFC
could be materially and adversely affected.





<PAGE>



Regulation

         The Company's business is subject to regulation and licensing under
various federal, state and local statutes and regulations. The Company's
business operations are conducted in approximately 30 states and, accordingly,
the laws and regulations of such states govern the Company's operations
conducted in those states. Most states where the Company operates limit the
interest rate, fees and other charges that may be imposed by, or prescribe
certain other terms of, the contracts that the Company purchases and define the
Company's rights to repossess and sell collateral. In addition, the Company is
required to be, and is, licensed to conduct its operations in certain states. As
the Company expands its operations into other states, it will be required to
comply with the laws of such states.

         An adverse change in those laws or regulations could have a material
adverse effect on the Company's profitability by, among other things, limiting
the states in which the Company may operate or the interest rate that may be
charged on installment contracts or restricting the Company's ability to realize
the value of any collateral securing contracts. The Company is not aware of any
materially adverse legislation currently pending in any jurisdiction where it
currently transacts business. See "Business -- Regulation."

Restrictions on the Payment of Dividends

         The Company currently intends to retain its earnings to finance the
growth and development of its business and, therefore, does not anticipate
paying any cash dividends in the foreseeable future. Any future dividend
payments will depend upon the financial condition, funding requirements and
earnings of TFC as well as other factors that the Company's Board of Directors
may deem relevant. As the Company is a legal entity separate and distinct from
TFC and as its revenues depend on the payment of dividends by TFC, limitations
on the ability of TFC to pay dividends to the Company will in turn limit the
ability of the Company to pay dividends to its stockholders. There are certain
restrictions on the payment of dividends in the form of various affirmative and
negative covenants included in TFC's Line of Credit and the Note Purchase
Agreement relating to the $6,435,000 in original principal amount of 13.50%
Subordinated Non-Convertible Notes due October 15, 1998 and the Note Purchase
agreement relating to the $10 million in original principal amount of 9.38%
Senior Subordinated Notes due June 30, 2002.



Effect of Certain Charter, Bylaw and Statutory Provisions

         Certain provisions of the Company's Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation") and Amended and Restated
Bylaws (the "Bylaws") could delay or frustrate the removal of incumbent
directors and could make more difficult a merger, tender offer or proxy contest
involving the Company, even if such events could be beneficial, in the short
term, to the interests of the stockholders. For example, the Certificate of
Incorporation provides for a classified Board of Directors and for certain
limitations on the calling of a special meeting of stockholders and the Bylaws
require advance notice of stockholder proposals and nominations of directors.
The Company also is subject to provisions of Delaware corporation law that
prohibit a publicly-held Delaware corporation from engaging in a broad range of
business combinations with a person who, together with affiliates and
associates, owns 15% or more of the corporation's common stock (an "interested
stockholder") for three years after the person became an interested stockholder,
unless the business combination is approved in a prescribed manner. Those
provisions could discourage or make more difficult a merger, tender offer or
similar transaction, even if favorable to the Company's stockholders.

Authorized Preferred and Common Stock

         Pursuant to the Certificate of Incorporation, shares of preferred stock
and Common Stock may be issued in the future without further stockholder
approval and upon such terms and conditions, and having such rights, privileges
and preferences, as the Board of Directors may determine. The rights of the
holders of Common Stock




<PAGE>



will be subject to, and may be adversely affected by, any preferred stock that
may be issued in the future. The issuance of preferred stock, while providing
desirable flexibility in connection with possible acquisitions and other
corporation transactions, could have the effect of making it more difficult for
a third party to acquire, or effectively preventing a third party from
acquiring, a majority of the outstanding voting stock of the Company. The
Company has no present plans to issue any shares of preferred stock.




<PAGE>



Executive Officers of the Company

         The executive officers of TFCE, TFC and FCF are as follows:
<TABLE>
<CAPTION>

Name                                        Age*                                  Position
<S> <C>
Robert S. Raley, Jr.                         59       Chairman of the Board of Directors of TFCEI, TFC and FCF,
                                                      President and Chief Executive Officer of TFCEI and TFC, and
                                                      Executive Vice President of FCF
Ronald G. Tray                               55       Vice President of TFCEI and Director, Executive Vice
                                                      President and Chief Operating Officer of TFC
David W. Karsten                             49       Vice President, Treasurer and Chief Financial Officer of TFCEI
                                                      and FCF, Executive Vice President, Treasurer and Chief
                                                      Financial Officer of TFC
Rick S. Lieberman                            40       Senior Vice President and Chief Lending Officer of TFC

G. Kent Brooks                               60       Director, President and Chief Executive Officer of FCF

*As of December 31, 1996

Background of Executive Officers
</TABLE>

         Robert S. Raley, Jr. founded TFC in 1977.  From that time through April
1990, and from May 1990 through April 1992, he served as President and Chief
Executive Officer of TFC.  In 1996, Mr. Raley was appointed President and Chief
Executive Officer of TFCE and was reappointed to that position for TFC.  Prior
to founding TFC, Mr. Raley was employed by Major Financial Services, Silver
Spring, Maryland, for 17 years in various positions, including Vice President
and Director of Operations.  Mr. Raley was a Director of TFCE from 1984 through
April 1990 and has been a Director of TFCE since May 1990.  Mr. Raley currently
serves as Chairman of the Board.

         Ronald G. Tray joined TFC as a Vice President in 1989 and became
Executive Vice President for Management Information Systems in 1992. Mr. Tray
was appointed Chief Operating Officer of TFC in 1996. Prior to joining TFC, Mr.
Tray was President of the Mid-Atlantic Division, Mtech Corporation, a data
processing service bureau for banks, located in Fairfax, Virginia. In 1996, Mr.
Tray resigned as a Director of TFCE, a position he had held since 1993.

         David W. Karsten, CPA, joined TFC as Chief Financial Officer in 1996.
From 1984 until 1995, Mr. Karsten was employed by USLICO Corp., an insurance
holding company, and served as Senior Vice President and Controller at the time
of his departure.

         Rick S. Lieberman, Senior Vice President and Chief Lending Officer of
TFC. Mr. Lieberman joined TFC in 1989 and has served the Company in several
capacities, including General Manager, Vice President of the Norfolk Regional
Service Center. Prior to joining TFC, he was with ITT Consumer Financial
Corporation for 8 years.

         G. Kent Brooks joined FCF in 1994 as President. Prior to that, he was
with Peoples Finance Corporation, Richmond, Virginia, from 1956 to 1980, the
last eight years of which he served as President. From 1980 to 1992, Mr. Brooks
served as a Senior Vice President and Regional Manager for Provident Financial
Corporation, subsequent to its acquisition of Peoples Financial Corporation.
From 1992 to 1993, Mr. Brooks was with American General Finance, subsequent to
its acquisition of Provident Financial Corporation. Mr. Brooks has been a
Director of FCF since 1994.






<PAGE>



Item 2.  Properties

         The Company's principal executive offices and Point-of-Sale Service
Center, Point-of-Sale Loan Production Office and Portfolio Loan Production
Office are located in Norfolk, Virginia. The combined facilities consist of
approximately 27,000 square feet of space pursuant to a lease expiring in 2006.

         The Company's Portfolio Service Center is located in Jacksonville,
Florida. The facility consists of approximately 17,000 square feet of space
pursuant to a lease expiring in 2001. The Company's Point-of-Sale Loan
Production Office in Dallas, Texas,consists of approximately 2,300 square feet
of space pursuant to a lease expiring in 1998. The Company's Point-of-Sale Loan
Production Office in San Diego, California, consists of approximately 1,100
square feet of space pursuant to a lease expiring in 1997. First Community
Finance, Inc.'s branch offices, on a combined basis, total approximately 5,000
square feet of space pursuant to leases expiring in 1997 to 1998.

         The Company believes that its facilities are adequate for its current
and near-term future requirements.


Item 3.  Legal Proceedings

         The Company is a party to several legal actions which are ordinary,
routine litigation incidental to its business. The Company believes that none of
those actions, either individually or in the aggregate, will have a material
adverse effect on the results of operations or financial position of the
Company.

Item 4.  Submission of Matters to a Vote of Security Holders

         None.





<PAGE>




                                     PART II

         The information required by Part II, Items 5, 6, 7 and 8 has been
incorporated herein by reference to the TFC Enterprises, Inc. 1996 Annual Report
as set forth below, in accordance with General Instruction G(2) of Form 10-K.


Item 5.  Market For Registrant's Common Equity and Related Stockholder Matters

         Since December 22, 1993, TFC Enterprises, Inc. Common Stock has traded
on the NASDAQ National Market System under the symbol "TFCE." Share price
information with respect to the Common Stock is set forth in the "Selected
Quarterly Data" table included in the TFC Enterprises, Inc. 1996 Annual Report,
which is incorporated herein by reference.

         As of March 18, 1997, there were approximately 3,000 holders of the
Common Stock, including approximately 120 holders of record. No cash dividends
have been paid with respect to the Common Stock since issuance. The Company has
no current plans to pay any cash dividends relating to the Common Stock in the
foreseeable future, although any dividends on the Common Stock will be at the
sole discretion of the Company's Board of Directors and will depend upon the
Company's profitability and financial condition, capital requirements, statutory
restrictions, requirements of the Company's lenders, future prospects and other
factors deemed relevant by the Company's Board of Directors. If any dividends
are paid to the holders of Common Stock, all holders will share equally on a per
share basis.

         The Company has not issued any of its authorized preferred stock.


Item 6.  Selected Financial Data

         Information included in the section entitled "Five-Year Summary of
Selected Financial Data" in the TFC Enterprises, Inc. 1996 Annual Report is
incorporated herein by reference.


Item 7.  Management's Discussion and Analysis of Financial Condition and Results
of Operations

         Information included in the section entitled "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in the TFC
Enterprises, Inc. 1996 Annual Report is incorporated herein by reference.


Item 8. Financial Statements and Supplementary Data

         The Consolidated Financial Statements of TFC Enterprises, Inc.,
including notes thereto, are presented in the TFC Enterprises, Inc. 1996 Annual
Report and are incorporated herein by reference.

Item 9.  Changes in and Disagreements with Accountants

         None.





<PAGE>




                                    PART III

         The information required by Part III, Items 10, 11, 12, and 13 has been
incorporated herein by reference to the Company's 1997 Proxy Statement as set
forth below, in accordance with General Instruction G(3) of Form 10-K.

Item 10.  Directors and Executive Officers of the Registrant

         Information relating to directors of the Company and compliance with
Section 16(a) of the Exchange Act is set forth in the sections entitled
"Election of Directors" and "Section 16(a) Beneficial Ownership Reporting
Compliance" in the Company's 1997 Proxy Statement and is incorporated herein by
reference. Pursuant to General Instruction G(3) of Form 10-K, certain
information concerning the executive officers of the Company is set forth under
the caption entitled "Executive Officers of the Company" in Part I, Item 1, of
this Form 10-K.

Item 11.  Executive Compensation

         Information regarding compensation of officers and directors of the
Company is set forth in the section entitled "Executive Compensation" in the
Company's 1997 Proxy Statement and is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

         Information regarding ownership of certain of the Company's securities
is set forth in the section entitled "Security Ownership of Management and
Certain Beneficial Owners" in the Company's 1997 Proxy Statement and is
incorporated herein by reference.

Item 13.  Certain Relationship and Related Transactions

         Information regarding certain relationships and related transactions
with the Company is set forth in the section entitled "Certain Relationships and
Related Transactions" in TFC's 1997 Proxy Statement and is incorporated herein
by reference.





<PAGE>




                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

         (a)       Documents filed as part of this report:

                  (1)      Financial Statements

                           The Consolidated Financial Statements of TFC
Enterprise, Inc. and the Auditor's Report thereon, are incorporated herein by
reference.  Applicable pages in the TFC Enterprises, Inc. 1996 Annual Report are
as follows:




                                                                     Page

Consolidated Financial Statements:
Report of Ernst & Young LLP, Independent Auditors                     19
Consolidated Balance Sheets at December 31, 1996 and 1995             20
Consolidated Statements of Operations for the Years ended
         December 31, 1996, 1995 and 1994                             21
Consolidated Statements of Changes in Shareholders' Equity
         for the Years ended December 31, 1996, 1995 and 1994         22
Consolidated Statements of Cash Flows for the Years ended
         December 31, 1996, 1995 and 1994                             23
Notes to Consolidated Financial Statements                            24

         (2)      Financial Statement Schedule

Report of Ernst & Young LLP, Independent Auditors, on Schedule I
Schedule I - Financial Information of Registrant - TFC Enterprises, Inc.

         All other schedules for which provision is made in the
applicable accounting regulations of the Securities and Exchange
Commission are not required under the related instructions or
are inapplicable and therefore have been omitted.

                  (3)      Exhibits

         The exhibits listed on the accompanying Exhibit Index are filed or
incorporated by reference as part of this Form 10-K and such Exhibit Index is
incorporated herein by reference.

         (b)      Reports on Form 8-K (filed during the fourth quarter of 1996):

                  On October 11, 1996, the Company filed a report on Form 8-K,
under Item 5, regarding the closing of the Company's Southwestern Regional
Service Center in Dallas, Texas and the relocation of the Company's accounting
office from Manassas, Virginia to Norfolk, Virginia.

                  On November 20, 1996, the Company filed a report on Form 8-K,
under Item 5, announcing that TFC had executed a commitment letter with its
primary lender for an extension of its credit facility and that FCF had received
a non-binding proposal for a credit facility from a bank.




<PAGE>



                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

                           TFC ENTERPRISES, INC.


                           By :/s/Robert S. Raley, Jr.
                               -----------------------
                                  Robert S. Raley, Jr.
                                  Chairman of the Board, President and
                                  Chief Executive Officer

Dated: April 11, 1997

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.


<TABLE>
<CAPTION>

Signature                                            Title                                  Date:

<S> <C>

/s/Robert S. Raley, Jr.                       Chairman of the Board                         April 11, 1997
------------------------                      and Director, President and
Robert S. Raley, Jr.                          Chief Executive Officer




                                               Director
------------------------
Walter S. Boone, Jr.



/s/Douglas B. Bywater                          Director                                    April 11, 1997
------------------------
Douglas B. Bywater



                                               Director
-------------------------
Andrew M. Ockershausen



/s/Phillip R. Smiley                           Director                                    April 11, 1997
--------------------------
Phillip R. Smiley



/s/Linwood R. Watson                           Director                                    April 11 1997
-----------------------
Linwood R. Watson



/s/David W. Karsten                            Chief Financial Officer                     April 11, 1997
-----------------------                        (Principal Accounting and Financial Officer)
David W. Karsten


</TABLE>
<PAGE>


                                 EXHIBIT INDEX
<TABLE>
<CAPTION>

Exhibit                                                     Description                                                 Sequential
  No.                                                                                                                    Page No.
<S> <C>
3.1       Amended and Restated Certificate of Incorporation of TFC Enterprises, Inc. (Incorporated by reference to the      *
          Registrant's Registration Statement on Form S-1, Commission File No. 33-70638, previously filed with the
          Commission on October 21, 1993.)
3.2       Amended and Restated Bylaws of TFC Enterprises, Inc.  (Incorporated by reference to the Registrant's              *
          Registration Statement on Form S-1, Commission File No. 33-70638, previously filed with the Commission on
          October 21, 1993.)
4         Form of Common Stock certificate of TFC Enterprises, Inc.  (Incorporated by reference to the Registrant's         *
          Registration Statement on Form S-1, Commission File No. 33-70638, previously filed with the Commission on
          October 21, 1993.)
10.1A     Loan and Security Agreement between G.E. Capital and The Finance Company dated September 24, 1992.                *
          (Incorporated by reference to the Registrant's Registration Statement on Form S-1, Commission File No.
          33-70638, previously filed with the Commission on October 21, 1993.)
10.1B     Commitment Letter executed by The Finance Company and G.E. Capital dated October 11, 1993, with respect to a      *
          $120 million line of credit and a related Letter Agreement executed by The Finance Company and G.E. Capital
          dated October 19, 1993. (Incorporated by reference to the Registrant's Registration Statement on Form S-1,
          Commission File No. 33-70638, previously filed with the Commission on October 21, 1993.)
10.2      Form of Master Dealer Agreement.  (Incorporated by reference to the Registrant's Registration Statement on        *
          Form S-1, Commission File No. 33-70638, previously filed with the Commission on October 21, 1993.)
10.3      Form of Asset Purchase Agreement.  (Incorporated by reference to the Registrant's Registration Statement on       *
          Form S-1, Commission File No. 33-70638, previously filed with the Commission on October 21, 1993.)
10.4      Form of Motor Vehicle Installment Sale Contract, Truth-in-Lending Disclosure, Promissory Note and Security        *
          Agreement.  (Incorporated by reference to the Registrant's Registration Statement on Form S-1, Commission
          File No. 33-70638, previously filed with the Commission on October 21, 1993.)
10.5      Note Purchase Agreement among TFCEI Acquisition Corp. and Connecticut General Life Insurance Company              *
          ("CIGNA") and certain affiliates of CIGNA dated October 25, 1988, relating to $6,500,000 in original
          principal amount of 14% Senior Notes due October 15, 1998, and Amendment Nos. 1 and 2.  (Incorporated by
          reference to the Registrant's Registration Statement on Form S-1, Commission File No. 33-70638, previously
          filed with the Commission on October 21, 1993.)
10.6      Note Purchase Agreement among The Finance Company and CIGNA and certain affiliates of CIGNA dated October 25,     *
          1988, relating to $6,435,000 in original principal amount of 13.5% Subordinated Non-Convertible Notes due
          October 15, 1998, and $65,000 in original principal amount of 13.5% Subordinated Convertible Notes due
          October 15, 1998, and Amendment Nos. 1, 2 and 3.  (Incorporated by reference to the Registrant's Registration
          Statement on Form S-1, Commission File No. 33-70638, previously filed with the Commission on October 21,
          1993.)
10.6(a)   Amendment No. 5 to Note Purchase Among The Finance Company and CIGNA and certain affiliates of CIGNA dated        *
          October 25, 1988, relating to $6,435,000 in original principal amount of 13.5% Subordinated Non-Convertible
          Notes due October 15, 1998, and $65,000 in original principal amount of 13 1/2% Subordinated Convertible Notes
          due October 15, 1998.
10.7      Stock Purchase Agreement among TFCEI Acquisition Corp. and the stockholders of TFCEI dated October 14, 1988.      *
          (Incorporated by reference to the Registrant's Registration Statement on Form S-1, Commission File No.
          33-70638, previously filed with the Commission on October 21, 1993.)
10.8      Form of Contingent Right to Purchase Shares of Common Stock of The Finance Company.  (Incorporated by             *
          reference to the Registrant's Registration Statement on Form S-1, Commission File No. 33-70638, previously
          filed with the Commission on October 21, 1993.)
10.9      Employment Agreement between The Finance Company and Robert S. Raley, Jr dated October 22, 1992.                  *
          (Incorporated by reference to the Registrant's Registration Statement on Form S-1, Commission File No.
          33-70638, previously filed with the Commission on October 21, 1993.)
10.10     Employment Agreement between The Finance Company and George R. Kouri dated October 1, 1988, as amended April      *
          1, 1992.  (Incorporated by reference to the Registrant's Registration Statement on Form S-1, Commission File
          No. 33-70638, previously filed with the Commission on October 21, 1993.)
10.11     Employment Agreement between The Finance Company and Joseph R. Becka dated October 1, 1988, as amended March      *
          16, 1993.  (Incorporated by reference to the Registrant's Registration Statement on Form S-1, Commission File
          No. 33-70638, previously filed with the Commission on October 21, 1993.)
10.12     Employment Agreement between The Finance Company and Preston K. Gnagey dated December 1, 1990.  (Incorporated     *
          by reference to the Registrant's Registration Statement on Form S-1, Commission File No. 33-70638, previously
          filed with the Commission on October 21, 1993.)
10.13     Employment Agreement between The Finance Company and Harold E. McCarty, Jr. dated December 1, 1990.               *
          (Incorporated by reference to the Registrant's Registration Statement on Form S-1, Commission File No.
          33-70638, previously filed with the Commission on October 21, 1993.)
10.14     Consulting Agreement between The Finance Company and RSR Associates, as assignee of CHI, dated October 27,        *
          1988 and Assignment and Assumption of Consulting Agreement dated May 1, 1990.  (Incorporated by reference to
          the Registrant's Registration Statement on Form S-1, Commission File No. 33-70638, previously filed with the
          Commission on October 21, 1993.)
10.15     Note Purchase Agreement between TFCEI and CHI dated May 1, 1990, relating to $1,000,000 in original principal     *
          amount of 14% Senior Subordinated Note due October 15, 1998.  (Incorporated by reference to the Registrant's
          Registration Statement on Form S-1, Commission File No. 33-70638, previously filed with the Commission on
          October 21, 1993.)
10.16     RSR Associates 6.75% Note for $50,000 due October 15, 1998.  (Incorporated by reference to the Registrant's       *
          Registration Statement on Form S-1, Commission File No. 33-70638, previously filed with the Commission on
          October 21, 1993.)
10.17     RSR Associates General Partnership Agreement dated April 19, 1990.  (Incorporated by reference to the             *
          Registrant's Registration Statement on Form S-1, Commission File No. 33-70638, previously filed with the
          Commission on October 21, 1993.)
10.18     Interest Rate Cap Agreement dated September 24, 1993, and related letter.  (Incorporated by reference to the      *
          Registrant's Registration Statement on Form S-1, Commission File No. 33-70638, previously filed with the
          Commission on October 21, 1993.)
10.19     The Finance Company 401(k) Savings Plan dated May 1, 1991, and Amendment No. 1 dated August 1, 1993.              *
          (Incorporated by reference to the Registrant's Registration Statement on Form S-1, Commission File No.
          33-70638, previously filed with the Commission on October 21, 1993.)
10.20     TFCEI Employee Stock Purchase Plan dated December 20, 1993.  (Incorporated by reference to the Registrant's       *
          Registration Statement on Form S-1, Commission File No. 33-70638, previously filed with the Commission on
          October 21, 1993.)
10.21     Forms of Junior Subordinated Promissory Notes.  (Incorporated by reference to the Registrant's Registration       *
          Statement on Form S-1, Commission File No. 33-70638, previously filed with the Commission on October 21,
          1993.)
10.22     Employment Agreement between George R. Kouri and The Finance Company dated December 21, 1993. (Incorporated       *
          by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1993, Commission File
          No. 1-11121, previously filed with the Commission.)
10.23     Employment Agreement between Joseph R. Becka and The Finance Company dated December 21, 1993. (Incorporated       *
          by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1993, Commission File No.
          1-11121, previously filed with the Commission.)
10.24     Employment Agreement between Preston K. Gnagey and The Finance Company dated December 27, 1993.                   *
          (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1993,
          Commission File No. 1-11121, previously filed with the Commission.)
10.25     Employment Agreement between Ronald G. Tray and The Finance Company dated December 23, 1993. (Incorporated        *
          by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1993, Commission File No.
          1-11121, previously filed with the Commission.)
10.26     Employment Agreement between George R. Kouri and The Finance Company, dated January 1, 1995. (Incorporated        *
          by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1994, Commission File No.
          1-11121, previously filed with the Commission.)
10.27     Employment Agreement between Joseph R. Becka and The Finance Company, dated January 1, 1995. (Incorporated        *
          by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1994, Commission File No.
          1-11121, previously filed with the Commission.)
10.28     Employment Agreement between Preston K. Gnagey and The Finance Company, dated January 1, 1995.  (Incorporated     *
          by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1994, Commission File No.
          1-11121, previously filed with the Commission.)
10.29     Employment Agreement between Ronald G. Tray and The Finance Company, dated January 1, 1995.  (Incorporated by     *
          reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1994, Commission File No.
          1-11121, previously filed with the Commission.)
10.30     Employment Agreement between Charles M. Johnston and The Finance Company, dated January 1, 1995.                  *
          (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1994,
          Commission File No. 1-11121, previously filed with the Commission.)
10.31     TFC Enterprises, Inc. 1995 Long-Term Incentive Plan.  (Incorporated by reference to the Registrant's Form         *
          10-K for the fiscal year ended December 31, 1994, Commission File No. 1-11121, previously filed with the
          Commission.)
10.32     Stock Option Award Agreement between George R. Kouri and TFC Enterprises, Inc. dated October 27, 1994.            *
          (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1994,
          Commission File No. 1-11121, previously filed with the Commission.)
10.33     Stock Option Award Agreement between Joseph R. Becka and TFC Enterprises, Inc. dated October 27, 1994.            *
          (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1994,
          Commission File No. 1-11121, previously filed with the Commission.)
10.34     Stock Option Award Agreement between Preston K. Gnagey and TFC Enterprises, Inc. dated October 27, 1994.          *
          (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1994,
          Commission File No. 1-11121, previously filed with the Commission.)
10.35     Stock Option Award Agreement between Ronald G. Tray and TFC Enterprises, Inc. dated October 27, 1994.             *
          (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1994,
          Commission File No. 1-11121, previously filed with the Commission.)
10.36     Stock Option Award Agreement between Charles M. Johnston and TFC Enterprises, Inc. dated October 27, 1994.        *
          (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1994,
          Commission File No. 1-11121, previously filed with the Commission.)
10.37     Loan and Security Agreement, dated December 27, 1994, between NationsBank of Virginia, N.A., TFC Enterprises,     *
          Inc., The Finance Company, The Insurance Agency, Inc. and First Community Finance, Inc.  (Incorporated by
          reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1994, Commission File No.
          1-11121, previously filed with the Commission.)
10.38     Amendment No. 4, dated March 3, 1995, to Loan and Security Agreement between General Electric Capital             *
          Corporation and The Finance Company.  (Incorporated by reference to the Registrant's Form 10-K for the fiscal
          year ended December 31, 1994, Commission File No. 1-11121, previously filed with the Commission.)
10.39     Office Lease, dated June 1, 1995, by and between AFW No. 39 Corporation and The Finance Company.                  *
          (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1994,
          Commission File No. 1-11121, previously filed with the Commission.)
10.40     Ceiling Rate Interest Agreement, dated August 2, 1994, by and between The Finance Company and Mellon Bank,        *
          N.A.  (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1994,
          Commission File No. 1-11121, previously filed with the Commission.)
10.41     Agreement, dated March 23, 1995, by and among G. E. Capital Corporation and The Finance Company.                  *
          (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1994,
          Commission File No. 1-11121, previously filed with the Commission.)
10.42     Amendment #4, dated April 1, 1995, to the Loan and Security Agreement between General Electric Capital            *
          Corporation and The Finance Company relating to the definition of the borrowing base dated April 1, 1995.
          (Incorporated by reference to the Registrant's Form 10-Q for the quarter ended March 31, 1995, Commission
          File No. 1-11121, previously filed with the Commission.)
10.43     Lease Agreement, dated April 28, 1995, between Three Oaks Plaza, Ltd. and The Finance Company, Inc.               *
          (Incorporated by reference to the Registrant's Form 10-Q for the quarter ended March 31, 1995, Commission
          File No. 1-11121, previously filed with the Commission.)
10.44     Amendment No. 1 to the Loan and Security Agreement by and between NationsBank of Virginia, N.A., TFC              *
          Enterprises, Inc., The Finance Company, The Insurance Agency, Inc., and First Community Finance, Inc. dated
          May 16, 1995 regarding a modification in the definition of reserve ratio.  (Incorporated by reference to the
          Registrant's Form 10-Q for the quarter ended June 30, 1995, Commission File No. 1-11121, previously filed
          with the Commission.)
10.45     Amendment No. 2 to the Loan and Security Agreement by and between NationsBank of Virginia, N.A., TFC              *
          Enterprises, Inc., The Finance Company, The Insurance Agency, Inc., and First Community Finance, Inc. dated
          May 30, 1995 regarding a modification in the debt ratio threshold.  (Incorporated by reference to the
          Registrant's Form 10-Q for the quarter ended June 30, 1995, Commission File No. 1-11121, previously filed
          with the Commission.)
10.46     Amendment No. 5 to the Loan and Security Agreement by and between General Electric Capital Corporation and        *
          The Finance Company dated June 23, 1995, regarding an increase in the available line of credit to
          $150,000,000 and an increase in the general interest rate charged on the line of credit.  (Incorporated by
          reference to the Registrant's Form 10-Q for the quarter ended June 30, 1995, Commission File No. 1-11121,
          previously filed with the Commission.)
10.47     Note purchase agreement among The Finance Company and Connecticut General Life Insurance Company ("CIGNA")        *
          and certain affiliates of CIGNA dated June 30, 1995, relating to $10,000,000 in original principal amount of
          9.38% Senior Subordinated Notes due June 30, 2002.  (Incorporated by reference to the Registrant's Form 10-Q
          for the quarter ended June 30, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.48     Ceiling Rate Interest Credit Agreement by and between The Finance Company and Mellon Bank, N.A., dated May        *
          10, 1995.  (Incorporated by reference to the Registrant's Form 10-Q for the quarter ended June 30, 1995,
          Commission File No. 1-11121, previously filed with the Commission.)  (Incorporated by reference to the
          Registrant's Form 10-Q for the quarter ended June 30, 1995, Commission File No. 1-11121, previously filed
          with the Commission.)
10.49     Ceiling Rate Interest Credit Agreement by and between The Finance Company and Mellon Bank, N.A., dated May        *
          24, 1995.  (Incorporated by reference to the Registrant's Form 10-Q for the quarter ended June 30, 1995,
          Commission File No. 1-11121, previously filed with the Commission.)
10.50     Lease agreement as of June 6, 1995, between Professors' Fund III Limited Partnership and The Finance Company      *
          regarding the premises located at 6170 Cornerstone Court East, San Diego, California.  (Incorporated by
          reference to the Registrant's Form 10-Q for the quarter ended June 30, 1995, Commission File No. 1-11121,
          previously filed with the Commission.)
10.51     Amendment to Employment Agreement between The Finance Company and George R. Kouri dated July 27, 1995             *
          (effective as of January 1, 1995).  (Incorporated by reference to the Registrant's Form 10-Q for the quarter
          ended June 30, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.52     Amendment to Employment Agreement between The Finance Company and Charles M. Johnston dated July 27, 1995         *
          (effective as of January 1, 1995).  (Incorporated by reference to the Registrant's Form 10-Q for the quarter
          ended June 30, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.53     Amendment to Employment Agreement between The Finance Company and Joseph R. Becka dated July 27, 1995             *
          (effective as of January 1, 1995).  (Incorporated by reference to the Registrant's Form 10-Q for the quarter
          ended June 30, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.54     Amendment to Employment Agreement between The Finance Company and Ronald G. Tray dated July 27, 1995              *
          (effective as of January 1, 1995).  (Incorporated by reference to the Registrant's Form 10-Q for the quarter
          ended June 30, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.55     Amendment to Employment Agreement between The Finance Company and Preston K. Gnagey dated July 27, 1995           *
          (effective as of January 1, 1995).  (Incorporated by reference to the Registrant's Form 10-Q for the quarter
          ended June 30, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.56     Amendment No. 1 to note purchase agreement, dated as of June 30, 1995, by and between The Finance Company and     *
          Connecticut General Li& Insurance Company ("CIGNA") regarding CIGNA's consent to the Company's $25 million
          credit facility with NationsBank.  (Incorporated by reference to the Registrant's Form 10-Q for the quarter
          ended September 30, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.57     Amendment No. 8 to Note Purchase Agreement, dated as of October 25, 1988, by and between The Finance Company      *
          and CIGNA regarding CIGNA's consent to the Company's $25 million credit facility with NationsBank.
          (Incorporated by reference to the Registrant's Form 10-Q for the quarter ended September 30, 1995, Commission
          File No. 1-11121, previously filed with the Commission.)
10.58     Amendment to Loan Agreement, dated August 16, 1995, by and between The Finance Company, NationsBank, TFC          *
          Enterprises, Inc., The Insurance Agency, Inc., and First Community Finance, Inc., regarding additions and
          amendments to certain definitions in the Loan and Security Agreement dated as of December 23, 1994.
          (Incorporated by reference to the Registrant's Form 10-Q for the quarter ended September 30, 1995, Commission
          File No. 1-11121, previously filed with the Commission.)
10.59     Loan and Security Agreement, dated August 16, 1995, by and between The Finance Company, NationsBank, TFC          *
          Enterprises, Inc., The Insurance Agency, Inc., and First Community Finance, Inc., regarding a $25 million
          loan payable to NationsBank.  (Incorporated by reference to the Registrant's Form 10-Q for the quarter ended
          September 30, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.60     Private Placement Memorandum, related to the 6.14% Automobile Receivables-Backed Notes, Series 1995-A, dated      *
          as of November 1, 1995, by and between TFC Receivables Corporation, The Finance Company, Harris Trust and
          Savings Bank and Financial Security Assurance Inc.  (Incorporated by reference to the Registrant's Form 10-K
          for the fiscal year ended December 31, 1995, Commission File No. 1-11121, previously filed with the
          Commission.)
10.61     Sale and Servicing Agreement, related to the 6.14% Automobile Receivables-Backed Notes, Series 1995-A, dated      *
          as of November 1, 1995, by and between TFC Receivables Corporation, The Finance Company and Harris Trust and
          Savings Bank.  (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December
          31, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.62     Indenture, related to the 6.14% Automobile Receivables-Backed Notes, Series 1995-A, dated as of November 1,       *
          1995, by and between TFC Receivables Corporation and Harris Trust and Savings Bank.  (Incorporated by
          reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1995, Commission File No.
          1-11121, previously filed with the Commission.)
10.63     Insurance and Indemnity Agreement, related to the 6.14% Automobile Receivables-Backed Notes, Series 1995-A,       *
          dated November 1, 1995, by and between TFC Receivables Corporation, The Finance Company and Financial
          Security Assurance Inc.  (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended
          December 31, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.64     Indemnification Agreement, related to the 6.14% Automobile Receivables-Backed Notes, Series 1995-A, dated         *
          November 1, 1995, by and between TFC Receivables Corporation, Financial Security Assurance Inc. and Chemical
          Securities Inc.  (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December
          31, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.65     Spread Account Agreement, related to the 6.14% Automobile Receivables-Backed Notes, Series 1995-A, dated          *
          November 1, 1995, by and between TFC Receivables Corporation, Financial Security Assurance Inc. and Harris
          Trust and Savings Bank.  (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended
          December 31, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.66     Stock Pledge Agreement, related to the 6.14% Automobile Receivables-Backed Notes, Series 1995-A, dated            *
          November 1, 1995, by and between The Finance Company, TFC Receivables Corporation, Financial Security
          Assurance Inc. and Harris Trust and Savings Bank.  (Incorporated by reference to the Registrant's Form 10-K
          for the fiscal year ended December 31, 1995, Commission File No. 1-11121, previously filed with the
          Commission.)
10.67     Second Amendment to Amended and Restated Bylaws of TFC Enterprises, Inc. regarding the number of directors        *
          comprising the Board of TFC Enterprises, Inc.  (Incorporated by reference to the Registrant's Form 10-K for
          the fiscal year ended December 31, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.68     Excess Compensation Repayment Agreement and associated Promissory Note between Robert S. Raley, Jr. and The       *
          Finance Company, dated January 1, 1996.  (Incorporated by reference to the Registrant's Form 10-K for the
          fiscal year ended December 31, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.69     Excess Compensation Repayment Agreement and associated Promissory Note between George R. Kouri and The            *
          Finance Company, dated January 1 1996.  (Incorporated by reference to the Registrant's Form 10-K for the
          fiscal year ended December 31, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.70     Excess Compensation Repayment Agreement and associated Promissory Note between Preston K. Gnagey and The          *
          Finance Company, dated January 1 1996.   (Incorporated by reference to the Registrant's Form 10-K for the
          fiscal year ended December 31, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.71     Excess Compensation Repayment Agreement and associated Promissory Note between Joseph R. Becka and The            *
          Finance Company, dated January 1 1996. (Incorporated by reference to the Registrant's Form 10-K for the
          fiscal year ended December 31, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.72     Excess Compensation Repayment Agreement and associated Promissory Note between Charles M. Johnson and The         *
          Finance Company, dated January 1 1996.   (Incorporated by reference to the Registrant's Form 10-K for the
          fiscal year ended December 31, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.73     Second Amendment to Employment Agreement Between George R. Kouri and The Finance Company dated January 1,         *
          1996.  (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1995,
          Commission File No. 1-11121, previously filed with the Commission.)
10.74     Second Amendment to Employment Agreement Between Joseph R. Becka and The Finance Company dated January 1,         *
          1996.  (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1995,
          Commission File No. 1-11121, previously filed with the Commission.)
10.75     Second Amendment to Employment Agreement Between Preston K. Gnagey and The Finance Company dated January 1,       *
          1996.  (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1995,
          Commission File No. 1-11121, previously filed with the Commission.)


<PAGE>


10.76     Second Amendment to Employment Agreement Between Ronald G. Tray and The Finance Company dated January 1,          *
          1996.  (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1995,
          Commission File No. 1-11121, previously filed with the Commission.)
10.77     Forbearance Agreement by and between The Finance Company and General Electric Capital Corporation ("GECC")        *
          dated as of March 21, 1996.  (Incorporated by reference to the Registrant's Form 10-K for the fiscal year
          ended December 31, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.78     Amendment No.9 and Waiver and Forbearance Agreement by and among The Finance Company , CIGNA, and certain         *
          affiliates of CIGNA, dated as of January 31, 1996, relating to 13.5% Senior Subordinated Notes.
          (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1995,
          Commission File No. 1-11121, previously filed with the Commission.)
10.79     Amendment No. 2 and Waiver and Forbearance Agreement by and among The Finance Company, CIGNA, and certain         *
          affiliates of CIGNA, dated as of January 31, 1996, relating to 9.38% Senior Subordinated Notes, dated as of
          January 31, 1996.  (Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended
          December 31, 1995, Commission File No. 1-11121, previously filed with the Commission.)
10.80     Forbearance Agreement by and among The Finance Company, TFC Enterprises, Inc., The Insurance Agency, Inc.,        *
          First Community Finance, Inc., and NationsBank, N.A., dated March 28, 1996.  (Incorporated by reference to
          the Registrant's Form 10-K for the fiscal year ended December 31, 1995, Commission File No. 1-11121,
          previously filed with the Commission.)
10.81     Early Retirement Agreement, dated as of September 30, 1996, between The Finance Company and George R. Kouri.      *
          (Incorporated by reference to the Registrant's Form 10-Q for the quarter ended September 31, 1996, Commission
          File No. 1-11121, previously filed with the Commission.)
10.82     Severance Agreement, dated as of September 30, 1996, between The Finance Company and Preston K. Gnagey.           *
          (Incorporated by reference to the Registrant's Form 10-Q for the quarter ended September 31, 1996, Commission
          File No. 1-11121, previously filed with the Commission.)
10.83     Early Retirement Agreement and Independent Contractor Agreement, dated  as of September 30, 1996 , between        *
          The Finance Company and Joseph R. Becka.  (Incorporated by reference to the Registrant's Form 10-Q for the
          quarter ended September 31, 1996, Commission File No. 1-11121, previously filed with the Commission.)
10.84     Severance Agreement, dated as of September 30, 1996, between Charles M. Johnston and The Finance Company.         *
          (Incorporated by reference to the Registrant's Form 10-Q for the quarter ended September 31, 1996, Commission
          File No. 1-11121, previously filed with the Commission.)
**10.85   Amended and Restated  Motor Vehicle Installment Contract Loan and Security Agreement dated December 20, 1996
          between The Finance Company and General Electric Capital Corporation.
**10.86   Amendment No. 1 to Amended and Restated Motor Vehicle Installment Contract Loan and Security Agreement dated
          April 4, 1997 by and between The Finance Company and General Electric Capital Corporation
**10.87   TFC Enterprises, Inc. Warrant to Purchase Common Stock dated December 20, 1996.
**10.88   Allonge to Warrant to Purchase  Common Stock dated April 4, 1997.
**10.89   TFC Enterprises, Inc. Warrant to Purchase Common Stock dated April 4, 1997.
**10.90   Amended and Restated Registration Rights dated April 4, 1997 between TFC Enterprises, Inc. and General
          Electric Capital Corporation
**10.91   TFC Enterprises, Inc. Guaranty dated April 4, 1997.
**10.92   First Community Finance, Inc. Guaranty dated April 4, 1997
**10.93   The Insurance Agency, Inc. Guaranty dated April 4, 1997
**10.94   Securities Pledge Agreement dated April 4, 1997 by TFC Enterprises, Inc. and General Electric Capital
          Corporation
**10.95   Security Agreement dated April 4, 1997 between TFC Enterprises, Inc., The Finance Company, First Community
          Finance, Inc., The Insurance Agency, Inc., and its subsidiaries and General Electric Capital Corporation
**10.96   Amendment No. 3 and Waiver of Note Agreement by and among The Finance Company, CIGNA,  and certain affiliates
          of CIGNA, dated as of  April 4, 1997, relating to 13.5% Senior Subordinated Notes.
**10.97   Amendment No. 10 and Waiver of Note Agreement by and among The Finance Company, CIGNA, and certain affiliates
          of CIGNA, dated as of April 4, 1997, relating to 9.375% Senior Subordinated Notes.
**11      Statement re: computation of per share earnings.
**13      Annual report to security holders.
**21      List of subsidiaries of TFC Enterprises, Inc.
**23      Consent of Ernst & Young LLP
**99.1    The Financial Statements and notes thereto which appear
          on pages 19 through 39 of TFC Enterprises, Inc. 1996
          Annual Report to Shareholders (filed as Exhibit 13 to
          this Form 10-K) are incorporated herein by reference.
**99.2    Financial Statement Schedule I.

</TABLE>

---------------------------------------------

*           (Not filed  herewith.  In accordance  with Rule 12b-32 of the
            General Rules and  Regulations  under the  Securities  Exchange Act
            of 1934, the exhibit is incorporated by reference).

**          Filed herewith.



<PAGE>



                 Schedule I- Financial Information of Registrant
                              TFC Enterprises, Inc.

Balance Sheets
<TABLE>
<CAPTION>

                                                                                                December 31
(in thousands)                                                                         1996                       1995
                                                                                       ----                       ----
<S> <C>
Assets
Investment in subsidiaries                                                         $      -                   $  3,144
Intangible assets, net                                                               13,161                     14,252
Due from subsidiaries                                                                25,320                     22,865
Other assets                                                                            165                        215
                                                                                -----------                 ----------
  Total assets                                                                     $ 38,646                   $ 40,476
                                                                                   ========                   ========

Liabilities and shareholders' equity
Liabilities:
Deficit in subsidiaries                                                               4,100                          -
Accounts payable and accrued expenses                                                   203                         78
Income taxes payable                                                                  3,579                      2,984
Deferred income taxes                                                                   902                      1,010
                                                                                -----------                  ---------
  Total liabilities                                                                   8,784                      4,072

Shareholders' equity:
Preferred stock, $.01 per value, 1,000,000 shares
  authorized; none outstanding                                                            -                          -
Common stock, $.01 par value, 40,000,000 shares
  authorized and 11,290,308 and 11,283,954 shares
      outstanding in 1996 and 1995, respectively                                         49                         49
Additional paid-in capital                                                           55,333                     54,279
Retained deficit                                                                    (25,520)                   (17,924)
                                                                                   --------                   --------
  Total shareholders' equity                                                         29,862                     36,404
                                                                                     ------                     ------
  Total liabilities and shareholders' equity                                       $ 38,646                   $ 40,476
                                                                                   ========                   ========

</TABLE>


                                   Page 1 of 3

<PAGE>



                 Schedule I- Financial Information of Registrant
                              TFC Enterprises, Inc.

Statements of Operations
<TABLE>
<CAPTION>

                                                                                    Years ended
                                                                                    December 31
(in thousands)                                                      1996                1995                      1994
                                                                    ----                ----                      ----
<S> <C>
Net interest revenue:
  Interest revenue                                                $2,132              $3,404                    $3,154

  Interest expense                                                     -                  30                         8
                                                                 -------             -------                 ---------
Net interest revenue                                               2,132               3,374                     3,146

Other revenue:
  Equity in net income (loss)
    of subsidiaries                                               (7,667)             (7,241)                     6,636
                                                                  -------             -------                    ------
Total other revenue                                               (7,667)             (7,241)                     6,636

Operating expenses:
  Amortization of intangible assets                                1,091               1,091                     1,091
  Other                                                              483                 704                       525
                                                                  ------               -----                    ------
Total operating expense                                            1,574               1,795                     1,616
                                                                   -----               -----                    ------
Income (loss) before income taxes                                 (7,109)             (5,662)                    8,166
Provision for income taxes                                           487                 799                       935
                                                                --------            --------                   -------
Net income (loss)                                                $(7,596)            $(6,461)                   $7,231
                                                                ========            ========                    ======


</TABLE>

                                   Page 2 of 3

<PAGE>


                 Schedule I- Financial Information of Registrant
                              TFC Enterprises, Inc.


Statements of Cash Flows
<TABLE>
<CAPTION>

                                                                                          Years ended December 31
(in thousands)                                                                    1996            1995              1994
                                                                                  ----            ----              ----
<S> <C>
Operating activities
Net income (loss)                                                             $(7,596)        $(6,461)           $ 7,231
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
    Equity in net (income) loss of subsidiaries                                 7,667           7,241             (6,636)
    Amortization of intangible assets                                           1,091           1,091              1,091
    Benefit from deferred income taxes                                           (108)           (108)               (79)
    Amortization of deferred charges                                                -              47                 22
    Changes in operating assets and liabilities:
    Decrease in recoverable income taxes                                            -               -                772
    Decrease (increase) in other assets                                            50             (80)                (9)
    Increase in due from subsidiaries                                          (2,455)         (1,831)           (12,537)
    Increase (decrease) in accounts payable and accrued
    liabilities                                                                   744              43                 34
    Increase (decrease) in income taxes payable                                   595            (105)             3,089
                                                                              --------        --------             -----
Net cash used in operating activities                                             (12)           (163)            (7,022)

Financing activities
Proceeds on issuance of common stock                                                -               -              7,101
Proceeds from stock options exercised                                              12              20                 54
                                                                                   --          -------       ------------
Net cash provided by financing activities                                          12              20              7,155

Increase (decrease) in cash                                                         -            (143)               133
Cash at beginning of year                                                           -             143                 10
                                                                                ------       --------             ------
Cash balance at end of year                                                 $       -       $       -           $    143
                                                                            ==========      ==========          ========

Noncash transactions:
Issuance of stock warrants                                                     $   423      $        -        $        -
Deferred compensation terminated and transfered to paid-in                         619               -                 -
capital
Conversion of due from subsidiaries to                                               -          20,000                 -
   equity in subsidiaries



</TABLE>



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